UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN

PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

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 Definitive Proxy Statement
 Definitive Additional Materials
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HARSCO CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LOGO

Notice of 2018 2019

Annual Meeting

of Stockholders

and Proxy Statement

Harsco Corporation

350 Poplar Church Road

Camp Hill, PA 17011 USA


LOGO

350 Poplar Church Road

Camp Hill, PA 17011 USA

Invitation to Attend 20182019 Annual Meeting of Stockholders

Tuesday, April 24, 201823, 2019

9:00 a.m., Eastern Time

Hilton Harrisburg, One North Second Street, Harrisburg, PennsylvaniaThe Wagner at the Battery, New York, New York

Dear Fellow Stockholders:

You are cordially invited to attend the 20182019 Annual Meeting of Stockholders (the “Annual Meeting”) of Harsco Corporation (the “Company”), which will be held on Tuesday, April 24, 2018,23, 2019, beginning at 9:00 a.m., Eastern Time, at The Wagner at the Hilton Harrisburg, One North SecondBattery, Two West Street, Harrisburg, Pennsylvania.New York, New York 10004.

Information about the business to be conducted at the Annual Meeting, including a listing and discussion of the various matters on which you will be asked to act, can be found in the attached Notice of 20182019 Annual Meeting of Stockholders and Proxy Statement.

Your vote is very important to us, and I encourage you to vote your shares whether or not you plan to attend the Annual Meeting. There are several ways in which you can vote your shares, including via the Internet, by telephone, or by signing, dating and returning your Proxy Card. Specific information about each of these voting methods can be found in the Proxy Statement under the heading “Questions and Answers About the Company’s Annual Meeting.”

I hope you will be able to attend this year’s Annual Meeting, and I look forward to greeting as many of you as possible. On behalf of my fellow members of the Board of Directors, I want to thank you in advance for voting and for your continued support of the Company.

 

LOGO

Sincerely,

 

LOGO

 

F. Nicholas Grasberger III

Chairman, President & Chief Executive Officer

LOGO

March 14, 20182019


TABLE OF CONTENTSTable of Contents

 

  

Page

2018NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS

 

  1

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

  2

OUR DIRECTOR NOMINEES

 

  3

GOVERNANCE HIGHLIGHTS

 

  4

EXECUTIVE COMPENSATION HIGHLIGHTS

 

  5

QUESTIONS AND ANSWERS ABOUT THE COMPANY’S ANNUAL MEETING

 

  6

THE BOARD OF DIRECTORS

 

  9

General Oversight

 

  9

Composition

 

  9

Leadership Structure

 

  9

Engagement Regarding Leadership Structure

  10

Board Role in Risk Oversight

 

  10

Experiences,Experience, Skills and Qualifications

 

  11

Diversity

 

  12

PROPOSAL 1: ELECTION OF DIRECTORS

 

  13

Nominees for Director

   13

  14

MEETINGS AND COMMITTEES OF THE BOARD

 

  18

Meetings of the Board and Director Attendance at Annual Meeting

 

  18

Committees of the Board

 

  18

CORPORATE GOVERNANCE

 

  21

Corporate Governance Principles

 

  21

Code of Conduct

 

  21

Stockholder and Interested Party Communications with Directors

 

  21

Director Independence

 

  21

Nominations of Directors

 

  21

NON-EMPLOYEE DIRECTOR COMPENSATION

  23

NON-EMPLOYEE DIRECTOR COMPENSATION2018 Director Compensation

 

  24

2017 Director Compensation

  25
SHARE OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

   27

  26

REPORT OF THE AUDIT COMMITTEE

 

  28

FEES BILLED BY THE INDEPENDENT AUDITORS FOR AUDIT AND NON-AUDIT SERVICES

   30

  29

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

   31

  30

COMPENSATION DISCUSSION & ANALYSIS

   32

  31

Introduction

  31

EXECUTIVE SUMMARY

   32

  31

Business Highlights

   32

  31

Compensation Highlights

   34

Discussion of Chief Executive Officer Pay  33

  36

2017 Named Executive Officers

  38

 

i


TABLE OF CONTENTSTable of Contents

(continued)

 

  

Page

DISCUSSION AND ANALYSIS OF 20172018 COMPENSATION

   39

  36

Compensation Guiding Principles

   39

  36

Key Compensation PracticesTalent Management Strategy

   40

Response to Previous Say-on-Pay Advisory Voting  36

  41

Key Changes Implemented to Executive Compensation Programs

  41

Overview of 20172018 Compensation Decisions and Actions

   42

Determining 2017 NEO Compensation  37

  42

Elements of 20172018 NEO Compensation Program

   48

  37

Compensation Decision-Making Framework

  38

2018 Compensation Decision Details

  43

Employment Arrangements with NEOs

   57

  50

Potential Payments upon Change in Control and Other Potential Post-Employment Payments

   57

  50

Stock Ownership Guidelines

   58

  51

Right to Recover Incentive Compensation

   58

  51

Policies on Hedging and Pledging of Shares

   59

  52

Policy Regarding Tax and Accounting Impact on Executive Compensation

   59

  52

Compensation Committee Report

   59

  52

Compensation Policies and Practices as They Relate to Risk Management

   60

  53

20172018 Summary Compensation Table

   61

  54

20172018 Grants of Plan-Based Awards Table

   63

  56

Outstanding Equity Awards at 20172018 Fiscal Year-End Table

   64

  57

20172018 Option Exercises and Stock Vested Table

   66

  59

20172018 Pension Benefits Table

   67

  60

20172018 Nonqualified Deferred Compensation Table

   68

  60

CEO Pay Ratio Disclosure

   69

  61

Termination or Change in Control Arrangements

   70

  62

EQUITY COMPENSATION PLAN INFORMATION (AS OF DECEMBER 31, 2017)2018)

   79

  70

PROPOSAL 3: VOTE, ON AN ADVISORY BASIS, TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

   80

  71

Response to Previous Say-on-Pay Votes

   80

  71

TRANSACTIONS WITH RELATED PERSONS

   81

  72

Policies and Procedures Regarding Transactions with Related Persons

   81

  72

EXECUTIVE DEVELOPMENT AND SUCCESSION

   82

  73

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

   82

  73

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

   82

  73

OTHER MATTERS

   82

  74

Householding of Proxy Materials

   82

  74

Stockholder Proposals and Nominations for Presentation at 20192020 Annual Meeting of Stockholders

   83

  74

 

ii


LOGO

350 Poplar Church Road

Camp Hill, PA 17011 USA

Notice of 20182019 Annual Meeting of Stockholders

Tuesday, April 24, 201823, 2019

9:00 a.m., Eastern Time

Hilton Harrisburg, One North Second Street, Harrisburg, PennsylvaniaThe Wagner at the Battery, New York, New York

The 20182019 Annual Meeting of Stockholders (the “Annual Meeting”) of Harsco Corporation (the “Company”) will be held on Tuesday, April 24, 2018,23, 2019, beginning at 9:00 a.m., Eastern Time, at The Wagner at the Hilton Harrisburg, One North SecondBattery, Two West Street, Harrisburg, Pennsylvania.New York, New York 10004.

The purposes of the meeting are as follows:

 

1.

To elect the eight nominees named in the Proxy Statement to serve as Directors until the 20192020 Annual Meeting of Stockholders;

2.

To ratify the appointment of PricewaterhouseCoopers LLP as independent auditors for the fiscal year ending December 31, 2018;2019;

3.

To vote, on an advisory basis, to approve the compensation of the Company’s named executive officers; and

4.

To conduct such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

The Proxy Statement accompanying this Notice of 20182019 Annual Meeting of Stockholders describes each of these items in detail. TheIn addition, the Proxy Statement contains other important information that you should read and consider before you vote.

The Board of Directors of the Company has fixed the close of business on March 1, 2018February 26, 2019 as the record date for the determination of stockholders who are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof.

The Company is furnishing proxy materials over the Internet as permitted under the rules of the Securities and Exchange Commission. Under these rules, many of the Company’s stockholders will receive a Notice of Internet Availability of Proxy Materials instead of a paper copy of the Notice of 20182019 Annual Meeting of Stockholders and Proxy Statement, our Proxy Card, our Annual Report on Form10-K and the Letter from our Chairman & CEO. We believe this process allows us to provide our stockholders with the information they need while lowering the costs of printing and distributing proxy materials. Stockholders who do not receive a Notice of Internet Availability of Proxy Materials will receive a paper copy of the proxy materials by mail.

Your vote is very important to us and we encourage you to vote your shares as soon as possible even if you plan to attend the Annual Meeting in person. Information about how to vote your shares via the Internet, by telephone, or by signing, dating and returning your Proxy Card can be found in the enclosed Proxy Statement.

By order of the Board of Directors,

 

LOGO

Russell C. Hochman

Senior Vice President and General Counsel, Chief Compliance Officer & Corporate Secretary

March 14, 20182019

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on April 24, 2018. 23, 2019. The Notice of 20182019 Annual Meeting of Stockholders and Proxy Statement, our Proxy Card, our Annual Report on FormForm 10-K and the Letter from our Chairman & CEO are available free of charge atwww.envisionreports.com/hsc (for registered stockholders) orwww.edocumentview.com/hsc(for (for all other stockholders), or by calling toll-free (866)641-4276.

LOGO

350 Poplar Church Road

Camp Hill, PA 17011 USA

Proxy Summary

20182019 ANNUAL MEETING OF STOCKHOLDERS

 

Date and Time:

 Tuesday, April 24, 201823, 2019
 9:00 a.m., Eastern Time

Place:

 Hilton HarrisburgThe Wagner at the Battery
 One North SecondTwo West Street
 Harrisburg, PennsylvaniaNew York, New York 10004

Record Date:

 March 1, 2018February 26, 2019

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

Voting Matter 

Board Vote

Recommendation

 

Page Number

with More

More

Information

  

Proposal No.  1:Election of Directors

 Election of DirectorsFOR each nominee
 13


  

Proposal No.  2:

Ratification of Appointment of Independent Auditors

 FOR 3130
  

Proposal No.  3:

Vote, on an Advisory Basis, to Approve Named Executive Officer Compensation

 FOR 8071

This Proxy Summary contains highlights of certain information in this Proxy Statement. Because it is only a summary, it does not contain all the information that you may wish to consider prior to voting. Please review the complete Proxy Statement and the Company’s Annual Report on Form10-K for additional information.

OUR DIRECTOR NOMINEES

You have the opportunity to vote on the election of the following eight nominees for Director. Additional information regarding each Director nominee’s experience, skills and qualifications to serve as a member of the Company’s Board of Directors can be found in the section entitled “Nominees for Director.”

 

     
Name Age   

Years on

Board

  Position  Independent  

Committee

Memberships*#

 

Age

 

 

Years on
Board

 

 

Position

 

 

Independent

 

 

Committee
Memberships*#

 

   

James F. Earl

  61   6  

 

Retired
Executive Vice President

of GATX Corporation

 

  Yes  MD&C+

Nominating

 62 7 Retired Executive Vice President of GATX Corporation Yes 

MD&C+

Nominating

    

Kathy G. Eddy

  67   14  

 

Founding Partner of

McDonough, Eddy, Parsons

& Baylous, AC

 

  Yes  Audit

Nominating+

 68 15 Founding Partner of McDonough, Eddy, Parsons & Baylous, AC Yes Audit Nominating+
   

David C. Everitt

  65   8  

 

Non-Executive Chairman of

the Board of Directors of the

Company

 

  Yes  None 66 9 Lead Director of the Company Yes None
    

F. Nicholas Grasberger III

  54   4  

 

President & Chief Executive
Officer of the Company

 

  No  None 55 5 Chairman, President & CEO of the Company No None

Elaine La Roche

  68   4  

 

CEO of China

International

Capital Corporation US

 

  Yes  Audit

Nominating

   
Carolann I. Haznedar 59 ++ Retired Senior Vice President Americas, DuPont Performance Materials Yes 

Audit

Nominating

    

Mario Longhi

  63   ++  

 

Retired President and Chief
Executive Officer of United
States Steel Corporation

 

  Yes  Audit

MD&C

 64 1 Retired President & Chief Executive Officer of United States Steel Corporation Yes 

Audit

MD&C

   

Edgar (Ed) M. Purvis, Jr.

  60   **  

 

Retired Executive Vice
President and Chief
Operating Officer of
Emerson Electric Co.

 

  Yes  MD&C

Nominating

 61 1 Retired Executive Vice President and Chief Operating Officer of Emerson Electric Co. Yes 

MD&C

Nominating

    

Phillip C. Widman

  63   4  

 

Retired Senior Vice

President and Chief

Financial Officer of Terex

Corporation

 

 

  Yes  Audit+

MD&C

 64 5 Retired Senior Vice President and Chief Financial Officer of Terex Corporation Yes 

Audit+

MD&C

 

*

MD&C = Management Development and CompensationCommittee

 

Nominating = Nominating and Corporate GovernanceCommittee

#

Reflects Committee Memberships as of March 1, 20182019

+

Indicates Committee Chair as of March 1, 20182019

++

Currently in his first year of service on the Company’s Board of Directors. Was appointed as a directorDirector on November 8, 2017.

**Currently in his first year of service on the Company’s Board of Directors. Was appointed as a director on February 13,October 22, 2018.

GOVERNANCE HIGHLIGHTS

 

  Board Composition

    8 Director nominees; 7 are independent

LOGO

 

    Average age of Director nominees is 63

3 new Directors in the last two years;5 new Directors in last 5 years

Highly qualified Directors reflect broad mix of business backgrounds, skills and experiences

 

    Average tenure of Director nominees is 5 years

    2 new Directors in the last year; 5 new Directors in last 5 years

    Highly qualified Directors reflect broad mix of business backgrounds, skills and experiences

  Corporate Governance

    3 fully independent Board committees

3 fully independent Board committees

Executive session of independent Directors held at each regularly-scheduled Board meeting

Declassified Board – all Directors elected annually

By-laws provide a resignation requirement if a Director does not receive majority approval in uncontested election (subject to acceptance by Board)

Restated Certificate of Incorporation provides for majority voting in uncontested elections of Directors

Formal policy on Board diversity

Mandatory retirement age of 72

Annual Board and committee self-assessments

Bi-Annual evaluation of individual Director performance

Corporate Governance Principles limit Director membership on other public company boards

Strong clawback and anti-hedging policies

Significant share ownership requirements for Directors and senior executives

Active role in risk oversight

Annual advisory vote to approve named executive officer compensation

 

    Executive session of independent Directors held at each regularly-scheduled Board meeting

    Declassified Board – all Directors elected annually

    By-laws provide a resignation requirement if a Director does not receive majority approval in uncontested election (subject to acceptance by Board)

    Restated Certificate of Incorporation provides for majority voting in uncontested elections of Directors

    Formal policy on Board diversity

    Mandatory retirement age of 72

    Annual Board and committee self-assessments

    Bi-Annual evaluation of individual Director performance

    Corporate Governance Principles limit Director membership on other public company boards

    Strong clawback and anti-hedging policies

    Significant share ownership requirements for Directors and senior executives

    Active role in risk oversight

    Annual advisory vote to approve named executive officer compensation

EXECUTIVE COMPENSATION HIGHLIGHTS

Our executive compensation program is intendeddesigned to provide competitive compensationpay based on Company performance, attract, retain and contributions to the Company, to incentivize, attract and retain key executives, tomotivate our senior leaders, align the interests of our key executives with the intereststhose of our stockholders, and to drivelong-term stockholder value. To achieve these objectives, our executive compensation program includes the following key features:

 

We Pay for Performance

by aligning our total compensation with business strategies to reward executives who achieve or exceed applicable Company and business unit goals.

¡At target performance levels, 2017 variable compensation represented approximately 80% of our President & Chief Executive Officer’s (“CEO”) total compensation and, on average, approximately 65% of total compensation for our other named executive officers (“NEOs”).

¡Payouts under our 2017 annual incentive plan were 100% performance based – all NEOs had at least 50% of their annual incentive tied to Harsco Consolidated results – and payouts varied based upon performance achievement.

¡One-third of the equity awards granted to NEOs in 2017 were in the form of performance share units, which may be earned based on achievement ofpre-determined performance goals.

 

At target performance levels, 2018 variable compensation represented approximately 82% of our Chairman, President & Chief Executive Officer’s (“CEO”) total compensation and, on average, approximately 67% of total compensation for our other named executive officers (“NEOs”).
Payouts under our 2018 annual incentive plan were 100% performance based – all NEOs had at least 50% of their annual incentive tied to Harsco Consolidated results – and payouts varied based upon performance achievement.
Forty percent of the equity awards granted to our CEO and one third of the equity awards granted to our other NEOs in 2018 were in the form of performance share units, which may be earned based on achievement ofpre-determined performance goals.

We Pay Competitively

by setting total target compensation at the median of our defined market for talent.

We regularly review and, as appropriate, make changes to our compensation peer group to ensure it is representative of our market for talent, our business portfolio and our global footprint.

 

¡We regularly review and, as appropriate, make changes to our compensation peer group to ensure it is representative of our market for talent, our business portfolio and our global footprint.
We provide competitive benefits to attract and retain our NEOs.

¡We provide competitive benefits and perquisites to our NEOs.

We Align Our Compensation Programs with Stockholder Interests

by providing a significant amount of each NEO’s compensation opportunity in the form of equity and requiring NEO stock ownership.

Our 2018 long-term incentive plan was comprised entirely of equity-based vehicles (restricted stock units, stock appreciation rights and performance share units).
Stock ownership requirements for our current NEOs ranged from three times salary for NEOs other than our CEO to six times salary for our CEO.

We Employ Sound Compensation Governance

by including practices and policies that are consistent with market practices, supportive of our business structure and aligned with stockholders’ expectations.

We follow a number of compensation guidelines and policies implemented to manage our programs in a prudent and risk averse manner.

 

¡Our 2017 long-term incentive plan was comprised entirely of equity-based vehicles (restricted stock units, stock appreciation rights and performance share units).

¡Stock ownership requirements for our current NEOs ranged from three times (for NEOs other than our President & CEO) to six times salary (for our President & CEO).

NEO Total Target Compensation for 2017
NEO Total Target Compensation for 2018NEO Total Target Compensation for 2018
      
Compensation Element 

% of Total

(CEO)

 

% of Total

(Average for
All Other NEOs)

 Description Cash Equity 

% of Total

(CEO)

 

% of Total

(Avg. for All
Other NEOs)

 Description Cash Equity
   

Base Salary

 20 35 Fixed annual cash amount    18 33 Annual stable source of income Yes  
   

Annual Incentive

(AIP Award)

 22 25 Variable, performance-based annual cash payment    20 23 Variable, performance-based annual cash payment Yes  
   

Long-Term Incentive

(LTIP Awards)

 58 40 Variable, time- and performance-based annual equity award grants withthree-year vesting    62 44 

Variable, time and

performance-based annual equity award grants with three-year vesting

   Yes

LOGO

350 Poplar Church Road

Camp Hill, PA 17011 USA

Proxy Statement

This Proxy Statement and the accompanying form of proxy are first being sent to the stockholders on or about March 14, 2019, and are being furnished in connection with the solicitation of proxies on behalf of the Board of Directors (the “Board”) of Harsco Corporation (the “Company,” “Harsco,” “we” or “us”) for use at the Annual Meeting of Stockholders of the Company (the “Annual Meeting”) to be held at The Wagner at the Hilton Harrisburg, One North SecondBattery, Two West Street, Harrisburg, Pennsylvania,New York, New York 10004, on Tuesday, April 24, 2018,23, 2019, beginning at 9:00 a.m., Eastern Time.

Should you wish to obtain directions to The Wagner at the Hilton HarrisburgBattery in order to attend the Annual Meeting and vote in person, contact our Corporate Communications Department by calling (717)763-7064.

The Notice of 20182019 Annual Meeting of Stockholders and Proxy Statement, our Proxy Card, our Annual Report on FormForm 10-K and the Letter from our Chairman & CEO are available free of charge atwww.envisionreports.com/hsc(for (for registered stockholders) orwww.edocumentview.com/hsc (for all other stockholders), or by calling toll-free (866)641-4276.

QUESTIONS AND ANSWERS ABOUT THE COMPANY’S ANNUAL MEETINGQuestions and Answers about the Company’s Annual Meeting

 

Q:

Who is entitled to vote at the Annual Meeting?

 

A:

You can vote if, as of the close of business on March 1, 2018February 26, 2019 (the “Record Date”), you were a stockholder of record of the Company’s common stock (“Common Stock”). As of the Record Date, there were 80,453,85280,075,361 shares of our Common Stock outstanding. Stockholders are entitled to cast one vote for each share of Common Stock held as of the Record Date on each matter presented for voting at the Annual Meeting. There are no cumulative voting rights.

 

Q:

How do I vote my shares by proxy?

 

A:

Most stockholders can vote their shares by proxy in three ways:

 

 

By Internet – You can vote via the Internet by going towww.envisionreports.com/hsc and following the instructions outlined on that website;

 

By Telephone – In the United States and Canada, you can vote telephonically by calling (800)1-800-652-8683652-8683 (toll free) and following the instructions provided by the recorded message; or

 

By Mail – If you received a paper copy of the proxy materials, you can vote by mail by filling out the enclosed proxy card and returning it pursuant to the instructions set forth on the card. If you wish to vote by mail but received a Notice of Internet Availability of Proxy Materials in lieu of a paper copy of the proxy materials, you may contact our Corporate Communications Department by calling (717)763-7064 to request that a full packet of proxy materials be sent to your home address. To facilitate timely delivery, all requests for a paper copy of the proxy materials must be received by April 13, 2018.12, 2019.

Please see the Notice of Internet Availability of Proxy Materials or the information your bank, broker or other holder of record provided you for more information on these voting options.

 

Q:

Can I vote in person at the Annual Meeting instead of voting by proxy?

 

A:Yes. However, while

Yes, please bring the 2019 Annual Meeting Admission Ticket and photo identification to the registration desk when you arrive at the Annual Meeting. While we encourage all stockholders to attend the Annual Meeting, we encourage you to vote your shares via the Internet, by telephone or by mail prior to the Annual Meeting, even if you plan to attend.

Q:

Can I change or revoke my proxy?

 

A:

Yes. You may change or revoke your proxy by Internet, telephone or mail prior to 11:59 p.m. Eastern Time on Monday, April 23, 2018.22, 2019. You may also change or revoke your proxy by attending the Annual Meeting and voting in person. If you hold your shares through a bank, broker or other nominee, only that bank, broker or nominee can revoke your proxy on your behalf.

 

Q:

What if I am a beneficial owner and do not give instructions to my broker?

 

A:

As a beneficial owner, in order to ensure your shares are voted in the way you would like, you must provide voting instructions to your broker by the deadline provided in the proxy materials you received from your broker. If you do not provide voting instructions to your broker, whether your shares can be voted by your broker depends on the proposal being considered. Under the rules of the New York Stock Exchange (“NYSE”), if your broker does not receive voting instructions from you, the broker is entitled to vote your shares on all “routine” proposals being considered, including the ratification of our auditors (Proposal No. 2). Brokers are not entitled to vote your shares with respect to the election of Directors or the advisory vote on the compensation of the Company’s named executive officers (Proposal Nos. 1 and 3) without your instructions. This is referred to as a broker“non-vote.”

 

Q:

What if I hold my shares through the Harsco Corporation Savings Plan or the Harsco Retirement Savings & Investment Plan?

 

A:

If you are a participant in the Harsco Corporation Savings Plan and/or the Harsco Retirement Savings & Investment Plan, you can instruct the Trustee of those plans how to vote the shares of Common Stock that are allocated to your account, if any, by going towww.proxyvote.com and following the instructions outlined in that website or by calling (800)1-800-690-6903690-6903 (toll free) and following the instructions provided by the recorded message. You may also fill out the enclosed voting instruction card and return it pursuant to the instructions set forth on the card.

If you do not instruct the Trustee how to vote your shares, the Trustee will vote them in the same proportion as those shares for which the Trustee did receive voting instructions.

 

Q:

How many shares must be present to conduct the Annual Meeting?

 

A:

To carry on the business of the Annual Meeting, a minimum number of shares, constituting a quorum, must be present at the meeting, either in person or by proxy. A quorum consists of a majority of the issued and outstanding shares of our Common Stock as of the Record Date.

 

Q:

What vote is required to pass each of the proposals at the Annual Meeting?

 

A:

Assuming that a quorum is present:

Proposal No. 1: Election of Directors – nominees for the Board of Directors will be elected if more votes are cast in favor of a nominee then are cast against such nominee by the holders of shares present in person or represented by proxy and entitled to vote at the Annual Meeting.

Proposal No. 1: Election of Directors – nominees for the Board of Directors will be elected if more votes are cast in favor of a nominee then are cast against such nominee by the holders of shares present in person or represented by proxy and entitled to vote at the Annual Meeting.

Proposal No. 2: Ratification of the Appointment of PricewaterhouseCoopers LLP as Independent Auditors – the affirmative vote of the holders of at least a majority of the shares cast at the Annual Meeting, in person or by proxy, is required.

Proposal No. 3: Vote, on an Advisory Basis, to Approve the Compensation of the Company’s Named Executive Officers – the affirmative vote of the holders of at least a majority of the shares present at the Annual Meeting, in person or by proxy, and entitled to vote is required.

Proposal No. 2: Ratification of the Appointment of PricewaterhouseCoopers LLP as Independent Auditors – the affirmative vote of the holders of at least a majority of the shares represented at the Annual Meeting, in person or by proxy, is required.

Proposal No. 3: Vote, on an Advisory Basis, to Approve the Compensation of the Company’s Named Executive Officers – the affirmative vote of the holders of at least a majority of the shares represented at the Annual Meeting, in person or by proxy, is required.

In certain circumstances, a stockholder will be considered to be present at the Annual Meeting for quorum purposes but will not be deemed to have cast a vote on each particular proposal. This occurs when a stockholder withholds a vote or abstains from voting on a proposal, or in the event of a brokernon-vote. In accordance with Delaware law and our Restated Certificate of Incorporation andby-laws, brokernon-votes will not be treated as votes cast with respect to the election of Directors (Proposal No. 1) and therefore will not affect the outcome of Director elections. With respect to the advisory vote to approve the compensation of our named executive officers (Proposal No. 3), abstentions will have the effect of negative votes, but brokernon-votes will not have any effect. With respect to the ratification of our auditors (Proposal No. 2), abstentions will have the effect of negative votes.

 

Q:

What happens if a nominee for Director does not receive majority approval?

 

A:

Our Restated Certificate of Incorporation provides that, in an uncontested election (that is, an election where the number of Director nominees does not exceed the number of Directors to be elected), each Director nominee must receive the affirmative vote of a majority of the votes cast with respect to his or her election in order to be elected. In addition, ourby-laws provide that if a nominee does not receive more “for” votes than votes “withheld” for his or her election, the Director must tender his or her resignation to the Board for consideration. The Nominating and Corporate Governance Committee will then review the resignation and recommend to the Board whether to accept or reject it. The Board will act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision within 90 days following certification of the election results.

If a Director’s resignation is not accepted by the Board, then the Director who tendered that resignation will continue to serve on the Board until the 2020 Annual Meeting of Stockholders and until his or her successor is elected and qualified, or until his or her earlier death, unconditional resignation or removal.

If a Director’s resignation is not accepted by the Board, then the Director who tendered that resignation will continue to serve on the Board until the 2019 Annual Meeting of Stockholders and until his or her successor is elected and qualified, or until his or her earlier death, unconditional resignation or removal.

 

Q:

Who counts the votes and how will my shares be voted if I return a proxy but do not submit instructions regarding how to vote on a particular matter?

 

A:

Stockholder votes will be tabulated by an independent inspector of election for the Annual Meeting.

The individuals appointed by the Board to serve as proxies for the Annual Meeting will vote your shares in accordance with the instructions you provide on your proxy card or through your Internet or telephonic vote. If you submit a proxy but do not indicate how your shares should be voted on a particular matter, your shares will be voted as follows:

 

FOR the election as Directors of each of the eight nominees of the Board;

 

FOR the ratification of the appointment of PricewaterhouseCoopers LLP as independent auditors for the fiscal year ending December 31, 2018;2019; and

 

FOR the approval, on an advisory basis, of our named executive officer compensation.

 

Q:

How are proxies solicited and what is the cost?

 

A:

We pay the cost of soliciting proxies for the meeting. In addition to solicitation by mail, our employees may solicit proxies personally or by telephone or facsimile, but they will not receive additional compensation for

these services. Arrangements may be made with brokerage houses, custodians, nominees and fiduciaries to send proxy materials to their principals and we may reimburse them for their expenses. We have retained D.F. King & Co., Inc. to assist in the solicitation of proxies at a cost that is not expected to exceed $15,000 plus reasonableout-of-pocket expenses.

THE BOARD OF DIRECTORSThe Board of Directors

General Oversight

The Board has general oversight responsibility for the Company’s affairs. Although the Board does not have responsibility forday-to-day management of the Company, Board members stay informed about the Company’s business through regular meetings, site visits and other periodic interactions with management. The Board is deeply involved in the strategic planning process for the Company and each of its business divisions. The Board also plays an important oversight role in the Company’s leadership development and succession planning processes.

Composition

The Board is currently comprised of teneight Directors, nineseven of whom qualify as independent. Stuart E. Graham and Terry D. Growcock will be retiring from the Board immediately prior to the Annual Meeting in accordance with the Board’s retirement policy in the Corporate Governance Principles, and the Board’s size will decrease from ten to eight members in accordance with the Company’sby-laws.

In accordance with the Board’s Corporate Governance Principles and applicable sections of the NYSE Listed Company Manual (the “NYSE Rules”), the independent Directors regularly meet in executive session. These meetings allow the independent Directors to discuss important issues, including the business and affairs of the Company as well as matters concerning management, without any member of management present. During the 20172018 fiscal year, the independent Directors held sixfive meetings. On average, the group of independent Directors attended 98% of the independent Directors’ meetings held in 2017.2018.

Leadership Structure

The Company’s governance documents provide the Board with flexibility to select the leadership structure that is most appropriate for the Company and its stockholders. The Board regularly evaluates the Company’s leadership structure and has concluded that the Company and its stockholders are best served by not having a formal policy regarding whether the same individual should serve as both Chairman of the Board and CEO. This approach allows the Board to elect the most qualified Director as Chairman of the Board while also maintaining the ability to separate the Chairman of the Board and CEO roles when necessary or appropriate. For example, as of September 10, 2012, we separated the positions of Chairman of

In 2018 the Board and CEO in light of the fact that our then-recently elected CEO was both new to the Company and had not previously served on a public company board of directors. Prior to this separation the positions of Chairman of the Board and CEO were combined. Currently, F. Nicholas Grasberger III, serves as our President & CEO, a position he has held since August 1, 2014. In this role, Mr. Grasberger is responsible for managing theday-to-day operations of the Company and for planning, formulating and coordinating the development and execution of our corporate strategy, policies, goals and objectives. David C. Everitt currently serves as theNon-Executive Chairman of the Board.

In the event the Board determines that the same individual should serve as both Chairman of the Board and CEO, the Board will establish an independent Lead Director position. The individual serving as Lead Director will be selected by the independent Directors and will have responsibilities similar to those of theNon-Executive Chairman of the Board. The Board’s Corporate Governance Principles currently indicateIn addition, the responsibilities of anBoard elected David C. Everitt as independent Lead Director ifof the position was established.Board. When the Board appointed Mr. Everitt as the Lead Director, the Board reviewed the Lead Director’s role and responsibilities to ensure responsible oversight, including taking into account feedback received from existing investors (see “Engagement Regarding Leadership Structure” below).

As Lead Director, Mr. Everitt has the following responsibilities, which are set forth in the Company’s Corporate Governance Principles:

Establishing the agenda for the executive sessions of the independent directors;

Calling meetings of the independent directors, in addition to the executive sessions of independent directors held after each Board meeting;

Chairing the executive sessions and other meetings of the independent directors;

Communicating the result of meetings of the independent directors to the Chairman and other members of management, as appropriate;

Regularly consulting with the Chairman;

Discussing the schedule and agenda for the Board meetings with the Chairman;

Approving the meeting schedules to assure that there is sufficient time for discussion of all agenda items;

Presiding at Board meetings in the absence of the Chairman;

Reviewing information that is sent to the Board and all critical communications to the Board; and

Being available for consultation and direct communication at the request of major stockholders.

Finally, the Board has established three standing committees to assist with its oversight responsibilities: (1) the Audit Committee; (2) the Management Development and Compensation Committee (the “MD&C Committee”); and (3) the Nominating and Corporate Governance Committee (the “Nominating Committee”). Each of the Audit Committee, MD&C Committee and Nominating Committee is comprised entirely of independent Directors.

Engagement Regarding Leadership Structure

In order to continuously evaluate the Company’s governance and compensation policies and processes, we continually engage our stockholders on various issues through an extensive and thoughtful investor relations program. In addition to the Company’s outreach via investor conferences, roadshows, and other means, an engagement team specifically reached out to holders of over 60% of our outstanding shares regarding governance matters and the potential recombination of our Chairman and CEO roles before the Board elected Mr. Grasberger as Chairman. During those engagements, Harsco received valuable feedback on considerations for, and responsibilities of, a Lead Director. In addition, during those engagements Harsco also gained valuable insight on several topics, including:

Governance trends;

Environmental risk management;

Board composition and Director skills/expertise; and

Executive compensation and alignment with performance.

This feedback was shared with the Board and its relevant committees.

Board Role in Risk Oversight

Management is responsible for identifying, evaluating, managing and mitigating the Company’s exposure to risk. It is the Board’s responsibility to oversee the Company’s risk management process and to ensure that management is taking appropriate action to identify, manage and mitigate key risks. The Board administers its risk oversight responsibilities both through active review and discussion of key risks facing the Company and by delegating certain risk oversight responsibilities to committees for further consideration and evaluation. The following table summarizes the role of the Board and each of its committees in overseeing risk:

 

Governing Body

 

Role inof Risk Oversight

Board

 

   Regularly reviews the strategic plans of the Company and each of its business divisions, including risks associated therewith

   Reviews enterprise-level and other key risks identified through the Company’s enterprise risk management (“ERM”) process as well as management’s plans to mitigate those risks

   Conducts annual succession plan reviews to ensure the Company maintains appropriate succession plans for its senior officers

Audit Committee

 

   Oversees compliance with legal and regulatory requirements and the Company’s Code of Conduct and Defalcations

   Oversees financial risks, including risks relating to key accounting policies

   Oversees the Company’s ERM framework and the process for identifying, assessing and monitoring key business risks

   Reviews internal controls with the Principal Financial Officer, Principal Accounting Officer and internal auditors

   Meets regularly, including executive sessions, with representatives of the independent auditors

Governing Body

Role of Risk Oversight

 

MD&C Committee

 

   Oversees risks relating to the Company’s compensation programs*

   Oversees risks relating to the Company’s equity programs*

   Oversees the process for conducting annual risk assessments of the Company’s compensation policies and practices*

   Employs an independent compensation consultant to assist in reviewing compensation programs, including the potential risks created by the programs*

   Oversees the Company’s executive management succession planning program

 

Nominating Committee

 

   Oversees risks relating to the Company’s governance structure and other corporate governance matters and processes

   Evaluates related person transactions

   Oversees compliance with key corporate governance documents, including the Corporate Governance Principles and the Insider Trading Policy

   Oversees the delegation of risks identified in the ERM framework to the Board and its committees

 

* Further detail regarding the MD&C Committee’s review of compensation-related risks can be found under the heading “Compensation Policies and Practices as They Relate to Risk Management” of this Proxy Statement.

The decision to administer the Board’s oversight responsibilities in this manner has a key effect on the Board’s leadership and committee structure, described in more detail above.

Experiences,Experience, Skills and Qualifications

The Nominating Committee works with the full Board to determine the appropriate characteristics, skills and experiences for the Board as a whole as well as its individual members. While the Nominating Committee has not established minimum criteria for Director candidates, it has established important factors that it considers when evaluating potential candidates. These factors are set forth in the Board’s Corporate Governance Principles and include integrity and strength of character, mature judgment, strategic thinking, demonstrated leadership skills, relevant business experience, experience with international business issues and risk, public company experience, innovation, technology or information technology expertise, brand marketing experience, availability, career specialization, relevant technical skills, time and willingness to perform duties as a Director, absence of conflicts of interest, diversity and the extent to which the candidate would fill a present need on the Board. In addition, as explained in more detail below in the section entitled “Diversity,” the Board is committed to a policy of inclusiveness that requires all new Board nominees to be drawn from a pool that includes diverse candidates, with a commitment to seeking out highly qualified women and minority candidates.

In addition to evaluating new Director candidates, the Nominating Committee regularly assesses the composition of the Board in order to ensure it reflects an appropriate balance of knowledge, skills, expertise, diversity and independence. As part of this assessment, each Director is asked to identify and assess the particular experiences, skills and other attributes that qualify him or her to serve as a member of the Board. Based on the most recent assessment of the Board’s composition completed in February 2018,2019, the Nominating Committee and the Board have determined that, in light of the Company’s current business structure and strategies, the Board has an appropriate mix of Director experiences, skills, qualifications and backgrounds.

Set forth below is a general description of the types of experiences and skills the Nominating Committee and the Board believe to be particularly relevant to the Company at this time:

Leadership Experience

Leadership Experience – Directors who have demonstrated significant leadership experience over an extended period of time, especially current and former executive officers, provide the Company with valuable insights that can only be gained through years of managing complex organizations. These individuals understand both theday-to-day operational responsibilities facing senior management and the role Directors play in overseeing the affairs of large organizations. Seven of the eight nominees are current or former executive officers.

Directors who have demonstrated significant leadership experience over an extended period of time, especially current and former executive officers, provide the Company with valuable insights that can only be gained through years of

International Experience – Given the Company’s global footprint and current focus on growing its presence in emerging markets, Directors with experience in markets outside the United States are critical to the Company’s long-term success.

Innovation and Technology Experience – In light of the important role of innovation and technology to the Company’s businesses, Directors with innovation and technology experience add significant value to the Board.

General Industrial Experience – Directors that have direct experience with industrial businesses bring key insights to the strategic planning process and provide important practical experience to the Board and management.

Brand Marketing Experience – Directors with a proven track record for marketing and growing global brands bring valuable skills that can have a positive impact on the Company’s operational results, especially as it looks to leverage its brand to expand into new markets and territories.

Financial Experience – Directors with an understanding of accounting, finance and financial reporting processes, particularly as they relate to large, multi-national businesses, are critical to the Company. Accurate financial reporting is a cornerstone of the Company’s success, and Directors with financial expertise help to provide effective oversight of the Company’s financial measures and processes.

managing complex organizations. These individuals understand both theday-to-day operational responsibilities facing senior management and the role Directors play in overseeing the affairs of large organizations. Seven of the eight nominees are current or former executive officers.

International Experience

Given the Company’s global footprint and current focus on growing its presence in emerging markets, Directors with experience in markets outside the United States are critical to the Company’s long-term success.

Innovation and Technology Experience

In light of the important role of innovation and technology to the Company’s businesses, Directors with innovation and technology experience add significant value to the Board.

General Industrial Experience

Directors that have direct experience with industrial businesses bring key insights to the strategic planning process and provide important practical experience to the Board and management.

Brand Marketing Experience

Directors with a proven track record for marketing and growing global brands bring valuable skills that can have a positive impact on the Company’s operational results, especially as it looks to leverage its brand to expand into new markets and territories.

Financial Experience

Directors with an understanding of accounting, finance and financial reporting processes, particularly as they relate to large, multi-national businesses, are critical to the Company. Accurate financial reporting is a cornerstone of the Company’s success, and Directors with financial expertise help to provide effective oversight of the Company’s financial measures and processes.

A description of the most relevant experiences, skills, attributes and qualifications that qualify each Director and Director candidate to serve as a member of the Board is included in his or her biography.

Diversity

The Board believes that diversity is one of many important considerations in board composition. To ensure the Board is comprised of members with an appropriate mix of characteristics, skills, experiences and backgrounds, the Board has adopted a Board diversity policy, which is set forth in the Board’s Corporate Governance Principles as well as the Nominating Committee’s written charter. Pursuant to the diversity policy, the Board is committed to seeking out highly qualified women and minority candidates as well as candidates with diverse backgrounds, experiences and skills as part of each Board search the Company undertakes, and to ensuring that Board nominees are drawn from a pool that includes diverse candidates, including women and minority candidates.

As noted above, the Nominating Committee evaluates the current composition of the Board fromtime-to-time to ensure that the Directors reflect a diverse mix of skills, experiences, backgrounds and opinions. Depending on the current composition of the Board, the Nominating Committee may weigh certain factors, including those relating to diversity, more or less heavily when evaluating potential Director candidates.

The Board and the Nominating Committee believe that the Company’s current Directors, as a group, reflect the diverse mix of skills, experiences, backgrounds and opinions necessary to foster an effective decision-making environment and promote the Company’s culture across the globe. Each of the Company’s current Directors has significant experience working in international environments (including Directors who have lived and worked outside the United States for significant portions of their careers), and Board member experiences cover a wide range of industries, including manufacturing, rail, accounting, consulting, consumer products, industrial services and education.industries.

PROPOSALProposal 1: ELECTION OF DIRECTORSElection of Directors

The first proposal to be voted on at the Annual Meeting is the election of eight Directors, each of whom has been recommended for election by the Board. S. E. Graham and T. D. Growcock will be retiring from the Board immediately prior to the Annual Meeting in accordance with the Board’s retirement policy in the Corporate Governance Principles, and the Board’s size will decrease from ten to eight members in accordance with the Company’sby-laws. If elected, the Directors will hold office until the next annual meeting of stockholders or until their successors are elected and qualified, subject to the Board’s resignation requirement (as described in more detail below).

The Board recommends that stockholders vote “FOR” the election of each of the following nominees:

 

J. F. Earl,

K. G. Eddy,

D. C. Everitt,

F. N. Grasberger III,

C. I. Haznedar,

E. La Roche,

M. Longhi,

E. M. Purvis, Jr., and

P. C. Widman.

As discussed above, under the Company’s Restated Certificate of Incorporation, in any uncontested election, each Director nominee must receive the affirmative vote of a majority of the votes cast with respect to his or her election in order to be elected. This is known as a “majority voting standard.” If any Director nominee fails to receive more “for” votes than votes “against” for his or her election, then such Director will be required by the Company’sby-laws to tender his or her resignation to the Board for consideration. The Nominating Committee will then review the resignation and recommend to the Board whether to accept or reject it. The Board will act on the Nominating Committee’s recommendation and publicly disclose its decision within 90 days following certification of the election results. In the event the Board determines not to accept the Director’s resignation, the Board will also disclose the reasons such resignation was rejected. The Director who tendered his or her resignation will not participate in the Nominating Committee’s recommendation or the Board’s decision.

If a Director’s resignation is not accepted by the Board, then the Director who tendered that resignation will continue to serve on the Board until the 20192020 Annual Meeting of Stockholders and until his or her successor is elected and qualified, or until his or her earlier death, unconditional resignation or removal.

Nominees for Director

All of the following Directors have been recommended for election by the Nominating Committee, and the Board has approved all such recommendations. Two current Directors, S. E. Graham and T. D. Growcock, are not being nominated for election because each of them will be retiring from the Board immediately prior to the Annual Meeting in accordance with the Board’s retirement policy in the Corporate Governance Principles. Each of the following nominees for Director has accepted the nomination and has agreed to serve as a Director if elected by the Company’s stockholders.

The information set forth below states the name of each nominee for Director standing forre-election, his or her age (as of March 1, 2018)2019), a listing of present and recent employment positions, the year in which he or she first became a Director of the Company, other directorships held, the nominee’s specific experience, qualifications, attributes or skills that qualify him or her to serve as a Director and the committees of the Board on which the individual serves.

Nominees for Election as Directors with Terms Expiring in 2019

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James F. EarlDirector since 2012, Age 61

Retired Executive Vice President of GATX Corporation (“GATX”) (one of the world’s leading railcar and locomotive leasing companies). Mr. Earl served as an executive with GATX since 1988, and was most recently Executive Vice President of GATX from 2006 until his retirement on March 1, 2018 and President of the GATX Rail International business segment and CEO of American Steamship Company (a division of GATX) from 2012 until his retirement on March 1, 2018. Prior to GATX, Mr. Earl held management positions with two railroad companies, Soo Line Railroad and Southern Pacific Transportation Company. He is a past recipient of the Norman W. Seip Award for Industry Excellence in the rail finance industry.

With several decades of senior management experience in the rail industry, Mr. Earl contributes to the Board a sophisticated and informed perspective on one of the Company’s major business units. Furthermore, as the retired President of the GATX Rail International business segment, Mr. Earl has gained substantial international business experience, which enhances his contributions to the Board.

Committee Memberships: MD&C (Chair), Nominating

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Kathy G. EddyDirector since 2004, Age 67

Founding partner of McDonough, Eddy, Parsons & Baylous, AC (a public accounting firm) since 1981. Chairman of the Board of Directors of the American Institute of Certified Public Accountants (“AICPA”) between 2000 and 2001. Current member of the AICPA Governing Council. Member of the Board of Directors, Executive Committee and Chairman of the Audit Committee of West Virginia United Health System, Inc. since 2011.

Ms. Eddy brings substantial financial accounting and consulting experience to our Board, having served as a certified public accountant for over 30 years. She is a past recipient of the AICPA gold medal for distinguished service, and she continues to serve the AICPA as a member of the Risk Management and Internal Control Advisory Panel. Ms. Eddy also gained significant leadership experience while serving as Chairman of the West Virginia Jobs Investment Trust Board from 1993 to 1997. Ms. Eddy also served as Chairman of the Board of Directors of Camden Clark Memorial Hospital in Parkersburg, West Virginia from 1997 to 2000, and she continues to serve on Camden Clark’s Board of Directors and on its Executive Committee. Ms. Eddy’s extensive accounting career, her long tenure as a member of the Company’s Board and Audit Committee (where she served as Chairman from 2007 to 2010), her service as Chairman of the Nominating Committee and her previous service as Lead Director, as well as her demonstrated leadership skills, make her an integral part of our Board.

Committee Memberships: Audit, Nominating (Chair)

Nominees for Election as Directors with Terms Expiring in 2020

LOGO

David C. EverittDirector since 2010, Age 65

Non-Executive Chairman of the Company since August 1, 2014. Interim President & CEO of the Company from February 28, 2014 to July 30, 2014. FormerCo-Leader of the Agriculture and Turf division of Deere & Company (the world’s largest manufacturer of agricultural equipment and a major U.S. producer of construction, forestry, and lawn and grounds care equipment), the company’s largest operating group. Mr. Everitt served as President – North America, Asia, Australia,Sub-Saharan and South Africa and Global Tractor and Turf Products from 2009 until his retirement from Deere & Company in September 2012. Prior to that, he had served as President, Agricultural Division – North America, Australia, Asia and Global Tractor and Implement Sourcing since January 2006. Mr. Everitt is a member of the Board of Directors of Allison Transmission, where he serves on the Nominating and Corporate Governance Committee, Brunswick Corporation, where he serves on the Nominating and Corporate Governance Committee and the Human Resources and Compensation Committee, and Nutrien Ltd. (created by the merger of Agrium, Inc. and Potash Company of America). He is also a member of the Board of Directors of the National Business Aviation Association.

Mr. Everitt’s service as former Interim President & CEO of the Company provides him with comprehensive knowledge of the various segments of our business and of the critical internal and external challenges facing the Company and the industries in which it operates. His leadership within the Company, as well his senior leadership roles across various Deere & Company entities, combined with his engineering experience and global expertise, make him a valuable Board contributor.

Committee Memberships: None

LOGO

F. Nicholas Grasberger IIIDirector since 2014, Age 54

President & Chief Executive Officer since August 1, 2014. Mr. Grasberger has held financial and operations executive positions throughout his career. Prior to joining Harsco in 2013, Mr. Grasberger served as the Managing Director of the multinational Precision Polymers Division of Fenner Plc from March 2011 to April 2013. Prior to joining Fenner, he served as Senior Vice President and Chief Financial Officer of Armstrong Holdings, Inc., the parent company of Armstrong World Industries from January 2005 to March 2009, and later as CEO of Armstrong’s Building Products division from April 2009 to November 2009. Previously, Mr. Grasberger served as the Chief Financial Officer for Kennametal, Inc. and before that as Corporate Treasurer and director of the corporate planning process at H. J. Heinz Company. He started his career with USX Corporation.

Mr. Grasberger’sday-to-day leadership of Harsco Corporation provides an invaluable contribution to the Company’s Board of Directors. From his previous executive positions with other large public companies serving in accounting, financial and operational roles, Mr. Grasberger brings leadership, vision and extensive business operating, financing and global experience to the Company.

Committee Memberships: None

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Elaine La RocheDirector since 2014, Age 68

CEO of China International Capital Corporation US since January 2016. Previously, Senior Advisor to China International Capital Corporation US (a Chinese financial services institution) from March 2011 until January 2016. Prior to that time, Ms. La Roche was with JPMorgan Chase & Co. (an international financial services institution) in Beijing, where she served as Vice Chairman, J.P. Morgan China Securities from 2008 to 2010. Over the course of a20-yearJames F. Earl career at Morgan Stanley (an international financial services institution), Ms. La Roche rose from Associate to Managing Director, serving in a variety of roles including Chief of Staff to the Chairman, President and Head of the Asia Desk, and Chief Executive Officer of China International Capital Corporation in Beijing from 1997-2000. Ms. La Roche currently serves as a director of Marsh & McLennan Companies, where she sits on the Audit Committee and Finance Committee, and she served on the board of China Construction Bank Corporation for nine years.

With more than 30 years’ experience as a financial services executive, Ms. La Roche brings extensive financial expertise, business acumen and operational oversight skills to the Board. Her focus on the Asian markets, specifically with regard to China where she lived and worked for various stretches of time over the last 18 years, is also a valuable asset to the Board. Her membership on other public company boards, including previous experience on anon-U.S. company board, further enhances her contribution to the Board.

Committee Memberships: Audit; Nominating

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Mario LonghiDirector since 2017, Age 63

Retired President & Chief Executive Officer and Director of United States Steel Corporation (“US Steel”). Mr. Longhi served as President & Chief Executive Officer and Director of US Steel from September 2013 until February 2017, and as Chief Executive Officer and Director of US Steel from February 2017 until his retirement in May 2017. From July 2012 until September 2013 Mr. Longhi served in various other senior management positions within US Steel. Prior to joining US Steel, Mr. Longhi spent six years at Gerdau Ameristeel Corporation, serving first as President from 2005 through 2006 and then additional in the role of Chief Executive Officer from 2006 until 2011. Before Gerdau Ameristeel, Mr. Longhi spent 23 years at Alcoa, Inc., which he joined in 1982 as a construction superintendent for the company’s Alumar Refinery in his native Brazil. Mr. Longhi received a Bachelor’s degree in metallurgical engineering from the Institute Mauá de Tecnologica in São Paulo, Brazil in 1977. Mr. Longhi was named 2015 Steelmaker of the Year by the Association for Iron and Steel Technology and CEO of the Year at the 2015 Platts Global Metals Awards. He was also honored by American Metal Market in 2011 with an Award for Steel Excellence as Industry Ambassador/Advocate of the Year. In January 2017, Mr. Longhi was invited to participate in U.S. President Donald Trump’s Manufacturing Jobs Initiative. Mr. Longhi is currently a director of ITT Inc.

Mr. Longhi’s career as one of the leading global steel industry executives brings a valuable addition to the Board. His experience serving as a CEO of multinational steel manufacturers not only adds considerable knowledge of our largest customer base to our Board, it also adds significant operational knowledge andin-depth understanding of our global business needs. Mr. Longhi further contributes leadership operational knowledge to the Board. His membership on other public company boards also enhances his contribution to the Board.

Committee Memberships: Audit, MD&C

Director since 2012, Age 62

Retired Executive Vice President of GATX Corporation (“GATX”) (one of the world’s leading railcar and locomotive leasing companies). Mr. Earl served as an executive with GATX since 1988 and was most recently Executive Vice President of GATX from 2006 until his retirement on March 1, 2018 and President of the GATX Rail International business segment and CEO of American Steamship Company (a division of GATX) from 2012 until his retirement on March 1, 2018. Prior to GATX, Mr. Earl held management positions with two railroad companies, Soo Line Railroad and Southern Pacific Transportation Company. He is a past recipient of the Norman W. Seip Award for Industry Excellence in the rail finance industry.

With several decades of senior management experience in the rail industry, Mr. Earl contributes to the Board a sophisticated and informed perspective on one of the Company’s major business units. Furthermore, as the retired President of the GATX Rail International business segment, Mr. Earl has gained substantial international business experience, which enhances his contributions to the Board.

Committee Memberships: MD&C (Chair), Nominating

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Edgar (Ed) M. Purvis, Jr.Director since 2018, Age 60

Retired Executive Vice President and Chief Operating Officer of Emerson Electric Co. (Emerson). Mr. Purvis served as Executive Vice President and Chief Operating Officer at Emerson from January 2015 until his retirement in November 2017. From 2008 until January 2015, Mr. Purvis served as Executive Vice President responsible for Climate Technologies at Emerson. Prior to working for Emerson, Mr. Purvis served in a number of senior management positions with Copeland Corporation from 1983 until it was acquired by Emerson in 2008. Mr. Purvis is a former member of the executive board of theAir-Conditioning, Heating and Refrigeration Institute, holds a bachelor’s degree in mechanical engineering from the University of Tennessee, a master’s degree in mechanical engineering from the University of Michigan – Dearborn, and a master’s degree in business administration from Capital University in Columbus, Ohio.

During Mr. Purvis’ career at Emerson he was responsible for Emerson’sday-to-day business activities, which included financial reviews, global procurement, logistics, information technology, product development and strategic planning. His experience brings to the Board valuable insight into the operational challenges for a global organization. In addition, Mr. Purvis brings strong business acumen and leadership skills to the Board.

Committee Memberships: MD&C, Nominating

LOGO

Phillip C. WidmanDirector since 2014, Age 63

Retired Senior Vice President and CFO of Terex Corporation (a global manufacturer delivering customer-driven solutions for a wide range of commercial applications, including the construction, infrastructure, quarrying, mining, manufacturing, transportation, energy and utility industries). Mr. Widman held this position from 2002 until his retirement in March 2013. Prior to that, he served as Executive Vice President and CFO of Philip Services Corporation (an integrated environmental and industrial service corporation) from 1998 to 2001. Mr. Widman currently serves as a director of Sturm, Ruger & Company, Inc., where he also serves as Chairman of the Audit Committee, as a member of the Risk Oversight Committee and as a member of the Ruger Capital Policy Committee; and Vectrus, Inc. where he serves on the Audit Committee and Compensation and Personnel Committee. He served as a member of the Board of Directors and Nominating and Governance Committee, and as Chairman of the Audit Committee, of Lubrizol Corporation from November 2008 until its acquisition by Berkshire Hathaway in September 2011.

Having served as a CFO for multiple businesses operating in the industrial services and manufacturing markets for more than 15 years, Mr. Widman adds considerable financial expertise, business management skills and operational knowledge to the Board. His membership on other public company boards further enhances his contribution to the Board.

Committee Memberships: Audit (Chair); MD&C

LOGO

Kathy G. Eddy

Director since 2004, Age 68

Founding partner of McDonough, Eddy, Parsons & Baylous, AC (a public accounting firm) since 1981. Chairman of the Board of Directors of the American Institute of Certified Public Accountants (“AICPA”) between 2000 and 2001. Current member of the AICPA Governing Council. Member of the Board of Directors, Executive Committee and Chairman of the Audit Committee of West Virginia United Health System, Inc. since 2011.

Ms. Eddy brings substantial financial accounting and consulting experience to our Board, having served as a certified public accountant for over 30 years. She is a past recipient of the AICPA gold medal for distinguished service, and she continues to serve the AICPA as a member of the Governing Council. Ms. Eddy also gained significant leadership experience while serving as Chairman of the West Virginia Jobs Investment Trust Board from 1993 to 1997. In addition, Ms. Eddy served as Chairman of the Board of Directors of Camden Clark Memorial Hospital in Parkersburg, West Virginia from 1997 to 2000, and she continues to serve on Camden Clark’s Board of Directors and on its Executive Committee. Ms. Eddy’s extensive accounting career, her long tenure as a member of the Company’s Board and Audit Committee (where she served as Chairman from 2007 to 2010), her service as Chair of the Nominating Committee and her previous service as Lead Director, as well as her demonstrated leadership skills, make her an integral part of our Board.

Committee Memberships: Audit, Nominating (Chair)

Nominees for Election as Directors with Terms Expiring in 2020 - Contd...

LOGO

David C. Everitt

Director since 2010, Age 66

Independent Lead Director of the Company since October 22, 2018. FormerNon-Executive Chairman of the Company from August 1, 2014 to October 22, 2018. Interim President & CEO of the Company from February 28, 2014 to July 30, 2014. FormerCo-Leader of the Agriculture and Turf division of Deere & Company (the world’s largest manufacturer of agricultural equipment and a major U.S. producer of construction, forestry, and lawn and grounds care equipment), the company’s largest operating group. Mr. Everitt served as President – North America, Asia, Australia,Sub-Saharan and South Africa and Global Tractor and Turf Products from 2009 until his retirement from Deere & Company in September 2012. Prior to that, he had served as President, Agricultural Division – North America, Australia, Asia and Global Tractor and Implement Sourcing since January 2006. Mr. Everitt is a member of the Board of Directors of Allison Transmission, where he serves on the Nominating and Corporate Governance Committee, Brunswick Corporation, where he serves on the Nominating and Corporate Governance Committee and the Human Resources and Compensation Committee, and Nutrien Ltd., where he serves on the Audit Committee and the Human Resources and Compensation Committee. Mr. Everitt previously served on the Board of Directors of Agrium, Inc. until its merger with Potash Corporation, which formed Nutrien Ltd. He is also a member of the Board of Directors of the National Business Aviation Association.

Mr. Everitt’s service both as formerNon-Executive Chairman and as former Interim President & CEO of the Company provides him with comprehensive knowledge of the various segments of our business and of the critical internal and external challenges facing the Company and the industries in which it operates. His leadership within the Company, as well his senior leadership roles across various Deere & Company entities, combined with his engineering experience and global expertise, make him a valuable Board contributor.

Committee Memberships: None

LOGO

F. Nicholas Grasberger III

Director since 2014, Age 55

Chairman, President and Chief Executive Officer since October 22, 2018. President and Chief Executive Officer from August 1, 2014 to October 22, 2018. Mr. Grasberger served as Senior Vice President and Chief Financial Officer from April 2013 to November 2014, and as President and Chief Operating Officer from April 2014 to August 2014. Prior to joining Harsco in 2013, Mr. Grasberger served as the Managing Director of the multinational Precision Polymers division of Fenner Plc from March 2011 to April 2013. From April 2009 to November 2009 he served as Executive Vice President and Chief Executive Officer of Armstrong Building Products. From January 2005 to March 2009 he served as Senior Vice President and Chief Financial Officer of Armstrong World Industries, Inc. Prior to his employment with Armstrong, Mr. Grasberger served as Vice President and Chief Financial Officer of Kennametal Inc. and before that as Corporate Treasurer and Director of the corporate planning process at H.J. Heinz Company.

Mr. Grasberger’sday-to-day leadership of Harsco Corporation provides an invaluable contribution to the Company’s Board of Directors. From his previous executive positions with other large public companies serving in accounting, financial and operational roles, Mr. Grasberger brings leadership, vision and extensive business operating, financing and global experience to the Company.

Committee Memberships: None

Nominees for Election as Directors with Terms Expiring in 2020 - Contd...

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Carolann I. Haznedar

Director since 2018, Age 59

Retired Senior Vice President Americas, DuPont Performance Materials. Ms. Haznedar held various positions with E.I. du Pont de Nemours and Company from August 1981 until June 2016. Most recently, she served as Senior Vice President Americas, DuPont Performance Materials from September 2015 until June 2016, Senior Vice President Americas, Packaging & Industrial Polymers from October 2011 until September 2015, and Senior Vice President Global, Packaging & Industrial Polymers from July 2008 until October 2011. Prior to E.I. du Pont de Nemours and Company, Ms. Haznedar worked for Edo Aire Corporation. Ms. Haznedar is currently a director of Allison Transmission, where she serves on the Audit Committee.

Ms. Haznedar’s career at E.I. du Pont de Nemours included responsibility for their multi-billion dollar global packaging and industrial polymers business. Other global businesses she led include Engineering Polymers focused in the automotive industry, Kevlar® Life Protection, and Elastomers serving industrial markets. She started at DuPont in manufacturing at one of their largest plants. Ms. Haznedar brings strong operational excellence and business leadership to our Board. In addition, her experience in driving growth and innovation, and her deep global experience with lean organizations, identifying and developing talent, combined with her outstanding record of achieving significant profitable growth is a benefit to our Board.

Committee Memberships: Audit, Nominating

LOGO

Mario Longhi

Director since 2017, Age 64

Retired President & Chief Executive Officer and former Director of United States Steel Corporation (“US Steel”). Mr. Longhi served as Chief Executive Officer of US Steel from September 2013 until his retirement in June 2017. From July 2012 until September 2013 Mr. Longhi served in various other senior management positions within US Steel. Prior to joining US Steel, Mr. Longhi spent six years at Gerdau Ameristeel Corporation, serving first as President from 2005 through 2006 and then additionally in the role of Chief Executive Officer from 2006 until 2011. Before Gerdau Ameristeel, Mr. Longhi spent 23 years at Alcoa, Inc., which he joined in 1982 as a construction superintendent for the company’s Alumar Refinery in his native Brazil. Mr. Longhi received a Bachelor’s degree in metallurgical engineering from the Institute Mauá de Tecnologica in São Paulo, Brazil in 1977. Mr. Longhi was named 2015 Steelmaker of the Year by the Association for Iron and Steel Technology and CEO of the Year at the 2015 Platts Global Metals Awards. He was also honored by American Metal Market in 2011 with an Award for Steel Excellence as Industry Ambassador/Advocate of the Year. In January 2017, Mr. Longhi was invited to participate in U.S. President Donald Trump’s Manufacturing Jobs Initiative. Mr. Longhi is currently a director of ITT Corp., where he serves on the Compensation and Personnel Committee.

Mr. Longhi’s career as one of the leading global steel industry executives brings a valuable addition to the Board. His experience serving as a CEO of multinational steel manufacturers not only adds considerable knowledge of our largest customer base to our Board, it also adds significant operational knowledge andin-depth understanding of our global business needs. Mr. Longhi also contributes operational leadership knowledge to the Board. His membership on other public company boards also enhances his contribution to the Board.

Committee Memberships: Audit, MD&C

Nominees for Election as Directors with Terms Expiring in 2020 - Contd...

LOGO

Edgar (Ed) M. Purvis, Jr.

Director since 2018, Age 61

Retired Executive Vice President and Chief Operating Officer of Emerson Electric Co. (Emerson). Mr. Purvis served as Executive Vice President and Chief Operating Officer at Emerson from January 2015 until his retirement in November 2017. From 2008 until January 2015, Mr. Purvis served as Executive Vice President responsible for Climate Technologies at Emerson. Prior to working for Emerson, Mr. Purvis served in a number of senior management positions with Copeland Corporation from 1983 until it was acquired by Emerson in 2008. Mr. Purvis is a former member of the executive board of theAir-Conditioning, Heating and Refrigeration Institute, holds a bachelor’s degree in mechanical engineering from the University of Tennessee, a master’s degree in mechanical engineering from the University of Michigan – Dearborn, and a master’s degree in business administration from Capital University in Columbus, Ohio.

During Mr. Purvis’ career at Emerson he was responsible for Emerson’sday-to-day business activities, which included financial reviews, global procurement, logistics, information technology, product development and strategic planning. His experience brings to the Board valuable insight into the operational challenges for a global organization. In addition, Mr. Purvis brings strong business acumen and leadership skills to the Board.

Committee Memberships: MD&C, Nominating

LOGO

Phillip C. Widman

Director since 2014, Age 64

Retired Senior Vice President and CFO of Terex Corporation (a global manufacturer delivering customer-driven solutions for a wide range of commercial applications, including the construction, infrastructure, quarrying, mining, manufacturing, transportation, energy and utility industries). Mr. Widman held this position from 2002 until his retirement in March 2013. Prior to that, he served as Executive Vice President and CFO of Philip Services Corporation (an integrated environmental and industrial service corporation) from 1998 to 2001. Mr. Widman currently serves as a director of Sturm, Ruger & Company, Inc., where he also serves as Chairman of the Audit Committee, as a member of the Risk Oversight Committee and as a member of the Ruger Capital Policy Committee; and Vectrus, Inc. where he serves on the Audit Committee and Compensation and Personnel Committee. He served as a member of the Board of Directors and Nominating and Governance Committee, and as Chairman of the Audit Committee, of Lubrizol Corporation from November 2008 until its acquisition by Berkshire Hathaway in September 2011.

Having served as a CFO for multiple businesses operating in the industrial services and manufacturing markets for more than 15 years, Mr. Widman adds considerable financial expertise, business management skills and operational knowledge to the Board. His membership on other public company boards further enhances his contribution to the Board.

Committee Memberships: Audit (Chair), MD&C

MEETINGS AND COMMITTEES OF THE BOARDMeetings and Committees of the Board

Meetings of the Board and Director Attendance at Annual Meeting

The Board held sixfive meetings during the fiscal year ended December 31, 2017.2018. Each Director attended at least 75% of the aggregate number of Board and applicable committee meetings held during the period of 20172019 for which he or she served as a Director.

It is our policy to request that all Board members attend annual stockholder meetings. However, we also recognize that personal attendance by all Directors is not always possible. All Directors that served on the Board at the time of the Annual Meeting of Stockholders in 20172018 attended the Annual Meeting of Stockholders in 2017.2018.

Committees of the Board

The Board has established standing Audit, Management Development and Compensation, and Nominating and Corporate Governance committees. Membership in each of these committees, as of March 1, 2018,2019, is shown in the following chart:

 

Audit

 

Management Development


and Compensation

 

Nominating and


Corporate Governance

 

Phillip C. Widman (Chair)

 

 

James F. Earl (Chair)

 

 

Kathy G. Eddy (Chair)

 

 

Kathy G. Eddy

 

 

 

Stuart E. Graham*

James F. Earl

Terry D. Growcock*

Terry D. Growcock*

Stuart E. Graham*

Elaine La Roche

 

Mario Longhi

 

 

 

 

Elaine La RocheJames F. Earl

 

 

Mario Longhi

Carolann I. Haznedar

 

 

 

Edgar M. Purvis, Jr.

 

 

 

Edgar M. Purvis, Jr.

Carolann I. Haznedar

 

Mario Longhi

 

 

Phillip C. Widman

 

 

 

*Retiring from the Board immediately prior to the Annual Meeting.

Edgar M. Purvis, Jr.

All Directors listed above, including committee chairs, served on the respective committees listed above for the entire 20172018 fiscal year, except as follows:

 

Audit CommitteeMr. LonghiMs. Haznedar was added on November 8, 2017.October 22, 2018.

Management Development and Compensation Committee – Mr. Longhi was added on November 8, 2017. Mr. Purvis was added on February 13, 2018.

Nominating and Corporate Governance CommitteeMr. PurvisMs. Haznedar was added on February 13,October 22, 2018.

The table below identifies the number of meetings held by each committee in 2017,2018, provides a brief description of the duties and responsibilities of each committee, and provides general information regarding the location of each committee’s charter:

 

Committee  

 

 

Meetings  

 

  

Duties and& Responsibilities

 

 

General Information

 

Audit

 7

5

  

  Oversee financial reporting processes, including meeting with members of management, the external auditors and the internal auditors;

  Review and approve audit andnon-audit services;

  Review results of the annual audit;

  Review adequacy of internal controls;

 

 

  Established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

   Reviewed its charter in 2017 and determined no changes were necessary

 

Committee  

 

 

Meetings  

Duties & Responsibilities

 

 

Duties and Responsibilities

 

General Information

 

     

   Review results of the annual audit;

   Review adequacy of internal controls;

  Discuss (with management and the independent auditors) the Company’s guidelines, policies and controls with respect to risk assessments and risk management;

  Oversee the Company’s ERM framework and the process for identifying, assessing and monitoring key business risks;

  Oversee (in conjunction with the Nominating Committee) the Company’s compliance program;

  Review and discuss Quarterly Reports on Form10-Q and Annual Report on Form10-K prior to filing with the Securities and Exchange Commission (the “SEC”); and

  Review and discuss Quarterly Earnings Releases prior to their release.

 

 

  Copy of the Audit Committee charter can be viewed at the Corporate Governance section of our website atwww.harsco.com/about-us

  See “Report of the Audit Committee”

MD&C

 5

6

  

  Establish and review the Company’s overall executive compensation philosophy;

philosophy, structure and operation to ensure they do not encourage excessive risk taking;

  Review and approve goals and objectives relevant to executive officer compensation;

   Evaluate executive officercompensation and evaluate performance relative to established goals and objectives and determine and approve compensation based on the performance evaluation;

objectives;

  Evaluate and approve (or recommend that the Board approve) compensation grants to executive officers under annual and incentive compensation plans, including equity-based compensation, and other executive benefits of executive officers;

  Review incentive compensation plans and equity-based compensation plans; and

  Oversee the executive officer assessment, development and succession planning process.

 

   Reviewed its charter in 2017 and determined no changes were necessary

  Copy of the MD&C Committee charter can be viewed at the Corporate Governance section of our website atwww.harsco.com/about-us

  See “Compensation Committee Report”

Committee  

Meetings  

Duties and Responsibilities

General Information

   Review the overall structure and operation of the Company’s compensation programs to ensure they do not encourage excessive risk taking;

   Oversee other benefit and compensation plans applicable to executive officers;

   Oversee the executive officer assessment, development and succession planning process; and

   Review and discuss with management the Compensation Discussion & Analysis to be included in the proxy statement.

Nominating

 3

5

  

  Establish criteria for the selection of new Directors to serve on the Board;

  Identify individuals qualified as candidates to serve on the Board and recommend Director candidates for election to the Board;

  Consider matters relating to the retirement of Board members, including term limits or age caps;

  Review matters relating to Director and Director nominee independence;

 

   Review and make recommendations to the Board regarding Board and committee size and composition;

   Oversee the evaluation of the Board and each of its committees;

   Make recommendations to the Board regardingnon-employee Director compensation, including equity compensation;

   Oversee the Company’s corporate governance program and Corporate Governance Principles;

   Oversee (in conjunction with Audit Committee) the Company’s compliance program; and

   Oversees the delegation of risks identified in the ERM framework to the Board and its committees.

 

   Reviewed its charter in 2017 and determined no changes were necessary

  Copy of the Nominating Committee charter can be viewed at the Corporate Governance section of our website atwww.harsco.com/about-us

  Additional details regarding the role of the Nominating Committee can be found in the section entitled “Nominations of Directors”

 

Committee  

  Meetings  

Duties & Responsibilities

General Information

  Review and make recommendations to the Board regarding Board and committee size and composition;

  Oversee the evaluation of the Board and each of its committees;

  Make recommendations to the Board regardingnon-employee Director compensation, including equity compensation;

  Oversee the Company’s corporate governance program and Corporate Governance Principles;

  Oversee (in conjunction with Audit Committee) the Company’s compliance program; and

  Oversee the delegation of risks identified in the ERM framework to the Board and its committees.

CORPORATE GOVERNANCECorporate Governance

We have a long-standing commitment to good corporate governance practices. These practices come in many different forms and apply at all levels of our organization. They provide the Board and our senior management with a framework that defines responsibilities, sets high standards of professional and personal conduct and promotes compliance with our various financial, ethical, legal and other obligations and responsibilities.

Corporate Governance Principles

The Board has adopted Corporate Governance Principles that, along with the charters of the Board committees, provide the framework for our Board’s operation and governance. The Nominating Committee is responsible for overseeing and reviewing our Corporate Governance Principles at least annually and recommending any proposed changes to the Board for approval. The Corporate Governance Principles are available on our website atwww.harsco.com/about-us in the Corporate Governance section.

Code of Conduct

We have adopted a Code of Conduct applicable to our Directors, officers and employees worldwide. The Code of Conduct is issued in booklet form and an online training program facilitates new employee orientation and individual refresher training. Our Code of Conduct is produced in over 20 languages. The Code of Conduct, including amendments thereto or waivers thereof granted to a Director or executive officer, if any, can be viewed on our website atwww.harsco.com/about-us in the Corporate Governance section.

Stockholder and Interested Party Communications with Directors

The Board has established a formal process for stockholders and interested parties to communicate directly with theNon-Executive Chairman, Lead Director, thenon-management Directors or with any individual member of the Board. Stockholders and interested parties may contact any member of the Board by writing to the specific Board member in care of our Corporate Secretary at our Corporate Headquarters (350 Poplar Church Road, Camp Hill, PA 17011). Our Corporate Secretary will forward any such correspondence to the applicable Board member; provided, however, that any such correspondence that is considered by our Corporate Secretary to be improper for submission to the intended recipients will not be provided to such Directors. In addition, Board members, including theNon-Executive Chairman, Lead Director, can be contacted bye-mail atBoardofDirectors@harsco.com.

Director Independence

The Board has affirmatively determined that the following nineseven Directors are independent pursuant to the applicable independence requirements set forth in the NYSE Rules and by the SEC because they either have no relationship with the Company (other than as a Director and stockholder) or because any relationship they have with the Company is immaterial: Messrs. Earl, Everitt, Graham, Growcock, Longhi, Purvis and Widman and Ms. Eddy and Ms. La Roche.Haznedar. In making these independence determinations, the Board, in consultation with the Nominating Committee, reviewed the direct and indirect relationships between each Director and the Company and its subsidiaries, as well as the compensation and other payments each Director received from or made to the Company and its subsidiaries.

Nominations of Directors

The Nominating Committee is responsible for overseeing the selection of qualified nominees to serve as members of the Board. Consistent with the Board diversity policy, in administering its oversight responsibilities, the Nominating Committee is committed to seeking out highly qualified women and minority candidates as well as candidates with diverse backgrounds, experiences and skills as part of each Board search the Company undertakes, and to ensuring that Board nominees are drawn from a pool that includes diverse candidates, including women and minority candidates. Beyond those specific parameters, the Nominating Committee has not

adopted formal selection procedures, but instead utilizes general guidelines that allow it to adjust the selection process to best satisfy the objectives established for any Director search. The Nominating Committee considers Director candidates recommended by any reasonable source, including current Directors, management and stockholders. In the case of Mr. Longhi and Mr. Purvis,Ms. Haznedar, the Nominating Committee

considered the recommendations of a third-party search firm. Pursuant to its charter, the Nominating Committee has the authority to retain search firms to assist it in identifying candidates to serve as Directors and to approve the fees and other retention terms of any such firms.

The Nominating Committee evaluates all Director candidates in the same manner, regardless of the source of the recommendation of such Director candidate.

The Nominating Committee will consider recommendations for Director candidates from stockholders if such recommendations are submitted in writing to:

Corporate Secretary

Harsco Corporation

350 Poplar Church Road,

Camp Hill, PA 17011

Any such written recommendation from stockholders must set forth the following information:

 

The full legal name, address and telephone number of the stockholder recommending the Director candidate for consideration and whether that stockholder is acting on behalf of or in concert with other beneficial owners, and, if so, the same information with respect to them;

 

The number of shares held by the recommending stockholder as of a recent date and how long such shares have been held, or, if such shares are held in street name, reasonable evidence satisfactory to the Nominating Committee of such stockholder’s ownership of such shares as of a recent date;

 

The full legal name, address and telephone number of the proposed nominee for Director;

 

A reasonably detailed description of the proposed nominee’s background, experience and qualifications, financial literacy and expertise, as well as any other information required to be disclosed in the solicitation of proxies for election of directors pursuant to the rules of the SEC, and the reasons why, in the opinion of the recommending stockholder, the proposed nominee is qualified and suited to be one of our Directors;

 

Disclosure of any direct or indirect relationship (or arrangements or understandings) between the recommending stockholder and the proposed nominee (or any of their respective affiliates);

 

Disclosure of any direct or indirect relationship between the proposed nominee and the Company, any of our employees or Directors, any beneficial owner of more than 5% of our common stock, or any of their respective affiliates;

 

Disclosure of any direct or indirect interest that the recommending stockholder or proposed nominee may have with respect to any pending or potential proposal or other matter to be considered at this Annual Meeting or any subsequent meeting of our stockholders; and

 

A written, signed and notarized acknowledgement from the proposed nominee consenting to such recommendation by the recommending stockholder, confirming that he or she will serve as a Director, if so elected, and consenting to our undertaking of an investigation into his or her background, experience and qualifications, any direct or indirect relationship with the recommending stockholder, the Company, our Directors or management or 5% stockholders, or interests in proposals or matters, and any other matter reasonably deemed relevant by the Nominating Committee to its considerations of such person as a potential Director candidate.

his or her background, experience and qualifications, any direct or indirect relationship with the recommending stockholder, the Company, our Directors or management or 5% stockholders, or interests in proposals or matters, and any other matter reasonably deemed relevant by the Nominating Committee to its considerations of such person as a potential Director candidate.

This information must be submitted as provided under the heading “STOCKHOLDERSTOCKHOLDER PROPOSALS AND NOMINATIONS FOR PRESENTATION AT 20192020 ANNUAL MEETING OF STOCKHOLDERS.STOCKHOLDERS.

There were no material changes to the procedures relating to stockholder nominations during 2017,2018, and there have been no such changes to date in 2018.2019. The Nominating Committee believes that these procedural requirements are intended solely to ensure that it has a sufficient basis on which to assess potential Director candidates and are not intended to discourage or interfere with appropriate stockholder nominations. The Nominating Committee does not believe that any such requirements subject any stockholder or proposed nominee to any unreasonable burden. The Nominating Committee and the Board reserve the right to change the above procedural requirements from time to time and/or to waive some or all of the foregoing requirements with respect to certain nominees, but any such waiver shall not preclude the Nominating Committee from insisting upon compliance with any and all of the above requirements by any other recommending stockholder or proposed nominees.

NON-EMPLOYEENon-Employee DIRECTOR COMPENSATIONDirector Compensation

The general policy of our Board is that compensation fornon-employee Directors should be competitive with similarly situated companies and should be comprised of a mix of cash and equity. Our Nominating Committee annually reviews market data regarding comparable director compensation programs. This data is prepared by management and the independent compensation consultant utilizing several broad board compensation studies completed within one year of the Nominating Committee’s review.

The compensation structure fornon-employee Directors for 20172018 was as follows:

 

Compensation Element

 

Current Program Value

Annual Retainer:Retainer

 $63,00070,000

Non-Executive Chairman Premium (Annual):(1)

 $90,000100,000

Audit Committee Chair Retainer (Annual):(2)

 $15,000*15,000

Audit Committee Member Retainer (Annual):

 $6,7507,500

MD&C Committee Chair Retainer (Annual):(2)

 $15,000+15,000

MD&C Committee Member Retainer (Annual):

 $4,5005,000

Nominating Committee Chair Retainer (Annual):(2)

 $9,00010,000

Nominating Committee Member Retainer (Annual):

 $4,5005,000

Board and Committee Meeting Fee (Per Meeting)

 (3)

Other Meetings (Per Meeting)

 (3)

Telephonic Board Meeting Fee (Per Meeting)

 (3)

Telephonic Committee Meeting Fee (Per Meeting)

 (3)

Restricted Stock Unit Grant Value (Annual):

 $110,000120,000

Plan Participation

 Deferred Compensation Plan

 

*Increased from $13,500 to $15,000 in April 2017.

+Increased from $9,000 to $15,000 in April 2017.

(1)

TheNon-Executive Chairman premium is paid in addition to the annual retainer. The Lead Director retained the Non-Executive Chairman premium upon election as Lead Director.

(2)

Committee chair retainers are paid in lieu of, not in addition to, committee member retainers.

(3)

For each Board or applicable committee meeting held in a given year in excess of twice the number of regularly scheduled meetings established at the beginning of such year, thenon-employee Directors will receive a per meeting fee equal to $1,350$1,500 (forin-person/telephonic Board meetings andin-person committee meetings) or $675$750 (for telephonic committee meetings).

In addition to the above listed compensation, Directors are reimbursed for reasonable travel expenses related to attendance at Board or committee meetings.

Our Board has instituted a stockholding requirement for Board members equal to five times the annual retainer. Board members have five years from the date they join the Board to comply with this requirement. Vested and unvested Restricted Stock Units (“RSUs”), as well as phantom shares acquired through deferral of Director fees (as described below), are included for purposes of determining compliance with Director stockholding requirements. At December 31, 2017,2018, all of ournon-employee Directors who had served for at least five years were in compliance with Director stockholding requirements.

Beginning in 2016, RSUs are granted under the new 2016Non-Employee Directors’ Long-Term Equity Compensation Plan (the “Director Plan”). Each RSU under the Director Plan vests at the close of business on the earlier of (i) the first anniversary of the grant date or (ii) the annual meeting of stockholders in the year immediately following the year of grant, subject to accelerated vesting in full if service as a Director terminates due to death, disability or under a

mandatory retirement policy, and subject to pro rata vesting in the event of termination of service in other circumstances. Each RSU will be settled by issuance of a share of our common stock. Dividend equivalents on the RSUs are not paid prior to vesting, but are settled thereafter.

The Deferred Compensation Plan forNon-Employee Directors allows eachnon-employee Director to defer all or a portion of his or her Director compensation, including RSU grant, until some future date selected by the Director. Pursuant to the Director’s election, the accumulated deferred compensation is held in either an interest-bearing account or a Company phantom share account. The interest-bearing deferred account accumulates notional interest on the account balance at a rate equal to the five-year United States Treasury Note yield rate in effect from time to time. Contributions to the phantom share account are recorded as notional shares of the Company’s Common Stock. Deferred amounts are credited to the Director’s account quarterly on the 15th of February, May, August and November. The number of phantom shares recorded is equal to the number of shares of Common Stock that the deferred compensation would have purchased at the market price of the stock on the day the account is credited. Dividend equivalents are earned on the phantom shares and are credited to the account as additional phantom shares. All phantom shares arenon-voting and payments out of the account are made solely in cash, based upon the market price of the Common Stock on the date of payment selected by the Director. Under certain circumstances, the accounts may be paid out early upon termination of directorship following a change in control.

Directors who are actively employed by us receive no additional compensation for serving as Directors, and we do not pay consulting or professional service fees to Directors.

20172018 Director Compensation

The table below details the compensation earned by ournon-employee Directors for 2017:2018:

 

   
Name 

Fees Earned

or Paid in Cash

($)(1)

 

Stock

Awards

($)(2)

 

Option

Awards

($)

 

All Other

Compensation

($)

 

Total

($)

  

Fees Earned
or Paid in Cash

($) (1)

 

   

Stock
Awards
($) (2)

 

  

Total
($)

 

   

James F. Earl

 $81,000 $109,997   $0 $0 $190,997    

 

$88,125

 

 

 

  $119,993

 

  $208,118

 

   

Kathy G. Eddy

 $78,750 $109,997   $0 $0 $188,747  $

 

85,312

 

 

 

  $119,993

 

  $205,305

 

   

David C. Everitt

 $153,000   $109,997   $0 $0 $262,997    

 

$165,750

 

 

 

  $119,993

 

  $285,743

 

Stuart E. Graham

 $72,000 $109,997   $0 $0 $181,997

Terry D. Growcock

 $74,250 $109,997   $0 $0 $184,247

Elaine La Roche

 $74,250 $109,997   $0 $0 $184,247

Mario Longhi*

 $12,375 $45,842 $0 $0 $58,217
   

Carolann I. Haznedar*

  $

 

20,625

 

 

 

  $60,171

 

  $80,796

 

   

Stuart E. Graham+

    

 

$23,042

 

 

 

  -0-

 

  $23,042

 

   

Terry D. Growcock+

  $

 

23,762

 

 

 

  -0-

 

  $23,762

 

   

Elaine La Roche#

    

 

$46,053

 

 

 

  $119,993

 

  $166,046

 

   

Mario Longhi

  $

 

80,438

 

 

 

  $119,993

 

  $200,431

 

   

Ed Purvis, Jr.

    

 

$72,000

 

 

 

  $119,993

 

  $191,993

 

   

Phillip C. Widman

 $82,125 $109,997   $0 $0 $192,122  $

 

88,125

 

 

 

  $119,993

 

  $208,118

 

 

**Mr. Longhi

Ms. Haznedar was appointed to the Board on November 8, 2017.October 22, 2018.

+

Mr. Graham and Mr. Growcock retired from the Board immediately prior to the 2018 annual meeting of stockholders.

#

Ms. La Roche resigned from the Board as of July 31, 2018.

(1)

Includes fees associated with chairing or sitting on a Board committee as well as fees relating to Board and committee meetings.

(2)

The amounts shown in this column represent the aggregate grant date fair value of the RSUs granted to eachnon-employee Director in 2017,2018, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718. Eachnon-employee Director, other

than Mr. Longhi,Ms. Haznedar, were granted 8,0295,911 RSUs on March 3, 2017, and the RSUs vested on March 3, 2018. Mr. Longhi was granted 2,458 RSUs on November 8, 2017,May 1, 2018, and the RSUs are generallyexpected to vested on April 23, 2019. Ms. Haznedar was granted 2,444 RSUs on October 22, 2018, and the RSUs are expected to vest on April 24, 2018.23, 2019. The information in this column does not reflect an estimate for forfeitures, and none of these awards has been forfeited as of March 1, 2018.February 26, 2019. See Note 13,14, “Stock-Based Compensation” to Notes to Consolidated Financial Statements in our Annual Report on Form10-K for the year ended December 31, 20172018 for a discussion of the assumptions used to calculate share-based compensation expense under FASB ASC Topic 718.

As of December 31, 2018,non-employee Directors held the following RSUs: Mr. Earl, 22,786; Ms. Eddy, 45,276; Mr. Everitt, 28,450; Ms. Haznedar 2,444; Mr. Longhi, 5,911; Mr. Purvis 7,036; and Mr. Widman, 17,122.

As of December 31, 2017,non-employee Directors held the following RSUs: Mr. Earl, 24,904; Ms. Eddy, 47,394; Mr. Everitt, 30,568; Mr. Graham, 37,407; Mr. Growcock, 40,001; Ms. La Roche, 19,240; Mr. Longhi, 2,458; and Mr. Widman, 19,240.

SHARE OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERSShare Ownership of Directors, Management and Certain Beneficial Owners

The following table sets forth information with respect to the beneficial ownership of our outstanding voting securities, stock options and other stock equivalents by: (1) our Chairman, President & CEO, our CFO, and the other three current executive officers named in the 20172018 Summary Compensation Table, whom we refer to collectively as our NEOs; (2) each Director and Director candidate; (3) all current Directors and executive officers as a group; and (4) certain beneficial owners of more than 5% of our Common Stock. All of our outstanding voting securities are Common Stock.

Beneficial ownership information in the table is as of March 1, 2018,February 26, 2019, except the number of shares beneficially owned by beneficial owners of more than 5% of the Common Stock which is as of the dates stated in footnotes (3) and (4) to the table (percentages are calculated assuming continued beneficial ownership at March 1, 2018)February 26, 2019).

 

 

Number of

Shares

Beneficially

Owned(1)

 

Percent

of

Class

 

Number of

Other Stock

Equivalents(2)

  

Number of

Shares

Beneficially

Owned (1)

 

 

Percent

of

Class

 

 

Number of Other Stock
Equivalents (2)

 

Named Executive Officers      

F. N. Grasberger III

 322,079  *  783,443  

 

691,402

 

 * 406,716

P. F. Minan

 72,709  *  228,750  

 

185,241

 

 * 116,316

T. L. McKenzie

 18,660  *  112,042  

 

61,472

 

 * 61,824

R. C. Hochman

 16,416  *  104,334  

 

64,782

 

 * 62,681

S. H. Gerson

 35,511  *  106,616 

J. S. Gill

 

 

32,659

 

 * 49,162

Directors and Director Candidates who are not Named Executive Officers

Directors and Director Candidates who are not Named Executive Officers

 

Directors and Director Candidates who are not Named Executive Officers

J. F. Earl 40,618  *   -  

 

46,529

 

 *         -

K. G. Eddy

 66,378  *   -  

 

64,260

 

 * 8,029

D. C. Everitt

 73,954  *   -  

 

79,865

 

 *         -

S. E. Graham

 58,121  *   - 

T. D. Growcock

 56,715  *  789 

E. La Roche

 34,954  *   - 

C. I. Haznedar

 

 

2,444

 

 *         -

M. Longhi

 2,458  *   -  

 

8,369

 

 *         -

E. M. Purvis, Jr.

  -  *  1,125  

 

7,036

 

 *         -

P. C. Widman

 34,954  *   -  

 

40,865

 

 *         -
All current Directors and
executive officers as a
group (15 persons in total,
including those listed above)
 838,422  1.04%  1,403,496 

All current Directors and
executive officers as a
group (14 persons in total,
including those listed above)

 

 

1,314,373

 1.64% 768,666
More than 5% Beneficial OwnersMore than 5% Beneficial Owners    

More than 5% Beneficial Owners

  

BlackRock, Inc.(3)

55 East 52nd Street

New York, NY 10055

 10,490,112  13.04%   - 

The Vanguard Group(4)

100 Vanguard Blvd.

Malvern, PA 19355

 9,617,122  11.95%   - 

BlackRock, Inc. (3)

East 52nd Street

New York, NY 10055

 11,465,982 14.32%         -

The Vanguard Group (4)

100 Vanguard Blvd.

Malvern, PA 19355

 11,213,154 14.00%         -

*

*

Less than one percent.

(1)

Includes securities that are exercisable, or vest, within 60 days. Includes, in the case of S. Gerson, and all current Directors and executive officers as a group, 12,279 shares pursuant to our Retirement Savings and Investment Plan (“RSIP”), in respect of which such persons have shared voting power and sole investment power. For each Director, includes RSUs which have vested and for Mr. Longhi, represents 2,458 RSU awardsRSUs that will vest within 60 days. Includes the following number of vested SARs calculated on a “net” basis, i.e. the number of shares each SAR may be exercised for based on the market value of Common Stock as of March 1, 2018:February 26, 2019: N. Grasberger, 87,918;224,315; P. Minan, 26,109;66,611; T. McKenzie, 12,789;32,735; R. Hochman, 11,046;28,957; and S. Gerson, 3,621.J. Gill, 11,608.

 

(2)

Includes, for executive officers, unvested RSUs, PSUs (stated at target), and SARs (stated on a gross basis). For Mr. Purvis, represents RSUs that will not vest within 60 days. In addition, Mr. GrowcockMs. Eddy elected to defer a portion of hisher Director fees in the forms of credits fornon-voting phantom shares under the terms of our Deferred Compensation Plan forNon-Employee Directors. These phantom shares are included as stock equivalents. They will ultimately be paid out in cash based upon the value of the shares at the time of payout. While unvested awards and phantom shares included in this column may not be voted or transferred, we have included them in the table as they represent an economic interest in our common stock that is subject to the same market risk as ownership of actual shares of our common stock.

 

(3)

The information for BlackRock, Inc. is derived from a Schedule 13G/A filing by such entity with the SEC on January 19, 2018.28, 2019. Based on its filings with the SEC, BlackRock, Inc. has the sole voting power over 10,277,00211,282,903 shares of our common stock and sole dispositive power over 10,490,11211,465,982 shares of our common stock.

 

(4)

The information for The Vanguard Group is derived from a Schedule 13G/A filing by such entity with the SEC on February 9, 2018.11, 2019. Based on its filings with the SEC, The Vanguard Group has the sole voting power over 156,814167,554 shares of our common stock and sole dispositive power over 9,453,85811,041,350 shares of our common stock.

Except as otherwise stated, each individual or entity has sole voting and investment power over the shares set forth opposite his, her or its name. None of the Directors, Director candidates or executive officers individually beneficially owned 1% or more of our Common Stock, and our current Directors and executive officers as a group beneficially owned less than 1% of our outstanding common stock.

REPORT OF THE AUDIT COMMITTEEReport of the Audit Committee

The Audit Committee is currently composed of fivefour Directors, each of whom is considered independent under the rules of the NYSE and the SEC. The Board has determined that each of Ms. La Roche, Ms. Eddy Mr. Growcock and Mr. Widman qualifies as an “audit committee financial expert” as that term is defined under the rules promulgated by the SEC.

The Audit Committee operates pursuant to a written charter that complies with the guidelines established by the NYSE.

The Audit Committee is responsible for monitoring our financial reporting processes and system of internal controls, supervising our internal auditors and overseeing the independence and performance of the independent auditors. In carrying out these responsibilities, the Audit Committee meets with our internal auditors and our independent auditors to review the overall scope and plans for their respective audits of our financial statements. The Audit Committee also meets privately (and in separate meetings) with members of management, our independent auditors and our internal auditors following each Audit Committee meeting and as may otherwise be needed. The Audit Committee meets with management and with the independent auditors each quarter to review and discuss our Annual Report on Form10-K and quarterly reports on FormForm 10-Q prior to their being filed with the SEC, and also meets with management and our independent auditors to review and discuss our quarterly earnings prior to their release.

The Audit Committee’s responsibility is to monitor and oversee the audit and financial reporting processes. However, the members of the Audit Committee rely, without independent verification, on the information provided to them and on the representations made by management, and the report issued by the independent registered public accounting firm. While the Audit Committee and the Board monitor our financial record keeping and controls, management is ultimately responsible for our financial reporting process, including our system of internal controls, disclosure control procedures and the preparation of the financial statements. The independent auditors support the financial reporting process by performing an audit of our financial statements and issuing a report thereon.

The Audit Committee has reviewed and discussed with management and the independent auditors the audited consolidated financial statements for the year ended December 31, 20172018 and related periods. These discussions focused on the quality, not just the acceptability, of the accounting principles used by us, key accounting policies followed in the preparation of the financial statements and the reasonableness of significant judgments made by management in the preparation of the financial statements and alternatives that may be available.

In addition, the Audit Committee has discussed with the independent auditors the matters required to be discussed pursuant to Statement on Auditing Standards No. 16,1301, “Communications with Audit Committees,” as adopted by the Public Company Accounting Oversight Board, including the quality of our accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements. The Audit Committee has also received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence and has discussed with the independent auditors the independent auditors’ independence.

Based on the review and discussions referred to above, the Audit Committee’s review of the representations of management and the report of the independent auditors, the Audit Committee recommended to the Board that the audited financial statements be included (and the Board approved such inclusion) in our Annual Report on Form10-K for the fiscal year ended December 31, 20172018 for filing with the SEC.

SUBMITTED BY THE AUDIT COMMITTEE:

P. C. Widman, Chairman

K. G. Eddy

T. D. Growcock

E. La RocheC. I. Haznedar

M. Longhi

FEES BILLED BY THE INDEPENDENT AUDITORS FOR AUDIT ANDFees Billed By the Independent Auditors for Audit andNON-AUDITNon-Audit SERVICESServices

The following table sets forth the amount of audit fees, audit-related fees, tax fees and all other fees billed or expected to be billed by PricewaterhouseCoopers LLP, our principal auditor for the years ended December 31, 20172018 and December 31, 2016.2017.

 

    2017  2016

Audit Fees(1)

  $4,157,600  $3,432,200

Audit-Related Fees(2)

  $545,100  $1,906,911

Tax Fees(3)

  $133,586  $641,760

All Other Fees(4)

  $23,524  $5,400

Total Fees

  $4,859,810  $5,986,271
   
    

2018

 

  2017

 

   

Audit Fees (1)

  $5,536,075  $4,157,600
   

Audit-Related Fees (2)

  $120,765  $545,100
   

Tax Fees (3)

  $298,247  $133,586
   

All Other Fees (4)

  $9,208  $23,524
   

Total Fees

  $5,964,295  $4,859,810

 

(1)

The 20172018 figure includes fees related to the integrated audit of the consolidated financial statements and internal controls over financial reporting as well as statutory audits and quarterly reviews. The 2016 figure includes fees of $77,000 over amounts reported in the prior year, reflecting additional amounts for statutory audits.

 

(2)

The 20172018 figure includes fees primarily related to accounting consultations relatedwith respect to the assessmentadoption of the new revenue recognition standard as well as procedures performed related to a compliance matter. The 2016 figure primarily includes fees related to the proposed separation of the Metals and Minerals business and accounting consultations.leasing standard.

 

(3)

The 20172018 figure includes fees related to income tax services other than those directly related to the audit of the income tax accrual, such as tax compliance and tax planning initiatives, including Treasury planning. The majority of 2016 fees relate to Treasury planning.

 

(4)

The 20172018 figure includes fees related to licensing fees for software products and training offered to Harsco employees. 2016 includes fees relatedprimarily to licensing fees for software products.

The Audit Committee has considered the possible effect ofnon-audit services on the auditors’ independence andpre-approved the type ofnon-audit services that were rendered. The Audit Committee has adopted a policy authorizing thepre-approval of certain audit,non-audit and tax services (and related fees) to be provided by the independent auditors. The services to be provided are to be reviewed with the Audit Committee and approval is given for a specific dollar amount and for a period of not greater than 12 months. Services that are notpre-approved in this manner must bepre-approved on acase-by-case basis throughout the year. Additionally, if thepre-approved fee is exceeded, the Audit Committee must be advised of such overruns. In making its decision regarding the approval of services, the Audit Committee will consider whether such services are consistent with the SEC’s rules on auditor independence, whether the independent auditor is best positioned to provide such services and whether the services might enhance the Company’s ability to manage or control risk or improve audit quality. No services were provided during the last two fiscal years pursuant to the de minimis safe harbor exception from thepre-approval requirements.

All of the fees included in the table above werepre-approved by the Audit Committee.

PROPOSALProposal 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORSRatification of Appointment of Independent Auditors

The Audit Committee has appointed PricewaterhouseCoopers LLP as independent auditors to audit our financial statements for the fiscal year ending December 31, 2018.2019. Although not required to do so, the Board has determined to submit the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our independent auditors to stockholders for ratification as a matter of good corporate governance. In the absence of contrary direction from stockholders, all proxies that are submitted will be voted in favor of the ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our independent auditors.

If this proposal is not ratified by at least a majority of the shares of our outstanding common stock present in person or by proxy and entitled to vote on matters at the Annual Meeting, the appointment of the independent auditors will be reevaluated by the Audit Committee. Due to the difficulty and expense of making any substitution of auditors, it is unlikely that their appointment for the audit of the financial statements for the fiscal year ending December 31, 20182019 would be changed. However, the Audit Committee may review whether to seek new independent auditors for the fiscal year ending December 31, 2019.2020.

A representative of PricewaterhouseCoopers LLP will attend the Annual Meeting, with the opportunity to make a statement and answer questions of stockholders.

Required Vote: The ratification of the appointment of PricewaterhouseCoopers LLP as independent auditors will be approved if it receives the approval of at least a majority of the shares represented at the Annual Meeting.

The Board recommends that stockholders vote “FOR” the ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as the Company’s independent auditors for the fiscal year ending December 31, 2018.2019.

COMPENSATION DISCUSSIONCompensation Discussion & ANALYSISAnalysis

ThisIntroduction

In this Compensation Discussion & Analysis (“CD&A”) provides information regarding our executive compensation guiding principles,, we review the objectives and elements of ourHarsco’s executive compensation program and discuss the factors that were considered in making2018 compensation decisions forearned by our named executive officers (“NEOs”).

Our NEOs for 2017. Our MD&C Committee is responsible for establishing our executive compensation program, including components underlying the philosophy and related policies. The MD&C Committee is charged with aligning the Company’s performance – and resulting impact on stockholder interests – with the compensation actions for both our NEOs and the broader Harsco employee population.fiscal 2018 were as follows:

LOGO

LOGO

F. Nicholas Grasberger III

Chairman, President & Chief Executive Officer (“CEO”) (1)

Peter F. Minan

Senior Vice President & Chief Financial Officer (“CFO”)

LOGO

LOGO

Russell C. Hochman

Senior Vice President and General Counsel, Chief Compliance Officer & Corporate Secretary

Tracey L. McKenzie

Senior Vice President & Chief Human Resources Officer (“CHRO”)

LOGO

Jeswant S. Gill

Senior Vice President & Group President, Harsco Rail

(1)

On October 22, 2018, the Board of Directors elected Mr. Grasberger to Chairman of the Board of Directors of the Company.

EXECUTIVE SUMMARYExecutive Summary

Business Highlights

Harsco managementDuring 2018, the Company continued to execute strategiesdeliver on its long-term strategy of generating financial returns in 2017 to further developexcess of the cost of capital and strengthen the Company’s portfolio of businesses, to maintainmaintaining a strong financial profileprofile. Harsco management successfully executed several initiatives to further strengthen and to enablegrow its existing businesses by exceeding its 2018 Annual Operating Plan goals and achieving other key business objectives.

In particular, the Company also accelerated its growth-focused investments in 2018 with Metal & Minerals’ (“M&M”) acquisition of the Altek Group, a high-growth company that provides global innovative environmental solutions to generate returns above the cost of capital. 2017 also representedaluminum industry. This acquisition expands the yearbreadth our service capabilities into aluminum dross and scrap processing as well as providing breakthrough technology solutions aimed at providing value to our customers’ waste streams. Success in which Harsco transitioned towards a broader growth strategy across its businesses. Each Business Unit focused on outpacing relevant market trends supported by a return-based decision making process. The success ofdelivering against our strategic initiatives, in recent years, along with some uplifta more favorable economic climate, resulted in end markets, is illustrated by the increases to our 2017 outlook throughout the yearstrong 2018 financial performance and thenotable year-over-year improvement in certainimprovements of key performance indicators (“KPIs”).

The Company’s largestA summary of Harsco’s key 2018 accomplishments is highlighted below:

Harsco Consolidated

Exceeded our Annual Operating Plan and the financial goals and guidance provided to investors at the beginning of the year for 2018 KPIs, including operating income, free cash flow and return on invested capital (“ROIC”).

Realized revenue growth of 7% and operating income improvement of 31%, with each business segment contributing to these increases and realizing double-digit margins for the second consecutive year.

Generated $192 million of Cash from Operating Activities.

Increased growth capital spending by 86% in 2018 compared with 2017.

Repriced $545 million term loan B facility, realizing a75-basis point or $4 million improvement in annual interest costs on top of the200-basis point or $11 million improvement realized in 2017. Also increased the amount of revolving credit commitments by $100 million to $500 million and reduced leverage ratio from 1.9x to 1.7x.

Harsco’s Board of Directors authorized a stock repurchase program under which the Company may repurchase up to $75 million of its common stock, which indicates business confidence and financial flexibility. Under this program, Harsco repurchased approximately 1.3 million shares ($30 million) during 2018.

Each of our business unit, segments executed successfully against their stated strategy, which contributed positively to the improvements realized by Harsco, including:

Metals & Minerals (“M&M”), continued to demonstrate improved – Continued its third year of strong financial performance forand executed its growth strategies as a second consecutive year. This trend further reflectsglobal environmental solutions provider – in particular, the financial benefitsacquisition of the transformational actions executed from 2013 to 2016 to build M&M intoAltek Group provides a leaner, higher-return business through a number of process efficiency initiatives. Additionally, M&M implemented asignificant environmental growth strategy to expand its business relationships with existing and new customers. Recent sales wins proveplatform within the benefits of this initiative. Overall, M&M’s 2017 operating income increased meaningfully and continues to generate strong free cash flow.aluminum industry.

Our

Industrial business unit also realized a sizable – Realized improvement in 2017 operating incomevarious performance indicators (described in the table below), while launching new product innovations and margins. These positive trends resulted from an increase infurther penetrating target markets as capital spending by U.S. energy customers which troughedincreased.

Rail – Generated strong financial results by growing revenue inmid-2016, coupled with short-cycle products and obtaining operating efficiencies. Invested in both research and development on new product introductions and significant efficiency initiatives implemented over the past two years. Meanwhile, our Rail business unit demonstrated resilience at the bottom of the North American economic cycle. Growth in its short-cycle, aftermarket and international sales partially offset the domestic revenue pressures, while Rail executed a number of transformational initiatives to improve operationaltechnologies and commercial effectiveness, positioning thisresources to enhance business for growth as end markets recover.

Harsco’s stated 2017 objectives included achieving its 2017 Annual Operating Plan; developing and implementing a growth strategy in M&M; pursuing growth through adjacent markets penetration and new products delivery in the Industrial business unit; executing cost and improvement initiatives in the Rail business unit to proactively manage unfavorable economic pressures; and maintaining a strong and appropriate capital structure. The Company made significant progress against these priorities, which are reflected in our 2017 financial results and improved share price. Overall, Harsco’s executive management team was pleased with the strategiccoming years.

Financial and operational progress within the underlying businesses and remains committed to the Company’s strategic initiatives.

A more extensive list of our key accomplishments is noted below:

Exceeded the outlooksuccesses for key 2017 financial performance indicators such as operating income, free cash flow and return on invested capital (“ROIC”) provided to the investment community at the beginning of the year;

Realized a year-over-year increase in the M&Meach business unit’s KPIs such as ROIC. Implemented a growth strategy resulting in the signing of new mill services contracts within identified growth markets such as India, Turkey and the Middle East;

Recognized an improvement in the Industrial business unit’s KPIs relative to 2016. Executed initiatives to expand our market and product capabilities in industrial grating, further penetrate the downstream market forair-cooled heat exchangers, and grew commercial boiler sales;

Grew aftermarket parts, our Protran technology and international equipment sales in the Rail business unit. Implemented cost reduction and commercial actions in the face of persistent weakness in the North American market; and

Repriced $546 million term loan B facility, realizing a 200 basis point or $11 million improvement in annual interest costs, a one year extension, and favorable covenant adjustments.

Each of our businesses demonstrated considerable progress against their operating objectives and contributed to the Company’s successes in 2017. Achievements and other notable activities across our business unitsunit are summarized in the table below:

 

2017 Achievements and Other Notable Activities by Business Unit

Metals & Minerals

 

Industrial

 

Rail

   Revenues increased 6% compared with 2017.

   Operating income increased 29 percent18% and operating margin increased by more than 190120 basis points.

 

   Approximately 37Finalized approximately 41 renewals and new growth contracts awarded during the year with estimated revenues of more than $550 millionnearly $1 billion over the terms of these contracts.

 

   Developed and implemented aCompleted personnel investments to support growth strategy for mill services and applied products offerings. Announcedambitions, which supported the Company winning new contracts within identified growth markets such as India, Turkey andthroughout the Middle East.world.

   Continued to improve our customers’ environmental performance.

 

   RevenueRevenues increased 25%, with topline growth realized in each of the three major business segments.

   Operating income increased 54% and operating incomemargin increased by 21 percent and 52 percent, respectively, as a result of the energy market recovery, new product introductions and incremental market penetration.270 basis points.

 

   Backlogs increase 57 percentincreased 145% compared withyear-end 2016.2017.

 

   Opened a West Coast facility to expand the geographic footprintGained market share in the Industrial grating unit.downstream market forair-cooled heat exchangers.

 

   Grew stainless steelLaunched first instantaneous water heater product for the commercial market.

   Further penetrated the stainless-steel commercial boiler market, with product sales by 16growth of 8 percent.

 

   Increased revenues compared with 2017 (excluding SBB, the Swiss railway system).

   Operating income increased 13% and operating margin increased 230 basis points.

Realized meaningful increase in short-cycleaftermarket parts and international machineProtran technology sales.

 

   Signed a significant contract to supply a major customer with stoneblower machines, startingEquipment sales within the North American market increased for the first time in 2019.several years.

 

   Launched business transformation initiative to achieve sizable cost reductionAwarded several major supply contracts during the year; these wins included Metropolitan Transportation Authority (MTA) of New York and improve commercial practices, positioning Rail for growth over the long term.Land Transport Authority of Singapore (LTA).

 

   Satisfied initial delivery requirements under the multi-year contract with the federal railway system of Switzerland (“SBB”); realized revenue of approximately $43 million.

Theend-markets served by Harsco were stableThrough product and service innovation, returns earned on growth-focused investments, sound financial management and delivering relevant and sustainable value to improving in 2017, and we expect to benefit as market conditions improve further.our customers, the outlook for each of Harsco’s business units remains positive for 2019.

Compensation Highlights

Our executive compensation program’s primary objective is aligning our executive’s pay with the interests of our stockholders. The program is also designed to reward short-and long-term financial, strategic and operational business results, while facilitating the Company’s need to attract, motivate, develop and retain highly-qualified executives who are critical to our long-term success.

Advisory Vote on Named Executive Officer Compensation

StockholdersAt our 2018 Annual Meeting, stockholders voted strongly in support of Harsco’s NEO compensation for its NEOs in 2017programs with approximately 94%95% of votes cast in support of the Harsco’ssay-on-pay proposal.

We continue to engage our stockholders on various issues through an extensive and thoughtful investor relations program. During this engagement, stockholders have an opportunity to provide feedback on a variety of topics, including executive compensation. The Company’s outreach via investor conferences, roadshows, and other means has increased and we have received strong favorable support from our stockholders the past few years. The MD&C Committee considers stockholders’ viewpoints in the development and approval of all compensation policies and practices at Harsco.

Program Governance Highlights

We strive to maintain a program that is consistent with market best practices, supportive of our business structure, and aligned with our stockholder’sstockholders’ expectations. The table below presents components of our executive compensation program that align with market best practices.governance practices and polices:

 

What we doWe Do

 

  

What we don’t doWe Don’t Do

 

 

Tie a significant amount of executive pay to Company performanceperformance;

 

  × 

Do not enter into employment contracts with our executivesexecutives;

 

 

Reward for business unit, corporate, and individual performanceperformance;

 

  × 

Nore-pricing of outstanding stock options and Stock Appreciation Rights (“SARs”);

 

 

Deliver pay that is aligned with performance (below target for weak years and above target for strong years)

 

  × No extravagant benefits or perquisites provided to executivesexecutives;

 

Maintain a clawback policy in the event of a material financial restatement thatwhich impacts incentivesincentives;

 

  × No taxgross-ups except for relocationrelocation;
 

Prohibit hedging and short salessales;

  × 

No single trigger severance payments or equity

acceleration on new awardsawards;

 

 

Utilize an independent compensation advisor and review performance and independence annually;

  × 

No dividends paid on unearned Performance Share Units (“PSUs”);

 

 

Conduct an annual risk review and make program changes as necessary

×necessary;

  

×

No PSUsPSU payout earned above target when the company’s Total Stockholder Return (“TSR”) is negative for the measurement periodnegative; and

 

 

Require a “double trigger” for severance payments upon a change in controlcontrol; and

 

  × 

Prohibit

No pledging of shares allowed by executives andnon-employee Directors non- employee Directors.

 

 

Maintain stock ownership guidelines of:

   6 times base salary for the CEO

   3 times base salary for other NEOs

   5 times annual retainer fornon-employee Directorsguidelines.

 

     

Changes to Compensation Programsfor 2018

In 2017,2018, the MD&C Committee management, and the MD&C Committee’s external compensation advisor, Pay Governance LLC (“Pay Governance”),management partnered closely to adopt the following changes to the Company’s pay program:

 

Component Change Details Rationale for Change

2017

LTIP

GrantBase Salary

 As discussedThe MD&C Committee approved base salary increases to NEOs ranging from 3% to 8%, effective May 1, 2018.NEOs received increases in recognition of their contributions to the Company including those described in the 2017 Proxy Statement,Business Highlights, positioning relative to market practices and overall merit increase budget for Harsco in the timing of the award date of the annual U.S.

Long-Term Incentive Plan (“LTIP”) grant was moved from early May to early March.Targets

 A first quarterThe MD&C Committee approved increases to LTIP grant alignstargets for the Company’s CEO and three other NEOs beginning with the timing utilized2018 grants.The MD&C Committee made these changes in consideration of each NEO’s compensation as compared to market practices, additional responsibilities assumed by our peersthe executives and is also consistent with our annual incentive program.their individual performance.

2018

PSU

Design

 

Effective with the 2018 grant, the PSU payout will be capped at 100% (“target”) if TSR is negative over the performance measurement period. Previously, payout was set to zero if TSR was negative.

 

Additionally, the CEO’s mix of PSUs as a percent of his LTIP award was increased from 33% to 40% for 2018.

 

The new approach is consistent with the prevailing market practice for companies that cap payouts for negative TSR and balances the incentive to outperform the index by limiting the upside when the share price declines for all LTIP participants.TSR.

 

The CEO’s PSU mix was adjusted to place more emphasis on performance contingent awards.

Incentive Plan Results

For 2017,2018, all three business units M&M, Industrial and Rail, earned an annual incentive payout based on their financial performance as compared against the approved Business Unit Contribution (“BUC”) targets. Harsco BUC consists of two distinct and separate components: 1) operating income (excluding the effect of certain special items as determined by the MD&C Committee)minus; minus; 2) a fixed cost of capital rate applied to planned controllable net assets deployed. Upon consolidation of each business unit’s results including Corporate charges, Harsco Consolidated earned an above target payout. The payout factors achieved related to the results achievedHarsco Consolidated and each of three business units are noted below.

 

Consolidated/Business Unit    Payout Factor

Harsco Consolidated

    188%137% of Target

Harsco M&M

    200%118% of Target

Harsco Rail

    103%113% of Target

Harsco Industrial

    167%120% of Target

The resulting payouts from the Annual Incentive Plan (“AIP”) along with the base salary earned andplus the long-term incentives granted in 20172018 for the NEOs are presented in the table below.

 

       Fiscal Year 2017 Actual Compensation Awarded    
Executive 

 Base Salary 

Earned

 

Non-Equity

Incentive Earned

 

Long-Term

Incentive

 Award Value 
Granted

  

Total Direct

 Compensation(1) 

F. Nicholas Grasberger III

 $841,183 $1,740,550  $2,676,740  $5,258,473

Peter F. Minan

 $499,612 $704,851  $794,937  $1,999,400

Russell C. Hochman

 $372,160 $455,036  $394,759  $1,221,955

Tracey L. McKenzie

 $367,062 $448,803  $389,371  $1,205,236

Scott H. Gerson

 $336,473 $448,183  $356,926  $1,141,582

       Fiscal Year  2018 Actual Compensation Awarded    
Executive 

 Base Salary 

Earned

 

 Non-Equity 

 Incentive 
  Earned 

  Long-Term 
Incentive
 Award
Value 
Granted
  Total Direct
 Compensation
(1) 
     

F. Nicholas Grasberger III

 $877,538 $1,323,770  $3,407,985  $5,609,293
     

Peter F. Minan

 $514,542 $529,010  $881,451  $1,925,003
     

Russell C. Hochman

 $391,583 $349,143  $547,191  $1,287,917
     

Tracey L. McKenzie

 $389,780 $347,632  $539,707  $1,277,119
     

Jeswant S. Gill

 $356,825 $334,725  $468,689  $1,160,239
 (1)

Total Direct Compensation is equal to the sum of base salary earned, AIP earned for 20172018 and paid in 20182019 and accounting fair value of long-term incentives granted in 2017.2018.

It is important to note that long-termLong-term incentives granted in March of 20172018 are considered by the MD&C Committee to be a pay opportunity with the realizable value fully dependent on Harsco’s future share price performance. The CEO’s long-term incentives consist of 40% PSUs, 30% SARs and 30% Restricted Stock Units (“RSUs”). For all other NEOs, long-term incentives consist ofone-third PSUs, SARs Restricted Stock Units (“RSUs”) and PSUs.RSUs.

The Company granted performance share unitsPSUs in 20152016 with vesting conditioned generally on Harsco’s TSR performance relative to the S&P MidCap 400600 Industrial Index for the3-year three-year period from 20152016 through 2017.2018. Harsco’s TSR for the performance period was at the 24th96th percentile of the index, resulting in a payout of 0%200% of target.

 

20152016 to 20172018 PSU Award    Payout Factor
Relative TSR versus S&P MidCap 400600 Industrials Index    0%200% of Target

Discussion of Chief Executive Officer Pay

We believe our executive compensation program strikes an appropriate balance between our ability to attract, motivate, develop, and retain highly qualified leaders and help to ensure our executives’ interests are parallel with the long-term interests of our stockholders. As such, the majority of executive compensation is structured utilizing equity compensation, aligning the realized value of these awards with stockholders’ interests.

Pay Opportunity versus Realized Pay and Potential Realizable Pay

On an annual basis, the MD&C Committee approves a targeted pay opportunity by establishing the target AIP level and the grant value of long-term incentive awards for the year. However, the potential real value of these awards is highly dependent on: (1) Harsco’s operating performance, as defined by BUC, for the cash AIP award; (2) Harsco’s share price and relative TSR performance for the long-term incentive compensation; and (3) satisfaction of the service obligation in the long-term incentive’s vesting schedules.

Realized Pay

As a large majority of pay opportunity represents potential pay that could be realized in future years, we also review the CEO’s realized pay for each full year. In short, realized pay is comprised of actual pay earned including base salary and AIP payouts plus the value of vested/exercised equity awards during the period. While Mr. Grasberger’s pay opportunity is established to be competitive with median market levels, his realized pay varies based on Harsco’s stock price performance, equity vesting and incentive payouts.

Potential Realizable Pay

In addition to pay opportunity and realized pay, a third perspective the Committee considers is potential realizable pay. Potential realizable pay considers base salary and AIP payouts plus a “snapshot” of the intrinsic value of equity within the period. The intrinsic value of equity uses the December 29, 2017 share price to calculate a “snapshot” value for awards granted within the period. It combines RSUs, “in the money” value of SARs, and an estimate of the value of unvested PSUs based on the relative total stockholder return performance to date.

Realized and Potential Realizable Pay as a Percent of Pay Opportunity

Mr. Grasberger’srealized pay for 2015 to 2017 was 49% of the pay opportunity granted over the same time period due to a combination of mixed results of actual AIP payouts, no PSUs earned, no SARs exercised and standard RSUs vesting. However, Mr. Grasberger’s potential realizable pay is 157% of the pay opportunity granted for the 2015 to 2017 period, primarily due to the Company’s strong TSR performance since 2016 that is driving an increase in the intrinsic value of equity awards above the value on the date of grant.

It is important to note that the intrinsic value of equity awards is based on share price and relative TSR performance of unvested awards for incomplete performance cycles and will change each year. The actual realized value will continue to be determined by the future share price (and, for PSUs, TSR) performance of the Company through the vesting periods.

See the illustration below for a detailed presentationDiscussion and Analysis of each of these methodologies.

LOGO

Pay Opportunity:Base salary earned + target AIP + grant date fair value of long-term incentive awards (PSUs + RSUs + SARs) in each fiscal year.

Realized Pay:Base salary earned + actual AIP paid + value of equity vested or exercised in each fiscal year.

Potential Realizable Pay:Base salary earned + actual AIP paid + intrinsic value of PSUs at the currently projected vesting level + the intrinsic value of RSUs and SARs. Intrinsic values were established as of December 29, 2017 using an $18.65 share price.

PSU TSR Performance Assumptions:2017 potential realizable pay assumes a 178% PSU payout based on the 2017 TSR relative to the S&P 600 Industrial Index. 2016 potential realizable pay assumes a 200% PSU payout based on the 2016 to 2017 TSR relative to the S&P 600 Industrial Index. 2015 potential realizable pay assumes a 0% PSU payout based on the 2015 to 2017 TSR relative to the S&P 400 MidCap Index.

CEO three-year aggregate pay comparison 157% of pay opportunity 49% of pay opportunity $Millions pay opportunity realized pay potential realizable pay base salary AIP PSUs RSUs SARs

Potential Realizable Pay versus the Peer Group

When comparing the last three years of pay and total stockholder return to the companies used in our market benchmarking analysis there is reasonable alignment between Harsco’s total stockholder return and the CEO’s potential realizable pay. The trend in potential realizable pay is aligned with total stockholder returns, as the majority of the CEO’s potential realizable value results from performance-based awards granted in the most recent two years where returns are the strongest.

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2017 Named Executive Officers

Our NEOs for fiscal 2017 are as follows:

NEOs2018 CompensationTitle at End of Fiscal 2017

F. Nicholas Grasberger III

President & Chief Executive Officer (“CEO”)

Peter F. Minan

Senior Vice President & Chief Financial Officer (“CFO”)

Russell C. Hochman

Senior Vice President and General Counsel, Chief Compliance Officer & Corporate Secretary

Tracey L. McKenzie

Senior Vice President & Chief Human Resources Officer (“CHRO”)

Scott H. Gerson

Senior Vice President & Group President, Harsco Industrial

For 2017, the CD&A and the related compensation tables and narratives cover five NEOs and disclose a variety of compensation decisions and actions. Details about the specific arrangements made with our NEOs can be found in the “Employment Arrangements with Certain NEOs” and “Potential Payments upon Change in Control and Other Potential Post-Employment Payments” sections.

Above median performance & below median realizable TDC value Above median performance & above median realizable TDC value Below median performance & below median realizable TDC value Below median performance & above median realizable TDC value ceo potentital realizable pay percent rank

DISCUSSION AND ANALYSIS OF 2017 COMPENSATION

Compensation Guiding Principles

The Company has a set of principles that guide our compensation program design with the core assumption that executive compensation is a highly effective business tool when designed, communicated and administered properly. These principles, listed below, strongly influenced our executive compensation decisions and the implementation of our 2017 program. The objectives set forth by the MD&C Committee and management team will help ensure any future Company compensation program will be designed in accordance with our guiding principles.for fiscal 2018.

 

Guiding PrinciplePrinciples

 

 

How We Employ These Guiding PrinciplesThem

 

Promote a Performance OrientedPerformance-Oriented Environment 

✓   Ensuring   Ensure employees have a clearline-of-sight regarding how their actions drive business results and how their overall compensation must be aligned to stockholder value creation;

 

✓   Providing   Provide greater rewards to those individuals and teams who most positively impact the success of the business; and

 

✓   Differentiating   Differentiate compensation in a manner that enables the Companyus to retain ourhigh-performing and high-potential talent and continue to attract additional high caliber talent to the organization.high-caliber talent.

 

Provide Market-Competitive Rewards 

   Regularly monitoringmonitor the practices and trends in the markets in which we compete for talent;

 

✓   Structuring   Structure our compensation program to target the median of relevant markets for talent; and

 

✓   Designing   Design a program in which realizable compensation is aligned with stock price and business performance outcomes.

 

Allow Flexibility within a Common Framework 

✓   First, creating   Create a program with a common global strategy and framework; and

 

✓   Then, allowing defined   Allow flexibility to accommodate the unique talent and compensation needs of our diverse businesses, workforce, and global markets.

 

Adhere to a Clear Governance
Model
 

✓   Employing   Employ appropriate oversight and controls to govern compensation program design and administration; and

 

   Clearly definingdefine the roles and responsibilities of all program stakeholders; and

✓   Maintaining a clawback policy to recoup incentives in the event of a financial restatement.stakeholders.

 

Be Well Communicated 

✓   Specifying   Specify the objectives, design, and value of each component of fixed and variable compensation within the context of their total rewards; and

 

✓   Utilizing   Use multiple avenues and sources of communicationscommunication to help ensure the link between pay and performance is well understood.

Key Compensation Practices

Further aligning with our Guiding Principles, the MD&C Committee maintains a clear set of goals for designing and implementing our pay program.

Goal

Supporting Compensation Practice

To Align our Compensation

Program with Stockholder

Interests

✓   Design our pay program to help ensure a meaningful portion of total compensation is linked to overall Company performance;

✓   Maintain market appropriate stock ownership requirements, including six times base salary for our President & CEO and three times base salary for our remaining NEOs, which helps to ensure our senior executives have a significant stake in the Company’s long-term success;

✓   Provide for “double trigger” vesting in ourchange-of-control agreements;

✓   Review our compensation program annually for appropriaterisk-to-reward balance;

✓   No employment agreements for our executives; and

✓   Engage in stockholder outreach to understand what is important tounderstood by our key owners.stakeholders.

 

To Pay for Performance

✓   Maintain a set of principles to guide the development of our executive compensation program to support and drive our business strategies, goals, and values;

✓   Set our executive compensation mix to be weighted more toward variable rather than fixed compensation;

✓   Design our program to differentiate payouts based upon business unit and individual performance; and

✓   Deliver below-target realized compensation to our executives in years with below-target performance.

To Align our Practices with the

Market

✓   Set our target executive compensation structure at the median of our defined market for talent;

✓   Use multiple industry surveys and advisory resources to help ensure a current understanding of changing market competitive practices;

✓   Provide market competitive benefits and perquisites to our executives; and

✓   Review our peer group for executive compensation comparison on a regular basis to ensure it is representative of our market for talent, our business portfolio and our global footprint.

Goal

Supporting Compensation Practice

Practice Sound Governance

✓   Prohibit there-pricing and buyback of our stock options and SARs;

✓   Maintain a clawback policy;

✓   Prohibit the hedging and pledging of equity awards;

✓   Prohibit taxgross-ups to our executives other than for relocation expenses;

✓   Seek to maintain the independence of our MD&C Committee members by reviewing and managingnon-employee Director pay decisions in the Nominating and Corporate Governance Committee;

✓   Engage an independent compensation consultant, Pay Governance, as an advisor to the MD&C Committee, and formally review the advisor’s performance and independence annually; and

✓   Charter the MD&C Committee to oversee executive talent assessment, development and succession, not just strictly compensation decisions.

To Attract, Motivate, Develop,

and Retain High Caliber Talent

✓   Conduct an annual Organizational Leadership Review that assesses the critical organizational capabilities required to execute the Company’s strategy, executive team performance, succession depth, and retention risk across all critical executive leadership positions;

✓   Share the results of the Organizational Leadership Review process regarding our most senior executives and solicit performance feedback from the full Board;

✓   Require annual performance evaluations for leadership, management and individual contributors; and

✓   Involve Board of Directors in the selection process for executive officers.

Response to PreviousSay-on-Pay Advisory VotingTalent Management Strategy

AtIntegral with our 2017 Annual Meeting, stockholders voted strongly in support of Harsco’s NEO compensation programs with 94% of votes cast in support ofguiding principles is our talent management strategy developed by management and supported by both the Harsco’ssay-on-pay proposal.

We believe the continued support demonstrates our commitment to attain the highest levels of stockholder support for our executive compensation program as stockholder input is respected. After strong favorable support the past few years, a formal outreach program on compensation was not conducted. Stockholders were engaged on various other issues throughout 2017 at which time stockholders had the opportunity to provide feedback on a variety of topics if they so wished. TheCompany’s MD&C Committee considers stockholder’s viewpoints inand the developmentBoard of Directors. Delivering our strategic goals and approval ofdriving positive stockholder return requires a strong focus on attracting and retaining a talented senior management team.

Annually, an organizational leadership review is performed, which assesses the critical organizational capabilities required to execute the Company’s strategy, executive team performance, succession depth, and retention risk across all compensation policies and practices at Harsco.

Key Changes Implemented to Executive Compensation Programs

As previously discussed in the prior year’s Compensation Discussion & Analysis,critical executive leadership positions. Feedback is sought from both the MD&C Committee management, and the MD&C Committee’s external compensation advisor partnered closely to adopt a changeBoard of Directors. In addition, Board members are involved in the timing of LTIP grants from May to early March. A first quarter LTIP grant aligns with the timing utilized byselection process for our peers and is also consistent with our annual incentive program.

Additionally, effective with the 2018 grant, the PSU payout will be capped at 100% (“target”) if TSR is negative over the measurement period. Previously, payout was set to zero if TSR was negative. The newNEOs.

approach is consistent with the prevailing market practice for companies that cap payouts for negative TSR and balances the incentive to outperform the index by limiting the upside when the share price declines for all LTIP participants. Lastly, the CEO’s mix of PSUs as a percent of his LTIP award was increased from 33% to 40% for 2018 to place more emphasis on performance contingent awards.

Overview of 20172018 Compensation Decisions and Actions

Applying our principles and stated compensation practices, the MD&C Committee reviewed each NEO’s compensation package individually with the objective of supporting our business strategies, ensuring market competitiveness, providing incentives to motivate and retain our key executives, and underpinning our succession planning process.

President & CEOElements of 2018 NEO Compensation Program

Effective May 1, 2017,The key elements of our 2018 NEO compensation program are described in the following table:

ElementDescription
Base Salary

   Annual stable source of income (fixed compensation) based on competitive market data.

Annual Incentive (AIP Awards)

   Variable, performance-based annual cash payment linked to and focused on financial and strategic short-term goals.

Long-Term Incentive (LTIP Awards)

   Variable, performance- and time-based annual award grant comprised of a mix of equity vehicles, including PSUs, SARs and RSUs.

   Realizable compensation based upon the intrinsic value of the Company’s stock price performance.

Perquisites and Personal Benefits

   Limitednon-cash compensation designed to attract and retain NEOs and provide a competitive compensation opportunity.

Retirement Benefits

   Defined contribution plans and pension plan benefits similar in form to benefits available to our other employees.

   Supplemental contributions available above Internal Revenue Code limits do not exceed amounts contributed below Internal Revenue Code limits.

Post-Employment Payments

   Contingent in nature and generally payable only if an NEO’s employment is terminated as specified under the terms of various plans and arrangements.

Target Total Compensation Mix

As reflected in the following charts, the MD&C Committee increased Mr. Grasberger’s base salary by 3%, in recognitionapproved a significant amount of his contributions to the Company including those describedeach NEO’s target total compensation opportunity in the Business Highlightsform of variable, rather than fixed, compensation for 2018. These results exclude retirement benefits and consistent with the overall merit increase budget for Harscopost-employment payments referred to in the U.S. His target AIP and LTIP, as a percent of base salary, were left unchanged from 2016. The CEO’s annual base salary and target incentive levels for the past three years are provided below:above table.

 

Fiscal Year

 

 

Base Salary

 

 

 

AIP Target

(as a % of base salary)

 

 

 

LTIP Target

(as a % of base salary)

 

 

2017

 

 

 

$849,750

 

 

 

110%

 

 

 

300%

 

 

2016

 

 

 

$825,000

 

 

 

110%

 

 

 

300%

 

 

2015

 

 

 

$825,000

 

 

 

110%

 

 

 

300%

 

Other NEOs

2018 Target Compensation Mix

Chief Executive Officer

2018 Target Compensation Mix

Average of Other NEOs

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LOGO

Consistent with the actions approved for the CEO, all other NEOs received a 3% increase in their annual base salaries, effective May 1, 2017, in recognition of their contributions to the Company and consistent with the overall merit increase budget for Harsco in the U.S. No adjustments were made to the incentive targets of any NEOs.

Determining 2017 NEO Compensation Decision-Making Framework

General Process

Executive compensation decisions at the Company are the product of several factors, in each case subject to modification by the MD&C Committee as it may deem necessary in its discretion, and also dependent upon whether the decisions are made in the normal pay setting cycle or under special circumstances for a newly appointed or hired executive. For 2017,2018, the predominant factors influencing pay determinations for our NEOs included:

 

Performance against the BUC performance metric;target;

 

Strategic initiatives, including creating and implementing a growth strategy in the M&M business unit; driving growth in the Industrial business unit; executing cost and operational improvements in the Rail business unit; and further improving the balance sheet position;

 

Achievement of specific operational goals relating to the sphere of influence of the applicable NEO; and

Market competitive compensation levels reflected in survey data and peer group data as described in more detail below.

Role ofBelow are the roles for the MD&C Committee, the Chairman, President & CEO, and the Compensation Consultants regarding the Compensation Decision-Making process.

For 2017, allRoles

MD&C Committee

All members of the MD&C Committee were independent Directors, enabling them to be objective representatives for our stockholders. The MD&C Committee oversaw the design and development of our 20172018 NEO compensation program and determined CEOour CEO’s compensation consistent with the overall objectives of the program, as described above. Theprogram. In addition, the MD&C Committee also approved all incentive compensation plans and approved or revised recommendations made by the Chairman, President & CEO for compensation decisions affecting any of the other NEOs.

Role of theChairman, President & CEO

Our Chairman, President & CEO, assisted by our Human Resources department, was responsible for the implementation and administration ofadministered the executive compensation program during 2017. Prior to and during 2017,as delegated by the MD&C Committee. Mr. Grasberger met with the MD&C Committee and, Pay Governancein consultation with the Compensation Consultant, made recommendations related to consider and recommend the overall structure for our NEO compensation program, to set and evaluate 2017evaluated 2018 AIP metrics and to makemade specific recommendations regarding the form and amount of compensation opportunities for the other NEOs. The final

Final decisions regarding the NEOs’NEO compensation were, however,are always made by the MD&C Committee. TheCommittee, and the Chairman, President & CEO does not play any role with respect to any matter affecting his own compensation.

Role ofIndependent Compensation Consultants

IndependentOur MD&C Committee Consultant

has the authority to engage and retain an independent compensation consultant to provide independent counsel and advice. At least annually, the MD&C Committee formally conducts an evaluation as to the effectiveness of the independent compensation consultant and periodically runs a request for proposal process to ensure the independent compensation consultant is meeting its needs. For 2017,2018, our MD&C Committee engaged Pay Governance to provideLLC through February and then engaged Pearl Meyer through the remainder of the year. Pearl Meyer was selected as the independent counsel and advice to the MD&C Committee. Pay Governance provided the following services toconsultant after an extensive review process conducted by the MD&C Committee based on clearly stated selection criteria including applicable expertise within our industry segment, reputation, and application of compensation philosophy with the MD&C Committee and the Company’s management team.

The following services were provided by the Independent Compensation Consultants in 2017:2018:

 

Review, design and recommendations for the 2017 short-term and long-term incentive plans;

Updates on trends and developments in executive compensation;

Review and recommendation regarding the compensation peer group for use in 2017 and 2018;

The annual executive competitive market assessment for 2018 pay decisions;

Provided advice regarding the Stock Incentive Plan design;

Conducted a risk assessment of the Company’s executive incentive plans;

Consulting related to the CEO Pay Ratio disclosure;

Support in drafting the CD&A of the Proxy Statement; and

Other ad hoc requests related to executive compensation market practices.

Consultant

Description of Services Provided

Pay Governance

   Review and recommendation regarding the compensation peer group for use in 2018;

   Annual competitive market assessment and recommendations for 2018 pay decisions;

   Review, design and recommendations for the 2018 short-and long-term incentive plans; and

   Support in drafting the CD&A of the 2018 Proxy Statement.

Pearl Meyer

   Updates on trends and developments in executive compensation;

   Conducted a risk assessment of the Company’s executive incentive plans;

   Review and recommendation regarding the compensation peer group for use in 2019;

   Annual competitive market assessment and recommendations for 2019 pay decisions;

   Review, design and recommendations for the 2019 short-and long-term incentive plans;

   Support in drafting the CD&A of the 2019 Proxy Statement; and

   Other ad hoc requests related to executive compensation market practices.

At the MD&C Committee’s direction during 2017,2018, management provided all MD&C Committee materials to the independent consultant and discussed such materials and any recommendations relating thereto with the consultant in advance of each MD&C Committee meeting. Pay GovernancePearl Meyer considered and discussed the information with the MD&C Committee chairperson, specifically identifying any issues or concerns. The MD&C Committee considered Pay Governance’sPearl Meyer’s input as part of its decision-making process.

Pay Governance also provided consulting related tonon-employee Director compensation directly to the Nominating and Governance Committee.

Independence Assessment: No Compensation Consultant Conflicts of Interest

The MD&C Committee assessed the independence of both Pay Governance and Pearl Meyer in 2017,2018, as required under NYSE listing rules. The MD&C Committee has also considered and assessed all relevant factors, including but not limited to those set forth in Rule10C-1(b)(4)(i) through (vi) under the Exchange Act, that could give rise to a potential conflict of interest with respect to the compensation consultant described above. Based on this review, we are not aware of any conflict of interest raised by the work performed by Pay Governance or Pearl Meyer that would prevent the consultant from serving as an independent consultant to the MD&C Committee.

Management Consultants

Our Human Resources department retained Willis Towers Watson during 20172018 to provide additional executive compensation support, including assistance with analysis and recommendations regarding short- and long-term incentive planning services because of their broad level of expertise and expansive knowledge of relevant market data in that area. In addition, Willis Towers Watson provided guidance related to the implementation of the CEO Pay Ratio disclosure requirements. Our Human Resources department also used various survey data compiled by Willis Towers Watson to provide information to the MD&C Committee as part of its decision-making processes.

In 2017,2018, Willis Towers Watson again provided pension plan-related and other similar advice to our Human Resources and Finance departments as well as measurement support for various casualty exposures. The decision to engage Willis Towers Watson for thesenon-compensation related services was made by management.

How We Used Market Data for 20172018 Pay Decisions

Based on our compensation philosophy, whereby we wish to attract and retain high caliber talent, ourOur first step in establishing pay levels for each of our NEOs is to target compensation initially at or near the median (50th(50th percentile) of market data for executives in similar positions. In reviewing the 20172018 compensation of our NEOs, the MD&C Committee references two sources of market data when making compensation decisions: survey data and peer group data.

Survey data:The MD&C Committee consulted with Pay Governance to review third-party compensation surveys focused on capital goods, industrial manufacturing and commodity based industriescommodity-based companies reflecting similar revenue size to Harsco. As we are a diversified industrial services company, no other company perfectly matches our profile, and we believe our most direct competitors for executive talent are not necessarily limited to the companies included in the survey or our Peer Group.peer group. The MD&C Committee does not materially rely upon data from any individual company participating in any of the surveys in making compensation decisions.

 

Compensation Peer Group data: The MD&C Committee also consulted with Pay Governance to review peer group compensation data obtained from SEC filings to help us understand the pay levels in industries in which we compete for talent. Peer group data is focused on elements of compensation (salary,(base salary, annual bonus, and long-term incentives) for NEOs at companies with comparable revenues, market capitalization, industry focus, number of employees, global (multi-national) footprint, and other similar business relatedbusiness-related factors. Our peer group used in making compensation decisions (“Compensation Peer Group”) for 20172018 is listed below.

All components of the Company’s NEO compensation packages, as well as the aggregate target total compensation (the sum of base salary, target annual incentives, and target long-term incentives) levels for the NEOs, are initially targeted to the 50th50th percentile of similarly situated employees of companies in the comparison Compensation Peer Group and relevant survey data. Variation above or below the 50th50th percentile results when, in the judgment of the MD&C Committee, the value of the NEO’s experience, performance, scope and/or specific skills, together with his or her ability to impact business results, or other business conditions, justify the variation.

Variation can also result based upon the terms of individually negotiated employment arrangements andyear-to-year fluctuations in the peer groupPeer Group data and/or the survey data.

Compensation Peer Group

Each year, we review our Compensation Peer Group to ensure our compensation is being benchmarked to comparable companies considering industry, financial and operational similarities. In lightlate 2017, upon review of the Company’s lower market cap2017 Compensation Peer Group and revenue sincethe agreed upon selection criteria which is noted below, the MD&C Committee, in conjunction with Pay Governance, determined no changes were required to the 19 publicly-traded companies to serve as the Compensation Peer Group was initially developed, the MD&C Committee approved changes to this custom peer group to better align with the current size and scope of the consolidated business. Although there are other companies who compete with Harsco’s various business segments, some were not included in the peer set due to their differences in size and scope as compared to Harsco.

for 2018. As in previous years, the following selection criteria was used in the development of the peer group:Compensation Peer Group:

 

Diversified industrial organizations;

 

Global (multi-national) footprint, operating in many individual locations (withwith approximately 30% or more of total revenues deriving from outside the United States);States;

 

Asset/capital intensive nature and/or long-term contract service providers; and

 

Sized to be approximately one half to 2.5 times our size as measured by revenues and within a reasonable range on a market cap basis.

Companies included in the 20172018 Compensation Peer Group were companies that had one or more business aspects that corresponded with one or more of the main aspects of our three business units: M&M, Rail, and Industrial. The following companies comprise the 20172018 Compensation Peer Group:

 

 

20172018 Compensation Peer Group

 

 

Actuant Corporation

 

  

 

Minerals Technologies

 

 

American Railcar Industries, Inc.

 

  

 

Rexnord Corporation

 

 

Astec Industries Inc.

 

  

 

SPX Corporation

 

 

Chart Industries Inc.

 

  

 

SPX FLOW, Inc.

 

 

CIRCOR International, Inc.

 

  

 

Standex International Corporation

 

 

Crane Co.

 

  

 

TriMas Corporation

 

 

EnPro Industries, Inc.

 

  

 

Valmont Industries, Inc.

 

 

Gibraltar Industries, Inc.

 

  

 

Watts Water Technologies, Inc.

 

 

The Greenbrier Companies, Inc.

 

  

 

Woodward, Inc.

 

 

Kennametal Inc.

 

   

In addition, the following companies, which were part of the 2016 Compensation Peer Group, were used as additional reference in evaluating competitive pay positioning:

2016 Companies Removed from Peer Group

AO Smith Corp.

Curtiss-Wright Corporation

IDEX Corporation

ITT Corporation

The Manitowoc Company, Inc.

Meritor, Inc.

Snap-On Inc.

Wabtec Corporation

Xylem Inc.

For the 20172018 Compensation Peer Group, median revenuesrevenue for 2017 (20162018 (2017 data was utilized to determine 20172018 NEO compensation) werewas approximately $1.4$1.5 billion (as compared to the Company’s 20172018 revenues of approximately $1.6$1.7 billion) and median market capitalization as of September 30, 20172018 was approximately $1.5$1.9 billion (as compared to the Company’s 20172018 market capitalization of approximately $1.5$2.3 billion). The following charts illustrate Harsco’s position in comparison to the 20172018 Compensation Peer Group’s median by total revenuesrevenue and market capitalization measured as of September 30, 2017.2018.

 

LOGO     

LOGO      

 LOGO

LOGO      

In 2018, upon review of the 2018 Compensation Peer Group and the selection criteria noted above, the MD&C Committee approved the recommendation of Pearl Meyer to remove American Railcar Industries, Inc. and add three new companies - Meritor, Inc., The Timken Company and ITT Inc. to the Compensation Peer Group for 2019 due to the Company’s growing market capitalization and revenue size. Although there are other companies who compete with Harsco’s various business segments, some were not included in the compensation peer set due to their differences in size and scope as compared to Harsco.

The 21 companies in our new 2019 Compensation Peer Group will be discussed in our 2020 Proxy Statement.

Initial Benchmarking

In reviewing base salaries, target total cash compensation, and target total compensation for 2017,2018, the MD&C Committee initially targeted each NEO’s compensation opportunity at the 50th50th percentile of both the combined peer groupCompensation Peer Group data and survey data. The MD&C Committee believes NEOs should not be compensated at either the high or low end of compensation as compared to the market, but rather should receive a reasonable level of compensation based on both the Company’s overall performance and their individual performance. The MD&C Committee then sets final compensation amounts either above or below the initial benchmarks, specifically taking into account:

 

Differences in the scope of responsibilities held by the NEOs;

Performance (specifically the effect of what the MD&C Committee viewed as exceptional performance) of duties during a NEO’s tenure with Harsco;

 

Market requirements; and

 

Length of service with the Company in specific positions.

While past performance is considered by the MD&C Committee in setting current year target compensation opportunities, the effect of current performance is much more significant in determining the level at which those compensation opportunities are earned and paid out. Our program provides each NEO an opportunity to earn a competitive level of compensation each year if we achieve ourpre-established objectives, with an opportunity to earn greater amounts by helping us exceed those targets or lesser amounts when performance falls short of targets.

Impact of NEO Individual Performance on 20172018 Compensation

Consistent with our performance-oriented pay philosophy, theThe compensation structure for the Chairman, President & CEO is designed to deliver approximately 20%18% of the annual compensation opportunity in the form of fixed pay (base salary)base salary (fixed compensation) and the remaining 80%82% in the form of variable compensation (target annual incentive compensation and target long-term equity-based compensation). The actual amount of compensation realized by the CEO may vary from this target based upon performance evaluated under the terms of our variable compensation plans. Once per year, the MD&C Committee completes an evaluation with respect to the Company’s goals and objectives and makes a report to the Board. Based upon this assessment, the CEO’s compensation was set for the 20172018 fiscal year, including base salary, annual incentive target, long-term equity-based compensation, perquisites, and other benefits. When evaluating the total level of CEO compensation for the 20172018 fiscal year, the MD&C Committee considered the following information:

 

Personal performance againstpre-established goals and objectives;

 

The Company’s performance and relative TSR; and

 

The compensation of CEOs at comparable companies, as reflected in the benchmark compensation data.

With respect to setting the compensation for the other NEOs, the MD&C Committee strives to deliver a competitive level of total compensation to each of the NEOs by evaluating and balancing the following objectives:

 

The strategic importance of the position within our executive team;

 

The overall performance level of the individual and the potential to make significant contributions to the Company in the future;

 

The value of the position in the marketplace;

 

Internal pay equity; and

 

Our executive compensation structure and guiding principles.

Consistent with our pay for performance philosophy, target

Target total direct compensation for our NEOs other than the Chairman, President & CEO is designed to deliver approximately 65%67% variable compensation at target performance and 35% fixed compensation.33% of base salary (fixed compensation). The amounts of compensation actually realized by our NEOs will vary from the target awards based upon performance evaluated under the terms of our compensation plans.

Each year, the Chairman, President & CEO presents his Organizational Leadership Review to the MD&C Committee to discuss the individual performance and potential of each of the other NEOs. Following this review, the Chairman, President & CEO submits compensation recommendations to the MD&C Committee for each NEO. These recommendations address all elements of compensation, including base salary, target annual incentive compensation, long-term equity-based compensation, perquisites, and other benefits. In evaluating these compensation recommendations, the MD&C Committee considers information such as the NEOs’ individual performance, the performance of the Company, and the compensation of similarly situated executive officers as determined by the referenced benchmark data. The MD&C Committee takes into account all ofapplies the same considerations as noted above when making its compensation decisions for the Chairman, President & CEO.

Elements of 2017 NEO2018 Compensation Program

The key elements of our 2017 NEO compensation program are described in the following table:

ElementDecision Details

Description

Base Salary

   Fixed annual cash amount based on competitive market data

   Targeted to market median

Annual Incentive (AIP Awards)

   Variable, performance-based annual cash payment linked to and focused on strategic and financial short-term goals

   Targeted to market median

Long-Term Incentive (LTIP Awards)

   Variable,time-and performance-based annual award grant comprised ofone-third PSUs,one-third RSUs andone-third SARs

   Realizable compensation based upon the intrinsic value of the Company’s stock price performance

   Targeted to market median

Perquisites and Personal Benefits

   Limitednon-cash compensation designed to attract and retain NEOs and provide a competitive compensation opportunity

Retirement Benefits

   Defined contribution plans and pension plan benefits similar in form to benefits available to our other employees

   Supplemental contributions available above Internal Revenue Code limits do not exceed amounts contributed below Internal Revenue Code limits

Post-Employment Payments

   Contingent in nature and generally payable only if an NEO’s employment is terminated as specified under the terms of various plans and arrangements

Target Compensation Mix

As reflected in the following charts, the MD&C Committee approved a significant amount of each NEO’s target total compensation opportunity in the form of variable, rather than fixed, compensation.

2017 Target Compensation Mix
Chief Executive Officer

LOGO

2017 Target Compensation Mix
Average of Other NEOs

LOGO

The charts above include annual base salary, target AIP and target LTIP as of December 31, 2017. The 2017 Target Compensation Mix Average of Other NEOs chart includes data for those NEOs, excluding the President & CEO, serving as named executive officers as of December 31, 2017.

Base Salary

Base salary represents annual fixed compensationa stable source of income (fixed compensation) and is a standard element of compensation necessary to attract and retain talent. It is the minimum payment for a satisfactory level of individual performance for as long as the executive remains employed with the Company. Base salary is set at the MD&C Committee’s discretion after taking into account the competitive landscape including the compensation practices of the companies in our selected Compensation Peer Group and survey data from a broader index of comparable companies, our business strategy, our short- and long-term performance goals, and individual factors, such as position, salary history, individual performance and contribution, an individual’s length of service with the Company, and placement within the general base salary range offered to our NEOs.

TheEffective May 1, 2018, NEOs received increases in their annual base salary rates are effective on May 1stsalaries, in recognition of their contributions to the applicable fiscal year.Company, overall positioning relative to market data, as well as the overall merit increase budget for Harsco in the U.S. The table below reflects the year-over-year changes in base salary approved by the MD&C Committee and effective as of December 31, 2017:January 1, 2019:

 

Annual Base Salary Rate
  Annual Base Salary Rate   %
Increase
   
Executive  Effective
May 1, 2016
   Effective
May 1, 2017
   

Effective

May 1,
2017

Effective

May 1,
2018

%
Increase

Effective

Jan 1,
2019
(1)

%
Increase

F. Nicholas Grasberger III

  $825,000   $849,750    +3$849,750$892,500+5%$919,2753%

Peter F. Minan

  $490,000   $504,700    +3$504,700$519,841+3%$535,4363%

Russell C. Hochman

  $365,000   $375,950    +3$375,950$400,000+6%$412,0003%

Tracey L. McKenzie

  $360,000   $370,800    +3$370,800$400,000+8%$412,0003%

Scott H. Gerson

  $330,000   $339,900    +3

Jeswant S. Gill

$350,000$360,500+3%$371,3153%
(1)

Effective 2019, our NEOs will receive adjustments to their annual base salary on January 1 at the same time other Harsco employees receive their annual merit increases.

20172018 AIP Awards

NEOs were eligible to participate in the 20172018 AIP program, which provides the opportunity to earn a performance-based cash incentive based on the achievement of near-term financial results and strategic goals. All NEOs were evaluated, in significant part, based on overall Company performance to improve financial results and drive stockholder value. In its decision-making authority, the MD&C Committee reviewed the targets as established based on the 20172018 Annual Operating Plan set at the beginning of the year versus actual financial results. The MD&C Committee is given discretion to reduce (but not increase) the final payout amounts for the NEOs.

Prior to 2018, Harsco’s performance-based incentives were intended to comply with the historical structure of IRC section 162(m) for the purposes of qualifying as performance-based compensation for tax deductibility purposes. To this end, incentives were awarded under the shareholder approved 2013 Equity & Incentive Plan, which identifies eligible employees covered by the plan, metrics used to assess company performance for determining incentive payments, and individual compensation limits.

Setting 20172018 AIP Award Opportunities

Target annual incentive opportunities are expressed as a percentage of base salary and payouts can range from 0% to 200% of target award amounts based on financial performance. Targets were established by the MD&C Committee based on each NEO’s level of responsibilities and his or her ability to impact our overall results, as well as consideration of the benchmarking data as previously discussed. For 2017,2018, there were no changes to target annual incentive levels for NEOs.

 

Executive

FY ’17‘18
Target AIP(1)AIP
(1)

AIP Opportunity Range (% of Target Award Opportunity)

ExecutiveBelow
Threshold
ThresholdTargetMaximum

F. Nicholas Grasberger III

110% 110%

Peter F. Minan

75% 75%

Russell C. Hochman

65%65% 0% of Target 25% of Target 100% of Target 200% of Target
 200% of Target 

Tracey L. McKenzie

65% 65%

Scott H. Gerson

 75
%

Jeswant S. Gill

75%

(1)

As of December 31, 20172018, expressed as a percentage of base salary.

AIP Performance Metrics and Payouts

Our annual cash incentive plan, the AIP, is intended to:

 

Our annual cash incentive plan, the AIP, is intended to:

   Hold our leadership team accountable for the efficient use of capital;

   Drive growth;

   Focus our executives on the achievement ofpre-determined Harsco BUC goals; and

   Ensure accountability towards delivering near-term commitments and consistent operating improvements.

What Is Harsco BUC?

Harsco BUC consists of two distinct components, including:

1)  Operating income (excluding the effect of certain special items as determined by the MD&C Committee); minus

2)  A fixed cost of capital rate applied to planned controllable net assets deployed.

Why Harsco BUC?

We believe this measure is appropriate for Harsco’s diverse portfolio of businesses because it:

1)  Provides a clearline-of-sight for AIP participants;

2)  Drives accountability towards delivering near-term commitments and consistent operating improvements; and

3)  Is easy to understand and administer.

Hold our leadership team accountable for the efficient use of capital;
Drive growth;
Focus our NEOs on the achievement ofpre-determined Harsco BUC targets; and
Ensure accountability towards delivering near-term commitments and consistent operating improvements.

For 2017,2018, all AIP payouts for NEOs were entirely dependent upon achievement of BUC performance. Performance metrics, weights and goals were developed based upon our annual operating plans, as approved by the Board, to drive alignment with commitments made to our stockholders. Specific weightings between Harsco Consolidated BUC and Business Unit BUC for each NEO is presented in the table below:below.

What Is Harsco BUC?

Harsco BUC consists of two distinct components, including:

1.  Operating income (excluding the effect of certain special items as determined by the MD&C Committee); minus

2.  A fixed cost of capital rate applied to planned controllable net assets deployed.

Why Harsco BUC?

We believe this measure is appropriate for Harsco’s diverse portfolio of businesses because it:

1.  Provides a clearline-of-sight for AIP participants;

2.  Drives accountability towards delivering near-term commitments and consistent operating improvements; and

3.  Is easy to understand and administer.

BUC Weighting 
Executive  Business Unit  

Harsco

Consolidated

  Business
Unit
 

F. Nicholas Grasberger III

  Harsco Consolidated     100  0

Peter F. Minan

  Harsco Consolidated     100  0

Russell C. Hochman

  Harsco Consolidated     100  0

Tracey L. McKenzie

  Harsco Consolidated     100  0

Scott H. Gerson

  Harsco Industrial   50  50

 

BUC Weighting

 

    

Executive

 

 

Business Unit  

 

 

Harsco Consolidated

 

 

Business Unit

 

 

F. Nicholas Grasberger III

 

       Harsco Consolidated        

 

 100%

 

 0%

 

 

Peter F. Minan

 

 Harsco Consolidated  

 

 100%

 

 0%

 

 

Russell C. Hochman

 

 Harsco Consolidated  

 

 100%

 

 0%

 

 

Tracey L. McKenzie

 

 Harsco Consolidated  

 

 100%

 

 0%

 

 

Jeswant S. Gill

 

 Harsco Rail  

 

 50%

 

 50%

 

In developing the Consolidated Harsco BUC goal, we established the threshold, target and maximum levels by starting with the first component – our operating income target as approved by the Board of Directors in our annual operating plan. We then apply the second component –used a fixed cost of capital rate applied to planned controllable net assets deployed. The operating income metric at threshold, target and maximum iswas then reduced by the fixed cost of capital, (whichwhich is applied consistently across all performance levels)levels, to derive the final BUC result at each performance level. Harsco Consolidated operating income and BUC goals arewere a product of the goals across the individual lines of business less a charge for Corporate operating expenses.

The 2017 BUC goals at thewere designed to enable business unit leadership to execute controllable strategic actions that deliver improved income generation with an efficient use of capital resources. The 2018 Harsco Consolidated levelBUC goals are presented in the table below:chart below.

 

 

Performance

Level

 

 Harsco Operating 

Income Goal

(% of Target)

    

Fixed

Capital Charge

    

Harsco

 Consolidated 

BUC

($ Millions)

 

AIP Payout

Factor

 (% of Target)(1) 

 

 Harsco

Operating 

Income Goal

(% of Target)

 

    

Fixed Capital

Charge

 

    

 

Harsco
 Consolidated 
BUC

($ Millions)

 

 

AIP Payout
Factor

 (% of

Target)(1) 

 

Maximum

 140%  -  Fixed cost of

 capital rate applied 

to planned

controllable net

assets deployed

  =  $32.0 200% 140%

 

 -    

 

 Fixed cost of
 capital rate applied 
to planned
controllable net
assets deployed

 

 

 =    

 

 td10.4

 

 200%

 

Target

 100%  -    =  (td0.8) 100% 100%

 

 -    

 

 =    

 

 $43.8

 

 100%

 

Threshold

 64%  -    =  ($49.4) 25% 82%

 

 -    

 

 =    

 

 td3.4

 

 25%

 

Below Threshold

 < 64%  -    =  <($49.4) 0% < 82%

 

 -    

 

 =    

 

 <td3.4

 

 0%

 

(1)

Payouts are interpolated between each specific performance level using anon-linear payout schedule. The schedule uses a commonly establishednon-linear design with an intermediate payout range of 90%80% to 110%120% of target for BUC results of $(31.4)$23.4 million to $3.7$61.7 million.

The BUC goals are designed to enable business unit leadership to execute controllable strategic actions that deliver improved income generation with an efficient use of capital resources.

The Harsco Consolidated BUC target which isfor 2018 was based on two distinct and separate components:on: (1) an operating income target of $106.1$166.4 millionminus (2) a fixed cost of capital rate applied to planned controllable net assets deployed. As our fixed capital charge exceeded the operating income target, thus Harsco’s Consolidated BUC target was negative $10.8 million. This operating income target reflects an increase of 9.5%57% over the 20162017 operating income target. In determining the operating income target for 2017,2018, we reviewed the prior year’s operating results, growth investments and the impact of current year’s strategic objectives. An increasepriorities. Continued improvement in Corporate spending was anticipated to support these objectives. We also anticipated modest improvements in manymost of Harsco’s keyend-markets and the impact of a stronger U.S. dollar against various currencies.was anticipated for 2018. Below are specific factors by business unit which were considered impactful and contributed to the increase in the 20172018 operating income target when compared with 20162017 actual results.

 

Metals & Minerals Industrial Rail

   An anticipated increase in steel production at customer sites andsites.

   Positive benefits from the addition of new service contracts, partially offset by site exits.

   Increased contributions from various Applied Products, including the Company’s abrasive and roofing granules business.

 

   Higher commodity prices, including nickel and ferrous scrapscrap.

 

   ExpectedPersonnel investments to support growth objectives, partially offset by expected cost savings from various operational initiatives

   Lower anticipated demand for specialty metallics (mainly nickel) and Applied Productsinitiatives.

 

   Less favorable mix of mill servicesservices.

 

   NegativePositive foreign exchange translation impacts from a strongerweaker U.S. dollardollar.

 

   Improved demand forair-cooled heat exchangers from U.S. energy customers

   Positive impacts from further market penetrationcustomers.

 

   Expected improvement in capital spending on industrial boilers, along with positive impacts from new product initiativesgrating and fencing as well as commercial boilers.

 

   Lower anticipated demand for metal gratingPositive impacts from further market penetration and fencing due to large project awards in 2016 as well as a lack of major capital projectsnew product initiatives.

 

   Competitive marketMore favorable product mix relative to 2017.

   Manufacturing savings realized from prior capital investments.

   More favorable competitive dynamics and margin pressure withinin certain product marketsmarkets.

 

   Forward loss provisions of $45 million recorded in 2016, not repeated in 2017

   Higher anticipated demand and market penetration for after-market parts and Protran technology productsproducts.

 

   IncreasedA less favorable mix of equipment sales to international customers

   Persistent weakness in the North American rail market, resulting in sluggish spending trends among key customersrelative to 2017.

 

   Lower anticipated contributions from services contractscontracts.

The MD&C Committee established a performance range around the operating income target of 64%82% to 140% of target from threshold to maximum after considering the volatility that commodity and served end market uncertainty was creating within our customer base, and the results of a market review of performance ranges in the industry.

Actual Harsco Consolidated BUC achieved was $28.3$72.3 million, driven by better than planned operational performance, strong cash flows, and capital management. Strongerimproved operating income performance resulted from the successful execution of business and cost control initiatives, favorable end market trends, in the energy sector, higher commodity prices, and lower overhead costs. Better capital charge performance occurred due to more disciplined capital spending and working capital management. The MD&C Committee gave careful consideration and assessment of the management team’s achievement against the established goals. As contemplated when setting the targets, certain adjustments were made due to the impact on annual results of certain nonrecurring, unusual items. The net adjustments reduced operating income by ($3.8) million. The adjustment for the capital component totaled $2.1$5.6 million for a portionthe capital charge associated with the Company’s 2018 acquisition of bad debt expense for a customer sitethe Altek business in its Metals and& Minerals that had entered into voluntary administration; the proceedings of which indicated most of thepre-administration receivables would not be paid by the customer. This adjustment wassegment. These adjustments were determined by the MD&C Committee to be excluded from the calculation of BUC since itthey did not directly reflect company or management performance and isare unusual and infrequent in nature. The adjusted BUC performance produced a 188%2018 AIP payout for Mr. Grasberger, Mr. Minan, Mr. Hochmancalculations and Ms. McKenzie, who were awarded $1,740,550, $704,851, $455,036 and $448,803 respectively.results are noted in the table below.

At the business unit level, Mr. Gerson’sGill’s incentive awards are determined using an equal weighting between Harsco Consolidated BUC and Harsco IndustrialRail BUC. Mr. Gerson’sGill’s annual goals are a balance between critical contributions to overall Harsco performance with the specific strategic initiatives of the IndustrialRail business unit. For 2017,2018, BUC performance for Harsco IndustrialRail was $26$30.6 million, resulting in a payout factor of 167%113% for Mr. GersonGill on the business unit component, and when including the Harsco Consolidated performance result, Mr. Gerson’sGill’s combined payout factor was 177.5%125% and he was awarded $448,183.

$334,725. The 20172018 AIP calculations and results were as followfollows for the NEOs:

 

  

FY ’17

Target

AIP(1)

  BUC Payout Factor Achieved    

Executive

  

FY ’18

Target

AIP(1)

 

 

BUC Payout Factor Achieved

 

   
  

FY ’17

Target

AIP(1)

  Consolidated   Business
Unit
    Result(2)  AIP
Earned

Consolidated

 

  

Business
Unit

 

  

Result(2)

 

 

AIP Earned

 

F. Nicholas Grasberger III

  188% +  NA =  188%  td,740,550  $966,255

 

 137%

 

 +

 

 NA

 

 =

 

 137%

 

 td,323,770

 

Peter F. Minan

  $374,921  188% +  NA =  188%  $704,851  $386,139

 

 137%

 

 +

 

 NA

 

 =

 

 137%

 

 $529,010

 

Russell C. Hochman

  $242,041  188% +  NA =  188%  $455,036  $254,849

 

 137%

 

 +

 

 NA

 

 =

 

 137%

 

 $349,143

 

Tracey L. McKenzie

  $238,725  188% +  NA =  188%  $448,803  $253,746

 

 137%

 

 +

 

 NA

 

 =

 

 137%

 

 $347,632

 

Scott H. Gerson

  $252,498  188% +  167% =  177.5%  $448,183

Jeswant S. Gill

  $267,780

 

 137%

 

 +

 

 113%

 

 =

 

 125%

 

 $334,725

 

(1)

Reflects 20172018pro-rated effective base salary times target AIP percent.

(2)

For Mr. Gerson,Gill, the combined payout factor reflects the combination of Harsco Consolidated and Business Unit results.

Long-Term Incentive Awards

The MD&C Committee’s philosophy, where long-term compensation is balanced between performance-based and service-based pay, helps us achieve alignment of stockholder and executive interests by:

 

Rewarding NEOs for the creation of sustained stockholder value, with compensation varying in line with performance;

 

Encouraging ownership of our stock, by management, including via our stock ownership guidelines;

 

Fostering teamwork that drives improved performance; and

Providing us with a means to retain and motivate high-caliber executives needed to attain our desired performance goals.

Setting 20172018 Long-Term Award Opportunities

Target long-term incentive opportunities are expressed as a percentage of base salary and the realized value is dependent on stock price and total shareholder return over a specified period of time. Targets were established by the MD&C Committee based on each NEO’s level of responsibilities and his or her ability to impact our overall results, as well as consideration of the benchmarking data previously discussed. For 2017, there were no changes to target long-term incentive levels for NEOs from 2016 levels.

ExecutiveFY’17
Target  LTIP(1)

F. Nicholas Grasberger III

   300%

Peter F. Minan

   150%

Russell C. Hochman

   100%

Tracey L. McKenzie

   100%

Scott H. Gerson

   100%
(1)As of December 31, 2017 expressed as a percentage of base salary.

As has been our practice historically, forFor the LTIP award cycle granted in 2017,2018, the MD&C Committee and the Board established the grant level for each NEO as a percentage of that NEO’s base salary. The MD&C Committee and the Board set target values for the 20172018 LTIP awards with the intent that each NEO’s total direct compensation opportunity falls within a reasonable range of the market median for the NEO’s position. See the “Grants of Plan-Based Awards in Fiscal 2017”2018” table for more information. In 2017, as discussed in the proxy statement last year, the timing of the annual LTIP Grant was changed from early May to early March to align with the timing utilized by our peers and to be consistent with our annual incentive process.

LTIP Components

Over the last several years, our LTIP program has evolved with our changing business model, feedback from our stockholders and market trends to achieve the appropriate balance of risk, retention and performance. Beginning in 2014, we included PSUs as a component of the LTIP for our Executive Leadership Team and reduced the proportion of SARs so that PSUs, SARs, and RSUs are all equally weighted. We have maintained this mix since 2015 for all NEOs.

NEO LTI Mix

LOGO

One-third

At its February 2018 meeting, the MD&C Committee increased long term incentive targets for some of our NEOs. The MD&C Committee made these changes in consideration of the award value is granted inexecutive’s compensation as compared to peer companies, additional responsibilities assumed by the form ofexecutive, tenure and individual performance. The table below reflects long-term incentive targets approved by the MD&C Committee:

Executive

 

  

 

FY’17 Target LTIP

 

  

 

FY’18 Target LTIP

 

 

F. Nicholas Grasberger III

 

  

   300%

 

  

   335%

 

 

Peter F. Minan

 

  

   150%

 

  

   150%

 

 

Russell C. Hochman

 

  

   100%

 

  

   125%

 

 

Tracey L. McKenzie

 

  

   100%

 

  

   125%

 

 

Jeswant S. Gill

 

  

   100%

 

  

   115%

 

In addition, the CEO’s LTI mix was adjusted to 40% PSUs, which “cliff” vest30% RSUs and 30% SARs beginning with 2018 grants, while all other NEOs maintained an equal mix across all three vehicles.

CEO LTI MixNEOs LTI Mix

LOGO

LOGO

A Closer Look at the end of a three-year performance period.LTIP Components The performance period for the 2017 grant is from January 1, 2017 through December 31, 2019. The objective of PSUs is to align pay with performance and reward contributions to Harsco stock performance relative to our market peers.

PSUs

Objective: Align pay with performance and reward contributions to Harsco stock performance relative to our market peers.

2018 Performance Period: January 1, 2018 through December 31, 2020.

Initial PSU Grant: Based on the closing price of Harsco Common Stock on the date of the grant. However, the actual accounting value of the award may differ from the grant value; realized value will be based on performance and stock price over time.

Payout: Capped at 100% (“target”) if TSR is negative over the performance measurement period.

TSR Calculation:30-day average stock price prior to the beginning of the performance period and the30-day average stock price at the end of the performance cycle.

Dividends: Assumed to have beenre-invested on theex-dividend date.

Vesting Date: Awards earned are settled in shares of Harsco Common Stock. Participants will also receive accumulated dividend equivalents on the ending number of shares delivered at the end of the performance period.

PSU Performance Level

Harsco’s TSR performance relative to the S&P 600 Industrial Index will generally determine the number of shares delivered at the end of the three-year performance cycle as follows (achievement will be interpolated between the various performance points on the table):

 

Performance Level

Index Percentile Achievement

Achievement

Payout as a % of Target

Target

Maximum

75th200%

Target

50th100%

Threshold

25th25%

Below Threshold

Below 25th0%

 

There is no payout if absolute TSR is negative for the 2017 to 2019 grant performance cycle.TSR is calculated based on the30-day average stock price prior to the beginning of the performance period and on the30-day average stock price at the end of the performance cycle. All dividends are assumed to have beenre-invested on theex-dividend date. The initial number of target PSUs granted is based on the closing price of Harsco Common Stock on the date of the grant. However, the actual accounting value of the award may differ from the grant value; realized value will be based on performance and stock price over time. At the vesting date, any earned awards are settled in shares of Harsco Common Stock. Participants will also receive accumulated dividend equivalents on the ending number of shares delivered at the end of the performance period.
SARs

Objective: Reward contributions to long-term stock value growth.

Award Value: Granted in the form of stock-settled SARs with a10-year expiration term, which generally vest “ratably” over three years.

Exercise Date: Awards are settled in shares of Harsco Common Stock.

 

RSUs

Objective: Reward contributions and continued employment (retention) with the Company.

Award Value: Granted in the form of time-vested RSUs, which generally vest “ratably” over three years.

Initial RSU Grant: Based on the closing price of Harsco Common Stock on the date of the grant.

Dividend Equivalents: Paid on RSUs quarterly through the regular payroll processes.

Vesting Date: Awards are settled in shares of Harsco Common Stock.

One-third of the award value is granted in the form of stock-settled SARs with a10-year expiration term, which generally vest “ratably” over three years. At the exercise date, awards are settled in shares of Harsco Common Stock. The objective of SARs is to reward contributions to long-term stock value growth.

One-third of the award value is granted in the form of time-vested RSUs, which generally vest “ratably” over three years. At each vesting date, awards are settled in shares of Harsco Common Stock. The objective of the RSUs is to reward contributions and continued employment (retention) with the Company. The number of RSUs granted is based on the closing price of Harsco Common Stock on the date of the grant. Dividend equivalents, if any, are paid on RSUs quarterly through the regular payroll processes.

Vesting of 20152016 to 20172018 Performance Share Unit Plan

The Company granted performance share units in 20152016 with vesting conditioned on Harsco’s TSR performance relative to the S&P 400 MidCap index600 Industrial Index for thethree-year period from 20152016 through 2017.2018. Harsco’s TSR result for the period equaled the 24th96th percentile of the index, resulting in a payout at 0%200% of the units granted in 2015.

2016.

Decisions Regarding 2018 Individual Incentive Targets

At its February 2018 meeting, the MD&C Committee made the following changes to certain of our NEO’s long term incentive targets. The MD&C Committee made these changes in consideration of the executive’s compensation as compared to peer companies, additional responsibilities assumed by the executive, tenure and individual performance.

ExecutiveFY’17
Target LTIP  
FY’18
Target  LTIP  

F. Nicholas Grasberger III

300%335%

Russell C. Hochman

100%125%

Tracey L. McKenzie

100%125%

Scott H. Gerson

100%115%

In addition, the CEO’s LTI mix was adjusted to 40% PSUs, 30% RSUs and 30% SARs while all other NEOs maintained an equal mix across all three vehicles. No adjustments were made to the 2018 annual incentive targets.

Other Compensation Elements

During 2017,2018, we provided our NEOs with the following broad-based employee benefits on the same terms that apply to ournon-executive U.S. employees:

 

Health insurance;

 

Disability insurance;

 

A term life insurance benefit equal to two times the individual’s salary up to a maximum benefit of $500,000; and

 

401(k) plan participation.

Since defined benefit plan accruals for Harsco’s U.S. executives were frozen effective December 31, 2008, we continue to note the change in pension value representing the net effect of interest adjustments (in other words, change in present value due to shortening of the discount period) and changes in assumptions used to estimate present values. Our NEOs are also eligible to participate in theNon-Qualified Retirement Savings and Investment Plan (“NQ RSIP”), which supplements the RSIP with respect to contributions that could not be made because of Internal Revenue Service compensation and contribution limitations.

We provided other benefits to certain NEOs during 2017.2018. While rarely used, the Board maintains a policy regarding our Chairman, President & CEO’s personal use of our corporate aircraft. In the event of personal use of the corporate aircraft,

our Chairman, President & CEO is taxed on the imputed income attributable to personal use of our aircraft, and our Chairman, President & CEO does not receive a taxgross-up from us with respect to such imputed amounts.

We offer limited perquisites and other personal benefits to our NEOs at competitive levels with those provided by our peer groupPeer Group companies, as well as the larger group of companies within the general industry that are similar in overall size and relative performance. We believe the other benefits we provided to our NEOs were necessary to help us attract and retain our senior executive team and the values of these benefits were reasonable, competitive, and consistent with the overall executive compensation program.

For more information on the perquisites and certain other benefits provided to the NEOs in 2017,2018, see the All Other Compensation Table that serves as a supplement to the 20172018 Summary Compensation Table.

Employment Arrangements with NEOs

The Company is not a party to any employment agreements with its NEOs. Additionally, no offer letter arrangements were outstanding between our NEOs and the Company in 2017.2018.

Potential Payments upon Change in Control and Other Potential Post-Employment Payments

Change in Control Severance Agreements

We are currently a party to change in control severance agreements with Messrs. Grasberger, Minan, Hochman, GersonGill and Ms. McKenzie. These change in control severance agreements reflect what we believe to be a market-based approach to a potential change in control scenario and incorporated several stockholder-favored compensation practices, including:

 

“Double-trigger” payment provisions that require a qualifying termination of employment after a change in control before benefits and payments are received; and

 

No excise taxgross-ups on severance benefits (each NEO will either pay the excise taxes on his or her severance benefits or the severance benefits will be reduced to a point where the excise tax does not apply, depending on which result is more favorable to the executive).

Mr. Grasberger is entitled to receive double-trigger severance benefits equal to three times his highest base salary in effect during the period beginning 90 days prior to the change in control through the date of termination, plus three times his highest target annual incentive for the year of termination. Each of Messrs. Minan, Hochman, GersonGill and Ms. McKenzie is entitled to receive double-trigger severance benefits equal to two times his or her highest base salary in effect during the period beginning 90 days prior to the change in control through the date of termination, plus two times his or her highest target annual incentive for the year of termination. Each change in control severance agreement provides for a rolling three-year term that renews each year, subject to certain exceptions.

The change in control severance agreements are reviewed on a regular basis, though not necessarily as part of the annual compensation review. The MD&C Committee believes the change in control severance agreements serve the following purposes:

 

Assure we have the continued dedication and full attention of certain key employees prior to and after the consummation of a change in control event;

 

Help ensure, if a possible change in control should arise and a change in control officer should be involved in deliberations or negotiations in connection with the possible change in control, such officer would be in a position to consider as objectively as possible whether the possible change in control transaction is in our best interest as well as the best interests of our stockholders, without concern for his or her position or financial well-being; and

 

Protect us by retaining key talent in the face of corporate changes.

Other Potential Post Employment Payments

Upon certain types of terminations of employment not related to a change in control, payments under various Company policies and plans may be paid to NEOs. These events and amounts are more fully explained under the heading “Termination or Change in Control Arrangements.”

Stock Ownership Guidelines

In 2017,2018, we continued to maintain stock ownership guidelines that applied to the NEOs. Our stock ownership guidelines encourage the retention of stock acquired through our LTIP awards. No shares may be sold by participants until their applicable ownership guidelines are satisfied, subject to a hardship exception administered by the MD&C Committee.

The stock ownership guidelines are established as a multiple of each NEO’s base salary and were benchmarked against the stock ownership guidelines for similarly situated executives at peer groupPeer Group companies. They were also based on the Board’s determination of appropriate share ownership levels based on our compensation system. Under the guidelines, each NEO is encouraged to own a specific amount of our common stock and is restricted from selling shares until the guideline has been satisfied. The share ownership levels (based on fair market value as measured periodically) for each NEO for 20172018 were as follows:

 

Name

 

Three Times Salary

 

Six Times Salary

F. Nicholas Grasberger III

   

Peter F. Minan

 
  

Russell C. Hochman

   

Tracey L. McKenzie

   

Scott H. GersonJeswant S. Gill

   

Our NEOs have five years from the date they are first granted LTIP awards to comply with the guidelines. If a NEO is promoted into a position with greater ownership requirements, that individual has five additional years to comply with the new guideline. All common stock held by the NEOs, whether acquired as a result of an LTIP award or otherwise, is included in determining whether they have achieved the applicable ownership guideline. Unvested stock options and unvested SARs are not included in calculating whether the guidelines have been met. Failure to meet the guidelines within the applicable five-year period will result in a review by the MD&C Committee to determine the cause of such failure and to develop an appropriate corrective action plan.

AtAs of December 31, 2017, all NEOs2018, Messrs. Grasberger, Minan and Hochman along with Ms. McKenzie have met their ownership guidelines.guidelines while Mr. Gill was within the five-yearphase-in period for meeting his ownership guidelines and continues to accumulate shares.

Right to Recover Incentive Compensation

Consistent with the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Company and the Board reserve the right to recover (or “clawback”) from certain current and/or former key employees any wrongfully earned performance-based compensation, including stock-based awards, under the following circumstances:

 

There is a restatement of Company financials due to material noncompliance with any financial reporting requirement;

 

The Board determines the current or former employee has willfully committed an act of fraud, dishonesty or recklessness in the performance of his or her duties that contributed to the noncompliance that resulted in the requirement to restate Company financials; and

 

The cash incentive or performance-based equity compensation would have been less valuable than what was actually awarded or paid based upon the application of the correct financial results.

These provisions are designed to deter and prevent detrimental behavior and to protect our investors from financial misconduct.

Policies on Hedging and Pledging of Shares

Consistent with the Dodd-Frank Act, the Company’s Insider Trading Policy prohibits all Board members, employees, including corporate officers, from engaging in any transaction in which they may profit from short-term speculative swings in the value of the Company securities (or “hedging”). For this purpose, “hedging” includes “short-sales” (selling borrowed securities which the seller hopes can be purchased at a lower price in the future) or “short sales against the box” (selling owned, but not delivered securities), “put” and “call” options (publicly available rights to sell or buy securities within a certain period of time at a specified price or the like), and other hedging transactions designed to minimize the risk inherent in owning Common Stock, such aszero-cost collars and forward sales contracts.

Additionally, Board members and executives are prohibited from pledging shares as collateral for a loan or in a margin account.

Policy Regarding Tax and Accounting Impact on Executive Compensation

Section 162(m)The MD&C Committee annually reviews and considers the deductibility of the Internal Revenue Code generally limits to $1 million the U.S. federal tax deductibility of compensation paid in one taxable year by publicly-traded corporations to certainour executive officers, (and, beginning in 2018, to certain former executive officers). Historically, qualified “performance-based compensation” as was defined under Section 162(m) was not subject to the limits on deductibility, provided such compensation meets certain requirements, including stockholder approvalwhich includes each of the material termsNEOs. Under the Tax Cuts and Jobs Act of 2017, the compensation. However, this exception has now beenexemption for qualifying performance-based compensation was repealed effective for taxable years beginning after December 31, 2017, unless certain transition relief for certain compensation arrangements in place as of November 2, 2017 is available.

In certain cases, we have sought to preserve this deductibility of2017. As a result, compensation paid to our NEOs while maintainingexecutive officers (on or after January 1, 2018) in excess of $1 million is generally not deductible unless it qualifies for certain transition relief. While the Company will monitor guidance and developments in this area, the MD&C Committee believes that its primary responsibility is to provide a compensation program that effectively attracts, retains and retains high performing executives in a highly competitive environment. However, on occasion we may not have been able to (or we may not be able to) satisfy all conditions ofrewards the Internal Revenue Codeexecutive talent necessary for deductibility and still meet our compensation needs. As a result, we may from time to time choose to pay compensation that would otherwise not be deductible under Section 162(m) if we believe that it is appropriate and in our and our stockholders’ best interests. Furthermore, even ifsuccess. Consequently, the MD&C Committee has intended (or should desire in the future) to grantmay pay or provide compensation that qualifies for the performance-based exception, we cannot guarantee that such compensation will so qualifyis not tax deductible or ultimately will be deductible.is otherwise limited as to tax deductibility.

Compensation Committee Report

The MD&C Committee has reviewed and discussed the Compensation Discussion & Analysis set forth above with management. Based on this review and discussion, the MD&C Committee recommended to the Board that the Compensation Discussion & Analysis be included in our Annual Report on Form10-K for the fiscal year ended December 31, 20172018 and our Proxy Statement for our 20182019 Annual Meeting of Stockholders, for filing with the SEC.

SUBMITTED BY THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:

J. F. Earl, Chairman

S. M. Longhi

E. Graham

T. D. GrowcockM. Purvis

P. C. Widman

M. Longhi

The foregoing report shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18 of the Exchange Act.

Compensation Policies and Practices as They Relate to Risk Management

In 2017, Pay Governance,2018, Pearl Meyer, along with senior management, reviewed our compensation policies and practices for all employees. They concluded, and the MD&C Committee concurred, that any risks arising from our compensation policies and practices are not reasonably likely to have a material adverse impact on the Company. In addition, we reviewed the relationship between our risk management policies and practices and the incentive compensation we provide to our NEOs and other key employees to confirm that our incentive compensation does not encourage unnecessary and excessive risk taking.

The findings of these reviews indicated that:

 

Our compensation program provides a balance between our short-term and long-term goals and objectives;

 

Under our compensation program, the highest amount of compensation can be achieved through consistent superior performance over sustained periods of time, which discourages short-term risk taking;

 

Incentive awards are capped by the MD&C Committee; and

 

Stock ownership guidelines, the clawback policy, and prohibition on hedging mitigate excessive risk taking.

Furthermore, as described above, compensation decisions may include the subjective use of negative discretion, which has the ability to restrain the influence of formulae or objective factors on excessive risk taking.

20172018 Summary Compensation Table

The following table presents the compensation provided to our NEOs for services rendered to us in 2015, 2016, 2017 and 2017,2018, as applicable:

 

Name and Principal

Position

 Year
(1)
  Salary
($)
  Bonus
($)(2)
  Stock
Awards
($)(3)(4)
  Option
Awards
($)(4)(5)
  Non-equity
Incentive Plan
Nonqualified
Compensation
($)(6)
  

Change in
Pension Value
and

Nonqualified

Earnings
($)(7)

  All Other
Compensation
($)
  

Total

($)

 

F. Nicholas Grasberger III

 

President & Chief
Executive Officer
  2017   $841,183   $0   $1,851,734   $825,006   $1,740,550   $0   $75,990   $5,334,463 
  2016   $825,000   $0   $1,672,391   $825,000   $680,625   $0   $50,148   $4,053,164 
  2015   $809,596   $0   $1,547,678   $825,733   $0   $0   $130,057   $3,313,064 

Peter F. Minan

                                    
SVP & Chief
Financial Officer
  2017   $499,612   $0   $549,933   $245,004   $704,851   $0   $45,955   $2,045,355 
  2016   $490,000   $0   $496,650   $245,001   $275,625   $0   $31,378   $1,538,654 
  2015   $484,865   $0   $459,631   $245,216   $0   $0   $35,683   $1,225,395 

Russell C. Hochman

 

SVP & General Counsel, Chief Compliance Officer & Corporate Secretary  2017   $372,160   $0   $273,091   $121,668   $455,036   $0   $34,951   $1,256,906 
 

 

 

 

2016

 

 

 

 

 

 

$365,000

 

 

 

 

 

 

$0

 

 

 

 

 

 

$246,636

 

 

 

 

 

 

$121,668

 

 

 

 

 

 

$177,938

 

 

 

 

 

 

$0

 

 

 

 

 

 

$27,339

 

 

 

 

 

 

$938,581

 

 

Tracey L. McKenzie

 

SVP & Chief Human Resources Officer  2017   $367,062   $0   $269,370   $120,001   $448,803   $0   $39,758   $1,244,994 
  2016   $360,000   $0   $243,259   $120,001   $175,500   $0   $27,452   $926,212 
  2015   $356,577   $0   $225,133   $120,108   $0   $0   $41,586   $743,404 

Scott H. Gerson

 

SVP & Group President,
Harsco Industrial
  2017   $336,473   $0   $246,923   $110,003   $448,183   $0   $35,581   $1,177,163 
  2016   $330,000   $0   $222,982   $110,001   $165,825   $0   $32,050   $860,858 
  2015   $319,731   $0   $206,371   $110,097   $57,621   $0   $38,902   $732,722 
          
Name and Principal Position Year
(1)
 Salary
($)
 Bonus
($)(2)
 Stock
Awards
($)(3)(4)
 Option
Awards
($)(4)(5)
 Non-equity
Incentive Plan
Compensation
($)(6)
 

Change in
Pension
Value and
Nonqualified
Earnings

($)(7)

 All Other
Compensation
($)
 Total ($)
 

F. Nicholas Grasberger III

 

Chairman, President &

Chief Executive Officer

 

 

2018

 

 $877,538 $0 $2,553,980 $854,005 $1,323,770 $0 $128,254 $5,737,547
 

 

2017

 

 $841,183 $0 $1,851,734 $825,006 $1,740,550 $0 $75,990 $5,334,463
 

 

2016

 

 $825,000 $0 $1,672,391 $825,000 $680,625 $0 $50,148 $4,053,164
 

Peter F. Minan

 

SVP & ChiefFinancial Officer 

 

2018

 

 $514,542 $0 $629,093 $252,358 $529,010 $0 $65,375 $1,990,378
 

 

2017

 

 $499,612 $0 $549,933 $245,004 $704,851 $0 $45,955 $2,045,355
 

 

2016

 

 $490,000 $0 $496,650 $245,001 $275,625 $0 $31,378 $1,538,654
 

Russell C. Hochman

 

SVP & General Counsel, ChiefCompliance Officer & CorporateSecretary 

 

2018

 

 $391,583 $0 $390,537 $156,654 $349,143 $0 $46,545 $1,334,462
 

 

2017

 

 $372,160 $0 $273,091 $121,668 $455,036 $0 $34,951 $1,256,906
 

 

2016

 

 $365,000 $0 $246,636 $121,668 $177,938 $0 $27,339 $938,581
 

 

Tracey L. McKenzie

 

SVP & Chief Human

Resources Officer

 

 

2018

 

 $389,780 $0 $385,205 $154,502 $347,632 $0 $56,982 $1,334,101
 

 

2017

 

 $367,062 $0 $269,370 $120,001 $448,803 $0 $39,758 $1,244,994
 

 

2016

 

 $360,000 $0 $243,259 $120,001 $175,500 $0 $27,452 $926,212
 

 

Jeswant S. Gill

 

SVP & Group President,

Harsco Rail

 2018 $356,825 $0 $334,513 $134,176 $334,725 $0 $50,081 $1,210,320

 

(1)

Amounts are not reported for 20152016 and 2017 if the executive was not ana NEO in that year.

 

(2)

No other bonus paid forto any NEO for 2015, 2016, 2017 and 2017.2018.

 

(3)

The amounts in this column reflect the aggregate grant date fair values (computed in accordance with FASB ASC Topic 718) of the RSU and PSU portion of the LTIP awards for 2015, 2016, 2017 and 2017.2018. The actual value, if any, realized by each NEO for these awards is a function of the value of the underlying shares if and when these awards vest and, for the PSUs, the level of attainment of the applicable performance goal. The above information does not reflect an estimate for forfeitures.

 

    

The amounts for the PSUs granted in 20172018 reflect a Monte-Carlo simulation that considers the probable outcome of the performance condition as of the grant date, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718. For these amounts, see the “Grant Date Fair Value of Stock and SAR/Option Awards” column of the “2017“2018 Grants of Plan-Based Awards” table below. The following are the values of the 20172018 PSUs as of the grant date assuming attainment of the maximum level of performance: Mr. Grasberger, $2,053,468;$3,399,932; Mr. Minan, $609,844;$753,484; Mr. Hochman, $302,842;$467,757; Ms. McKenzie, $298,716;$461,372; and Mr. Gerson, $273,823.Gill, $400,656.

 

(4)

See Note 13,14, “Stock-Based Compensation,” to the Notes to Consolidated Financial Statements in our Annual Report on Form10-K for the year ended December 31, 20172018 for a discussion of the assumptions used by us to calculate these grant date fair values.

(5)

The amounts shown in this column for 20172018 represent the grant date fair value (computed in accordance with FASB ASC Topic 718) for the SAR portion of the 20172018 LTIP awards. These amounts may not represent actual compensation that will be realized by the NEOs with respect to these awards, but instead represent the grant date fair value of the awards for accounting purposes, as required to be shown in this table by SEC rules. In order for each NEO to realize any value upon exercise of the SARs, the market price of our Common Stock must remainthen be above $13.70$19.80 per share. Any amounts that may become payable to the NEOs with respect to these awards are also subject to the service-based vesting criteria described above under the heading “Long-Term Incentive Awards” in the CD&A.

 

(6)

The amounts shown in this column reflect the actual AIP award payout (if any) for each NEO, as applicable, as approved by the MD&C Committee based on the achievement of thepre-determined financial objectives as further described above in the CD&A.

 

(7)

None of the NEOs are covered under the Harsco Employees’ Pension Plan (the “HEPP”). Therefore, no amounts are reported under this column.

All Other Compensation

The following table summarizes the incremental cost of perquisites and other benefits provided to our NEOs in 2017,2018, and describes the benefits included in the “All Other Compensation” column of the 20172018 Summary Compensation Table:

 

All Other

Compensation

 Year F. Nicholas
Grasberger III
 Peter F.
Minan
 Russell C.
Hochman
 Tracey L.
McKenzie
 Scott  H.
Gerson
Personal use of corporate aircraft(1) 2017 $0 $0 $0 $0 $0
Company contributions to qualified plan 2017 $10,800 $7,635 $9,925 $10,800 $10,800
Dollar value of executive physical exam paid by us or on our behalf 2017 $0 $3,000 $3,000 $3,000 $3,000
Dollar value of life insurance premiums paid by Company or on our behalf 2017 $1,098 $1,098 $1,098 $1,098 $1,098
Dollar value of health insurance premiums paid by Company or on our behalf 2017 $13,502 $13,495 $9,206 $13,440 $10,873
Dollar value of long-term disability premiums paid by us or on our behalf 2017 $518 $518 $518 $518 $518
Company contributions under Non- Qualified Restoration Plan 2017 $50,072 $20,209 $11,204 $10,902 $9,292
Dividend equivalents(2) 2017 $0 $0 $0 $0 $0
Severance payments and benefits(3) 2017 $0 $0 $0 $0 $0
Total 2017 $75,990 $45,955 $34,951 $39,758 $35,581

(1)The amounts reported reflect the incremental cost of a NEO’s personal use of corporate aircraft. The incremental cost of personal use of Company aircraft is calculated based on the variable operating costs to us, which consist of trip-specific costs which may include fuel, crew travel,on-board catering, trip-related maintenance, logistics (landing fees, permits, etc.), parking costs and other miscellaneous variable costs. Incremental cost calculations do not include fixed costs associated with owning our aircraft since we would incur these costs anyway. On certain occasions, and depending on availability, family members of a NEO may ride along on the Company aircraft when it is already flying to a destination for a business purpose. This use has no incremental additional cost to the Company. While it happens very rarely, if an aircraft flies empty before picking up or after dropping off a passenger flying for personal reasons, this “deadhead” segment would be included in the incremental cost. For 2017, none of the NEOs incurred personal use of the corporate aircraft.

(2)The amounts reported consist of cash dividend equivalents earned on restricted stock unit grants made after April 1, 2014 (cash dividend equivalents are only paid on unvested RSU grants made after April 1, 2014). None of the NEOs earned cash dividend equivalents during 2017.

(3)No severance payments were made during 2017 for any NEO.
       
All Other Compensation Year F. Nicholas
Grasberger III
 Peter F.
Minan
 Russell C.
Hochman
 Tracey L.
McKenzie
 

Jeswant S.

Gill

       

Company contributions to qualified plan

 

 2018

 

 $11,000

 

 $11,000

 

 $11,000

 

 $11,000

 

 $11,000

 

       

Dollar value of executive physical exam paid by us or on our behalf

 

 2018

 

 $3,000

 

 $0

 

 $0

 

 $3,000

 

 $0

 

       

Dollar value of life insurance premiums paid by Company or on our behalf

 

 2018

 

 $1,050

 

 $1,050

 

 $1,050

 

 $1,050

 

 $1,050

 

       

Dollar value of health insurance premiums paid by Company or on our behalf

 

 2018

 

 $17,928

 

 $12,997

 

 $9,078

 

 $17,837

 

 $17,928

 

       

Company contributions to Health Savings Account

 

 2018

 

 $1,000

 

 $2,000

 

 $2,000

 

 $1,000

 

 $1,000

 

       

Dollar value of long-term disability premiums paid by us or on our behalf

 

 2018

 

 $552

 

 $552

 

 $552

 

 $552

 

 $552

 

       

Company contributions underNon-Qualified Restoration Plan

 

 2018

 

 $93,724

 

 $37,776

 

 $22,865

 

 $22,543

 

 $18,551

 

       

Total

 

 2018

 

 $128,254

 

 $65,375

 

 $46,545

 

 $56,982

 

 $50,081

 

20172018 Grants of Plan-Based Awards Table

The following table sets forth information concerning grants of plan-based awards made to the NEOs during 2017:2018:

 

                                                                                                                                                                                                      
    

 

 

 

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
RSUs
(#)(3)
 

All Other
Option
Awards:
Number of
Securities or
Underlying
Options
SARs

(#)(4)

 

Exercise
or Base
Price of
SAR/
Option

Awards

($)

 

Grant Date
Fair Value
of Stock and
SAR/Option
Awards

($)

   Estimated Future Payouts

UnderNon-Equity Incentive

Plan Awards(1)

 Estimated Future Payouts Under Equity Incentive Plan Awards(2) All other

Stock

Awards:

Number of

shares of

 All Other

Option

Awards:

Number of

Securities or

 Exercise

or Base

Price of

SAR/

 Grant Date
Fair Value
of Stock
Name  

Grant

Date

 Threshold
($)
 Target
($)
 

Maximum

($)

 Threshold
(#)
 Target
(#)
 Maximum
(#)
  Grant
Date
 Threshold

($)

 Target

($)

 Maximum

($)

 Threshold

(#)

 Target

(#)

 Maximum

(#)

 Stock or

Units RSUs

(#)(3)

 Underlying

Options SARs

(#)(4)

 Option

Awards

($)

 and SAR/

Option
Awards ($)

F. Nicholas Grasberger III

F. Nicholas Grasberger III

F. Nicholas Grasberger III
   td41,564 $966,255 td,932,510              
   td31,456 $925,825 td,851,650               3/2/2018       14,377 57,509 115,018       td,699,966
 3/3/2017       15,055 60,219 120,438       td,026,734 3/2/2018             43,132     $854,014
 3/3/2017             60,219     $825,000 3/2/2018               93,232 td9.80 $854,005
 3/3/2017               134,585 $13.70 $825,006

Peter F. Minan

Peter F. Minan

Peter F. Minan
   $93,730 $374,921 $749,842                 $96,535 $386,139 $772,278              
 3/3/2017       4,471 17,884 35,768       $304,922 3/2/2018       3,186 12,745 25,490       $376,742
 3/3/2017             17,884     $245,011 3/2/2018             12,745     td52,351
 3/3/2017               39,968 $13.70 $245,004 3/2/2018        27,550 td9.80 td52,358

Russell C. Hochman

Russell C. Hochman

Russell C. Hochman
   $63,712 td54,849 $509,698              
   $60,510 td42,041 $484,082               3/2/2018       1,978 7,912 15,824       td33,879
 3/3/2017       2,220 8,881 17,762       td51,421 3/2/2018             7,912     td56,658
 3/3/2017             8,881     td21,670 3/2/2018        17,102 td9.80 td56,654
 3/3/2017               19,848 $13.70 $121,668

Tracey L. McKenzie

Tracey L. McKenzie

Tracey L. McKenzie
   $59,681 $238,725 $477,450                 $63,437 td53,746 $507,492              
 3/3/2017       2,190 8,760 17,520       $149,358 3/2/2018       1,951 7,804 15,608       td30,686
 3/3/2017             8,760     $120,012 3/2/2018             7,804     td54,519
 3/3/2017               19,576 $13.70 $120,001 3/2/2018        16,867 td9.80 td54,502

Scott H. Gerson

Jeswant S. Gill Jeswant S. Gill
   $63,124 $252,498 $504,996                 $66,945 td67,780 $535,560              
 3/3/2017       2,008 8,030 16,060       $136,912 3/2/2018       1,694 6,777 13,554       td00,328
 3/3/2017             8,030     $110,011 3/2/2018             6,777     td34,185
 3/3/2017               17,945 $13.70 $110,003 3/2/2018               14,648 td9.80 td34,176

 

(1)

These columns reflect 20172018 AIP award opportunities, which awards were made pursuant to the 2013 Equity and Incentive Compensation Plan, as amended (“2013 Plan”) and are described more fully in the section entitled “2017“2018 AIP Awards.” Target amounts reflect 20172018 effective base salary times target AIP percent. Threshold amounts represent approximately 25% of target values, and maximum amounts represent 200% of target values. Actual payouts with respect to these awards for 20172018 are disclosed in the“Non-Equity Incentive Plan Compensation” column of the 20172018 Summary Compensation Table.

 

(2)

These columns reflect the range of 20172018 PSU award opportunities. Threshold amounts represent approximately 25% of target values, and maximum amounts represent 200% of target values.

 

(3)

This column reflects the RSU component of the 20172018 LTIP awards granted to the NEOs under our 2013 Equity and Incentive Compensation Plan and are described more fully under the heading “Long-Term Incentive Awards” in the CD&A. These RSUs will generally vest ratably on the first three anniversaries of the grant date.

 

(4)

This column reflects the SAR component of the 20172018 LTIP awards granted to the NEOs, which were granted under our 2013 Equity and Incentive Compensation Plan and are described more fully under the heading “Long-Term Incentive Awards” in the CD&A. These SARs will generally vest ratably over three years and expire 10 years from the date of grant.

Outstanding Equity Awards at 20172018 FiscalYear-End Table

The following table sets forth information concerning the outstanding equity awards for the NEOs as of December 31, 2017:2018:

 

   Option Awards(1)  Stock Awards 
Name 

Number of
Securities
Underlying
Unexercised
Options

(#)
Exercisable

 

Number of
Securities
Underlying
Unexercised
Options

(#)
Unexercisable

 Option
Exercise
Price
($)
  Option
Expiration
Date
  Number of
Shares or
Units of Stock
That Have
Not Vested
(#)(2)
  Market
Value of
Shares
or Units of
Stock That
Have
Not Vested
($)(3)
  Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#)(4)
  Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested ($)(5)
 

F. Nicholas Grasberger III

 

                    
  0 134,585  $13.70   3/3/2027                 
  93,856 187,714  $7.00   5/6/2026                 
  162,386 81,193  $16.53   5/8/2025                 
  84,290 0  $25.11   8/1/2024                 
  51,900 0  $23.25   4/7/2024                 
  52,697 13,175  $22.70   5/10/2023                 
                       342,904   $6,395,156 
               188,700   $3,519,255         

Peter F. Minan

                        
  0 39,968  $13.70   3/3/2027                 
  27,872 55,746  $7.00   5/6/2026                 
  48,223 24,112  $16.53   5/8/2025                 
  12,401 0  $20.48   11/25/2024                 
                       101,834   $1,899,195 
               56,040   $1,045,146         

Russell C. Hochman

                        
  0 19,848  $13.70   3/3/2027                 
  13,841 27,684  $7.00   5/6/2026                 
  12,473 6,237  $16.53   5/8/2025                 
  7,258 0  $25.93   5/9/2024                 
                       50,570   $943,134 
               24,303   $453,251         

Tracey L. McKenzie

 

                    
  0 19,576  $13.70   3/3/2027                 
  13,652 27,304  $7.00   5/6/2026                 
  23,620 11,810  $16.53   5/8/2025                 
  15,808 0  $23.43   9/15/2024                 
                       49,879   $930,240 
               27,449   $511,924         

Scott H. Gerson

                        
  0 17,945  $13.70   3/3/2027                 
  0 25,029  $7.00   5/6/2026                 
  21,651 10,826  $16.53   5/8/2025                 
  12,255 0  $25.93   5/9/2024                 
  15,641 3,911  $22.70   5/10/2023                 
  15,593 0  $23.73   3/16/2022                 
  31,851 0  $31.75   1/25/2018                 
  3,149 0  $31.75   1/25/2018                 
                       45,721   $852,704 
               25,161   $469,253         

Name Option Awards (1)  Stock Awards 
 

Number of

Securities

Underlying

Unexercised

Options (#)

  Exercisable  

 

Number of

Securities

Underlying

Unexercised

Options (#)

  Unexercisable  

 Option
Exercise
Price ($)
  Option
Expiration
Date
  

Number
of Shares
or Units

of Stock
That

Have Not
Vested
(#)(2)

  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
  Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#)(4)
  Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)(5)
 
      

F. Nicholas Grasberger III

 

 

      
         
  0 93,232  $19.80   3/2/2028                 
      
  44,861 89,724  $13.70   3/3/2027        
         
  187,713 93,857  $7.00   5/6/2026                 
      
  243,579 0  $16.53   5/8/2025        
         
  84,290 0  $25.11   8/1/2024                 
      
  51,900 0  $23.25   4/7/2024        
         
  65,872 0  $22.70   5/10/2023                 
      
            235,456   $4,676,156 
         
               122,564   $2,434,121         
  

Peter F. Minan

 

       
         
  0 27,550  $19.80   3/2/2028                 
       
  13,322 26,646  $13.70   3/3/2027        
         
  55,745 27,873  $7.00   5/6/2026                 
       
  72,335 0  $16.53   5/8/2025        
         
  12,401 0  $20.48   11/25/2024                 
         
                       61,258   $1,216,584 
         
               36,335   $721,613         
  

Russell C. Hochman

 

                        
         
  0 17,102  $19.80   3/2/2028                 
      
  6,616 13,232  $13.70   3/3/2027        
         
  27,683 13,842  $7.00   5/6/2026                 
      
  18,710 0  $16.53   5/8/2025        
         
  7,258 0  $25.93   5/9/2024                 
      
            33,586   $667,018 
         
               19,627   $389,792         
  

Tracey L. McKenzie

 

 

      
         
  0 16,867  $19.80   3/2/2028                 
      
  6,525 13,051  $13.70   3/3/2027        
         
  27,304 13,652  $7.00   5/6/2026                 
      
  35,430 0  $16.53   5/8/2025        
         
  15,808 0  $23.43   9/15/2024                 
      
            33,128   $657,922 
         
               19,359   $384,470         
  

Jeswant S. Gill

 

       
         
  0 14,648  $19.80   3/2/2028                 
      
  6,344 12,689  $13.70   3/3/2027        
         
  14,457 7,229  $12.25   11/11/2026                 
      
            30,586   $607,438 
         
               15,630   $310,412         

(1)

These columns reflect the following awards:

 

 (a)

For Mr. Grasberger, Mr. Minan, Mr. Hochman, Ms. McKenzie, and Mr. GersonGill (the first entry in these columns), the SARs granted on March 3, 2017;2, 2018;

 

 (b)

For Mr. Grasberger, Mr. Minan, Mr. Hochman, Ms. McKenzie, and Mr. GersonGill (the second entry in these columns), the SARs granted on May 6, 2016;March 3, 2017;

 

 (c)

For Mr. Grasberger, Mr. Minan, Mr. Hochman, Ms. McKenzie, and Mr. GersonGill (the third entry in these columns), the SARs granted on May 8, 2015;November 11, 2016;

 

 (d)

For Mr. Grasberger, Mr. Minan, Mr. Hochman and Ms. McKenzie (the fourththird entry in these columns), the SARs granted on November 25, 2014;May 6, 2016,

 

 (e)

For Mr. Grasberger, Mr. Minan, Mr. Hochman and Ms. McKenzie (the fourth entry in these columns), the SARs granted on September 15, 2014;May 8, 2015;

 

 (f)

For Mr. GrasbergerMinan (the fourthfifth entry in these columns), the SARs granted on August 1,November 25, 2014;

 

 (g)

For Mr. Hochman and Mr. GersonMs. McKenzie (the fourthfifth entry in these columns), the SARs granted on May 9,September 15, 2014;

 

 (h)

For Mr. Grasberger (the fifth entry in these columns), the SARs granted on April 7,August 1, 2014;

 

 (i)

For Mr. Hochman (the fifth entry in these columns), the SARs granted on May 9, 2014;

(j)

For Mr. Grasberger (the sixth entry in these columns) and Mr. Gerson (the fifth entry in these columns), the SARs granted on May 10, 2013;

April 7, 2014; and

(j)For Mr. Gerson (the sixth entry in these columns), SARs granted March 16, 2012; and

 

 (k)

For Mr. GersonGrasberger (the seventh and eight entriesentry in these columns), stock optionsthe SARs granted January 25, 2011.on May 10, 2013.

2012 and

2013 SARs grants generally vest and become exercisable in five equal installments on the first five anniversaries of the date of grant. The 2014 and later SARs grants generally vest and become exercisable in three equal installments on the first three anniversaries of the date of grant. The stock options generally vest and become exercisable three years after the grant date. The exercise prices for the SARs and options granted in 2012 and 2011 are equal to the average of the high and low price of our Common Stock on the date of grant. The grants of SARs and options in 2012 and 2011 were made pursuant to the 1995 Plan. The exercise prices for the SARs granted in 2013 and later are equal to the closing price of our Common Stock on the date of grant. 2013 and later SARs grants were made pursuant to the 2013 Plan.

 

(2)

The stock awards reflected in this column consist of:

 

 (a)

The following numbers of RSUs granted to Mr. Grasberger, Mr. Minan, Mr. Hochman, Ms. McKenzie and Mr. GersonGill on March 2, 2018, which in each case will generally vestone-third annually over three years after the grant date: Mr. Grasberger, 43,132 RSUs; Mr. Minan, 12,745 RSUs; Mr. Hochman, 7,912 RSUs; Ms. McKenzie, 7,804 RSUs; Mr. Gill, 6,777 RSUs;

(b)

The following numbers of RSUs granted to Mr. Grasberger, Mr. Minan, Mr. Hochman, Ms. McKenzie and Mr. Gill on March 3, 2017, which in each case will generally vestone-third annually over three years after the grant date: Mr. Grasberger, 60,21940,146 RSUs; Mr. Minan, 17,88411,923 RSUs; Mr. Hochman, 8,8815,921 RSUs; Ms. McKenzie, 8,7605,840 RSUs; Mr. Gerson, 8,030Gill, 5,678 RSUs;

 

 (b)(c)

The following numbers of RSUs granted to Mr. Gill on November 11, 2016, which in each case will generally vestone-third annually over three years after the grant date, 3,175 RSUs; and

(d)

The following numbers of RSUs granted to Mr. Grasberger, Mr. Minan, Mr. Hochman and Ms. McKenzie and Mr. Gerson on May 6, 2016, which in each case will generally vestone-third annually over three years after the grant date: Mr. Grasberger, 117,85739,286 RSUs; Mr. Minan, 35,00011,667 RSUs; Mr. Hochman, 17,3815,794 RSUs; Ms. McKenzie, 17,143 RSUs; Mr. Gerson, 15,714 RSUs; and

5,715 RSUs.

(c)The following numbers of RSUs granted to Mr. Grasberger, Mr. Minan, Mr. Hochman, Ms. McKenzie and Mr. Gerson on May 8, 2015, which in each case will generally “cliff” vest three years after the grant date: Mr. Grasberger, 49,909 RSUs; Mr. Minan, 14,822 RSUs; Mr. Hochman, 3,834 RSUs; Ms. McKenzie, 7,260 RSUs; Mr. Gerson, 6,655 RSUs.

 

(3)

The market value was computed by multiplying the closing market price of our stock on December 29, 201731,2018 ($18.65)19.86) by the number of RSUs and estimated shares in the previous column.

(4)

The stock awards reflected in this column consist of PSUs based on:

 

 (a)

An estimate of a maximum performance for target grants of 117,857, 35,000, 17,381, 17,14360,219, 17,884, 8,881, 8,760 and 15,7148,516 PSUs made to Mr. Grasberger, Mr. Minan, Mr. Hochman, Ms. McKenzie, and Mr. Gerson, respectively, on May 6, 2016, which will generally “cliff” vest on December 31, 2018 based on performance for the three-year period ended December 31, 2018;

(b)An estimate of a 178% performance for target grants of 60,219, 17,884, 8,881, 8,760 and 8,030 PSUs made to Mr. Grasberger, Mr. Minan, Mr. Hochman, Ms. McKenzie, and Mr. Gerson,Gill, respectively, on March 3, 2017, which will generally “cliff” vest on December 31, 2019 based on performance for the three-year period ended December 31, 2019; and

 

 (c)(b)On

An estimate of a maximum performance for target grants of 57,509, 12,745, 7,912, 7,804 and 6,777 PSUs made to Mr. Grasberger, Mr. Minan, Mr. Hochman, Ms. McKenzie, and Mr. Gill, respectively, on March 2, 2018, which will generally “cliff” vest on December 31, 2017, the2020 based on performance share units granted in 2015 with vesting conditioned on Harsco’s TSR performance relative to the S&P 400 MidCap index for the3-year period from 2015 through 2017 ended. Harsco’s TSR for the three-year period was at the 24th percentile of the index, below the threshold performance level, resulting in no shares being earned. All outstanding equity awards related to this performance share grant are reported with a zero balance.ended December 31, 2020.

 

(5)

The market value was computed by multiplying the closing market price of our stock on December 29, 201731, 2018 ($18.65)19.86) by maximum number of PSUs (200% of the target amount) for the May 6, 2016 grant issued with a three-year performance period ending December 31, 2018 reported in the previous column, 178% of target amount for the March 3, 2017 grant issued with a three-year performance period ending December 31, 2019 reported inand by maximum number of PSUs (200% of the previous column, and a zero market valuetarget amount) for the PSUs for the May 8, 2015March 2, 2018 grant issued with thea three-year performance period ending December 31, 2017 since no payout will occur due to a below threshold performance attainment.2020 reported in the previous column.

20172018 Option Exercises and Stock Vested Table

 

 Option Awards Stock Awards 

 

Option Awards

 

 

 

Stock Awards

 

Name 

Number of Shares 

Acquired on 

Exercise 

(#)(1) 

 

Value 
Realized on 

Exercise 

($)(1) 

 

Number of Shares 

Acquired on 

Vesting 

(#)(2), (3) 

 

Value Realized 

on Vesting 

($)(4) 

 

  Number of Shares  

Acquired on 

Exercise (#) 

 

  Value Realized on  

Exercise ($) 

 

    Number of Shares    
Acquired on  Vesting

(#)(1), (2) 

 

  Value Realized on  

Vesting ($)(3) 

  

F. Nicholas Grasberger III

 - - 81,535 $1,216,787 - - 344,982 $7,455,479
  

Peter F. Minan

 - - 15,572 $249,175 - - 102,450 $2,214,069
  

Russell C. Hochman

 - - 9,482 $143,144 - - 47,350 $1,021,920
  

Tracey L. McKenzie

 - - 10,694 $181,979 - - 50,180 $1,084,450

Scott H. Gerson

 12,514 $102,923 9,095 $139,499
  

Jeswant S. Gill

 - - 25,061 $558,148

 

(1)Mr. Gerson exercised 12,514 SARs during 2017 corresponding to the May 6, 2016 grant. The value realized at the time of exercise is calculated by multiplying the number of SARs upon exercise by the difference between the closing price of our Common Stock at the time of the transaction (7,796 SARs times $15.30 and 4,718 SARs times $15.10) and the closing price of our Common Stock on the date of grant ($7.00 grant date fair value).

(2)The number of shares in this column consists of the shares earned in settlement of the time-based portion of the LTIP awards, which pursuant to the terms of the 2013 Equity and Incentive Compensation Plan, as follows:

 

 (a)

Mr. Grasberger’s shares consisted of three RSU grants, one grant of 15,70020,073 RSUs vested on April 7, 2017,March 3, 2018, at a fair market value of $12.55;$19.80; the second grant of 39,28539,286 RSUs vested on May 6, 2017,2018, at a fair market value of $15.55;$21.45; and the third grant of 26,55049,909 RSUs vested on August 1, 2017,May 8, 2018, at a fair market value of $15.40.$22.00.

 (b)

Mr. Minan’s shares consisted of twothree RSU grants, one grant of 11,6665,961 RSUs vested on May 6, 2017,March 3, 2018, at a fair market value of $15.55; and$19.80; the second grant of 3,90611,667 RSUs vested on November 25, 2017,May 6, 2018, at a fair market value of $17.35.$21.45; and the third grant of 14,822 RSUs vested on May 8, 2018, at a fair market value of $22.00.

 

 (c)

Mr. Hochman’s shares consisted of three RSU grants, one grant of 1,4042,960 RSUs vested on January 14, 2017,March 3, 2018, at a fair market value of $13.30;$19.80; the second grant of 5,7935,794 RSUs vested on May 6, 2017,2018, at a fair market value of $15.55;$21.45; and the third grant of 2,2853,834 RSUs vested on May 9, 2017,8, 2018, at a fair market value of $15.05.$22.00.

 

 (d)

Ms. McKenzie’s shares consisted of three RSU grants, one grant of 2,920 RSUs vested on March 3, 2018, at a fair market value of $19.80; the second grant of 5,714 RSUs vested on May 6, 2018, at a fair market value of $21.45; and the third grant of 7,260 RSUs vested on May 8, 2018, at a fair market value of $22.00.

(e)

Mr. Gill’s shares consisted of two RSU grants, one grant of 5,7142,838 RSUs vested on May 6, 2017,March 3, 2018, at a fair market value of $15.55;$19.80; and the second grant of 4,9803,175 RSUs vested on September 15, 2017,November 11, 2018, at a fair market value of $18.70.$27.85.

 

(2)(e)Mr. Gerson’s shares consisted of two RSU grants, one grant of 5,238 RSUs vested on May 6, 2017, at a fair market value of $15.55; and the second grant of 3,857 RSUs vested on May 9, 2017, at a fair market value of $15.05.

(3)On December 31, 2017,2018, the performance share units granted in 20152016 with vesting conditioned on Harsco’s TSR performance relative to the S&P 400 MidCap index600 Industrials Index for the3-year period from 20152016 through 20172018 ended. Harsco’s TSR for the period was at the 24th96th percentile of the index, belowat the thresholdmaximum performance level, resulting in no shares beinga 200% earned from the 20152016 grant. As a result, PSUs issued on May 8, 20156, 2016 to Mr. Grasberger of 49,909;117,857; Mr. Minan of 14,822;35,000; Mr. Hochman of 3,834;17,381; Ms. McKenzie of 7,260;17,143; and PSUs issued on November 11, 2016 to Mr. GersonGill of 6,655 were cancelled with no shares issued.9,524 all vested at a 200% value.

 

(3)(4)The

For the RSUs, the value realized on vesting was calculated using the fair market value based on the closing stock prices of our Common Stock on the respective vesting dates. For the PSUs, the value realized on vesting was calculated using the fair market value based on the closing stock prices of our Common Stock on February 15, 2019 ($21.71), the Friday following the date the MD&C Committee approved the PSU payment.

20172018 Pension Benefits Table

The following table describes pension benefits provided to the NEOs:

Name Plan Name

 Number of Years 

Credited Service
(#)

 Present Value of 

Accumulated
Benefit ($)(1)

 Payments During 

Last Fiscal Year
($)

F. Nicholas Grasberger III

Harsco Employees’ Pension Plan

N/A

N/A

N/A

Peter F. Minan

Harsco Employees’ Pension Plan

N/A

N/A

N/A

Russell C. Hochman

Harsco Employees’ Pension Plan

N/A

N/A

N/A

Tracey L. McKenzie

Harsco Employees’ Pension Plan

N/A

N/A

N/A

Scott H. Gerson

Harsco Employees’ Pension Plan

N/A

N/A

N/A

(1)None of NEOs is covered under the Harsco Employees’ Pension Plan, therefore no future payments are expected.

Retirement Plans

None of theour NEOs are covered under the Harsco Employees’ Pension Plan (the “HEPP”)., therefore no future payments are expected.

20172018 Nonqualified Deferred Compensation Table

The following table describes the nonqualified deferred compensation of the NEOs:

 

Name

 

Plan Name

 

Executive    

  Contributions      

in    

Last FY    

($)    

 

Registrant    

  Contributions      

in    

Last FY    

($)(1)    

 

  Aggregate      

Earnings    
in    

Last FY    

($)(2)    

 

Aggregate    

  Withdrawals/      

Distributions    

($)    

 

Aggregate    

Balance    

at    

Last FYE    

($)(3)    

 Plan Name 

Executive

Contributions

in Last FY ($)

 

Registrant

Contributions
in Last FY

($)(1)

 

Aggregate

Earnings in

Last FY

($)(2)

 

Aggregate

Withdrawals/

Distributions

($)

 

Aggregate

Balance

at Last FYE

($)(3)

F. Nicholas Grasberger III

F. Nicholas Grasberger III

F. Nicholas Grasberger III
 Non-Qualified Restoration Plan $0         $50,072     $25,664     $0         $169,252     Non-Qualified Restoration Plan $0 $93,724 ($15,956) $0 $247,020

Peter F. Minan

Peter F. Minan

Peter F. Minan
 Non-Qualified Restoration Plan $0         $20,209     $4,976     $0         $43,430     Non-Qualified Restoration Plan $0 $37,776 ($934) $0 $80,271

Russell C. Hochman

Russell C. Hochman

Russell C. Hochman
 Non-Qualified Restoration Plan $0         $11,204     $3,979     $0         $30,762     Non-Qualified Restoration Plan $0 $22,865 ($2,571) $0 $51,055

Tracey L. McKenzie

Tracey L. McKenzie

Tracey L. McKenzie
 Non-Qualified Restoration Plan $0         $10,902     $1,657     $0         $22,334     Non-Qualified Restoration Plan $0 $22,543 ($1,309) $0 $43,567

Scott H. Gerson

Jeswant S. GillJeswant S. Gill
 Non-Qualified Restoration Plan $0         $9,292     $21,451     $0         $90,112     Non-Qualified Restoration Plan $0 $18,551 ($1,177) $0 $20,574

 

(1)

This column reflects amounts contributed by us to the bookkeeping account maintained for each applicable NEO under our NQ RSIP. The NQ RSIP is an unfunded plan, and contributions are made in the form of credits ofnon-qualified deferred compensation to bookkeeping accounts maintained as a record of the benefits to which participants are entitled. The amounts reported in this column are reported as compensation for 20172018 in the 20172018 Summary Compensation Table under the “All Other Compensation” column.

 

(2)

Aggregate earningsearnings/(losses) in 20172018 include (a) earningsearnings/(losses) on the bookkeeping account maintained for the applicable NEO under the NQ RSIP, credited at the same rates of return as those applicable to the investment fund(s) selected by the NEO under the RSIP; and (b) as applicable, dividend equivalents credited to the portion of each applicable NEOs’ bookkeeping account, if any, deemed to be invested in the Harsco Corporation Stock fund under the NQ RSIP. The investment options available under the NQ RSIP are substantially consistent with those available under the RSIP. Because there were no preferential earningsearnings/(losses) on deferred compensation during fiscal year 2017,2018, none of the amounts reported in this column are reported as compensation for 20172018 in the Summary Compensation Table.

 

(3)

Amounts reflect the value of the bookkeeping account maintained for each applicable NEO under the NQ RSIP, determined based on the value of the investment fund(s) to which such account is deemed to be allocated. The following amounts are included in the fiscalyear-end balance and, for NEOs that were included in the fiscal 20162017 proxy disclosure, were previously reported in the 20162017 Summary Compensation Table as compensation: Mr. Grasberger, $22,400;$50,072; Mr. Minan, $9,000; $20,209;

Mr. Hochman, $4,000;$11,204; Ms. McKenzie, $3,800;$10,902; and for Mr. Gerson, $4,905.Gill, no amounts were reported in the fiscal 2017. Theyear-end aggregate balance for the NEOs as reported on the 20162017 proxy disclosure, which are included in 20172018 aggregate balance, were as follows: Mr. Grasberger, $93,516;$169,252; Mr. Minan, $18,244;$43,430; Mr. Hochman, $15,579;$30,762; and Ms. McKenzie, $9,774; and$22,334; for Mr. Gerson, $59,369.Gill, the calculated amount is $3,200.

Nonqualified Deferred Compensation

Retirement Savings and Investment Plan (“RSIP”)

Under the RSIP, we make matching contributions to the account of each participating employee equal to 100% of the employee’s contributions up to the first 3% of compensation and 50% of the employee’s contributions up to the next 2% of compensation. In addition, the RSIP provides for a discretionary contribution, as decided by the Company each year, to the account of each eligible employee who remains an active employee as of December 31 of such plan year. Under the NQ RSIP, we provide the matching and discretionary contributions, if any, that would otherwise be made under the qualified portion of the RSIP for salaried employees’ contributions, but for Internal Revenue Code

limitations under Section 402(g), Section 401(a)(17), Section 415 or Section 401(m). Company contributions to the NQ RSIP are made in the form of credits ofnon-qualified deferred compensation to bookkeeping accounts maintained as a record of the benefits to which employees are entitled.

CEO Pay Ratio Disclosure

Pursuant to Section 953(b) of the Dodd-Frank Act, the SEC issued the “Pay Ratio” disclosure rule under Item 402(u) of RegulationS-K requiring companies to disclose the ratio of annual total compensation for their Principal Executive Officer to that of the employee identified as the Company’s median employee.compensated individual.

Based onWe determined that the 2018 annual total compensation of the individual identified as the Company’s median compensated individual (excluding the CEO) was $56,522, the annual total compensation of Mr. Grasberger was $5,737,547 and the ratio between the two was 102:1.

This pay ratio is a reasonable estimate ofcalculated in a manner consistent with SEC rules based on our payroll and employment records and the 2017methodology described below. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of our median employeemethodologies, to apply certain exclusions, and Mr. Grasberger’s 2017 totalto make reasonable estimates and assumptions that reflect their compensation (as detailedpractices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in the Summary Compensation Table of this proxy statement), we have estimated the following “pay ratio” for 2017:calculating their own pay ratios.

CEO: $5,334,463

Median Employee: $46,427

Ratio of CEO to Median Employee: 115:1

All data included in the calculation is prepared in accordance with the requirements of Item 402(u) of RegulationS-K.

Methodology for Selecting the Median Employee

The SEC pay ratio rules permit a company to use the same median employee identified in the first year of the required calculation for three years if there are no changes that would significantly affect the pay ratio disclosure. While our company acquired the Altek Group in 2018 (consisting of approximately 80 employees), this acquisition did not impact our employee population or compensation arrangements in any manner that would significantly affect our pay ratio disclosure. As such, the median employee used for 2018 is the same employee as identified in 2017, when we used the following methodology:

We selected October 1, 2017 as our determination date and used foreign exchange rates effective on September 30, 2017. We applied the 5% “de minimis” allowance to exclude the following countries from our employee population totaling 4.7%:

 

Egypt: 368 employees or 3.8% of 9,615; and

Serbia: 88 employees or 0.9% of 9,615.

The total population used for the “de minimus” exception prior to these exclusions is 9,615, with 2,091 being U.S. based employees, and 7,524 beingnon-U.S. employees. After applying the 5% “de minimis” exclusion, the total population is 9,159.

In selecting the median employee, we utilized a valid statistical sampling approach to identify a cluster of employees within 10% of the median, using a consistently applied compensation measure of annual base pay. To determine annual base pay for our hourly and our part-time employee population, we used reasonable assumptions to calculate the actual hours worked. From the cluster of employees at or near the median, we selected a median employee that best represented our overall employee population.

Putting the Ratio in Context

As discussed in the CD&A of this proxy, according to our compensation philosophy, we target our pay and benefits at competitive levels based on the job duties of the job and location of the employee. It is our philosophy to offer total remuneration opportunities whichthat actively support recruiting, motivating and retaining talented employees at all levels within our organization.

WeOur workforce is global – we have a global workforceemployees located in 3537 countries around the world. Our international employee footprint is driven by the needs of our clients, with the majority of our employees working at client sites outside of the United States. The location ofAs such, when interpreting our employees is a function of our international client base and the needs of those clients at their locations and not a function of an “offshoring” strategy.

ItCEO Pay Ratio results, it is important when interpreting the pay ratio results to consider ourkeep in mind that pay practices vary widely by country based on client contract terms, local statutory requirements, cost of living and applicable local market competitive pay practices.

Lastly, the total compensation for our Senior Executivessenior executives is comprised of a significant portion that varies based on financial and stock price performance of the Company. Eighty percent82% of our CEO’s total pay varies with performance while the majority of pay for our median employee (77%) is 75% fixed base salary and overtime. The equity portion of the CEO’s pay used in the CEO Pay Ratio calculation reflects his “opportunity” and the actual value of these awards will vary based on stock price and performance.

Termination or Change in Control Arrangements

We have entered into agreements with and maintain plans that will require us to provide compensation to certain of our NEOs in the event of a termination of employment, including as the result of a change in control.

Set forth below are tables, one for each NEO who remained an officer as of December 31, 2017,2018, showing our payment obligations following the potential termination of the officer’s employment with us, including as the result of a change in control. The amounts disclosed below in each table are estimates only and do not necessarily reflect the actual amounts that would be paid to the officers, which would only be known at the time that they become eligible for payment and, in the case of payments related to a change in control, would only be payable if a change in control were to occur. The tables reflect the amounts that would be payable under various arrangements assuming that the termination event occurred on December 29, 2017.31, 2018.

   Termination as a Result of

Change in

Control(3)

For Cause or

Voluntary(4)

Involuntary

not for Cause(5)

Death or

Disability(6)

   Retirement(8)Change in
Control (3)
 

Compensation:

For Cause or
Voluntary (4)
 Involuntary
not for Cause (5)
 Death or
Disability (6)
 Retirement  (8)
 
Compensation
      

Unpaid base salary through date of termination

  
    

Unpaidnon-equity incentive plan compensation

  
Unpaid long-term incentives
      

Unpaid long-term incentives:

Restricted Stock Units          

Restricted Stock UnitsVested

      

Unvested and accelerated (1)

    
Stock Options          

Vested

     
    

Unvested and accelerated(1)accelerated (2)

         

Stock Options

      
Stock Appreciation Rights          

Vested

 

Unvested and accelerated (1)

    
Performance Shares    
Unpaid deferred compensation    

Unvested

Multiple of base salary and accelerated(2)

target incentive award         
 

Stock Appreciation Rights

Vested

Unvested and accelerated(1)

Performance Shares

Unpaid deferred compensation

Multiple of base salary and target incentive award

Benefits and perquisites:

perquisites
      

Defined benefit pension plan

  
    

401(k) savings plan

  
   

Supplemental retirement

benefit plan

   

Supplemental retirement benefit plan

 

Life insurance proceeds

       (7)  
 ✓(7)     

Accrued but unpaid vacation

      

 

(1)

Pursuant to the terms of each RSU and SAR award agreement, RSUs and SARs granted to our NEOs immediately vest and becomenon-forfeitable upon the executive’s death, disability or retirement on or after the specified retirement age (age 62). In addition, RSUs and SARs granted to our NEOs under the 1995 Plan immediately vest and becomenon-forfeitable upon a change in control (as defined in the 1995 Plan). RSUs and SARs granted to our NEOs under the 2013 Plan immediately vest and becomenon-forfeitable upon the executive’s qualifying termination following a change in control (as defined in the 2013 Plan).

(2)

The stock options granted to certain of our NEOs in 2011 automatically accelerate and become vested upon a change in control.

 

(3)

In accordance with the terms of the change in control severance agreements entered into by and between us and our NEOs (each, a “CIC Agreement”), Messrs. Grasberger, Minan, Hochman and GersonGill and Ms. McKenzie will each be entitled to the payments described below if such executive’s employment is terminated by us or by them under the circumstances described below during the three-year period following the date on which a “change in control” (as defined in the CIC Agreement) occurs (which we refer to as the “Protection Period”):

Termination due to death or disability (as defined in the CIC Agreement): the CIC Agreement will terminate without further obligations other than those accrued or earned and vested (if applicable) as of the date of termination, including:

 

Othe executive’s full base salary through the date of termination at the rate in effect on the date of termination or, if higher, at the highest rate in effect at any time from the90-day period preceding the effective date of the change in control through the date of termination (the “Highest Base Salary”);

the executive’s full base salary through the date of termination at the rate in effect on the date of termination or, if higher, at the highest rate in effect at any time from the90-day period preceding the effective date of the change in control through the date of termination (the “Highest Base Salary”);

Oapro-rata target annual incentive compensation payment for the year of termination; and

apro-rata target annual incentive compensation payment for the year of termination; and

Oany compensation previously deferred by the executive (together with any accrued interest) and not yet paid by us and any accrued vacation pay not yet paid by us (we refer to the amounts in these threesub-bullets as the “Accrued Obligations”);

any compensation previously deferred by the executive (together with any accrued interest) and not yet paid by us and any accrued vacation pay not yet paid by us (we refer to the amounts in these threesub-bullets as the “Accrued Obligations”);

 

Termination for “cause” (as defined in the CIC Agreement): the CIC Agreement will terminate without further obligations other than the obligation to pay to the executive the Highest Base Salary through the date of termination plus the amount of any compensation previously deferred by the executive (together with any accrued interest) and not yet paid by us;

 

Termination by the executive other than for “good reason” (as defined in the CIC Agreement), including by reason of retirement: the CIC Agreement will terminate without further obligations other than those accrued or earned and vested (if applicable) through the date of termination, including the executive’s base salary through the date of termination at the rate in effect on the date of termination plus the amount of any compensation previously deferred by the executive (together with any accrued interest) and not yet paid by us; and

 

Termination by us (other than for “cause,” death or disability) or termination by the executive for “good reason”: we shall pay the executive the aggregate of the following amounts:

 

Othe executive’s full base salary and vacation pay accrued through the date of termination at the rate in effect on the date of termination pluspro-rated annual incentive compensation through the date of termination at the same percentage rate applicable to the calendar year immediately prior to the year in which the date of termination occurs, plus all other amounts to which the executive is entitled under any of our compensation plans, programs, practices or policies in effect at the time such payments are due;

the executive’s full base salary and vacation pay accrued through the date of termination at the rate in effect on the date of termination pluspro-rated annual incentive compensation through the date of termination at the same percentage rate applicable to the calendar year immediately prior to the year in which the date of termination occurs, plus all other amounts to which the executive is entitled under any of our compensation plans, programs, practices or policies in effect at the time such payments are due;

Oany compensation previously deferred by the executive (together with any accrued interest) and not yet paid by us; and

any compensation previously deferred by the executive (together with any accrued interest) and not yet paid by us; and

Oa lump sum severance payment in an amount equal to a multiple of the executive’s Highest Base Salary and target annual incentive compensation in effect for the year in which the date of termination occurs. The multiple is three times base salary and target incentive compensation in the case of Mr. Grasberger, and two times base salary and target incentive compensation in the case of Messrs. Minan, Hochman and Gerson and Ms. McKenzie.

a lump sum severance payment in an amount equal to a multiple of the executive’s Highest Base Salary and target annual incentive compensation in effect for the year in which the date of termination occurs. The multiple is three times base salary and target incentive compensation in the case of Mr. Grasberger, and two times base salary and target incentive compensation in the case of Messrs. Minan, Hochman and Gill and Ms. McKenzie.

The payments described above and shown in the individual tables below may be subject to reduction to avoid the imposition of golden parachute excise taxes in certain cases. No downward adjustments have been estimated or reflected in the individual tables below. No NEO is entitled to agross-up payment to offset any golden parachute excise taxes or related taxes that may be owed as a result of the NEO’s receipt of compensation from the Company.

The individual tables below set forth the present value of lump sum payments for Accrued Obligations and the other payments described above based on 20172018 salaries and 20172018 target annual incentive compensation, assuming the triggering event occurred on December 29, 201731, 2018 during a Protection Period.

 

(4)

The individual tables below set forth the present value of the lump sum payments for each executive officer assuming (a) the executive officer was terminated for cause or voluntarily on December 29, 201731, 2018 and (b) that such termination took place either prior to a change in control or following the Protection Period (as defined above and as applicable to the NEO). In the case of a voluntary termination, both qualified pension plan and SERP benefits are payable.

(5)

The individual tables below set forth the present value of the lump sum payments for each executive officer assuming (a) the executive officer was terminated involuntarily without cause on December 29, 201731, 2018 and (b) that such termination took place either prior to a change in control or following the Protection Period (as defined above and as applicable to the NEO).

 

(6)

The individual tables below set forth the present value of the lump sum payments for each executive officer assuming (a) the executive’s death or disability occurred on December 29, 201731, 2018 and (b) that such death or disability took place either prior to a change in control or following the Protection Period (as defined above and as applicable to the NEO).

 

(7)

Life insurance proceeds are payable only in the event of the executive’s death (not disability).

 

(8)

The individual tables below set forth the present value of the lump sum payments for each executive officer assuming (a) the executive officer retired on December 29, 201731, 2018 and (b) that such retirement took place either prior to a change in control or following the Protection Period (as defined above and as applicable to the NEO).

The following table describes the potential compensation upon termination or a change in control for F. Nicholas Grasberger III, our Chairman, President & CEO, assuming such events occurred at December 29, 2017:31, 2018:

 

 
 Termination as a Result of 

Termination as a Result of

 

Executive Benefits and

Payments Upon

Termination

 

Change in  

Control —  

Voluntary  

($)  

 

Change in  

Control —  

Involuntary  

not for  

Cause / for  

Good Reason  

($)  

 

Cause or  

Voluntary  

($)(1)  

 

 Involuntary   

not for  

Cause  

($)  

 

Death  

($)(2)  

 

Disability  

($)(2)     

 

Retirement  

($)  

 

Change in
Control —
    Voluntary    
($)

 

 

 

Change in

Control —

Involuntary

not for Cause
/ for Good
Reason     ($)

 

 

Cause or

    Voluntary    

($) (1)

 

 

    Involuntary    
not for
Cause

($)

 

 

Death
($) (2)

 

 

    Disability    
($) (2)

 

 

    Retirement    
($)

 

  

Compensation

                            
       

Unpaid Base Salary

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-

UnpaidNon-Equity Incentive Plan Compensation(3)

 -0- -0- -0- -0- -0- -0- -0-

Unpaid Long-Term Incentives(4):

              
       

UnpaidNon-Equity Incen- tive Plan Compensation (3)

 -0- -0- -0- -0- -0- -0- -0-
 

Unpaid long-term incentives (4)

        
       

RSUs (unvested and accelerated)

 -0- 3,519,255 -0- -0- 3,519,255 3,519,255 -0- -0- 2,434,121 -0- -0- 2,434,121 2,434,121 -0-
       

SARs (unvested and accelerated)

 -0- 3,025,193 -0- -0- 3,025,193 3,025,193 -0- -0- 1,765,295 -0- -0- 1,765,295 1,765,295 -0-
       

PSUs

 -0- 6,395,156 -0- -0- 6,395,156 6,395,156 -0- -0- 4,676,156 -0- -0- 4,676,156 4,676,156 -0-
       

Multiple of Base Salary

 -0- 2,549,250 -0- -0- -0- -0- -0- -0- 2,677,500 -0- -0- -0- -0- -0-
       

Multiple ofNon-Equity Incentive Plan Compensation

 -0- 2,804,175 -0- -0- -0- -0- -0- -0- 2,945,250 -0- -0- -0- -0- -0-
 

Deferred Compensation

                      
       

NQ RSIP and Unpaid Deferred Compensation

 169,252 169,252 169,252 169,252 169,252 169,252 169,252 247,020 247,020 247,020 247,020 247,020 247,020 247,020
       

RSIP

 163,924 163,924 163,924 163,924 163,924 163,924 163,924 194,429 194,429 194,429 194,429 194,429 194,429 194,429

Benefits and Perquisites

              
 

Benefits and perquisites

        
       

Pension

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-
       

Life Insurance Proceeds

 -0- -0- -0- -0- 500,000 -0- -0- -0- -0- -0- -0- 500,000 -0- -0-
       

Total:

 333,176 18,626,205 333,176 333,176 13,772,780 13,272,780 333,176 441,449 14,939,771 441,449 441,449 9,817,021 9,317,021 441,449

 

(1)

If Mr. Grasberger were terminated during the Protection Period for cause, he would receive the payment shown for termination as a result of cause in anon-change in control scenario.

 

(2)

The amounts payable to Mr. Grasberger due to his death or disability during the Protection Period would match the amounts payable to him for such occurrences outside of the Protection Period.

(3)

Assumes allnon-equity incentive plan compensation earned for 2017,2018, as disclosed in the“Non-Equity Incentive Plan Compensation” column of the 20172018 Summary Compensation Table, has been earned as of December 29, 2017,31, 2018, and thus is not additional compensation resulting from the termination scenarios described in this table.

 

(4)

Vesting of awards granted under the 2013 Plan only accelerates in the event of a qualifying termination following a change in control.

The following table describes the potential compensation upon termination or a change in control for Peter F. Minan, our Senior Vice President & CFO, assuming such events had occurred at December 29, 2017:31, 2018:

 

 
 

Termination as a Result of

 

Executive Benefits and

Payments Upon

Termination

 Termination as a Result of 

Change in

  Control —  

Voluntary
($)

 

 

 

Change in

Control —

Involuntary

not for Cause
/ for Good
Reason ($)

 

 

Cause or

  Voluntary  

($)  (1)

 

 

  Involuntary  

not for

Cause

($)

 

 

    Death  
($)  (2)

 

 

  Disability  
($)  (2)

 

 

  Retirement  
($)

 

Change in

Control —

Voluntary

($)

 

Change in

Control —

Involuntary

not for

Cause / for

Good Reason

($)

 

Cause or

Voluntary

($)(1)

 

 Involuntary 

not for

Cause

($)

 

Death

($)(2)

 

Disability

($)(2)

 

Retirement

($)

Compensation

              

Compensation

       

Unpaid Base Salary

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-

UnpaidNon-Equity Incentive Plan Compensation(3)

 -0- -0- -0- -0- -0- -0- -0-

Unpaid Long-Term Incentives(4):

              
       

UnpaidNon-Equity
Incentive Plan Compensation (3)

 -0- -0- -0- -0- -0- -0- -0-

Unpaid long-term incentives (4)

Unpaid long-term incentives (4)

       

RSUs (unvested and accelerated)

 -0- 1,045,146 -0- -0- 1,045,146 1,045,146 -0- -0- 721,613 -0- -0- 721,613 721,613 -0-
       

SARs (unvested and accelerated)

 -0- 898,400 -0- -0- 898,400 898,400 -0- -0- 524,239 -0- -0- 524,239 524,239 -0-
    ��  

PSUs

 -0- 1,899,195 -0- -0- 1,899,195 1,899,195 -0- -0- 1,216,584 -0- -0- 1,216,584 1,216,584 -0-
       

Multiple of Base Salary

 -0- 1,009,400 -0- -0- -0- -0- -0- -0- 1,039,682 -0- -0- -0- -0- -0-
       

Multiple ofNon-Equity Incentive Plan Compensation

 -0- 757,050 -0- -0- -0- -0- -0- -0- 779,761 -0- -0- -0- -0- -0-

Deferred Compensation

              

Deferred Compensation

       

NQ RSIP and Unpaid Deferred Compensation

 43,430 43,430 43,430 43,430 43,430 43,430 43,430 80,271 80,271 80,271 80,271 80,271 80,271 80,271
       

RSIP

 94,190 94,190 94,190 94,190 94,190 94,190 94,190 128,920 128,920 128,920 128,920 128,920 128,920 128,920

Benefits and Perquisites

              

Benefits and perquisites

Benefits and perquisites

       

Pension

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-
       

Life Insurance Proceeds

 -0- -0- -0- -0- 500,000 -0- -0- -0- -0- -0- -0- 500,000 -0- -0-
       

Total:

 137,620 5,746,811 137,620 137,620 4,480,361 3,980,361 137,620 209,191 4,491,070 209,191 209,191 3,171,627 2,671,627 209,191

 

(1)

If Mr. Minan were terminated during the Protection Period for cause, he would receive the payment shown for termination as a result of cause in anon-change in control scenario.

 

(2)

The amounts payable to Mr. Minan due to his death or disability during the Protection Period would match the amounts payable to him for such occurrences outside of the Protection Period.

 

(3)

Assumes allnon-equity incentive plan compensation earned for 2017,2018, as disclosed in the“Non-Equity Incentive Plan Compensation” column of the 20172018 Summary Compensation Table, has been earned as of December 29, 2017,31, 2018, and thus is not additional compensation resulting from the termination scenarios described in this table.

 

(4)

Vesting of awards granted under the 2013 Plan only accelerates in the event of a qualifying termination following a change in control.

The following table describes the potential compensation upon termination or a change in control for Russell C. Hochman, our Senior Vice President & General Counsel, Chief Compliance Officer & Corporate Secretary, assuming such events occurred at December 29, 2017:31, 2018:

 

 
 

Termination as a Result of

 

Executive Benefits and

Payments Upon

Termination

 Termination as a Result of 

Change in

  Control —  

Voluntary
($)

 

 

 

Change in

Control —

Involuntary

not for Cause
/ for Good
Reason ($)

 

 

Cause or

  Voluntary  

($)  (1)

 

  Involuntary  

not for

Cause

($)

 

 

    Death  
($)  (2)

 

 

  Disability  
($)  (2)

 

 

  Retirement  
($)

 

Change in

Control —

Voluntary

($)

 

Change in

Control —

Involuntary

not for

Cause / for

Good Reason

($)

 

Cause or

Voluntary

($)(1)

 

Involuntary

not for

Cause

($)

 

Death

($)(2)

 

Disability

($)(2)

 

Retirement

($)

Compensation

              

Compensation

       

Unpaid Base Salary

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-

UnpaidNon-Equity Incentive Plan Compensation(3)

 -0- -0- -0- -0- -0- -0- -0-

Unpaid Long-Term Incentives(4):

              
       

UnpaidNon-Equity Incentive Plan Compensation (3)

 -0- -0- -0- -0- -0- -0- -0-

Unpaid long-term incentives (4)

Unpaid long-term incentives (4)

       

RSUs (unvested and accelerated)

 -0- 453,251 -0- -0- 453,251 453,251 -0- -0- 389,792 -0- -0- 389,792 389,792 -0-
       

SARs (unvested and accelerated)

 -0- 433,989 -0- -0- 433,989 433,989 -0- -0- 260,543 -0- -0- 260,543 260,543 -0-
       

PSUs

 -0- 943,134 -0- -0- 943,134 943,134 -0- -0- 667,018 -0- -0- 667,018 667,018 -0-
       

Multiple of Base Salary

 -0- 751,900 -0- -0- -0- -0- -0- -0- 800,000 -0- -0- -0- -0- -0-
       

Multiple ofNon-Equity Incentive Plan Compensation

 -0- 488,735 -0- -0- -0- -0- -0- -0- 520,000 -0- -0- -0- -0- -0-

Deferred Compensation

              

Deferred Compensation

       

NQ RSIP and Unpaid Deferred Compensation

 30,762 30,762 30,762 30,762 30,762 30,762 30,762 51,055 51,055 51,055 51,055 51,055 51,055 51,055
       

RSIP

 212,743 212,743 212,743 212,743 212,743 212,743 212,743 236,077 236,077 236,077 236,077 236,077 236,077 236,077

Benefits and Perquisites

              

Benefits and perquisites

Benefits and perquisites

       

Pension

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-
       

Life Insurance Proceeds

 -0- -0- -0- -0- 500,000 -0- -0- -0- -0- -0- -0- 500,000 -0- -0-
       

Total:

 243,505 3,314,514 243,505 243,505 2,573,879 2,073,879 243,505 287,132 2,924,485 287,132 287,132 2,104,485 1,604,485 287,132

 

(1)

If Mr. Hochman were terminated during the Protection Period for cause, he would receive the payment shown for termination as a result of cause in anon-change in control scenario.

 

(2)

The amounts payable to Mr. Hochman due to his death or disability during the Protection Period would match the amounts payable to him for such occurrences outside of the Protection Period.

 

(3)

Assumes allnon-equity incentive plan compensation earned for 2017,2018, as disclosed in the“Non-Equity Incentive Plan Compensation” column of the 20172018 Summary Compensation Table, has been earned as of December 29, 2017,31, 2018, and thus is not additional compensation resulting from the termination scenarios described in this table.

 

(4)

Vesting of awards granted under the 2013 Plan only accelerates in the event of a qualifying termination following a change in control.

The following table describes the potential compensation upon termination or a change in control for Tracey L. McKenzie, our Senior Vice President & Chief Human Resources Officer, assuming such events occurred at December 29, 2017:31, 2018:

 

 

Termination as a Result of

 

Executive Benefits

and

Payments Upon

Termination

 Termination as a Result of 

Change in

Control —

  Voluntary  

($)

 

Change in

Control —

  Involuntary  

not for Cause

/ for Good
Reason   ($)

 

Cause or

  Voluntary  

($) (1)

 

  Involuntary  

not for

Cause

($)

 

Death

($) (2)

 

  Disability  

($) (2)

 

  Retirement  

($)

 Change in 

Control —

 Voluntary 

($)

 

Change in

Control —

Involuntary

not for

Cause / for

 Good Reason 

($)

 

Cause or

 Voluntary 

($)(1)

 

 Involuntary 

not for

Cause

($)

 

Death

($)(2)

 

 Disability 

($)(2)

 

 Retirement 

($)

Compensation

              

Compensation

       

Unpaid Base Salary

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-

UnpaidNon-Equity Incentive Plan Compensation(3)

 -0- -0- -0- -0- -0- -0- -0-

Unpaid Long-Term Incentives(4):

              
       

UnpaidNon-Equity Incentive Plan Compensation (3)

 -0- -0- -0- -0- -0- -0- -0-

Unpaid long-term incentives (4)

Unpaid long-term incentives (4)

       

RSUs (unvested and accelerated)

 -0- 511,924 -0- -0- 511,924 511,924 -0- -0- 384,470 -0- -0- 384,470 384,470 -0-
       

SARs (unvested and accelerated)

 -0- 440,030 -0- -0- 440,030 440,030 -0- -0- 256,971 -0- -0- 256,971 256,971 -0-
       

PSUs

 -0- 930,240 -0- -0- 930,240 930,240 -0- -0- 657,922 -0- -0- 657,922 657,922 -0-
       

Multiple of Base Salary

 -0- 741,600 -0- -0- -0- -0- -0- -0- 800,000 -0- -0- -0- -0- -0-
       

Multiple ofNon-Equity Incentive Plan Compensation

 -0- 482,040 -0- -0- -0- -0- -0- -0- 520,000 -0- -0- -0- -0- -0-

Deferred Compensation

              

Deferred Compensation

       

NQ RSIP and Unpaid Deferred Compensation

 22,334 22,334 22,334 22,334 22,334 22,334 22,334 43,567 43,567 43,567 43,567 43,567 43,567 43,567
       

RSIP

 96,623 96,623 96,623 96,623 96,623 96,623 96,623 122,068 122,068 122,068 122,068 122,068 122,068 122,068

Benefits and Perquisites

              

Benefits and perquisites

Benefits and perquisites

       

Pension

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-
       

Life Insurance Proceeds

 -0- -0- -0- -0- 500,000 -0- -0- -0- -0- -0- -0- 500,000 -0- -0-
       

Total:

 118,957 3,224,791 118,957 118,957 2,501,151 2,001,151 118,957 165,635 2,784,998 165,635 165,635 1,964,998 1,464,998 165,635

 

(1)

If Ms. McKenzie were terminated during the Protection Period for cause, she would receive the payment shown for termination as a result of cause in anon-change in control scenario.

 

(2)

The amounts payable to Ms. McKenzie due to her death or disability during the Protection Period would match the amounts payable to her for such occurrences outside of the Protection Period.

 

(3)

Assumes allnon-equity incentive plan compensation earned for 2017,2018, as disclosed in the“Non-Equity Incentive Plan Compensation” column of the 20172018 Summary Compensation Table, has been earned as of December 29, 2017,31, 2018, and thus is not additional compensation resulting from the termination scenarios described in this table.

 

(4)

Vesting of awards granted under the 2013 Plan only accelerates in the event of a qualifying termination following a change in control.

The following table describes the potential compensation upon termination or a change in control for Scott H. Gerson,Jeswant S. Gill, our Senior Vice President & Group President Harsco Industrials,Rail, assuming such events occurred at December 29, 2017:31, 2018:

 

 
 Termination as a Result of

Executive Benefits and

Payments Upon

Termination

 Termination as a Result of 

Change in

Control —

  Voluntary  

($)

 

Change in

Control —

Involuntary

not for Cause

/ for Good

Reason ($)

 

Cause or

  Voluntary  

($) (1)

 

  Involuntary  

not for

Cause

($)

 Death
($) (2)
 

  Disability  

($) (2)

 

  Retirement  

($)

Change in

Control –

Voluntary

($)

 

Change in  

Control –  

Involuntary  

not for  

Cause / for  

Good Reason  

($)  

 

Cause or  

Voluntary  

($)(1)  

 

Involuntary  

not for  

Cause  

($)  

 

Death  

($)(2)  

 

Disability  

($)(2)  

 

Retirement  

($)  

Compensation

              

Compensation

       

Unpaid Base Salary

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-

UnpaidNon-Equity Incentive Plan Compensation(3)

 -0- -0- -0- -0- -0- -0- -0-

Unpaid Long-Term Incentives(4):

              
       

UnpaidNon-Equity Incentive Plan Compensation (3)

 -0- -0- -0- -0- -0- -0- -0-

Unpaid long-term incentives (4)

Unpaid long-term incentives (4)

       

RSUs (unvested and accelerated)

 -0- 469,253 -0- -0- 469,253 469,253 -0- -0- 310,412 -0- -0- 310,412 310,412 -0-
       

SARs (unvested and accelerated)

 -0- 403,367 -0- -0- 403,367 403,367 -0- -0- 134,056 -0- -0- 134,056 134,056 -0-
       

PSUs

 -0- 852,704 -0- -0- 852,704 852,704 -0- -0- 607,438 -0- -0- 607,438 607,438 -0-
       

Multiple of Base Salary

 -0- 679,800 -0- -0- -0- -0- -0- -0- 721,000 -0- -0- -0- -0- -0-
       

Multiple ofNon-Equity Incentive Plan Compensation

 -0- 509,850 -0- -0- -0- -0- -0- -0- 540,750 -0- -0- -0- -0- -0-

Deferred Compensation

              

Deferred Compensation

       

NQ RSIP and Unpaid Deferred Compensation

 90,112 90,112 90,112 90,112 90,112 90,112 90,112 20,574 20,574 20,574 20,574 20,574 20,574 20,574
       

RSIP

 332,876 332,876 332,876 332,876 332,876 332,876 332,876 54,025 54,025 54,025 54,025 54,025 54,025 54,025

Benefits and Perquisites

              

Benefits and perquisites

Benefits and perquisites

       

Pension

 -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-
       

Life Insurance Proceeds

 -0- -0- -0- -0- 500,000 -0- -0- -0- -0- -0- -0- 500,000 -0- -0-
       

Total:

 422,988 3,337,962 422,988 422,988 2,648,312 2,148,312 422,988 74,599 2,388,255 74,599 74,599 1,626,505 1,126,505 74,599

 

(1)

If Mr. GersonGill were terminated during the Protection Period for cause, he would receive the payment shown for termination as a result of cause in anon-change in control scenario.

 

(2)

The amounts payable to Mr. GersonGill due to his death or disability during the Protection Period would match the amounts payable to him for such occurrences outside of the Protection Period.

 

(3)

Assumes allnon-equity incentive plan compensation earned for 2017,2018, as disclosed in the“Non-Equity Incentive Plan Compensation” column of the 20172018 Summary Compensation Table, has been earned as of December 29, 2017,31, 2018, and thus is not additional compensation resulting from the termination scenarios described in this table.

 

(4)

Vesting of awards granted under the 2013 Plan only accelerates in the event of a qualifying termination following a change in control.

EQUITY COMPENSATION PLAN INFORMATION (AS OF DECEMBEREquity Compensation Plan Information (as of December 31, 2017)2018)

 

Plan category

 

  

Number of          

Securities To Be          

Issued upon          

Exercise of          

Outstanding          

Options,          

Warrants and          

Rights          

(a)          

 

  

Weighted-          

Average          

Exercise Price of          

Outstanding          

Options,          

Warrants          

and Rights          

(b)          

 

  

Number of Securities          

Remaining Available for          

Future Issuance Under          

Equity Compensation Plans          

(excluding securities reflected           

in column (a))          

(c)          

 

Equity compensation plans approved by security holders

  3,267,298(1)  $13.69  4,366,677(2)

Equity compensation plans not approved by security holders

  N/A  N/A  N/A

Total

  3,267,298(1)  $13.69  4,366,677(2)

Plan category

Number of Securities To

  Be Issued upon Exercise  

of Outstanding Options,

Warrants and Rights

(a)

Weighted-Average

Exercise Price of

  Outstanding Options,  

Warrants and Rights

(b)

Number of Securities

  Remaining Available for  

Future Issuance Under

Equity Compensation

Plans (excluding

securities reflected in
column (a)) (c)

Equity compensation plans approved by security holders3,277,992 (1)$17.763,889,526 (2)
Equity compensation plans not approved by security holdersN/AN/AN/A
Total3,277,992 (1)$17.763,889,526 (2)

 

(1)

Includes outstanding options to purchase 42,500 shares of common stock, 1,679,2761,745,447 SARs outstanding, 801,939583,380 RSUs outstanding and 743,583949,165 PSUs outstanding, in each case as of December 31, 2017.2018. The options and SARs have a weighted average remaining term of 7.336.94 years. Based on our December 29, 201731, 2018 closing stock price of $18.65$19.86 per share, 1,185,4731,348,819 SARs outstanding arein-the-money and 425,079447,642 shares would be issuable for our outstanding SARs as of December 31, 2017.2018. Additionally, based on our calculated TSR, 1,428,817total stockholder return, 1,898,330 shares would be issuable for our outstanding PSUs as of December 31, 2017.2018.

 

(2)

Plans include the 1995 Executive Incentive Compensation Plan, the 1995Non-Employee Directors’ Stock Plan, the 2016Non-Employee Directors’ Long-Term Equity Compensation Plan, and the 2013 Equity and Incentive Compensation Plan, as amended. As of December 31, 2017, 233,7992018, 194,370 and 4,366,6773,695,156 shares remained available for future issuance under the 2016Non-Employee Directors’ Long-Term Equity Compensation Plan and the 2013 Equity and Incentive Compensation Plan, respectively. All of the shares under the 2016Non-Employee Directors’ Long-Term Equity Compensation Plan are available for full-value awards granted under such plan, while 2,843,3452,374,533 shares are available for full-value awards granted under the 2013 Equity and Incentive Compensation Plan. No shares remain available for future issuance under the 1995 Executive Incentive Compensation Plan or the 1995Non-Employee Directors’ Stock Plan.

PROPOSALProposal 3: VOTE, ON AN ADVISORY BASIS, TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATIONVote, on an Advisory Basis, to Approve Named Executive Officer Compensation

In accordance with the Dodd-Frank Act and related SEC rules, and as required under Section 14A of the Exchange Act, our Board has adopted a policy of providing an annual stockholder vote to approve, on an advisory(non-binding) basis, the compensation of our NEOs as disclosed in this Proxy Statement.

Response to PreviousSay-on-Pay Votes

Stockholders voted strongly in support of Harsco’s executive compensation programs in 20172018 with approximately 94%95% of votes cast in support of the program. We believe the continued support demonstrates that we are committed to attaining the highest levels of stockholder support for our executive compensation programs and that we respect input from our stockholders and take their concerns seriously.

As described in detail under “Compensation Discussion & Analysis,” our executive compensation program’s primary objective is aligning our executives’ pay with the interests of our stockholders. The program is also designed to reward short- and long-term financial, strategic and operational business results, while facilitating the Company’s need to attract, motivate, develop and retain and motivate superior executive talent, including our NEOs,highly-qualified executives who are critical to our success. Under this program, we seek to align pay and performance by making a significant portion of our NEOs’ total compensation dependent on:

Achievement of specific annual and long-term strategic and financial goals; and

success.

Realization of increased stockholder value.

We have many compensation practices that help ensure that our compensation programs are strongly aligned with our goals and strategies and promote good pay and corporate governance practices. These practices are discussed in detail under “Meetings and Committees of the Board” and “Compensation Discussion & Analysis” and include:

 

We have

Tie a significant amount of executive pay to Company performance;

Reward for business unit, corporate, and individual performance;

Maintain a clawback policy in the event of a material financial restatement;

Prohibit hedging and short sales;

Utilize an independent compensation advisor and review performance and independence annually;

Conduct an annual risk review and make program changes as necessary;

Require a “double trigger” for severance payments upon a change in control; and

Maintain substantial stock ownership guidelines and stock holding requirements for Directors and executive officers that promote alignment of their interests with our stockholders’ interests;

interests.

Our long-term incentive program is 100% stock-based;

Approximately 80% of our President & CEO’s target total compensation was variable compensation (58% of our President & CEO’s target total compensation is based on long-term performance);

On average, 65% of our other NEOs’ target total compensation was variable compensation;

We employ our executive officers “at will” without individual severance agreements or employment contracts; and

We have implemented significant risk mitigators, such as limits on incentive awards, use of multiple performance measures in our incentive plans, and an executive incentive compensation recoupment (clawback) policy.

Please read the “Compensation Discussion & Analysis” section for additional details about our executive compensation programs, including information about the fiscal year 20172018 compensation of our NEOs.

We are asking our stockholders to support our NEO compensation as described in this Proxy Statement. This proposal gives you, as a stockholder, the opportunity to express your views on our NEOs’ compensation. Your vote is not intended to address any specific item of our compensation program, but rather to address our overall approach to the compensation of our NEOs described in this Proxy Statement. Our MD&C Committee and our Board believe our overall program effectively implements our compensation philosophy and achieves our goals. Accordingly, we ask you to vote “FOR” the following resolution at our Annual Meeting:

“RESOLVED, that Harsco Corporation’s stockholders approve, on an advisory basis, the compensation paid to Harsco Corporation’s Named Executive Officers, as disclosed in the Proxy Statement for the 2018

2019 Annual Meeting of Stockholders pursuant to the SEC’s compensation disclosure rules, including the Compensation Discussion & Analysis, the Executive Compensation Tables and related narrative discussion.”

Required Vote: Our NEO compensation as disclosed in this Proxy Statement will be approved if it receives more votes “FOR” than votes “AGAINST.” Abstentions will have the effect of votes “AGAINST” with respect to this proposal and broker“non-votes” are not considered as votes cast with respect to this proposal and therefore will have no effect on the outcome.

This vote on NEO compensation is advisory, and therefore will not be binding on the Company, our MD&C Committee or our Board. However, our Board and MD&C Committee value our stockholders’ opinions. If a significant percentage of our stockholders votes against the NEO compensation as disclosed in this Proxy Statement, we will consider our stockholders’ concerns, and the Human Resources Department and MD&C Committee will evaluate whether any actions are necessary or appropriate to address those concerns. Unless our Board modifies its policy of holding an advisory vote to approve executive compensation on an annual basis, the next advisory vote will be held at our 20192020 Annual Meeting of Stockholders.

The Board recommends that you vote “FOR” the approval, on an advisory basis, of our Named Executive Officer compensation as disclosed in this Proxy Statement.

TRANSACTIONS WITH RELATED PERSONSTransactions with Related Persons

For the fiscal year ended December 31, 2017,2018, there were no transactions with the Company in which any related person had a direct or indirect material interest that would be required to be disclosed pursuant to Item 404 of RegulationS-K, nor were any such transactions planned.

Policies and Procedures Regarding Transactions with Related Persons

Our policies and procedures regarding related person transactions are set forth in writing in the Nominating Committee Charter and in our Code of Conduct. As set forth in its charter, the Nominating Committee is generally responsible for reviewing and approving all material transactions with any related person. Related persons include any of our Directors, Director nominees or executive officers and certain of our stockholders, and their immediate family members. Copies of the Nominating Committee’s Charter and our Code of Conduct are available at the Corporate Governance section of our website atwww.harsco.com/about-us. Approval of related person transactions by our full Board may also be warranted under certain circumstances (for example, to allow for approval of a related person transaction by a majority of disinterested Directors).

To identify related person transactions, each year we submit and require our Directors and officers to complete Directors’ and Officers’ Questionnaires identifying any and all transactions with us in which the officer or Director (or their family members) has an interest. We review related person transactions due to the potential for a conflict of interest. A conflict of interest occurs when an individual’s private interest interferes, or appears to interfere, in any way with our interests. We expect our Directors, officers and employees to act and make decisions that are in our best interests and encourage them to avoid situations which could present a conflict between our interests and their own personal interests.

Our Directors, officers and employees are prohibited from using their position of employment or other relationship with us to influence decisions concerning business transactions between us and a company in which they or a member of their immediate family has a personal interest through ownership, with the exception of investments in publicly-held corporations when the investment results in less than a one percent ownership interest. In addition, Directors, officers and employees must not accept personal favors or benefits from those dealing with us that could influence or could give the impression of influencing their business judgment. Our Code of Conduct, which applies to each of our Directors, officers and employees, sets forth our expectations

regarding potential and actual conflicts of interest. The section of the Code of Conduct entitled “My Commitment to the Company” covers the concept of conflicts of interest and our view about when an inappropriate undertaking may be occurring.

EXECUTIVE DEVELOPMENT AND SUCCESSIONExecutive Development and Succession

The executive development process ensures continuity of leadership over the long term, and it forms the basis on which we make ongoing executive assignments. Through the integration of the performance assessment and executive development processes, position assignments are made based on executives’ qualifications and readiness for the position. Our future leaders are developed through these carefully selected assignments. We believe that consistent and ongoing application of this process meets the long-range requirements of the business and achieves competitive advantage.

Each year, our MD&C Committee reviews our leadership talent development program to ensure good performance and alignment between business strategies and operating plans. The Board annually reviews the results of the leadership capability and succession process with the Chairman, President & CEO in executive session.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONCompensation Committee Interlocks and Insider Participation

Messrs. Earl, Graham, Growcock, Longhi, Purvis and Widman served as members of our MD&C Committee during 2017.2018. None of them served as one of our officers or employees or as an officer or employee of any of our subsidiaries during that time or in the past, and none of them or any other Director served as an executive officer of any entity for which any of our executive officers serve as a director or a member of its compensation committee.

None of the members of our MD&C Committee has a relationship with us that is required to be disclosed under Item 404 of RegulationS-K under the Exchange Act.

SECTIONSection 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEBeneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers, Directors and more than 10% stockholders to file with the SEC and the NYSE Euronext reports of ownership and changes in ownership in their holdings of our stock. Copies of these reports also must be furnished to us. Based on an examination of these reports and information furnished by these stockholders, all such reports have been timely filed.

OTHER MATTERSOther Matters

Householding of Proxy Materials

We and some brokers “household” the Letter from our Chairman & CEO, Annual Report on Form10-K and other proxy materials, delivering a single copy of each to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If at any time you no longer wish to participate in householding and would prefer to receive a separate copy of the proxy materials, including the Letter from our Chairman & CEO and Annual Report on Form10-K, or if you are receiving multiple copies of the proxy materials and wish to receive only one, please notify your broker, if your shares are held in a brokerage account, or us, if you hold registered shares, at which time we will promptly deliver separate copies of the materials to each of the affected stockholders or discontinue the practice, according to your wishes. You can notify us by sending a written request to Harsco Corporation, 350 Poplar Church Road, Camp Hill, PA 17011 or by calling (717)(717) 763-7064.

Stockholder Proposals and Nominations for Presentation at 20192020 Annual Meeting of Stockholders

The 20192020 Annual Meeting of Stockholders is expected to be held on April 23, 2019.21, 2020. If one of our stockholders wishes to submit a proposal for consideration at the 20192020 Annual Meeting of Stockholders, such proposal must be received at our executive offices no later than November 14, 201812, 2019 to be considered for inclusion in our Proxy Statement and Proxy Card relating to the 20192020 Annual Meeting of Stockholders. Although a stockholder proposal received after such date will not be entitled to inclusion in our Proxy Statement and Proxy Card, a stockholder can submit a proposal for consideration at the 20192020 Annual Meeting of Stockholders in accordance with ourby-laws if written notice is mailed and received at the principal executive offices of the Company not earlier than the close of business on the 120th and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder in order to be timely must be delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the 90th day prior to such annual meeting or, if the first public announcement or notice of the date of such annual meeting is made or given to stockholders less than 100 days prior to the date of such annual meeting, the close of business on the 10th day following the day on which public announcement was made or notice of the date of such meeting is mailed, whichever first occurs.

In order to nominate a candidate for election as a Director at the 20192020 Annual Meeting of Stockholders, a stockholder must provide written notice and supporting information to the Secretary of the Company by personal delivery or mail not later than January 24, 2019.22, 2020. If the stockholder does not also comply with the requirements of Rule14a-4(c) under the Exchange Act, the Company may exercise discretionary voting authority under proxies it solicits to vote in accordance with its best judgment on any such stockholder proposal.

 LOGOLOGO  
   
   
   IMPORTANT ANNUAL MEETING INFORMATION    

 

     

Electronic Voting InstructionsYour vote matters - here’s how to vote!

Available 24 hours a day, 7 days a week!You may vote online or by phone instead of mailing this card.

 

Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.

 

VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.LOGO

ProxiesVotes submitted via the Internet or telephoneelectronically must be received by 11:59 p.m.59pm, (ET), Eastern Time, on April 23, 2018.22, 2019.

 

Vote by InternetOnline

Go towww.envisionreports.com/hsc

Or or scan the QR code – login details are located in the shaded bar below.

LOGO

Phone

Call toll free1-800-652-VOTE (8683) within the USA, US territories and Canada

Using ablack ink pen, mark your votes with your smartphoneanX as shown in this example.

FollowPlease do not write outside the steps outlined on the secure websitedesignated areas.

LOGO

LOGO

Save paper, time and money!

Sign up for electronic delivery at www.envisionreports.com/hsc

 

Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas.  2019 Annual Meeting Proxy Card 

LOGO

    

Vote by telephone

Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone

Follow the instructions provided by the recorded message

Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card

LOGO

q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q

 

 A Proposals — The Board of Directors recommends a voteFOR all the nominees listed on Proposal 1 andFOR Proposals 2 and 3.
 A 

Proposals – The Board of Directors recommend a voteFOR all the nominees listed andFOR Proposals 2 - 3.

1. Election of Directors: For Against Abstain  For+
AgainstAbstain  For Against Abstain 

+

ForAgainstAbstainForAgainstAbstain
 

 

01 - J.F.J. F. Earl

 

 

 

 

 

 

 

 

02 - K.G.K. G. Eddy

 

 

 

 

 

 

 

 

03 - D.C.D. C. Everitt

 

 

 

 

 

 

 
 

 

04 - F.N.F. N. Grasberger III

 

 

 

 

 

 

 

 

05 - E. La RocheC. I. Haznedar

 

 

 

 

 

 

 

 

06 - M. Longhi

 

 

 

 

 

 

 
 

 

07 - E.M.E. M. Purvis, Jr.

 

 

 

 

 

 

 

 

08 - P.C.P. C. Widman

 

 

 

 

 

 

     

 

   For Against Abstain   For Against Abstain
2. Ratification of the appointment of PricewaterhouseCoopers LLP as independent auditors for the fiscal year ending December 31, 2018.     3. Vote, on an advisory basis, on named executive officer compensation.   
          
      .    
   For Against Abstain   For Against Abstain
2. Ratification of the appointment of PricewaterhouseCoopers LLP as independent auditors for the fiscal year ending December 31, 2019.     3. Vote, on an advisory basis, on named executive officer compensation.   
          
      .    

 

 B  Non-Voting Items
Change of Address — Please print new address below.Comments — Please print your comments below.

 

 C 

Authorized Signatures This section must be completed for your vote to be counted. — Datecount. Please date and Sign Belowsign below.

NOTE: Please sign exactly as namename(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or guardian,custodian, please give full title as such.title.

 

Date (mm/dd/yyyy) Please print date below. 

Signature 1 Please keep signature within the box.

 

Signature 2 Please keep signature within the box.

       /        /
      

 

   

1 P C F

 +
    
 02RJNB                                     02ZU7A 


2019 Annual Meeting Admission Ticket

2019 Annual Meeting of Harsco Corporation Stockholders

April 23, 2019, 9:00 am ET

The Wagner at the Battery

Two West Street, New York, NY 10004

Upon arrival, please present this admission ticket and photo identification at the registration desk.

Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders.

The Notice of 2018 Annual Meeting of Stockholders and Proxy Statement, our Proxy Card and our 2017 Annual Report on Form 10-K arematerial is available at:http://www.envisionreports.com/hsc (for registered stockholders) orhttp://www.edocumentview.com/hsc (for all other stockholders).

 

LOGO

Small steps make an impact.

LOGO   
Help the environment by consenting to receive electronic

delivery, sign up at www.envisionreports.com/hsc

q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q

LOGO

 

Proxy —  Harsco Corporation

 

LOGO       

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OFNotice of 2019 Annual Meeting of Stockholders

HARSCO CORPORATIONProxy Solicited by Board of Directors for Annual Meeting – April 23, 2019

The undersigned hereby appoints D.C. Everitt, F.N.F. N. Grasberger III, and K.G.K. G. Eddy and eachD. C. Everitt, or any of them, each with power to act without the other and with power of substitution, as proxies and attorneys-in-fact andare hereby authorizes themauthorized to represent and vote as provided on the other side, all the shares of Harsco Corporation Common Stockthe undersigned, with all the powers which the undersigned is entitledwould possess if personally present, at the Annual Meeting of Stockholders of Harsco Corporation to be held on April 23, 2019 or at any postponement or adjournment thereof.

Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the Board of Directors and inFOR items2-3.

In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.

(Items to be voted appear on reverse side)

  C  Non-Voting Items

Change of Address – Please print new address below.

Comments – Please print your comments below.

LOGO     


LOGO

Using ablack ink pen, mark your votes with anX as shown in this example.

Please do not write outside the designated areas.

LOGO

  2019 Annual Meeting Proxy Card

q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q

 A Proposals – The Board of Directors recommend a voteFOR all the nominees listed andFOR Proposals 2 - 3.

1.Election of Directors:LOGO     

ForAgainstAbstainForAgainstAbstainForAgainstAbstain
01 - J. F. Earl02 - K. G. Eddy03 - D. C. Everitt
04 - F. N. Grasberger III05 - C. I. Haznedar06 - M. Longhi
07 - E. M. Purvis, Jr.08 - P. C. Widman

   For  Against  Abstain          For  Against  Abstain
2. Ratification of the appointment of PricewaterhouseCoopers LLP as independent auditors for the fiscal year ending December 31, 2019.         3. Vote, on an advisory basis, on named executive officer compensation.      

 B Authorized Signatures – This section must be completed for your vote to count. Please date and sign below.

Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.

Date (mm/dd/yyyy) – Please print date below.Signature 1 – Please keep signature within the box.Signature 2 – Please keep signature within the box.
       /        /

1  U  P  X

LOGO     

02ZU8A


Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders.

The material is available at: www.edocumentview.com/hsc

q  IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.  q

 Harsco Corporation

Notice of 2019 Annual Meeting of Stockholders

Proxy Solicited by Board of Directors for Annual Meeting – April 23, 2019

F. N. Grasberger III, K. G. Eddy and D. C. Everitt, or any of them, each with the power of substitution, are hereby authorized to be held April 24, 2018 or at any adjournment or postponement thereof,represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders.

THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE ELECTION OF ALL DIRECTOR NOMINEES LISTED AND “FOR” ITEMS 2 AND 3.

(Continued andStockholders of Harsco Corporation to be marked, datedheld on April 23, 2019 or at any postponement or adjournment thereof.

Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the Board of Directors and signedFOR items2-3.

In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.

(Items to be voted appear on the otherreverse side)