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| HOW DO WE ADDRESS RISK? In the following section, we outline strategies that we have developed to mitigate risks over the short and long term in consideration of regulatory requirements. |
Compensation Program Design Mitigates Risk Annually, PPG management undertakes a review of all of PPG’s compensation programs to identify any inherent material risks to PPG created by these programs. The framework used to identify any potential risks that could be incentivized by our compensation programs was developed with input from members of our human resources, finance, and legal functions and our independent executive compensation consultant, FW Cook. The effect of the global COVID-19 pandemic and any potential negative impact to the Company’s compensation plans was also considered. Based on the results of the 20222023 review, we concluded that the design of our compensation programs does not encourage our employees to take unnecessary or excessive risks that could harm the long-term value of PPG. Features | | |
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of our compensation programs and practices that mitigate risk include, among other things: (i) incentive plans that are appropriately weighted between short-term and long-term performance and cash and equity; (ii) long-term incentives that consist of a mix of stock options, performance-based restricted stock units and total shareholder return contingent shares, which provides for a balanced mix of performance measures; (iii) ranges of performance and multiple performance targets are utilized to determine incentive compensation payouts, rather than a single performance target that provides an “all or nothing” basis for compensation; (iv) maximum payouts are in place in our incentive compensation programs to limit excessive payments; (v) determination of incentive compensation payouts is subject to managerial approval and/or Human Capital Management and Compensation Committee discretion; and (vi) our executive officers are subject to a recoupment policy in the event of a financial restatement affecting their incentive compensation payout. The results of this review are shared with the Human Capital Management and Compensation Committee. | | | | 
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In addition, the following design elements of our compensation program mitigate potential risks. | ● | Our officers are subject to stock ownership requirements, as discussed below. |
| ● | Our officers may not engage in transactions that are contrary to the interests of shareholders, such as “short sales,” “short sales against the box,” “put” and “call” options and hedging transactions designed to minimize an executive’s risk inherent in owning PPG stock. In addition, officers may not hold PPG stock in a margin account and may not pledge PPG stock as collateral for a loan. |
| ● | Executive officers are subject to a “clawback”compensation recovery policy that is designed to recoup incentive compensation when a financial restatement occurs and certain other conditions exist.occurs. |
| ● | We provide very limited perquisites to our executive officers. |
| ● | We do not provide limited tax gross-ups on perquisitesand tax reimbursements to our named executive officers.officers related to costs incurred for international assignments. |
Financial Restatement Effective July 20, 2023, PPG’s Board of Directors adopted a new Compensation Recovery Policy that complies with the New York Stock Exchange’s recently-adopted listing standards. It is our policy that we will to the extent permitted by governing law, seek recoupment ofrecoup incentive compensation paid toreceived by any executive officer or the chief accounting officer serving during the prior three completed fiscal years where: | ● | the payment was predicated upon the achievement of certainone or more financial resultsreporting measures that were subsequently the subject of a restatement; |
● | material accounting restatement (as defined in the executive officer is found to have engaged in fraud or misconduct that caused or partially caused the need for the restatement;policy); and |
| ● | a lower payment would have been made to the executive officer based uponafter taking into account the restated financial results.accounting restatement. |
In each such instance, we will, subject to the extent practicable, seek tolimited exceptions, recover the amount by which the individual executive officer’s incentive compensation for the relevant period exceeded the payment that would have been made basedafter taking into account the accounting restatement. A complete copy of PPG’s Compensation Recovery Policy has been filed as an exhibit to PPG’s Annual Report on Form 10-K for the restated financial results, plus a reasonable rate of interest.year ended December 31, 2023. PPG Stock Ownership Requirements The Human Capital Management and Compensation Committee also believes that it is in the best interests of shareholders for our officers to own a significant amount of PPG common stock, thereby aligning their interests with the interests of shareholders. Accordingly, in 2003 the Human Capital Management Compensation Committee implemented stock ownership requirements applicable to all of our officers based on a multiple of base salary. The current stock ownership requirements are: | | | | Position
| | | Position | Required Stock Ownership | Executive Chairman and PresidentChairman and Chief Executive Officer | 6 times base salary | Other executive officers | 3 times base salary | Other officers | 1 or 2 times base salary |
Ownership for purposes of these requirements includes shares of PPG common stock personally owned as well as all stock holdings in PPG’s savings plan and deferred compensation accounts and any unvested time-based restricted stock units. Unexercised options and unvested performance shares awarded under our long-term incentive plans are not counted for these purposes. Officers are expected to meet these ownership requirements within five years of election, appointment or promotion. Those officers who have not yet met this requirement are paid 20% of their annual incentive in PPG stock, which is restricted from sale for a period of two to five years. In addition, for officers who have | | | 46 2023 Proxy Statement
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been subject to the policy for more than five years at their current requirement level and have not met the ownership requirement, 100% of the vested shares delivered from the performance-based restricted stock unit (“PBRSU”) award and total shareholder return share award (“TSR”) must be held by the officer for a minimum of one year and until the requirement is met. All executive officers named in the Summary Compensation Table, except Mr. Knavish, have met their ownership requirement. Mr. Knavish’s stock ownership requirement increased with his promotion to Chief Executive Officer. He is within his five-year compliance period and should meet the ownership requirement by the end of such period. | | | 48 2024 Proxy Statement |
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Prohibition on Hedging and Pledging PPG Securities PPG officers and directors may not engage in any transaction in which they may profit from short-term speculative swings in the value of PPG’s securities. This prohibition includes “short sales” (selling borrowed securities that 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) and other hedging transactions designed to minimize an executive’s risk inherent in owning PPG stock, such as zero-cost collars and forward sale contracts. In addition, officers may not hold PPG stock in a margin account and may not pledge PPG stock as collateral for a loan. This policy is designed to discourage risk taking with PPG securities by officers and to ensure compliance with all insider trading rules. PPG employees who are not officers of the Company are not subject to these prohibitions. However, PPG’s Global Code of Ethics prohibits all PPG employees from buying or selling PPG stock or the stock of any other company while aware of material non-public information and prohibits employees from sharing material non-public information for financial or other personal benefit. Our Policies with Respect to the Granting of Equity Awards Equity awards may be granted by either the Human Capital Management and Compensation Committee or its delegate. The Human Capital Management and Compensation Committee only delegates authority to grant equity awards to employees who are not executive officers, and only in aggregate amounts not exceeding amounts approved by the Human Capital Management and Compensation Committee. The Board generally does not grant equity awards, although the Human Capital Management and Compensation Committee regularly reports its activity, including approval of grants, to the Board. Timing of Grants. Equity awards are granted in February at a regularly scheduled meeting of the Human Capital Management and Compensation Committee, and generally further grants are not made for the remainder of the year. These meetings occur approximately one month after the release of our earnings for the immediately preceding year. Beginning in February 2024, annual equity award grants are granted two business days after the filing of the Company’s Annual Report on Form 10-K based on grant values approved by the Human Capital Management and Compensation Committee at its February meeting. On limited occasions, grants may occur on an interim basis, primarily for the purpose of approving a compensation package for a newly hired or promoted executive officer. These grants are made on the second Friday of the second month of the quarter after the hire or promotion date; provided, however, that if the date of hire or promotion would fall within a Company imposed blackout period, the grant date will be the first business day following such blackout period. The timing of these grants is driven solely by the activity related to the need for the hiring or promotion, not our stock price or the timing of any release of Company information. Option Exercise Price. The exercise price of a newly granted stock option is the closing price on the New York Stock Exchange on the date of grant. With respect to the occasional interim grants of stock options to a newly hired or promoted executive, the exercise price is the closing price on the New York Stock Exchange on the date of grant, which is the second Friday of the second month of the quarter after the hire or promotion date; provided, however, that if the date of hire or promotion would fall within a Company imposed blackout period, the grant date will be the first business day following such blackout period. Change In Control Agreements We have agreements in place with each of the executive officers named in the Summary Compensation Table providing for their continued employment for a period of up to three years in the event of an actual or threatened change in control of PPG (as “change in control” is defined in the agreements). We believe that these agreements serve to maintain the focus of our senior executives and ensure that their attention, efforts and commitment are aligned with maximizing the success of PPG and shareholder value. These agreements avoid distractions involving executive management that arise when the Board is considering possible strategic transactions involving a change in control and assure continuity of executive management and objective input to the Board when it is considering any strategic transaction. For additional information concerning our change in control agreements, see “Potential Payments Upon Termination or Change in Control.” Tax Deductibility of Compensation Expense Section 162(m) of the Internal Revenue Code limits the deductibility of compensation in excess of $1 million paid to any one of our named executive officers during any fiscal year. While it considers the tax and accounting consequences of utilizing various forms of compensation, the Human Capital Management and Compensation Committee designs our compensation programs based on the long-term interests of PPG, with deductibility of compensation being one of a variety of considerations taken into account. | | | |
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compensation programs based on the long-term interests of PPG, with deductibility of compensation being one of a variety of considerations taken into account.
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| HOW DO WE PAY OUR EXECUTIVES? In this section, we describe the components of the total compensation package for our executives and how these components align with our greater pay-for-performance philosophy. |
Principal Components of Executive Compensation The principal components of our executive compensation program are: | | | COMPENSATION COMPONENT | OVERVIEW | OBJECTIVES | Base Salary | Fixed compensation that is established annually based on local market data and individual performance | Maintain parity with the competitive market for executives in comparable positions | Annual Incentive Awards | Variable compensation that is based on Company, business, and individual performance | Incentivize executive officers to achieve our short-term performance objectives | Long-Term, Equity-Based Incentives | Variable compensation that is based solely on Company performance | Retain our executive officers, align their financial interests with the interests of shareholders, and incentivize achievement of our long-term strategic goals |
Mix of Compensation Components Executive compensation is based on our pay-for-performance philosophy, which emphasizes executive performance measures that correlate closely with the achievement of both shorter-term performance objectives and longer-term shareholder value creation. To this end, a substantial portion of our executives’ annual and long-term compensation is performance-based, with the payment being contingent on the achievement of performance goals. The portion of compensation that is performance-based increases with the executive’s level of responsibility. We use performance- based compensation for more senior positions because these roles have greater leadership responsibility and influence on the performance of the Company as a whole. Annual Compensation Our annual compensation policies reflect our pay-for-performance philosophy. We set target total annual compensation for our executive officers to be competitive with the market value for comparable positions, taking into account each executive’s experience in the position and performance. Annual incentive awards are targeted at a level that, when combined with base salaries, is intended to yield total annual compensation that approximates market value. As a result, total annual compensation for a position generally should exceed its market value when our financial performance exceeds our applicable annual targets and individual performance contributes to meeting our objectives. Total annual compensation generally should be below market value when our financial performance does not meet targets and/or individual performance does not have a favorable impact on our objectives. Base Salary. Based on the Human Capital Management and Compensation Committee’s review of the applicable compensation data as discussed above, in February 20222023 the Human Capital Management and Compensation Committee set base salaries effective March 1, 20222023 for all executive officers in relation to the market value for comparable positions. Mr. McGarry receiveddid not receive a base salary increase of $40,000. With his promotion to Chief Operating Officer on March 1, 2022,in 2023. Mr. Knavish’s annual base salary increased by $200,000$300,000 to $900,000.$1,200,000. Mr. Morales received a base salary increase of $45,000.$30,000. Ms. Liebert and Ms. Foulkes each received a base salary increase of $20,000.$25,000. Mr. Vadlamannati received a base salary increase of $15,000.$28,000. Ms. Ericson received a base salary increase of $27,000. Ms. Liebert resigned from the Company, effective September 16, 2022.
On October 19, 2022, Mr. McGarry was appointed Executive Chairman and Mr. Knavish was appointed President and Chief Executive Officer, each effective January 1, 2023.
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Annual Incentive Awards. In February 2022,2023, the Human Capital Management and Compensation Committee established annual incentive awards primarily based on target levels set for each executive officer and pre-established, short-term performance objectives. On an annual basis, the Human Capital Management and Compensation Committee establishes a target annual incentive award for each executive officer based on the executive’s position and the market value of comparable positions in our comparator group. For 2022,2023, this target, when expressed as a percentage of base salary, was as follows for each of the executive officers named in the Summary Compensation | | | 50 2024 Proxy Statement |
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Table: Mr. McGarry, 160%; Mr. Knavish, 110%145%; Mr. Morales, 100%; Ms. Liebert, 80%; Ms. Foulkes, 80%90%; and Mr. Vadlamannati, 70% and Ms. Ericson, 70%. The amount of an executive’s actual annual incentive award, in relation to the executive’s target opportunity, is determined on the basis of achievement of short-term performance objectives. The performance objectives for our Executive Chairman, our PresidentChairman and Chief Executive Officer, our Senior Vice President and Chief Financial Officer and our Senior Vice President and General Counsel include specific financial targets for Company performance (weighted 80%) and personal performance (weighted 20%). The performance objectives for our other executive officers include specific financial targets for Company performance (weighted 50%), business performance (weighted 30%) and personal performance (weighted 20%). For many years, PPG has been committed to sustainability. Recognizing the importance of sustainability and its ability to drive innovation in our business, PPG includes sustainability goals in the performance goals of its Executive Chairman and President and Chief Executive Officer. Performance against these goals is reviewed by the Human Capital Management and Compensation Committee of the Board of Directors. Annual incentive compensation of PPG’s executives and senior managers is partially (20%) based on personal goals that tie to overall corporate business goals, with the remainder based on company and business financial performance. Depending on their role, some executives and senior managers, by virtue of their responsibilities, may have goals related to social or environmental performance. In addition, executive business unit leaders receive sustainability scorecards for their business unit, and they are responsible for driving improvement in their business unit’s sustainability metrics. Safety, waste costs, energy usage and costs, and sustainablesustainably advantaged product sales are part of these executives’ annual performance review. Beginning in 2022, our executive officers have ESG goals included in the individual performance component of their annual incentive award. Each executive officer has a specific DE&Idiversity, equity and inclusion goal and a sustainability or governance goaltargets that is alignedalign with the Company’s strategies and targets.strategies. The potential payout of the Company performance component of the annual incentive is based on a pre-determined schedule recommended by management and approved by the Human Capital Management and Compensation Committee. The schedule corresponds to various levels of potential Company financial performance measured by adjusted earnings per diluted share from continuing operations (weighted 60%), adjusted cash flow from operating activities (weighted 20%), price increase (weighted 10%) and sales volume growth (weighted 10%), assuming the minimum adjusted earnings per diluted share from continuing operations threshold is met. The maximum payout of this component under the schedule is 220% of target. In assessing Company performance against objectives, the Human Capital Management and Compensation Committee considers reported results against the approved target objectives, taking into consideration whether significant uncontrollable and unforeseen events or economic obstacles or more favorable circumstances impacted the Company’s results. Adjustments that are applied to determine the corporate component of the annual incentive are typically consistent with the non-GAAP adjustments reported in our quarterly financial statements, but the adjustments applied by the Human Capital Management and Compensation Committee may differ depending on the circumstances. The assessment of Company performance determines the percentage of the target award that will be awarded to each executive for the Company performance component of the annual incentive award. For 2022,2023, as described below, the Human Capital Management and Compensation Committee exercised discretion and approved certain non-operating adjustments to the 20222023 reported earnings per diluted share from continuing operations, cash flow from operating activities – continuing operations results, price increase and sales volume growth, consistent with guidelines established previously by the Human Capital Management and Compensation Committee.Committee and the non-GAAP adjustments reported in our quarterly financial statements. In the past, select adjustments have related to items such as legacy litigation or legacy environmental remediation, accounting rule changes and major business portfolio changes, including planned restructuring initiatives. Beginning with the calculation of the 2022 annual incentive award, one half of the earnings impact (positive or negative) of foreign currency translation versus plan will be applied as an adjustment to earnings per diluted share. In February 2022,2023, the Human Capital Management and Compensation Committee approved a financial performance standard for the Company component of the award of $7.48$6.05 adjusted earnings per diluted share from continuing operations, adjusted cash flow from operating activities of $2,392$1,895 million, price increase of 5.10%3.80% and sales volume growth of 2.50%-1.20%. If achieved, this standard would generate 100% of the target bonus for the Company component of the award. The approved performance standard for 20222023 included a threshold adjusted earnings per diluted share from continuing operations of $5.53,$4.47, below which no bonus would be paid, regardless of the adjusted cash flow from operating activities, the sales increase or the sales volume growth results. The committee also set threshold cash flow from continuing operations performance of $1,489$1,180 million, a threshold price increase performance of 0.00% and a threshold sales volume growth performance of 0.00%-2.40% for payment on those three components. In addition, the approved performance standard for 20222023 included a maximum bonus opportunity of 220% if adjusted earnings per | | | |
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diluted share from continuing operations of $8.35,$6.75, adjusted cash flow from operating activities of $2,679$2,122 million, price increase of 7.65%5.70% and sales volume growth of 3.75%-0.60% were achieved.
For 2022,2023, the Human Capital Management and Compensation Committee approved the actual Company performance component for incentive awards based on adjusted earnings per diluted share from continuing operations of $6.22,$7.50, adjusted cash flow from operating activities of $1,059$2,514 million, price increase of 11.20%4.60% and sales volume growth of - 3.60%1.80%. The earnings per diluted share performance component included adjustments of $0.90$0.67 for impairment and other related charges, associated with the Company’s wind down of its Russian operations, $0.53$0.61 for a pension settlement charge, $0.51 for acquisition-related amortization expense, $0.24 for portfolio optimization costs, $0.14 for business restructuring-related costs, net, $0.10 for environmental remediation costs, $0.10 for Argentina currency devaluation losses, and $0.05($0.05) for transaction-related costs.insurance recoveries. Beginning with the calculation of the 20222023 annual incentive award, one half of the earnings impact (positive or negative) of foreign currency translation versus plan will be applied as an adjustment to earnings per diluted share. For 2022,2023, an adjustment of $0.17 for unfavorablefavorable currency translation was applied. Adjustments to the cash flow from operating activities performance component included adding back $85$57 million for restructuring cash spending and $11$46 million for cash contributions to pension plans.
Adjusted earnings per diluted share from continuing operations of $6.22,$7.50, adjusted cash flow from operating activities of $1,059$2,514 million, price increase of 11.20%4.60% and sales volume growth of -3.60%-1.80% resulted in a payout of 45%196% of target for the Company performance component, based on the schedule discussed above. For the adjusted earnings per diluted share component, this schedule yielded a payout of 38%220% for the result of $6.22$7.50 per share. For the adjusted cash flow from operating activities component, this schedule yielded a payout of 0%220% for the result of $1,059$2,514 million. For the price increase component, this schedule yielded a payout of 220%150% for the result of 11.20%4.60%. For the sales volume growth component, this schedule yielded a payout of 0%50% for the result of -3.60%-1.80%. Combining these four results using the 60%, 20%, 10% and 10% weightings, respectively, yielded an overall result of 45%196%, which was approved by the Human Capital Management and Compensation Committee. Approved 20222023 Performance Components | | | Adjusted Earnings Per Diluted | | Adjusted Cash Flow from Operating Activities | Share - Continuing Operations | | (20% Weighting) | (60% Weighting) | | |  
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The personal performance component of the annual incentive is based on measures of individual performance relevant to the particular individual’s job responsibilities. The personal performance assessments of our Executive Chairman and President and Chief Executive Officer are determined by the Human Capital Management and Compensation Committee with input from the other non-management members of the Board. The personal performance of each other executive officer is determined by our Chairman and Chief Executive Officer. The following factors were considered in | | | 5052 20232024 Proxy Statement
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Committee with input from the other non-management members of the Board. The personal performance of each other executive officer is determined by our Executive Chairman and President and Chief Executive Officer. The following factors were considered in assessing the personal performance of the executive officers named in the Summary Compensation Table for 20222023 against individual objectives:
Under Mr. McGarry’s leadership, the Company deliveredsuccessfully transitioned the roles of Chief Executive Officer and Chairman of the Board to Mr. Knavish. Mr. McGarry’s mentorship during this transition was an important element to Mr. Knavish’s and the Company’s success in 2023. Mr. McGarry also led director recruitment efforts resulting in the election of Mr. Roberts to the Board. Under his leadership, the Board was integral in overseeing PPG’s new enterprise growth strategy. These results exceeded expectations. Mr. Knavish led the Company to record net sales, adjusted earnings per share and operating cash flow. The breadth and diversity of PPG’s business portfolio was a key driver, as the company benefited from solid volume growth in China and continued growth in aerospace coatings and automotive OEM coatings, despite thelackluster global COVID-19 pandemic, ongoing raw material, labor and transportation availability challenges, and geopolitical events, all of which significantly impacted the Company’s 2022 performance and businesses. Organic sales were higher by 8%, including higher selling prices of about 11%. Record total net sales for 2022 were approximately $17.7 billion, up 5% compared to 2021.industrial demand. The Company’s 20222023 full-year reported net income from continuing operations was $1.3 billion, or $5.35 per diluted share versus $1.0 billion, or $4.33 per diluted share, versus $1.4 billion, or $5.93 per diluted share, in 2021. Full year 20222022. Full-year 2023 adjusted earnings per diluted share from continuing operations decreased 11%was a record, increasing 27% year-over-year to $6.05$7.67 compared with $6.77$6.05 in 2021.2022. Adjusted net income from continuing operations for 20222023 was $1.8 billion, versus $1.4 billion versus $1.6 billion in 2021. Acquisition-related2022. Aggregate segment margins were 310 basis points higher than the prior year, driven by strong selling price realization and moderating raw material costs, partially offset by higher selling, general and administrative costs and lower sales contributed 3% to net sales growth as the Company benefited from four strategic acquisitions that were completed in 2021. Foreign currency translation was unfavorable for the year and impacted net sales by about 5%. During 2022, severe cost inflation, supply disruptions, geopolitical issues in Europe and continuing impacts from the pandemic significantly impacted net sales and earnings. There was partial recovery in the end-use markets that were impacted by mobility restrictions in 2020 and 2021, such as automotive original equipment manufacturer, automotive refinish coatings and aerospace coatings businesses, but all three remained below 2019 global demand levels.volumes. Demand was mixed by geographic region. Raw material cost inflation trended higherlower for most of the year, finishing the fourth quarter about 35% above fourth quarter 2019 levels.year. Mr. Knavish successfully activated PPG’s new enterprise growth strategy and made progress accelerating growth in key areas. New 2030 corporate sustainability operational and sales targets were developed, reviewed and approved. Science-Based Targets (“SBT”) were submitted tovalidated by the SBTScience-Based Targets Initiative in September 2022, with validation expected in2023, and the Company made progress against its targets. However, PPG’s spill and release and injury and illness rates did not meet target for 2023. Once the targets are validated, new 2030 ESG targets will be published. In 2022, PPG delivered mixed performance improvements for its sustainability goals versus 2021, but the waste and sustainable product metrics remain aligned to 2025 targets. PPG achieved its overall goal of increasing year-over-year representation of our targeted demographics. The Company also promoted an inclusive culture as demonstrated through the increase in enterprise-wide employee resource network and diversity, equity and inclusion capability building and training participation. Finally, employee engagement increased for the seventh year in a row. Considering overall 2022 business performance, these efforts generated results lower than our overall expectations. Mr. Knavish began 2022 leading PPG’s global architectural coatings business. He also oversaw the automotive refinish coatings business, the traffic solutions business and the Latin America region. With his appointment to Chief Operating Officer in March 2022, Mr. Knavish assumed leadership responsibility for all of the Company’s remaining businesses, operating regions and for the information technology, environment, health and safety (“EH&S”), and procurement functions. In the U.S. and Canada, demand in the residential and commercial construction markets was strong at the beginning of the year but softened as the year progressed. Architectural coatings – Europe, Middle East and Africa organic sales were flat compared to prior year as selling price increases were offset by lower sales volumes. Architectural coatings – Americas and Asia Pacific organic sales increased a mid-single-digit percentage during the year primarily due to selling price increases that more than offset lower sales volumes. In aggregate, organic sales for the Company’s other business units increased primarily due to higher selling prices which were partially offset by lower sales volumes and unfavorable foreign currency translation. PPG’s spill and release and injury and illness rates did not meet target for 2022. Mr. Knavish served as the executive sponsor of the Black Employee Network. He effectively performed as a member ofled the Executive Committee, positively influencing the results of the Company. Considering overall 2022 business performance, these efforts generatedFinally, employee engagement increased for the eighth year in a row. These results lower than our overallexceeded expectations.
Mr. Morales led the finance organization. In 2022,2023, the Company generated approximately $1.0 billion ofrecord cash flow from operations of approximately $2.4 billion, which is lowerhigher than 20212022 by $1.4 billion, primarily due to a larger increasestrong earnings and reductions in working capital in 2022 compared to the prior year, which reflectsreflecting the impact of higherlower raw material costs on inventories and higher selling prices on trade receivables. Operating working capital as a percentage of fourth quarter sales increased over 2021. The Company made solid progress in the second half ofannualized for 2023 was lower than 2022 lowering inventories on a sequential basis. As the year progressed, year-over-yearby 170 basis points. Year-over-year segment margins improved, and operating working capital decreased. He led the Company’s efforts to contain costs, delivering about $110$60 million in savings from restructuring actions, andincluding the impact of acquisition-related synergies, and to return capital to our shareholders through $190$100 million of share repurchases and approximately $570$600 million of dividends. The Company also reduced its net debt by $1.2 billion year over year. Mr. Morales was the executive sponsor of our Abilities First Employee Resource Network. Mr. Morales performed effectively as a member of the Executive Committee, positively influencing the results of the Company. Considering overall 2022 business performance, these efforts generatedThese results lower than our overallexceeded expectations. Ms. Foulkes led the legal organization. She has expertly managed litigation, compliance and environmental concerns globally for the Company. In addition, she continued to effectively managedmanage the complexities associated with the warCompany’s divestiture of its businesses in Ukraine.Russia and the divestitures of several smaller businesses. Her department was also responsible for securing a significant arbitration award, an important ruling in a case alleging liability for lead contamination and for certain insurance recoveries. She was the executive sponsor of our Lesbian, Gay, Bi-sexual,Bisexual, Transgender, Queer (LGBTQ+) Employee Resource Network. Engagement scores for the Law Department were among the highest in the Company. Ms. Foulkes performed effectively as a member of the Executive Committee, positively influencing the results of the Company. These results exceeded expectations. Mr. Vadlamannati led the global Operations function and participated in the protective and marine coatings bonus plan for the first quarter of 2023. The Operations function made progress reducing the Company’s manufacturing costs and reducing complexity across the Company. He provided leadership to his functional responsibilities for the global Procurement and EH&S organizations. The Procurement organization was successful in lowering the Company’s overall raw materials costs, but PPG’s spill and release and injury and illness rates did not meet target for 2023. Mr. Vadlamannati provided leadership of the Company’s Operations function, which delivered above-target performance. These results met expectations. Ms. Ericson led the global protective and marine coatings business and the Latin America region. Organic sales in the protective and marine coatings business were higher by a mid-single-digit percentage due to selling price realization and higher sales volumes. In her first year of leading the protective and marine coatings business, she developed and implemented a robust growth strategy. She was a strong proponent of the Company’s diversity, equity and inclusion efforts. These results exceeded expectations. | | | |
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effectively as a member of the Executive Committee, positively influencing the results of the Company. While Ms. Foulkes provided strong leadership to the legal function to manage the complexities associated with the war in Ukraine. However, overall 2022 business results were lower than our expectations.
Mr. Vadlamannati led the global protective and marine coatings business and the EMEA region. Organic sales in the protective and marine coatings business were higher by a mid-single-digit percentage due to selling price increases in all regions. Sales were negatively affected by pandemic-related restrictions in China. European demand for coatings softened in 2022, mostly impacted by geopolitical issues and high levels of inflation. He provided leadership to his staff responsibilities for the global EH&S organization, but PPG’s spill and release and injury and illness rates did not meet target for 2022. Mr. Vadlamannati provided leadership of the Company’s response to the war in Ukraine and delivered above-target performance in leading the global protective and marine coatings business. These results exceeded expectations.
Business unit short-term performance objectives and their assessment are specific to each particular business and are based on earnings before taxes and interest, working capital reduction, price increase and sales volume growth. The overall assessment of business performance determines the percentage of target paid to applicable executives for the business component of the annual incentive award. For 2022,2023, we assessed the performance of 12 defined businesses against the criteria discussed above. Actual payouts of the business performance component ranged from 20%40% to 130%190% of target. The business performance component payout for our executive officer named in the Summary Compensation Table who has primarily business unit responsibility, Mr. Vadlamannati,Ms. Ericson, is based on the performance of each of the specific businesses and regionsbusiness for which he isshe was responsible. Mr. Vadlamannati’sMs. Ericson’s business performance component was a resultbased on the results of the protective and marine coatings business. The performance of this business was higher than theexceeded performance objectives for earnings before interest and taxes, andworking capital reduction, price increase and were below the performance objectives for working capital performance and sales volume growth. Thisgrowth and resulted in achieving 130%190% of target for this component.
The level of achievement of corporate and personal performance objectives for 20222023 for Messrs. McGarry, Knavish, and Morales and Ms. Foulkes corresponded to payouts of 63%183%, 63%184%, 63%183% and 63%183% of target, respectively. The level of achievement of business, corporate and personal performance objectives for 20222023 for Mr. Vadlamannati and Ms. Ericson corresponded to a payoutpayouts of 89%175% and 181% of target.target, respectively. The annual incentive awards actually paid to each of these executives for 20222023 are shown in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. Annual incentive awards for these executive officers for the years that they have been named executive officers have ranged from 63% to 121%184% of target. Due to Ms. Liebert’s departure from the Company in September 2022, she was ineligible to receive a payout under the annual incentive plan.
Annual incentive awards are payable in cash, except that any executive who does not meet the stock ownership requirements described under “PPG Stock Ownership Requirements” receives 20% of their annual incentive award in the form of PPG common stock. Such stock is restricted from sale by such executive for a period of between two and five years, depending upon the level of stock ownership of the executive. In addition, for officers who have been subject to the policy for more than five years at their current requirement level and have not met the ownership requirement, 100% of the vested shares delivered from the PBRSU award and TSR share award must be held by the officer for a minimum of one year and until the requirement is met. U.S.-based participants are entitled to defer part or all of an annual incentive award under our deferred compensation plan. All executive officers named in the Summary Compensation Table have met their stock ownership requirement. For additional information concerning our deferred compensation plan, see “Deferred Compensation Opportunities.” Long-Term Incentive Compensation Our Human Capital Management and Compensation Committee believes that long-term incentive compensation is an important component of our program because it has the effect of retaining executives, aligning executives’ financial interests with the interests of shareholders and incentivizing achievement of PPG’s long-term strategic goals. Payment of long-term incentive awards is based solely on Company performance. Grants are targeted at levels that approximate market value for comparable positions, utilizing the same compensation data used for setting total annual compensation. Each February, the Human Capital Management and Compensation Committee reviews and approves equity-based compensation for that year to be granted to executive officers. Three types of long-term incentive awards are granted annually to executive officers: | ● | Total Shareholder Return contingent shares, or TSR shares; and |
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| ● | Performance-based Restricted Stock Units, or PBRSUs. |
The number of stock options, TSR shares and PBRSUs granted to executive officers is intended to represent an estimated potential value that, when combined with total annual compensation, as discussed above, will approximate the market value of total annual and long-term compensation paid to executives in our comparator group and in a cross-section of general industrial companies represented in nationally-recognized executive compensation surveys. These types of long-term incentive awards were selected to provide a program that focuses on different aspects of long-term performance: stock price appreciation, total return to shareholders and earnings per share growth and cash flow return on capital. The estimated potential value of the awards granted to each executive officer is delivered equally through each instrument, so that approximately one-third of the value of the total award is in stock options, one-third is in performance-based RSUs, and one-third is in TSR shares. The Human Capital Management and Compensation Committee selected equal distribution to emphasize its view that each of the three equity-based vehicles serves a particular purpose and is equally important in supporting our long-term compensation strategy. | | | 54 2024 Proxy Statement |
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Stock Options. Stock options provide our executive officers with the opportunity to purchase and maintain an equity interest in PPG and to share in the appreciation of the value of our stock. All stock options granted to executive officers in 20222023 were granted from our shareholder-approved Omnibus Incentive Plan. Some features of our stock option program include: | ● | Options become exercisable on the third anniversary of the date of grant; |
| ● | The term of each grant does not exceed ten years; |
| ● | The exercise price is equal to the closing market price on the date of grant (we do not backdate or grant discounted stock options); |
| ● | We do not grant options with “reload” or “restored” provisions; and |
| ● | Repricing of stock options is prohibited. |
We continue to use stock options as a long-term incentive because stock options focus the management team on delivering levels of company financial performance over a longer term that contribute to shareholder value. For additional information concerning the timing of grants of stock options, see “Our Policies with Respect to the Granting of Equity Awards.” In February 2022,2023, the following stock options were awarded to each of the executive officers named in the Summary Compensation Table: Mr. McGarry, 91,266; Mr. Knavish, 25,554;67,115; Mr. Morales, 27,380; Ms. Liebert, 16,884;26,605; Ms. Foulkes, 10,952; and12,874; Mr. Vadlamannati, 9,127.8,583; and Ms. Ericson, 7,724. Such awards are consistent with our program to distribute long-term incentive awards equally among three different equity-based vehicles, as discussed above. Upon Ms. Liebert’s departure from the Company in September 2022, she forfeited her stock options. TSR Shares. TSR shares represent a contingent share grant that is made at the beginning of a three-calendar-year performance period and vests on the last day of the performance period. The grant is settled in a combination of cash and shares of PPG common stock at the end of the performance period. The award amount generated by the grant is based on PPG’s total shareholder return relative to the S&P 500 comparison group. This comparison group represents the entire S&P 500 Index as it existed at the beginning of the performance period, excluding any companies that have been removed from the Index because they ceased to be publicly traded during the performance period. The calculation of total shareholder return assumes that all dividends were reinvested. Summarized below are the material provisions of the TSR share program:
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| | | BASIS OF PAYOUT | PERFORMANCE PERIOD | VESTING AND PAYOUT OF BENEFIT | Total shareholder return of PPG compared to total shareholder return for S&P 500 companies (as described above)
Payout is 0% to 200% of original TSR shares awarded: | 3 calendar years | Vest on last day of performance period
Settled in a combination of cash and shares at end of performance period
Dividend equivalents are awarded at the end of the performance period, based on the actual number of shares earned and paid |
| | | | PPG TSR | | GRANT PAYOUT | 90th percentile | | 200 | % | 80th percentile | | 175 | % | 70th percentile | | 150 | % | 60th percentile | | 125 | % | 50th percentile | | 100 | % | 40th percentile | | 75 | % | 30th percentile | | 50 | % | Below | | — | % |
If minimum performance is not achieved, no payment is made with respect to the TSR share grant. If performance is above target, payment may exceed the original number of contingent TSR shares awarded. Target performance is set at the 50th percentile rank. The minimum and maximum number of shares that may be issued upon settlement of a TSR share grant ranges from 0% to 200% of the original number of contingent TSR shares awarded. Dividend equivalents are awarded at the end of the performance period, based on the actual number of shares earned and paid to an executive. TSR shares are intended to reward executives only when we provide a greater long-term return to shareholders relative to a percentage of the comparison set of companies, which is consistent with our pay-for-performance compensation philosophy. In February 2022,2023, the following TSR shares were awarded to each of the executive officers named in the Summary Compensation Table: Mr. McGarry, 21,949; Mr. Knavish, 6,146;19,883; Mr. Morales, 6,585; Ms. Liebert, 4,060;7,886; Ms. Foulkes, 2,634; and3,816; Mr. Vadlamannati, 2,195.2,544; and Ms. Ericson, 2,290. Such awards are consistent with our program to distribute long-term incentive awards equally among three different equity-based vehicles, as discussed above under “Long-Term Incentive Compensation.” | | | |
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The performance period for the TSR shares granted in 20202021 ended on December 31, 2022.2023. PPG’s total shareholder return was measured against that of the S&P 500 (as described above) over the three-year period ending December 31, 2022.2023. PPG’s ranking on this performance measure was at the 28th32nd percentile, resulting in payouts at 0.0%55.2% of target. If theThe payouts were distributed the payout would have been 50% in shares of PPG common stock and 50% in cash with the cash payment calculated based on the average PPG stock closing price during the month of December 2022.2023. Payouts to the executive officers named in the Summary Compensation Table for the 20202021 TSR grants were: Mr. McGarry, 05,804 shares and $0;$852,724; Mr. Knavish, 01,179 shares and $0;$173,219; Mr. Morales, 01,549 shares and $0;$227,579; Ms. Foulkes, 0741 shares and $0; and$108,868; Mr. Vadlamannati, 0674 shares and $99,024; and Ms. Ericson, 607 shares and $0.$89,180. Such share payouts, which vested in December 2022,2023, are reflected in the Option Exercises and Stock Vested table. Upon Ms. Liebert’s departure from the Company in September 2022, she forfeited her TSR shares. Performance-based RSUs. Performance-based RSUs, or PBRSUs, represent a contingent share grant that is made at the beginning of a three-calendar-year performance period and vests on the last day of the performance period. If we achieve certain pre-determined performance thresholds, payment is settled in shares of PPG common stock in the February immediately after the end of the three-year performance period. The performance criteria for each year in the three-year performance period were growth in adjusted earnings per diluted share and 11% cash flow return on capital, taking into account the same adjustment categories utilized by the Human Capital Management and Compensation Committee in determining adjusted earnings per diluted share for purposes of annual incentive awards (see “Annual Incentive Awards” above). The adjusted earnings per diluted share growth portion of the PBRSU awards will utilize a linear payment scale that will be calculated annually as shown below:
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ADJUSTED EPS GROWTH (ANNUAL) | ACHIEVEMENT LEVEL | | PAYOUT FACTOR | < 5.0% | | 0.0% | 5.0% | | 50.0% | 6.0% | | 60.0% | 7.0% | | 70.0% | 8.0% | | 80.0% | 9.0% | | 90.0% | >= 10.0% | | 100.0% |
Achievement of 10% growth in adjusted earnings per diluted share is required to receive 100% of the original share grant. A payout scale is not applied to the cash flow return on capital goal, which requires achievement of 11% for this goal to be met each year. Performance against the adjusted earnings per diluted share goal and the cash flow return on capital goal are calculated annually, and the annual payout for each goal is weighted equally over the three-year period. If minimum performance is not achieved, no shares are issued with respect to the grant. If performance is above target, the number of shares issued may exceed the original number of contingent shares awarded. The minimum and maximum number of shares that may be issued upon settlement of a PBRSU award ranges from 0% to 200% of the original number of contingent shares awarded, depending on the goals attained during the three-year period. No dividend equivalents are awarded on performance-based RSUs. By including performance-based RSUs in the long-term incentive mix, executives are rewarded when financial performance objectives are achieved over an extended period of time. Summarized below are the material provisions of the performance-based RSUs: | | | 56 2024 Proxy Statement |
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| | | BASIS OF PAYOUT | PERFORMANCE PERIOD | VESTING AND PAYOUT OF BENEFIT | Performance Goals:
Greater than 5.0% growth in adjusted earnings per diluted share
11% cash flow return on capital
Payout is 0% to 200% of original PBRSU shares awarded:awarded | 3 calendar years | Vest on last day of performance period
Settled in shares in the February immediately after the end of performance period
No dividend equivalents are awarded | | |
In February 2022,2023, the following PBRSUs were awarded to each of the executive officers named in the Summary Compensation Table: Mr. McGarry, 23,111; Mr. Knavish, 6,471;21,173; Mr. Morales, 6,933; Ms. Liebert, 4,276;8,378; Ms. Foulkes, 2,773; and4,054; Mr. Vadlamannati, 2,311.2,703; and Ms. Ericson, 2,433. Such awards are consistent with our program to distribute long-term incentive awards equally among three different equity-based vehicles, as discussed above under “Long-Term Incentive Compensation.” The performance period for the PBRSUs granted in 20202021 ended on December 31, 2022.2023. For the 20202021 grants, the payout was at 100%133.3% of target. Specifically, the results were as follows: PBRSU Performance Measures for 2020-20222021-2023 Performance Period | | | | | | | | | | | | | Payout | | Portion of | | Payout % | | | Result | | Factor | | Performance Cycle | | Achieved | Adjusted EPS Growth | | | | | | | | | 2020 | | -8.4% | | 0.0% | | 1/3 | | 0.0% | 2021 | | 10.6% | | 100.0% | | 1/3 | | 33.3% | 2022 | | -8.1% | | 0.0% | | 1/3 | | 0.0% | | | | | | | | | 33.3% | Cash Flow ROC | | | | | | | | | 2020 | | 17.8% | | 100.0% | | 1/3 | | 33.3% | 2021 | | 11.0% | | 100.0% | | 1/3 | | 33.3% | 2022 | | 4.7% | | 0.0% | | 1/3 | | 0.0% | | | | | | | | | 66.7% | Total Performance-based RSU payout | | | | | | | | 100.0% |
| | | | | | | | | | | | | Payout | | Portion of | | Payout % | | | Result | | Factor | | Performance Cycle | | Achieved | Adjusted EPS Growth | | | | | | | | | 2021 | | 10.6% | | 100.0% | | 1/3 | | 33.3% | 2022 | | -8.1% | | 0.0% | | 1/3 | | 0.0% | 2023 | | 26.8% | | 100.0% | | 1/3 | | 33.3% | | | | | | | | | 66.7% | Cash Flow ROC | | | | | | | | | 2021 | | 11.0% | | 100.0% | | 1/3 | | 33.3% | 2022 | | 4.7% | | 0.0% | | 1/3 | | 0.0% | 2023 | | 15.4% | | 100.0% | | 1/3 | | 33.3% | | | | | | | | | 66.7% | Total Performance-based RSU payout | | | | | | | | 133.3% |
The Company made share payouts to the executive officers named in the Summary Compensation Table for the 20202021 PBRSU grants as follows: Mr. McGarry, 24,351;32,248; Mr. Knavish, 4,132;6,004; Mr. Morales, 5,903;7,891; Ms. Foulkes, 2,361; and | | |
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3,774; Mr. Vadlamannati, 2,657.3,432; and Ms. Ericson, 3,088. Such payouts, which vested in December 2022,2023, are reflected in the Option Exercises and Stock Vested table. Upon Ms. Liebert’s departure from the Company in September 2022, she forfeited her PBRSUs. Perquisites and Other Benefits In addition to the annual and long-term compensation described above, executive officers named in the Summary Compensation Table receive certain perquisites and other benefits. Such perquisites may include financial counseling services, and limited personal use of PPG’s corporate aircraft.aircraft and reimbursements of certain relocation expenses and taxes incurred due to international assignments. At the direction of the Human Capital Management and Compensation Committee, in 2011 executive officer perquisites were reviewed and reduced. Effective January 1, 2012, personal club memberships were discontinued. Other benefits for our executive officers may include Company matching contributions under our Deferred Compensation Plan. These perquisites and other benefits are provided to increase the availability of the executives to focus on the business of the enterprise or because we believe they are important to our ability to attract and retain top-quality executive talent. The costs to PPG associated with providing these benefits for executive officers named in the Summary Compensation Table are reflected in the “All Other Compensation” column of the Summary Compensation Table and in the All Other Compensation Table. We also provide other benefits, such as medical, dental and life insurance and disability coverage, to each executive named in the Summary Compensation Table under our benefit plans, which are also provided to most eligible U.S.-based salaried employees. In addition, all of our U.S.-based executive officers are eligible to participate in the PPG Industries Foundation Matching Gift Program, which encourages charitable donations by all of our U.S. employees by matching their contributions to eligible institutions. Contributions of up to a total of $10,000 per year, in most cases, may be matched under the program. The match amount was increased to $20,000 for 2022 in support of PPG’s and the PPG Industries Foundation’s commitment to assist in ongoing relief and recovery efforts for affected communities during the Ukrainian refugees humanitarian crisis. Most charitable organizations are eligible for the Matching Gifts Program, with a few exceptions. The value of these benefits is not included in the Summary Compensation Table because such benefits are made available on a Company-wide basis to most U.S. salaried employees. We also provide vacation and other paid holidays to all employees, including the executive officers named in the Summary Compensation Table, which are comparable to those provided at other large companies. | | | |
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Deferred Compensation Opportunities and Retirement Plans Another aspect of our executive compensation program is our Deferred Compensation Plan. The plan is a voluntary, non-tax qualified, unfunded, deferred compensation plan available to all U.S.-based executive officers and other participants in our management incentive plans to enable them to save for retirement by deferring a portion of their current compensation. The plan also provides eligible employees with supplemental contributions equal to the contributions they would have received under our Employee Savings Plan, but for certain limitations under the Internal Revenue Code. Under the plan, compensation may be deferred until death, disability, retirement or termination or, in the case of the cash portion of certain incentive awards, other earlier specified dates the participants may select. Deferred amounts (other than the PPG common stock portion of deferred incentive awards, which must be invested in PPG stock) are credited to an investment account that earns a return based on the investment options chosen by the participant. The value of a participant’s investment account is based on the value of the investments selected. Benefits are paid out of our general assets. For certain longer-serving, U.S.-based, salaried employees, we maintain both a tax-qualified defined benefit pension plan and a non-qualified defined benefit pension plan. Substantially all employees in the U.S., including our executive officers, participate in the PPG Industries Employee Savings Plan. For additional information concerning our Deferred Compensation Plan, pension plans and the PPG Industries Employee Savings Plan, see “Pension Benefits” and “PPG Industries Employee Savings Plan and Deferred Compensation Plan” and the accompanying Pension Benefits Table and Non-Qualified Deferred Compensation Table. | | 
| WHY YOU SHOULD APPROVE OUR SAY-ON-PAY
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The Board believes that PPG’s executive compensation program aligns the interests of our executives with those of our shareholders. Our executive compensation is based on our pay for performance philosophy, which emphasizes executive performance measures that correlate closely with the achievement of both shorter term performance | | | 56 2023 Proxy Statement
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objectives and longer term shareholder value creation. At the 20222023 Annual Meeting, we held a shareholder advisory vote on the compensation of our named executive officers, commonly referred to as a say-on-pay vote. Our shareholders overwhelmingly approved the compensation of our named executive officers, with approximately 95%93% of shareholder votes cast in favor of our 20222023 say-on-pay resolution. Following its review of this vote, the Human Capital Management and Compensation Committee recommended to the full Board that we retain our general approach to executive compensation, with an emphasis on short-term and long-term incentive compensation that rewards our executive officers when they deliver value for our shareholders. Consistent with this philosophy: | ● | Our performance metrics are focused on increasing shareholder value and are tied to measures impacting both shorter-term and longer-term performance. Shorter-term performance metrics include adjusted earnings per diluted share from continuing operations, cash flow from operating activities, earnings before interest and taxes, working capital reduction, price increase and sales volume growth. Longer-term performance metrics include total shareholder return, adjusted earnings per diluted share growth, adjusted cash flow return on capital and stock price appreciation. |
| ● | Payment of long-term incentive awards is based solely on Company performance. We have three-year award and payout cycles for both performance-based restricted stock units and total shareholder return shares. We also have three-year vesting for stock options. |
| ● | Between 71%70% and 90%84% of the named executive officers’ target total direct compensation opportunity for 20222023 was in the form of performance-based variable compensation and long-term incentives motivating them to deliver strong business performance and create shareholder value. |
| ● | Our financial performance was belowexceeded our expectations as we did not achieveachieved our adjusted earnings per diluted share target, our adjusted cash flow from operating activities target orand our sales volume growthprice increase target. As a result, annual incentive awards were paid to executive officers ranged from 63%175% to 89%184% of target. |
| ● | Executive stock ownership goals align the interests of executives with shareholders. |
| ● | We provide very limited perquisites to our executive officers. |
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| ● | Our officers may not engage in transactions that are contrary to the interests of shareholders, such as “short sales,” “short sales against the box,” “put” and “call” options and hedging transactions designed to minimize an executive’s risk inherent in owning PPG stock. In addition, officers may not hold PPG stock in a margin account and may not pledge PPG stock as collateral for a loan. |
| ● | Executive officers are subject to a “clawback”compensation recovery policy that is designed to recoup incentive compensation when a financial restatement occurs and certain other conditions exist.occurs. |
HUMAN CAPITAL MANAGEMENT AND COMPENSATION COMMITTEE REPORT TO SHAREHOLDERS
We have reviewed and discussed the Compensation Discussion and Analysis section of this Proxy Statement with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated in the Annual Report on Form 10-K for the year ended December 31, 2023. Human Capital Management and Compensation Committee: Gary R. Heminger (Chair) Michael W. Lamach Katleen A. Ligocki Guillermo Novo Martin H. Richenhagen Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that incorporate future filings, including this Proxy Statement, in whole or in part, the foregoing Human Capital Management and Compensation Committee Report to Shareholders shall not be incorporated by reference into any such filings. | | | |
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COMPENSATION OF EXECUTIVE OFFICERS Summary Compensation Table (2020-2022)(2021-2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | CHANGE | | | | | | | | | | | | | | | | | | | | | | | | | CHANGE | | | | | | | | | | | | | | | | | | | | | | | IN PENSION | | | | | | | | | | | | | | | | | | | | | IN PENSION | | | | | | | | | | | | | | | | | | | | | | VALUE AND | | | | | | | | | | | | | | | | | | | | | VALUE AND | | | | | | | | | | | | | | | | | | | | | | NONQUALIFIED | | | | | | | | | | | | | | | | | | | | | NONQUALIFIED | | | | | | | | | | | | | | | | | | | NON-EQUITY | | DEFERRED | | | | | | | | | | | | | | | | | | NON-EQUITY | | DEFERRED | | | | | | | | | | | | | | | STOCK | | OPTION | | INCENTIVE PLAN | | COMPENSATION | | ALL OTHER | | | | | | | | | | | | STOCK | | OPTION | | INCENTIVE PLAN | | COMPENSATION | | ALL OTHER | | | | NAME AND POSITION | | YEAR | | SALARY(3) | | BONUS(4) | | AWARDS(5) | | AWARDS(6) | | COMPENSATION(7) | | EARNINGS(8) | | COMPENSATION(9) | | TOTAL | | YEAR | | SALARY(3) | | BONUS(4) | | AWARDS(5) | | AWARDS(6) | | COMPENSATION(7) | | EARNINGS(8) | | COMPENSATION(9) | | TOTAL | M. H. McGarry(1) | | 2022 | | $ | 1,333,333 | | $ | — | | $ | 6,666,695 | | $ | 3,333,331 | | $ | 1,351,000 | | $ | (4,368,862) | | $ | 551,880 | | $ | 8,867,377 | | 2023 | | $ | 1,005,000 | | $ | — | | $ | 4,898,968 | | $ | — | | $ | 2,940,000 | | $ | 711,688 | | $ | 285,067 | | $ | 9,840,723 | Executive Chairman | | 2021 | | $ | 1,300,000 | | $ | — | | $ | 6,266,679 | | $ | 3,133,323 | | $ | 2,250,000 | | $ | (218,598) | | $ | 468,212 | | $ | 13,199,616 | | | | 2020 | | $ | 1,164,167 | | $ | — | | $ | 5,499,994 | | $ | 2,749,715 | | $ | 1,950,000 | | $ | 4,289,632 | | $ | 250,485 | | $ | 15,903,993 | | Former Executive Chairman | | | 2022 | | $ | 1,333,333 | | $ | — | | $ | 6,666,695 | | $ | 3,333,331 | | $ | 1,351,000 | | $ | (4,368,862) | | $ | 551,880 | | $ | 8,867,377 | and Chief Executive Officer | | | 2021 | | $ | 1,300,000 | | $ | — | | $ | 6,266,679 | | $ | 3,133,323 | | $ | 2,250,000 | | $ | (218,598) | | $ | 468,212 | | $ | 13,199,616 | T. M. Knavish(1) | | 2022 | | $ | 866,667 | | $ | — | | $ | 1,866,705 | | $ | 933,315 | | $ | 625,000 | | $ | (1,602,788) | | $ | 172,293 | | $ | 2,861,192 | | 2023 | | $ | 1,200,000 | | $ | — | | $ | 4,999,561 | | $ | 2,500,188 | | $ | 3,200,000 | | $ | 312,592 | | $ | 260,614 | | $ | 12,472,955 | President and Chief | | 2021 | | $ | 700,000 | | $ | — | | $ | 1,166,640 | | $ | 583,322 | | $ | 680,000 | | $ | (165,897) | | $ | 130,643 | | $ | 3,094,708 | | Executive Officer | | 2020 | | $ | 638,333 | | $ | — | | $ | 933,353 | | $ | 466,627 | | $ | 560,000 | | $ | 1,395,301 | | $ | 59,649 | | $ | 4,053,263 | | Chairman and | | | 2022 | | $ | 866,667 | | $ | — | | $ | 1,866,705 | | $ | 933,315 | | $ | 625,000 | | $ | (1,602,788) | | $ | 172,293 | | $ | 2,861,192 | Chief Executive Officer | | | 2021 | | $ | 700,000 | | $ | — | | $ | 1,166,640 | | $ | 583,322 | | $ | 680,000 | | $ | (165,897) | | $ | 130,643 | | $ | 3,094,708 | V. J. Morales | | 2022 | | $ | 767,500 | | $ | — | | $ | 2,000,011 | | $ | 1,000,007 | | $ | 490,000 | | $ | (1,688,858) | | $ | 176,810 | | $ | 2,745,470 | | 2023 | | $ | 800,000 | | $ | — | | $ | 2,066,808 | | $ | 1,033,338 | | $ | 1,475,000 | | $ | 320,582 | | $ | 94,710 | | $ | 5,790,438 | Senior Vice President | | 2021 | | $ | 726,667 | | $ | — | | $ | 1,533,228 | | $ | 766,669 | | $ | 750,000 | | $ | (180,405) | | $ | 143,457 | | $ | 3,739,616 | | 2022 | | $ | 767,500 | | $ | — | | $ | 2,000,011 | | $ | 1,000,007 | | $ | 490,000 | | $ | (1,688,858) | | $ | 176,810 | | $ | 2,745,470 | and Chief Financial Officer | | 2020 | | $ | 637,500 | | $ | — | | $ | 1,333,309 | | $ | 666,606 | | $ | 639,000 | | $ | 1,612,807 | | $ | 60,637 | | $ | 4,949,859 | | 2021 | | $ | 726,667 | | $ | — | | $ | 1,533,228 | | $ | 766,669 | | $ | 750,000 | | $ | (180,405) | | $ | 143,457 | | $ | 3,739,616 | R. B. Liebert(1) | | 2022 | | $ | 508,667 | | $ | — | | $ | 1,233,319 | | $ | 616,659 | | $ | — | | $ | — | | $ | 107,576 | | $ | 2,466,221 | | Former Executive Vice President | | 2021 | | $ | 700,000 | | $ | — | | $ | 1,166,640 | | $ | 583,322 | | $ | 560,000 | | $ | — | | $ | 107,014 | | $ | 3,116,976 | | | | 2020 | | $ | 638,333 | | $ | — | | $ | 933,353 | | $ | 466,627 | | $ | 560,000 | | $ | — | | $ | 85,840 | | $ | 2,684,153 | | A. M. Foulkes | | 2022 | | $ | 576,667 | | $ | — | | $ | 799,976 | | $ | 400,003 | | $ | 290,000 | | $ | (942,319) | | $ | 122,206 | | $ | 1,246,533 | | 2023 | | $ | 600,833 | | $ | — | | $ | 1,000,110 | | $ | 500,026 | | $ | 995,000 | | $ | 196,624 | | $ | 70,802 | | $ | 3,363,395 | Senior Vice President, | | 2021 | | $ | 556,667 | | $ | — | | $ | 733,305 | | $ | 366,665 | | $ | 510,000 | | $ | (75,589) | | $ | 98,005 | | $ | 2,189,053 | | Senior Vice President | | | 2022 | | $ | 576,667 | | $ | — | | $ | 799,976 | | $ | 400,003 | | $ | 290,000 | | $ | (942,319) | | $ | 122,206 | | $ | 1,246,533 | and General Counsel | | 2020 | | $ | 490,000 | | $ | — | | $ | 533,277 | | $ | 266,647 | | $ | 432,000 | | $ | 974,552 | | $ | 45,844 | | $ | 2,742,320 | | 2021 | | $ | 556,667 | | $ | — | | $ | 733,305 | | $ | 366,665 | | $ | 510,000 | | $ | (75,589) | | $ | 98,005 | | $ | 2,189,053 | R. Vadlamannati(2) | | 2022 | | $ | 557,500 | | $ | — | | $ | 666,671 | | $ | 333,348 | | $ | 350,000 | | $ | — | | $ | 175,478 | | $ | 2,082,997 | | 2023 | | $ | 583,333 | | $ | — | | $ | 666,781 | | $ | 333,364 | | $ | 720,300 | | $ | — | | $ | 980,270 | | $ | 3,284,048 | Senior Vice President,
Operations | | | 2022 | | $ | 557,500 | | $ | — | | $ | 666,671 | | $ | 333,348 | | $ | 350,000 | | $ | — | | $ | 175,478 | | $ | 2,082,997 | A. Ericson(2) | | | 2023 | | $ | 562,500 | | | — | | $ | 600,192 | | | 300,000 | | | 718,389 | | | — | | | 56,835 | | | 2,237,916 | Senior Vice President, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Global Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | Protective and Marine Coatings | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Mr. McGarry was appointed Executive Chairman, effective January 1, 2023 and retired on October 1, 2023. Mr. Knavish was appointed Chief Operating Officer, effective March 1, 2022, and President and Chief Executive Officer, effective January 1, 2023. Ms. Liebert voluntarily resigned2023 and as Chairman and Chief Executive Vice President,Officer, effective September 16, 2022. She did not receive a severance payment or an annual incentive award for 2022 and all outstanding equity awards were forfeited upon her resignation.October 1, 2023. |
| (2) | Mr. Vadlamannati was not a named executive officer in 20202021. Ms. Ericson was not a named executive officer in 2021 or 2021.2022. |
| (3) | The annual salaries as of January 1, 2023, and as of the annual salary increase date of March 1, 2023, were: Mr. McGarry, $1,340,000 and no increase; Mr. Knavish, $1,200,000 and no increase; Mr. Morales, $775,000 and $805,000; Ms. Foulkes, $580,000 and $605,000; Mr. Vadlamannati, $560,000 and $588,000 and Ms. Ericson, $540,000 and $567,000 The annual salaries as of January 1, 2022, and as of the annual salary increase date of March 1, 2022, were: Mr. McGarry, $1,300,000 and $1,340,000;$1,340,000 on March 1, 2022; Mr. Knavish, $700,000 and $900,000;$900,000 on March 1, 2022; Mr. Morales, $730,000 and $775,000; Ms. Liebert, $700,000 and $720,000; Ms. Foulkes, $560,000 and $580,000; and Mr. Vadlamannati, $545,000 and $560,000.$580,000. The annual salaries as of January 1, 2021, and as of the annual salary increase date of March 1, 2021, were: Mr. McGarry, $1,300,000 and $1,300,000;no increase on March 1, 2021; Mr. Knavish, $700,000 and $700,000;no increase on March 1, 2021; Mr. Morales, $710,000 and $730,000; Ms. Liebert, $700,000 and $700,000; and Ms. Foulkes, $540,000 and $560,000. The annual salaries as of January 1, 2020, and as of the annual salary increase date of March 1, 2020, were: Mr. McGarry, $1,265,000 and $1,300,000; Mr. Knavish, $680,000 and $700,000; Mr. Morales, $630,000 and $710,000; Ms. Liebert, $680,000 and $700,000; and Ms. Foulkes, $510,000 and $540,000. Given the global COVID-19 pandemic and its impact on the Company, the Human Capital Management and Compensation Committee approved a base salary reduction for the named executive officers, which was effective April 2020 through July 2020. For Mr. McGarry, his base salary was reduced by 30% to $910,000. For Messrs. Knavish and Morales and Mss. Liebert and Foulkes, their base salary was reduced by 25% to $525,000, $532,500, $525,000 and $405,000, respectively. The full base salaries were restated effective August 2020 as follows: Mr. McGarry, $1,300,000; Mr. Knavish, $700,000; Mr. Morales, $710,000; Ms. Liebert, $700,000; and Ms. Foulkes, $540,000. |
| (4) | The named executive officers were not entitled to receive any payments that would be characterized as “Bonus” payments for the fiscal years ended December 31, 2023, 2022 2021 and 2020.2021. Amounts listed under the column “Non-Equity Incentive Plan Compensation” constitute annual incentive awards for 2023, 2022 2021 and 20202021 that were determined by the Human Capital Management and Compensation Committee at its February 14, 2024, February 15, 2023 and February 16, 2022 and February 17, 2021 meetings, respectively, and, to the extent not deferred by an executive, were paid out shortly thereafter. |
| (5) | The amounts in this column represent the grant date fair value calculated in accordance with FASB ASC Topic 718 for grants occurring in the fiscal years ended December 31, 2023, 2022 2021 and 20202021 of performance-based restricted stock units, or PBRSUs, and performance-based total shareholder return contingent shares, or TSRs, granted as part of the long-term incentive components of our compensation program described on pages 5254 through 56.57. The assumptions used in calculating these amounts for 20222023 are set forth in Note 19 to our Financial Statements for the year ended December 31, 2022,2023, which is located on pages 6466 through 6668 of our Annual Report on Form 10-K. PBRSUs and TSRs are subject to performance conditions, and the grant date fair value shown is based on performance at target levels, which is the probable outcome of such conditions. The value of these awards made in the fiscal year ended December 31, 2023, assuming that the highest level of performance conditions will be achieved, is as follows: Mr. Knavish, $9,999,122 Mr. Morales, $4,133,615; Ms. Foulkes, $2,000,219 and Mr. Vadlamannati, $1,333,562 and Ms. Ericson, $1,200,384. The value of these awards made in the fiscal year ended December 31, 2022, assuming that the highest level of performance conditions will be achieved, is as follows: Mr. McGarry $13,333,388; Mr. Knavish, $3,733,411;$3,733,411 Mr. Morales, $4,000,021; Ms. Liebert, $2,466,639;and Ms. Foulkes, $1,599,951; and Mr. Vadlamannati, $1,333,340.$1,599,951. The value of these awards made in the fiscal year ended December 31, 2021, assuming that the highest level of performance conditions will be achieved, is as follows: Mr. McGarry $12,533,357; Mr. Knavish, $2,333,280; Mr. Morales, $3,066,456; Ms. Liebert, $2,333,280; and Ms. Foulkes, $1,466,611. The value of these awards made in the fiscal year ended December 31, 2020, assuming that the highest level of performance conditions will be achieved, is as follows: Mr. McGarry $10,999,988; Mr. Knavish, $1,866,705; Mr. Morales, $2,666,617; Ms. Liebert, $1,866,705; and Ms. Foulkes, $1,066,554. |
| (6) | The amounts in this column represent the grant date fair value computed in accordance with FASB ASC Topic 718 for stock option grants occurring in the fiscal years ended December 31, 2023, 2022 2021 and 20202021 as part of the long-term incentive component of our compensation program described on pages 5254 through 56.57. The assumptions used in calculating these amounts are set forth in Note 19 to our Financial Statements for the year ended December 31, 2022,2023, which is located on pages 6466 through 6668 of our Annual Report on Form 10-K. |
| (7) | The amounts in this column reflect the dollar value of annual incentive awards for 2023, 2022 2021 and 2020,2021, as described on pages 4850 through 52.54. |
| (8) | The amounts in this column reflect the actuarial increase or decrease in the present value of the named executive officer’s benefits under our qualified and non-qualified pension plans, determined using interest rate and mortality rate assumptions consistent with those used in our financial statements, except that retirement age is assumed to be normal retirement age as defined in the applicable plan. |
| (9) | Includes all other compensation as described in the table entitled “All Other Compensation Table.” |
| | | 5860 20232024 Proxy Statement
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All Other Compensation Table (2022)(2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PERQUISITES | | OTHER COMPENSATION | | | | | PERQUISITES | | OTHER COMPENSATION | | | | | | PERSONAL USE | | | | | | | | | | | EMPLOYEE | | DEFERRED | | | | | | | | TOTAL | | PERSONAL USE | | | | | | | | | | | EMPLOYEE | | DEFERRED | | | | | | | | TOTAL | | | OF COMPANY | | FINANCIAL | | | | | TOTAL | | SAVINGS PLAN | | COMPENSATION | | DEFERRED | | TOTAL OTHER | | ALL OTHER | | OF COMPANY | | FINANCIAL | | | | | TOTAL | | SAVINGS PLAN | | COMPENSATION | | DEFERRED | | TOTAL OTHER | | ALL OTHER | | | AIRCRAFT(1) | | COUNSELING(2) | | OTHER(3) | | PERQUISITES | | CONTRIBUTIONS(4) | | CONTRIBUTIONS(5) | | DIVIDENDS(6) | | COMPENSATION | | COMPENSATION | | AIRCRAFT(1) | | COUNSELING(2) | | OTHER(3) | | PERQUISITES | | CONTRIBUTIONS(4) | | CONTRIBUTIONS(5) | | DIVIDENDS(6) | | COMPENSATION | | COMPENSATION | M. H. McGarry | | $ | 121,137 | | $ | 13,035 | | $ | — | | $ | 134,172 | | $ | 18,896 | | $ | 255,842 | | $ | 142,970 | | $ | 417,708 | | $ | 551,880 | | $ | 93,607 | | $ | 13,360 | | $ | — | | $ | 106,967 | | $ | 29,262 | | $ | 148,838 | | $ | — | | $ | 178,100 | | $ | 285,067 | T. M. Knavish | | $ | 1,884 | | $ | 13,035 | | $ | — | | $ | 14,919 | | $ | 35,135 | | $ | 104,371 | | $ | 17,868 | | $ | 157,374 | | $ | 172,293 | | $ | 84,574 | | $ | 13,360 | | $ | — | | $ | 97,934 | | $ | 36,300 | | $ | 126,380 | | $ | — | | $ | 162,680 | | $ | 260,614 | V. J. Morales | | $ | — | | $ | 13,035 | | $ | — | | $ | 13,035 | | $ | 27,025 | | $ | 109,638 | | $ | 27,112 | | $ | 163,775 | | $ | 176,810 | | $ | — | | $ | 13,360 | | $ | — | | $ | 13,360 | | $ | 33,350 | | $ | 48,000 | | $ | — | | $ | 81,350 | | $ | 94,710 | R. B. Liebert | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 29,771 | | $ | 59,937 | | $ | 17,868 | | $ | 107,576 | | $ | 107,576 | | A. M. Foulkes | | $ | — | | $ | 13,035 | | $ | — | | $ | 13,035 | | $ | 23,367 | | $ | 76,867 | | $ | 8,937 | | $ | 109,171 | | $ | 122,206 | | $ | — | | $ | 13,360 | | $ | — | | $ | 13,360 | | $ | 29,400 | | $ | 28,042 | | $ | — | | $ | 57,442 | | $ | 70,802 | R. Vadlamannati | | $ | — | | $ | — | | $ | 93,856 | | $ | 93,856 | | $ | 34,700 | | $ | 32,625 | | $ | 14,297 | | $ | 81,622 | | $ | 175,478 | | $ | — | | $ | 10,249 | | $ | 903,554 | | $ | 913,803 | | $ | 36,300 | | $ | 30,167 | | $ | — | | $ | 66,467 | | $ | 980,270 | A. Ericson | | | $ | — | | $ | 13,360 | | $ | — | | $ | 13,360 | | $ | 24,695 | | $ | 18,780 | | $ | — | | $ | 43,475 | | $ | 56,835 |
| (1) | The amounts in this column reflect the aggregate incremental cost to PPG of personal use of corporate aircraft. The aggregate incremental cost to PPG is determined on a per flight basis and includes the cost of fuel, a pro rata share of repairs and maintenance, landing and storage fees, crew-related expenses and other miscellaneous variable costs. A portion of this value attributable to personal use of corporate aircraft (as calculated in accordance with Internal Revenue Service guidelines) is included as compensation on the W-2 of Mr. McGarry and Mr. Knavish. |
| (2) | The amounts in this column reflect the cost of financial counseling services paid by PPG. |
| (3) | PPG provides expatriate benefits to employees, including the named executive officers, who transfer from a home to a host country on an assignment. The expatriate benefits that are typically provided include relocation assistance, housing subsidy, family assistance, cultural/language assistance, and income tax equalization, reimbursements and filing services, among other benefits. For Mr. Vadlamannati, the amount in this column reflectsinclude housing-related expenses ($72,284),$54,823, automotive-related expenses ($13,434),$6,383, personal travel-related expenses ($6,638) and$4,560, tax preparation expenses ($1,500)$1,500, Visa assistance $665 and tax equalization and reimbursements $835,623 all related to his international assignment. |
| (4) | The amounts in this column reflect Company contributions under the Employee Savings Plan. |
| (5) | The amounts in this column reflect Company contributions under the Deferred Compensation Plan in lieu of Company contributions that could not be made under the Employee Savings Plan because of the Internal Revenue Code limitations. |
| (6) | The amounts in this column represent dividend equivalents on the TSR award that was paid during 2022.2023. |
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| 20232024 Proxy Statement 5961
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Grants of Plan Based Awards (2022)(2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ALL OTHER | | | | | | | | | | | | | | | | | | | | | | | | ALL OTHER | | | | | ALL OTHER | | | | | | | | ESTIMATED FUTURE PAYOUTS UNDER | | ESTIMATED FUTURE PAYOUTS UNDER | | OPTION | | | | | | | | | | ESTIMATED FUTURE PAYOUTS UNDER | | ESTIMATED FUTURE PAYOUTS UNDER | | OPTION | | | | | STOCK | | | | | | | | NON-EQUITY INCENTIVE PLAN AWARDS(1) | | EQUITY INCENTIVE PLAN AWARDS | | AWARDS: | | | | | | | | | | NON-EQUITY INCENTIVE PLAN AWARDS(1) | | EQUITY INCENTIVE PLAN AWARDS | | AWARDS: | | | | | AWARDS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | GRANT DATE | | | | | | | | | | | | | | | | | | | | | | | | | | GRANT DATE | | | | | | | | | | | | | | | | | | | | | | EXERCISE OR | | FAIR VALUE | | | | | | | | | | | | | | | | | | | | | EXERCISE OR | | | | FAIR VALUE | | | | | | | | | | | | | | | | | | | | NUMBER OF | | BASE PRICE | | OF STOCK | | | | | | | | | | | | | | | | | | | NUMBER OF | | BASE PRICE | | NUMBER OF | | OF STOCK | | | | | | | | | | | | | | | | | | | | SECURITIES | | OF OPTION | | AND OPTION | | | | | | | | | | | | | | | | | | | SECURITIES | | OF OPTION | | SECURITIES | | AND OPTION | NAME | | GRANT DATE | | THRESHOLD ($) | | TARGET ($) | | MAXIMUM ($) | | THRESHOLD (#) | | TARGET (#) | | MAXIMUM (#) | | UNDERLYING (#) | | AWARDS ($/SH)(2) | | AWARDS(3) | | GRANT DATE | | THRESHOLD ($) | | TARGET ($) | | MAXIMUM ($) | | THRESHOLD (#) | | TARGET (#) | | MAXIMUM (#) | | UNDERLYING (#) | | AWARDS ($/SH)(2) | | UNDERLYING (#) | | AWARDS(3) | M. H. McGarry | | N/A | | $ | 214,400 | | $ | 2,144,000 | | $ | 4,523,840 | | | | | | | | | | | | | | | | N/A | | $ | 214,400 | | $ | 2,144,000 | | $ | 4,523,840 | | | | | | | | | | | | | | | | | | | 16-Feb-22 | | | | | | | | | | | | | | | | | 91,266 | | $ | 151.87 | | $ | 3,333,331 | | 1-Jan-23 | | | | | | | | | | | | | | | | | | | | | 39,765 | | $ | 4,898,968 | | | 16-Feb-22 | | | | | | | | | | | 3,852 | | 23,111 | | 46,222 | U | | | | | | $ | 3,333,300 | | | | 16-Feb-22 | | | | | | | | | | | 10,975 | | 21,949 | | 43,898 | T | | | | | | $ | 3,333,395 | | T. M. Knavish | | N/A | | $ | 99,000 | | $ | 990,000 | | $ | 2,088,900 | | | | | | | | | | | | | | | | N/A | | $ | 174,000 | | $ | 1,740,000 | | $ | 3,671,400 | | | | | | | | | | | | | | | | | | | 16-Feb-22 | | | | | | | | | | | | | | | | | 25,554 | | $ | 151.87 | | $ | 933,315 | | 1-Jan-23 | | | | | | | | | | | | | | | | | 67,115 | | $ | 125.75 | | | | $ | 2,500,188 | | | 16-Feb-22 | | | | | | | | | | | 1,079 | | 6,471 | | 12,942 | U | | | | | | $ | 933,312 | | 1-Jan-23 | | | | | | | | | | | 3,529 | | 21,173 | | 42,346 | U | | | | | | | | $ | 2,499,473 | | | 16-Feb-22 | | | | | | | | | | | 3,073 | | 6,146 | | 12,292 | T | | | | | | $ | 933,393 | | 1-Jan-23 | | | | | | | | | | | 9,942 | | 19,883 | | 39,766 | T | | | | | | | | $ | 2,500,088 | V. J. Morales | | N/A | | $ | 77,500 | | $ | 775,000 | | $ | 1,635,250 | | | | | | | | | | | | | | | | N/A | | $ | 80,500 | | $ | 805,000 | | $ | 1,698,550 | | | | | | | | | | | | | | | | | | | 16-Feb-22 | | | | | | | | | | | | | | | | | 27,380 | | $ | 151.87 | | $ | 1,000,007 | | | | 16-Feb-22 | | | | | | | | | | | 1,156 | | 6,933 | | 13,866 | U | | | | | | $ | 999,947 | | | | 16-Feb-22 | | | | | | | | | | | 3,293 | | 6,585 | | 13,170 | T | | | | | | $ | 1,000,064 | | R. B. Liebert | | N/A | | $ | 57,600 | | $ | 576,000 | | $ | 1,215,360 | | | | | | | | | | | | | | | | | | 16-Feb-22 | | | | | | | | | | | | | | | | | 16,884 | | $ | 151.87 | | $ | 616,659 | | 15-Feb-23 | | | | | | | | | | | | | | | | | 26,605 | | $ | 131.04 | | | | $ | 1,033,338 | | | 16-Feb-22 | | | | | | | | | | | 713 | | 4,276 | | 8,552 | U | | | | | | $ | 616,727 | | 15-Feb-23 | | | | | | | | | | 1,396 | | 8,378 | | 16,756 | U | | | | | | | | $ | 1,033,426 | | | 16-Feb-22 | | | | | | | | | | | 2,030 | | 4,060 | | 8,120 | T | | | | | | $ | 616,592 | | 15-Feb-23 | | | | | | | | | | | 3,943 | | 7,886 | | 15,772 | T | | | | | | | | $ | 1,033,381 | A. M. Foulkes | | N/A | | $ | 46,400 | | $ | 464,000 | | $ | 979,040 | | | | | | | | | | | | | | | | N/A | | $ | 54,450 | | $ | 544,500 | | $ | 1,148,895 | | | | | | | | | | | | | | | | | | | 16-Feb-22 | | | | | | | | | | | | | | | | | 10,952 | | $ | 151.87 | | $ | 400,003 | | 16-Feb-22 | | | | | | | | | | | | | | | | | 12,874 | | $ | 131.04 | | | | $ | 500,026 | | | 16-Feb-22 | | | | | | | | | | | 462 | | 2,773 | | 5,546 | U | | | | | | $ | 399,950 | | 16-Feb-22 | | | | | | | | | | 676 | | 4,054 | | 8,108 | U | | | | | | | | $ | 500,061 | | | 16-Feb-22 | | | | | | | | | | | 1,317 | | 2,634 | | 5,268 | T | | | | | | $ | 400,026 | | 16-Feb-22 | | | | | | | | | | | 1,908 | | 3,816 | | 7,632 | T | | | | | | | | $ | 500,049 | R. Vadlamannati | | N/A | | $ | 39,200 | | $ | 392,000 | | $ | 809,480 | | | | | | | | | | | | | | | | N/A | | $ | 41,160 | | $ | 411,600 | | $ | 849,954 | | | | | | | | | | | | | | | | | | | 16-Feb-22 | | | | | | | | | | | | | | | | | 9,127 | | $ | 151.87 | | $ | 333,348 | | 15-Feb-23 | | | | | | | | | | | | | | | | 8,583 | | $ | 131.04 | | | | $ | 333,364 | | | 16-Feb-22 | | | | | | | | | | | 385 | | 2,311 | | 4,622 | U | | | | | | $ | 333,316 | | 15-Feb-23 | | | | | | | | | | 451 | | 2,703 | | 5,406 | U | | | | | | | | $ | 333,415 | | | 16-Feb-22 | | | | | | | | | | | 1,098 | | 2,195 | | 4,390 | T | | | | | | $ | 333,355 | | 15-Feb-23 | | | | | | | | | | 1,272 | | 2,544 | | 5,088 | T | | | | | | | | $ | 333,366 | A. Ericson | | | N/A | | $ | 39,690 | | $ | 396,900 | | $ | 837,459 | | | | | | | | | | | | | | | | | | | | 16-Feb-22 | | | | | | | | | | | | | | | | 7,724 | | $ | 131.04 | | | | $ | 300,000 | | | | 16-Feb-22 | | | | | | | | | | 406 | | 2,433 | | 4,866 | U | | | | | | | | $ | 300,111 | | | | 16-Feb-22 | | | | | | | | | | 1,145 | | 2,290 | | 4,580 | T | | | | | | | | $ | 300,082 |
U—PBRSUs. Estimated future payouts relate to the performance period of 20222023 through 2024.2025. For additional information concerning the material terms of these PBRSU grants, see pages 5456 through 56.57. T—TSR shares. Estimated future payouts relate to the performance period of 20222023 through 2024.2025. For additional information concerning the material terms of these TSR grants, see pages 5355 through 54.56. | (1) | The amounts in these columns reflect the minimum payment level, if an award is achieved, the target payment level and the maximum payment level under our annual incentive award program. For additional information concerning our annual incentive award program, see pages 4850 through 52.54. |
| (2) | The exercise price of option awards is the closing sale price of PPG common stock reported for the date of grant on the New York Stock Exchange. Option awards vest on the third anniversary of the date of grant. For additional information concerning stock option awards, see page 53.55. |
| (3) | Refer to Note 19 to our Financial Statements for the year ended December 31, 2022,2023, which is located on pages 6466 through 6668 of our Annual Report on Form 10-K, for the relevant assumptions used to determine the valuation of stock-based compensation awards. |
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Outstanding Equity Awards at Fiscal Year-End (2022)(2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | OPTION AWARDS | | | | | | | | OPTION AWARDS | | | | | | | | | | | | | | | | | | | | | | | | EQUITY INCENTIVE | | | | | | | | | | | | | | | | | EQUITY INCENTIVE | | | | | | | | | | | | | | EQUITY INCENTIVE | | | | PLAN AWARDS: | | | | | | | | | | | | | EQUITY INCENTIVE | | | | PLAN AWARDS: | | | | | | | | | | | | | | PLAN AWARDS: | | | | MARKET OR | | | | | | | | | | | | | PLAN AWARDS: | | | | MARKET OR | | | NUMBER OF | | NUMBER OF | | | | | | | | | NUMBER OF | | | | PAYOUT VALUE | | NUMBER OF | | NUMBER OF | | | | | | | | | NUMBER OF | | | | PAYOUT VALUE | | | SECURITIES | | SECURITIES | | | | | | | | | UNEARNED | | | | OF UNEARNED | | SECURITIES | | SECURITIES | | | | | | | | | UNEARNED | | | | OF UNEARNED | | | UNDERLYING | | UNDERLYING | | | | | | | | | SHARES, UNITS | | | | SHARES, UNITS | | UNDERLYING | | UNDERLYING | | | | | | | | | SHARES, UNITS | | | | SHARES, UNITS | | | UNEXERCISED | | UNEXERCISED | | OPTION | | | | OPTION | | OR OTHER | | | | OR OTHER | | UNEXERCISED | | UNEXERCISED | | OPTION | | | | OPTION | | OR OTHER | | | | OR OTHER | | | OPTIONS (#) | | OPTIONS (#) | | EXERCISE | | OPTION | | EXPIRATION | | RIGHTS NOT | | PERFORMANCE | | RIGHTS NOT | | OPTIONS (#) | | OPTIONS (#) | | EXERCISE | | OPTION | | EXPIRATION | | RIGHTS NOT | | PERFORMANCE | | RIGHTS NOT | NAME | | EXERCISABLE | | UNEXERCISABLE | | PRICE ($) | | VEST DATE | | DATE | | VESTED (#)(1)(2) | | PERIOD | | VESTED ($)(3) | | EXERCISABLE | | UNEXERCISABLE | | PRICE ($) | | VEST DATE | | DATE | | VESTED (#)(1)(2) | | PERIOD | | VESTED ($)(3) | M. H. McGarry | | 28,414 | | | | $ | 118.12 | | 18-Feb-18 | | 17-Feb-25 | | 23,111 | U | 2022-2024 | | 2,905,977 | | 105,057 | | | | $ | 116.32 | | 14-Feb-21 | | 13-Feb-28 | | 23,111 | U | 2022-2024 | | 3,456,250 | | | 61,867 | | | | $ | 95.00 | | 17-Feb-19 | | 16-Feb-26 | | 24,192 | U | 2021-2023 | | 3,041,902 | | 118,514 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | 21,949 | T | 2022-2024 | | 3,282,473 | | | 16,760 | | | | $ | 105.98 | | 1-Sep-19 | | 31-Aug-26 | | 11,985 | T | 2022-2024 | | 1,506,994 | | 125,386 | | | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | | | | | | | | 118,204 | | | | $ | 101.50 | | 15-Feb-20 | | 14-Feb-27 | | — | T | 2021-2023 | | — | | | | 107,049 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | | | | | | | | 105,057 | | | | $ | 116.32 | | 14-Feb-21 | | 13-Feb-28 | | | | | | | | | | 91,266 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | | | | | | T. M. Knavish | | | 4,800 | | | | $ | 118.12 | | 18-Feb-18 | | 17-Feb-25 | | 6,471 | U | 2022-2024 | | 967,738 | | | 118,514 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | | | | | | | 14,814 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | 21,173 | U | 2023-2025 | | 3,166,422 | | | | | 125,386 | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | | | | | | | | | | | 107,049 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | | | | | | | | | | | 91,266 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | | | | | | | T. M. Knavish | | 4,800 | | | | $ | 118.12 | | 18-Feb-18 | | 17-Feb-25 | | 6,471 | U | 2022-2024 | | 813,664 | | | | 14,814 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | 4,504 | U | 2021-2023 | | 566,333 | | 21,278 | | | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | 6,146 | T | 2022-2024 | | 919,134 | | | | | 21,278 | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | 3,356 | T | 2022-2024 | | 421,983 | | | | 19,929 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | 39,766 | T | 2023-2025 | | 5,947,005 | | | | | 19,929 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | — | T | 2021-2023 | | — | | | | 25,554 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | | | | | | | | | | 25,554 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | | | | | | | | | 67,115 | | $ | 125.74 | | 1-Jan-26 | | 31-Dec-32 | | | | | | | V. J. Morales | | 3,700 | | | | $ | 93.53 | | 19-Feb-17 | | 18-Feb-24 | | 6,933 | U | 2022-2024 | | 871,755 | | 3,400 | | | | $ | 118.12 | | 18-Feb-18 | | 17-Feb-25 | | 6,933 | U | 2022-2024 | | 1,036,830 | | | 3,400 | | | | $ | 118.12 | | 18-Feb-18 | | 17-Feb-25 | | 5,919 | U | 2021-2023 | | 744,255 | | 5,200 | | | | $ | 95.00 | | 17-Feb-19 | | 16-Feb-26 | | 8,378 | U | 2023-2025 | | 1,252,930 | | | 5,200 | | | | $ | 95.00 | | 17-Feb-19 | | 16-Feb-26 | | 3,596 | T | 2022-2024 | | 452,161 | | 12,600 | | | | $ | 101.50 | | 15-Feb-20 | | 14-Feb-27 | | 6,585 | T | 2022-2024 | | 984,787 | | | 12,600 | | | | $ | 101.50 | | 15-Feb-20 | | 14-Feb-27 | | — | T | 2021-2023 | | — | | 17,072 | | | | $ | 116.32 | | 14-Feb-21 | | 13-Feb-28 | | 15,772 | T | 2023-2025 | | 2,358,703 | | | 17,072 | | | | $ | 116.32 | | 14-Feb-21 | | 13-Feb-28 | | | | | | | | 19,259 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | | | | | | | | 19,259 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | | | | | | | 30,397 | | | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | | | | | | | | | | 30,397 | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | | | | | | | | | 26,193 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | | | | | | | | | | 26,193 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | | | | | | | | | 27,380 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | | | | | | | | | | 27,380 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | | | | | | | | | 26,605 | | $ | 131.04 | | 15-Feb-26 | | 14-Feb-33 | | | | | | | A. M. Foulkes | | 3,300 | | | | $ | 118.12 | | 18-Feb-18 | | 17-Feb-25 | | 2,773 | U | 2022-2024 | | 348,677 | | 12,159 | | | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | 2,773 | U | 2022-2024 | | 414,702 | | | 5,050 | | | | $ | 95.00 | | 17-Feb-19 | | 16-Feb-26 | | 2,831 | U | 2021-2023 | | 355,970 | | | | 12,527 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | 4,054 | U | 2023-2025 | | 606,276 | | | 2,850 | | | | $ | 101.50 | | 15-Feb-20 | | 14-Feb-27 | | 1,439 | T | 2022-2024 | | 180,940 | | | | 10,952 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | 2,634 | T | 2022-2024 | | 393,915 | | | 3,150 | | | | $ | 116.32 | | 14-Feb-21 | | 13-Feb-28 | | — | T | 2021-2023 | | — | | | | 12,874 | | $ | 131.04 | | 15-Feb-26 | | 14-Feb-33 | | 7,632 | T | 2023-2025 | | 1,141,366 | | | 7,407 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | | | | | | | | | | | 12,159 | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | | | | | | | | | | | 12,527 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | | | | | | | | | | | 10,952 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | | | | | | | R. Vadlamannati | | 9,192 | | | | $ | 116.32 | | 14-Feb-21 | | 13-Feb-28 | | 2,311 | U | 2022-2024 | | 290,585 | | 9,192 | | | | $ | 116.32 | | 14-Feb-21 | | 13-Feb-28 | | 2,311 | U | 2022-2024 | | 345,610 | | | 11,851 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | 2,574 | U | 2021-2023 | | 323,655 | | 11,851 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | 2,703 | U | 2023-2025 | | 404,234 | | | | | 13,678 | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | 1,199 | T | 2022-2024 | | 150,762 | | 13,678 | | | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | 2,195 | T | 2022-2024 | | 328,262 | | | | | 11,388 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | — | T | 2021-2023 | | — | | | | 11,388 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | 5,088 | T | 2023-2025 | | 760,910 | | | | | 9,127 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | | | | | | | | | 9,127 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | | | | | | | | | | | 8,583 | | $ | 131.04 | | 15-Feb-26 | | 14-Feb-33 | | | | | | | A. Ericson | | | 11,111 | | | | $ | 109.74 | | 20-Feb-22 | | 19-Feb-29 | | 2,080 | U | 2022-2024 | | 311,064 | | | | 12,159 | | | | $ | 119.52 | | 19-Feb-23 | | 18-Feb-30 | | 2,433 | U | 2023-2025 | | 363,855 | | | | | | 10,249 | | $ | 136.60 | | 17-Feb-24 | | 16-Feb-31 | | 1,975 | T | 2022-2024 | | 295,361 | | | | | | 8,214 | | $ | 151.87 | | 16-Feb-25 | | 15-Feb-32 | | 4,580 | T | 2023-2025 | | 684,939 | | | | | | 7,724 | | $ | 131.04 | | 15-Feb-26 | | 14-Feb-33 | | | | | | |
U—PBRSUs. For additional information concerning the material terms of these PBRSU grants, see pages 5456 through 56.57. T—TSR shares. For additional information concerning the material terms of these TSR grants, see pages 5355 through 54.56. | (1) | The PBRSUs for the 2021 - 2023 performance period reflect an estimated payout of 100.0%. The PBRSUs for the 2022 - 2024 performance period reflect an estimated payout of 100.0%. |
(2) | The TSRsPBRSUs for the 20212023 - 20232025 performance period reflect an estimated payout of 0.0%100.0%. The TSRs |
| (2) | Based on PPG’s performance through the end of fiscal year 2023 relative to the performance criteria. Our current period to date results for the 2022 -– 2024 ongoing performance period reflect an estimated payoutis between threshold and target, and thus the target number of 54.6%.TSR shares granted in 2022 is included above. Our current period to date results for the 2023 – 2025 ongoing performance period is between target and maximum, and thus the maximum number of TSR shares granted in 2023 is included above. |
| (3) | Payout value is based on the $125.74$149.55 closing sale price of PPG common stock reported on December 30, 202229, 2023 on the New York Stock Exchange Composite Tape. |
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| 20232024 Proxy Statement 6163
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Option Exercises and Stock Vested (2022)(2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | OPTION AWARDS | | STOCK AWARDS | | | | | OPTION AWARDS | | STOCK AWARDS | | | | | | | | | | | NUMBER OF | | NUMBER OF | | | | | | | | | | NUMBER OF | | NUMBER OF | | | | | | NUMBER OF | | | | | SHARES | | SHARES | | VALUE | | NUMBER OF | | | | | SHARES | | SHARES | | VALUE | | | SHARES | | VALUE | | ACQUIRED ON | | ACQUIRED ON | | REALIZED | | SHARES | | VALUE | | ACQUIRED ON | | ACQUIRED ON | | REALIZED | | | ACQUIRED ON | | REALIZED ON | | RSU | | TSR | | ON | | ACQUIRED ON | | REALIZED ON | | RSU | | TSR | | ON | NAME | | EXERCISE (#) | | EXERCISE ($)(1) | | VESTING (#)(2) | | VESTING (#)(3) | | VESTING ($)(4) | | EXERCISE (#) | | EXERCISE ($)(1) | | VESTING (#)(2) | | VESTING (#)(3) | | VESTING ($)(4) | M. H. McGarry | | — | | $ | — | | 24,351 | | — | | $ | 3,061,895 | | 225,245 | | $ | 8,991,847 | | 72,013 | | 5,804 | | $ | 11,689,633 | T. M. Knavish | | — | | $ | — | | 4,132 | | — | | $ | 519,558 | | — | | $ | — | | 6,004 | | 1,179 | | $ | 1,244,336 | V. J. Morales | | — | | $ | — | | 5,903 | | — | | $ | 742,243 | | 3,700 | | $ | 184,260 | | 7,891 | | 1,549 | | $ | 1,635,257 | R. B. Liebert | | 30,086 | | $ | 677,344 | | — | | — | | $ | — | | A. M. Foulkes | | — | | $ | — | | 2,361 | | — | | $ | 296,872 | | 21,757 | | $ | 453,912 | | 3,774 | | 741 | | $ | 782,137 | R. Vadlamannati | | — | | $ | — | | 2,657 | | — | | $ | 334,091 | | — | | $ | — | | 3,432 | | 674 | | $ | 711,304 | A. Ericson | | | — | | $ | — | | 3,088 | | 607 | | $ | 640,171 |
| (1) | The amounts in this column are calculated by multiplying the number of shares acquired on exercise by the difference between the fair market value of the common stock on the date of exercise and the exercise price of the options. |
| (2) | The amounts in this column are the number of shares acquired upon the vesting of PBRSU awards granted in 2020.2021. Payout of 20202021 PBRSU awards is described on pages 5456 through 56.57. |
| (3) | The amounts in this column represent the number of shares earned upon the vesting of TSR awards granted in 2020.2021. As described on pages 5355 through 54,56, when earned, TSR awards are paid 50% in shares of PPG common stock and 50% in cash. |
| (4) | The amounts in this column are calculated by multiplying (a) the number of PPG shares acquired upon vesting of the PBRSU awards and (b) the number of TSR shares of PPG common stock earned upon vesting by $125.74,$149.55, the closing stock price of PPG common stock reported on December 30, 202229, 2023 on the New York Stock Exchange Composite Tape. The amounts in this column also include the TSR cash portion of the award calculated based on the average PPG stock closing price during the month of December 20222023 ($129.34)146.92). |
Pension Benefits For certain longer-serving, U.S.-based, salaried employees we maintain both a tax-qualified defined benefit pension plan, called Retirement Plan C,F (formerly named Retirement Plan C), and a non-qualified defined benefit pension plan, called the Non-Qualified Retirement Plan. Employees hired on or after January 1, 2006 are not eligible to participate in these plans. Each of the executive officers named in the Summary Compensation Table participates in these plans, with the exception of Mr. Vadlamannati and Ms. Liebert and Mr. Vadlamannati.Ericson. The executives named below ceased to accrue benefits under Retirement Plan CF on December 31, 2020. The table below shows the present value of accumulated benefits payable to each such named executive officer as of December 31, 2022,2023, including the number of years of service credited to each such named executive officer, under each of Retirement Plan CF and the Non-Qualified Retirement Plan, determined using interest rate and mortality rate assumptions consistent with those used in our financial statements. The material terms of Retirement Plan CF and the Non-Qualified Retirement Plan are described below. Pension Benefits (2022)(2023) | | | | | | | | | | | | | | | | | | | | | NUMBER OF | | | PRESENT | | | | | NUMBER OF | | | PRESENT | | | | | | YEARS | | | VALUE OF | | | | | YEARS | | | VALUE OF | | | | | | CREDITED | | | ACCUMULATED | | | | | CREDITED | | | ACCUMULATED | | NAME | | PLAN NAME | | SERVICE (#) | | | BENEFIT ($) | | | PLAN NAME | | SERVICE (#) | | | BENEFIT ($) | | M. H. McGarry | | Retirement Plan C | | 40.0 | | $ | 1,326,797 | | | Retirement Plan F | | 40.0 | | $ | 1,386,103 | | | | Non-Qualified Retirement Plan | | 40.0 | | $ | 14,619,351 | (1) | | Non-Qualified Retirement Plan | | 40.0 | | $ | 15,271,734 | (1) | T. M. Knavish | | Retirement Plan C | | 33.7 | | $ | 805,365 | | | Retirement Plan F | | 33.7 | | $ | 888,949 | | | | Non-Qualified Retirement Plan | | 33.7 | | $ | 2,171,439 | (1) | | Non-Qualified Retirement Plan | | 33.7 | | $ | 2,400,447 | (1) | V. J. Morales | | Retirement Plan C | | 36.0 | | $ | 815,223 | | | Retirement Plan F | | 36.0 | | $ | 901,018 | | | | Non-Qualified Retirement Plan | | 36.0 | | $ | 2,194,567 | (1) | | Non-Qualified Retirement Plan | | 36.0 | | $ | 2,429,353 | (1) | A. M. Foulkes | | Retirement Plan C | | 26.0 | | $ | 739,793 | | | Retirement Plan F | | 26.0 | | $ | 812,484 | | | | Non-Qualified Retirement Plan | | 26.0 | | $ | 1,242,366 | (1) | | Non-Qualified Retirement Plan | | 26.0 | | $ | 1,366,299 | (1) |
| (1) | ThisUpon retirement, this officer is eligible to commence a retirement benefit under the Non-Qualified Pension Plan based on the officer’s age and years of service as of December 31, 2022.2023. As further described in the narrative discussion following this table, the estimated lump-sum present value under the Non-Qualified Pension Plan to which the officer would be entitled is as follows: Mr. McGarry, $19,744,157;$19,178,197; Mr. Knavish, $4,561,694;$4,490,135; Mr. Morales, $4,730,781;$4,659,927; and Ms. Foulkes, $2,417,626.$2,371,400. |
| | | 6264 20232024 Proxy Statement
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The values reflected in the “Present Value of Accumulated Benefit” column of the Pension Benefits Table are equal to the actuarial present value of each officer’s accrued benefit under the applicable plan as of December 31, 2022,2023, using the same actuarial factors and assumptions used for financial statement reporting purposes, except that retirement age is assumed to be normal retirement age as defined in the applicable plan. These assumptions are described under Note 14 to our Financial Statements for the year ended December 31, 2022,2023, which is located on pages 5455 through 6062 of our Annual Report on Form 10-K. In accordance with Item 402(h) of Regulation S-K, the present value amounts are calculated using a 5.43%5.16% discount rate for Retirement Plan CF and 5.42%5.14% discount rate for the Non-Qualified Retirement Plan. The lump-sum payment amounts for the Non-Qualified Pension Plan are calculated in accordance with the relevant provisions of the Non-Qualified Pension Plan using the Pension Benefit Guaranty Corporation discount rate of 2.75%3.00% as in effect on December 31, 2022,2023, rather than the 5.42%5.14% discount rate used for financial statement reporting purposes. The benefit payable under Retirement Plan CF is a function of the participant’s five-year average annual covered base compensation for the highest five consecutive years out of the final ten years immediately prior to retirement and credited years of service. In January 2011, Retirement Plan CF was amended such that eligible employees with combined age and service points fewer than 60 and actively employed by the Company as of December 31, 2011 ceased to accrue benefits under Retirement Plan CF as of December 31, 2011. Eligible employees with combined age and service points of 60 or more and actively employed by the Company at December 31, 2011 ceased to accrue benefits under Retirement Plan CF upon the earlier of their retirement date or December 31, 2020. Eligible employees now earn retirement benefits through the PPG Industries Employee Savings Plan. The Non-Qualified Retirement Plan’s benefit is supplemental to the qualified plan’s benefit in that the Non-Qualified Retirement Plan provides a benefit that is substantially equal to the difference between the amount that would have been payable under the qualified Retirement Plan C,F, in the absence of legislation limiting the compensation covered by the plan, and the amount actually payable under Retirement Plan C.F. The Non-Qualified Retirement Plan also includes a benefit based on bonus awards for certain U.S. management bonus program participants. The benefit payable under the Non-Qualified Plan is determined in the same manner as for Retirement Plan CF with regard to credited service and base salary above legislative limits; incentive payments are factored in by using the average of the highest five payments during the last ten years prior to retirement. Retirement Plan CF contains the following material terms: | ● | The normal form of benefit is a life annuity for unmarried participants and a joint and 50% survivor annuity for married participants; |
| ● | A participant may elect out of the normal form of benefit and receive an actuarially-equivalent alternative form of benefit, including a single life annuity (for a married participant) or a joint and survivor annuity with a survivor benefit ranging from 1%-100%, as selected by the participant; |
| ● | There is no lump-sum benefit option; |
| ● | A participant may elect early retirement up to ten years prior to the participant’s normal retirement age, subject to reduction of the retirement benefit to reflect the early commencement of the benefit; and |
| ● | A participant has a fully vested benefit under the plan upon completing five years of service or reaching early retirement age. |
The Non-Qualified Plan contains the following material terms: | ● | A participant is entitled to a distribution upon reaching the later of their early retirement date (as defined in the qualified plan) or the participant’s termination of employment; |
| ● | The normal form of payment for benefits at retirement for the group of participants that includes each of the executive officers named in the Summary Compensation Table who participates in the plan is a lump-sum payment; and |
| ● | A participant has a fully vested benefit under the plan upon completing five years of service or reaching early retirement age, but their accrued benefit is subject to forfeiture if the participant engages in any competitive activity, or other activity that is deemed contrary or harmful to the interests of PPG. |
PPG Industries Employee Savings Plan and Deferred Compensation Plan The PPG Industries Employee Savings Plan (the “Savings Plan”) covers substantially all employees in the U.S. All of the executive officers named in the Summary Compensation Table participate in the Savings Plan. The Company makes matching contributions to the Savings Plan, at management’s discretion, based upon participants’ savings, subject to certain limitations. For most participants, Company-matching contributions are established each year at the discretion of the Company and are applied to participant savings up to a maximum of 6% of eligible participant | | | |
| 20232024 Proxy Statement 6365
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compensation. Employees can contribute from 1% to 50% of eligible plan compensation to the Savings Plan, subject to certain Plan or legal limits that may apply. Employees are always 100% vested in any money employees contribute or the Company contributes to the Savings Plan as a matching contribution. Executive officers and certain other employees also receive additional Company contributions to the Savings Plan. These contributions are between 2% and 5% of a participant’s eligible plan compensation, based on age and years of service. If contributions made for the benefit of an executive are limited due to requirements of the Internal Revenue Code, we credit such excess contributions to the executive officer’s account in the Deferred Compensation Plan. These contributions vest upon completion of three years of service with the Company. In the U.S., we maintain the Deferred Compensation Plan to allow participants, including each of the executive officers named in the Summary Compensation Table, to defer a portion of their compensation in a phantom PPG stock account or other phantom investment accounts. The amount deferred earns a return based on the investment options selected by the executive officer. Executive officers may elect to defer up to 50% of their base salary, and up to 100% of any incentive award, TSR share award and restricted stock unit award that the executive officer may be entitled to receive. All dividend equivalents earned on TSR share award grants are deferred into the Deferred Compensation Plan. We also may make certain additional contributions to the executive officer’s account. For example, if the executive officer’s contributions under the Savings Plan are limited due to requirements of the Internal Revenue Code, we will credit such excess contributions to the executive officer’s account under the Deferred Compensation Plan. The executive officer is always fully vested in compensation that he or she elects to have deferred into the plan and any contributions made on behalf of the executive officer related to the Savings Plan. Company contributions are invested proportionally into the investment options chosen by the employee. The table below shows the Deferred Compensation Plan’s current investment options and their respective annual rate of return for the year ended December 31, 2022,2023, as reported by the administrator of the plan. | | | | INVESTMENT OPTION | | RATE OF RETURN | | PPG Stock Account | | (25.35)20.90
| % | Fidelity Growth Company Fund | | (33.78)47.23
| % | Fidelity Contrafund | | (28.26)39.33
| % | Fidelity US Equity Index Fund | | (18.13)26.29
| % | Fidelity Intermediate Bond Fund | | (8.73)5.54
| % | Fidelity Government Money Market | | 1.434.79
| % |
The amount owed to executive officers under the Deferred Compensation Plan is an unfunded and unsecured general obligation of PPG. An executive officer receives a distribution of the balance in their plan account upon retirement, death, disability, termination of employment, a scheduled payment date, financial hardship (for amounts deferred prior to January 1, 2005) or unforeseeable emergency (for amounts deferred after December 31, 2004). Distributions can be in the form of a lump sum or installments. Payment can commence at the time of separation or, in certain situations, can be deferred until a later point in time. Compensation deferred prior to January 1, 2005 and related earnings are distributed according to the executive officer’s election. Compensation deferred after December 31, 2004 and related earnings are distributed according to the executive officer’s election only in the case of retirement (no earlier than six months following retirement). In the case of disability or termination, the distribution is made in a lump sum on the date that is the later of (i) the first day of the first quarter of a plan year that is six months and ten days following the separation or (ii) January 1 of the year following the separation. In the case of death, a distribution is made to the executive officer’s beneficiary as soon as administratively possible. Distributions from the PPG stock account are in the form of PPG common stock and distributions from all other investment options are in cash. Non-Qualified Deferred Compensation (2022)(2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | EXECUTIVE | | | REGISTRANT | | | AGGREGATE | | | AGGREGATE | | | | | EXECUTIVE | | | REGISTRANT | | | AGGREGATE | | | AGGREGATE | NAME | | PLAN(1) | | CONTRIBUTIONS ($)(2) | | CONTRIBUTIONS ($)(3) | | EARNINGS ($)(4) | | BALANCE ($)(5) | | PLAN(1) | | CONTRIBUTIONS ($)(2) | | CONTRIBUTIONS ($)(3) | | EARNINGS ($)(4) | | BALANCE ($)(5) | M. H. McGarry | | DCP | | $ | 80,000 | | $ | 398,812 | | $ | (745,976) | | $ | 3,350,128 | | DCP | | $ | 60,300 | | $ | 148,838 | | $ | 876,784 | | $ | 4,436,050 | T. M. Knavish | | DCP | | $ | 26,000 | | $ | 122,240 | | $ | (470,033) | | $ | 1,995,845 | | DCP | | $ | 36,000 | | $ | 126,380 | | $ | 359,083 | | $ | 2,517,308 | V. J. Morales | | DCP | | $ | 1,082,490 | | $ | 136,749 | | $ | (448,675) | | $ | 2,501,540 | | DCP | | $ | 773,529 | | $ | 48,000 | | $ | 544,773 | | $ | 3,867,842 | R. B. Liebert | | DCP | | $ | 50,936 | | $ | 77,805 | | $ | (170,425) | | $ | 762,077 | | A. M. Foulkes | | DCP | | $ | — | | $ | 85,804 | | $ | (32,936) | | $ | 181,932 | | DCP | | $ | — | | $ | 28,042 | | $ | 6,302 | | $ | 216,276 | R. Vadlamannati | | DCP | | $ | — | | $ | 46,922 | | $ | (66,994) | | $ | 233,517 | | DCP | | $ | — | | $ | 30,167 | | $ | 75,686 | | $ | 339,370 | A. Ericson | | | DCP | | $ | — | | $ | 18,780 | | $ | 5,068 | | $ | 122,333 |
| (1) | All executive officers named in the Summary Compensation Table participate in the Deferred Compensation Plan, or DCP. |
| (2) | The amounts in this column are reported as compensation in the “Salary” and “All Other Compensation” columns of the Summary Compensation Table. |
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| (3) | The amounts in this column are reported in the “All Other Compensation” column of the Summary Compensation Table. |
| (4) | None of the amounts in this column are included as compensation in the Summary Compensation Table. |
| (5) | The following aggregate amounts were reported in the Summary Compensation Table as 20202021 and 20212022 compensation, as applicable: Mr. Knavish, $254,050; Mr. McGarry, $611,992; Mr. Knavish, $156,051;$885,248; Mr. Morales, $1,030,783; Ms. Liebert, $270,230; and$2,110,023; Ms. Foulkes, $110,531.$162,269; and Mr. Vadlamannati, $46,922. Ms. Ericson was not an NEO in 2021 and 2022. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The tables below reflect the amount of compensation to each of our currently serving executive officers named in the Summary Compensation Table in the event of termination of such executive’s employment under certain circumstances. The amounts shown assume that such termination was effective as of December 31, 2022,2023, and thus includes amounts earned through such time and are estimates of the amounts that would be paid out to the executives upon their termination. The actual amounts to be paid out can only be determined at the time of such executive’s separation from PPG. For purposes of calculating the estimated potential payments to our officers under the Non-Qualified Pension Plan, as reflected in the tables below, we have used the same actuarial factors and assumptions used for financial statement reporting purposes and set forth under Note 14 to our Financial Statements for the year ended December 31, 2022,2023, which is located on pages 5455 through 6062 of our Annual Report on Form 10-K. However, the amounts reflected in the tables below for the Non-Qualified Pension Plan are calculated in accordance with the relevant provisions of the Non-Qualified Pension Plan using the 5.42%5.14% discount rate for our U.S. non-qualified defined benefit pension plan that is used for financial statement reporting purposes. Potential Payments and Benefits Upon Termination The first column of each table below sets forth the payments to which the officer would be entitled, other than accrued but unpaid base salary and any benefits payable or provided under broad-based employee benefit plans and programs, in the event of a termination of the officer’s employment for any reason by PPG or the officer, and assuming such termination occurred prior to, or did not otherwise arise in connection with, a change in control of PPG. The second column of each table reflects payments that would be due in the event of the officer’s termination of employment due to death prior to a change in control of PPG. In any of these events, we are not obligated to provide other health or welfare benefits or any special severance payments, accelerated vesting of equity compensation or tax gross-ups to the officers. Employees hired on or after January 1, 2006 are not eligible to participate in the Non-Qualified Retirement Plan. Mr. Vadlamannati is not included in the table below because heand Ms. Ericson received financial counseling, but they did not participate in the Non- Qualified Retirement Plan, and as of December 31, 2022 he did not receive financial counseling.Plan. | | | |
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Change in Control
Voluntary or Involuntary Termination (2022)(2023) | | | | | | | | | | | | | | | | | VOLUNTARY OR | | | | | | VOLUNTARY OR | | | | | | | INVOLUNTARY | | | | | | INVOLUNTARY | | | | | | | TERMINATION | | DEATH | | | TERMINATION | | DEATH | | M. H. McGarry | | | | | | | | | | | | | | | Non-Qualified Pension | | $ | — | (1) | $ | 14,376,908 | (2) | | $ | — | (1) | $ | 13,747,919 | (2) | Financial Counseling | | | 13,035 | | | — | | | | 13,360 | | | — | | Total | | $ | 13,035 | | $ | 14,376,908 | | | $ | 13,360 | | $ | 13,747,919 | | T. M. Knavish | | | | | | | | | | | | | | | Non-Qualified Pension | | $ | — | (1) | $ | 3,422,778 | (2) | | $ | — | (1) | $ | 3,415,520 | (2) | Financial Counseling | | | 13,035 | | | — | | | | 13,360 | | | — | | Total | | $ | 13,035 | | $ | 3,422,778 | | | $ | 13,360 | | $ | 3,415,520 | | V. J. Morales | | | | | | | | | | | | | | | Non-Qualified Pension | | $ | — | (1) | $ | 3,372,878 | (2) | | $ | — | (1) | $ | 3,363,928 | (2) | Financial Counseling | | | 13,035 | | | — | | | | 13,360 | | | — | | Total | | $ | 13,035 | | $ | 3,372,878 | | | $ | 13,360 | | $ | 3,363,928 | | A. M. Foulkes | | | | | | | | | | | | | | | Non-Qualified Pension | | $ | — | (1) | $ | 1,416,074 | (2) | | $ | — | (1) | $ | 1,397,920 | (2) | Financial Counseling | | | 13,035 | | | — | | | | 13,360 | | | — | | Total | | $ | 13,035 | | $ | 1,416,074 | | | $ | 13,360 | | $ | 1,397,920 | | R. Vadlamannati | | | | | | | | | Non-Qualified Pension | | | $ | — | (1) | $ | — | (2) | Financial Counseling | | | | 10,249 | | | — | | Total | | | $ | 10,249 | | $ | — | | A. Ericson | | | | | | | | | Non-Qualified Pension | | | $ | — | (1) | $ | — | (2) | Financial Counseling | | | | 13,360 | | | — | | Total | | | $ | 13,360 | | $ | — | |
| (1) | This officer is eligible to commence a retirement benefit under the Non-Qualified Pension Plan based on the officer’s age and years of service as of December 31, 20222023 upon any termination of the officer’s employment. The estimated lump-sum present value under the Non-Qualified Pension Plan to which this officer would be entitled is presented in the Pension Benefits Table. |
| (2) | This officer’s beneficiary is eligible to commence a beneficiary retirement benefit under the Non-Qualified Pension Plan based on the officer’s age and years of service as of December 31, 20222023 upon the officer’s termination of employment due to death. The amount reflected in this column for this officer is not a present value amount, but the estimated aggregate payments over the lifetime of the eligible beneficiary of the officer, assuming payments commenced following the officer’s termination of employment as a result of death on December 31, 2022.2023. |
Potential Payments and Benefits Upon Termination Following, or in Connection with, a Change in Control of PPG We have entered into change in control agreements with our executive officers named in the Summary Compensation Table and with certain other officers. The change in control agreements have three-year terms, which terms are automatically extended for one year upon each anniversary unless a notice not to extend is given by PPG. If a “change in control” occurs during the term of an agreement, then the agreement becomes operative for a fixed three-year period. The agreements provide generally that the officer’s terms and conditions of employment (including position, location, compensation and benefits) will not be adversely changed during the three-year period after a change in control of PPG. The change in control agreements also contain non-competition provisions and confidentiality provisions prohibiting the officer from divulging or communicating, without our prior consent or except as required by law, any confidential information, knowledge or data relating to PPG or its business during the officer’s employment and at all times thereafter. The Human Capital Management and Compensation Committee approved certain changes to our change in control agreements, which are described under “Changes to Form of Change in Control Agreement.” Termination For Cause or Other Than For Good Reason. Under the change in control agreements, in the event of an officer’s termination of employment by PPG for cause or by the officer other than for good reason during the | | | 68 2024 Proxy Statement |
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three-year period following a change in control, the officer will receive payment only of their accrued but unpaid base salary and any benefits payable or provided under broad-based employee benefit plans and programs. Termination Without Cause or For Good Reason. If PPG terminates the officer’s employment (other than for cause, death or disability) or the officer terminates their employment for good reason during the three-year period | | | 66 2023 Proxy Statement
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following a change in control, and upon certain terminations prior to a change in control or in connection with or in anticipation of a change in control, the officer is generally entitled to receive the following payments and benefits: | ● | a pro-rata bonus for the year of the date of termination based on the officer’s highest annual bonus during the three years prior to the change in control or the annual bonus for the most recent fiscal year after the change in control, whichever is higher (such higher amount referred to herein as the “highest annual bonus”); |
| ● | three times the officer’s annual base salary; |
| ● | three times the officer’s highest annual bonus; |
● | a lump-sum payment having an actuarial present value equal tobonus or target annual bonus depending on the additional pension benefits the officer would have received if he or she had continued to be employed by PPG for an additional three years for purposesversion of both age and service credit, assuming the officer’s compensation for each such additional year is equal to their annual base salary prior to the change in control (or any higher salary thereafter) and their annual bonus is at least equal toagreement signed by the officer’s highest annual bonus during the three years prior to the change in control (the “Pension Differential”);officer; |
| ● | a lump-sum payment equal to the present value of any employer contributions the executive would have received or accrued under PPG’s defined contribution retirement plans and arrangements (whether qualified or non-qualified) in which the executive participates if the executive’s employment continued for an additional three years in respect of retirement benefits provided in the form of a defined contribution retirement plan, program or arrangement, but excluding any salary or pay deferral contributions to such plans or arrangements that are deemed to be employer contributions under applicable law; |
| ● | continued medical, dental and life insurance benefits for three years and continued age and service credit for purposes of determining the officer’s eligibility for retiree medical benefits; |
| ● | continued payment of financial counseling expenses for the officer for three years; and |
| ● | a payment in an amount sufficient to make the officer whole for any excise tax on excess parachute payments imposed under Section 4999 of the Internal Revenue Code. |
The table below sets forth the amounts each executive officer named in the Summary Compensation Table would be entitled to receive, other than accrued but unpaid base salary and any benefits payable or provided under broad-based employee benefit plans and programs, in the event of a termination of the executive officer’s employment by PPG without cause or by the executive officer for good reason following or in connection with a change in control of PPG. For purposes of calculating the estimated potential payment to such executive officers with respect to the Pension Differential under the change in control agreements, as reflected in the table below, we have used the same actuarial factors and assumptions used for financial statement reporting purposes and set forth under Note 14 to our Financial Statements for the year ended December 31, 2022, which is located on pages 54 through 60 of our Annual Report on Form 10-K, including a discount rate of 5.43% for Retirement Plan C and 5.42% for our U.S. non-qualified defined benefit pension plan.
Termination During the 30-Day Window Period. Under certain of our change in control agreements, if an officer terminates their employment for any reason during a 30-day window period following the first anniversary of the change in control, the officer will be entitled to the payments and benefits described above, except that the multiplier of three referenced above would be two for purposes of all payments and benefits for which the multiplier is relevant. Definitions. For purposes of the agreements, the terms set forth below generally have the meanings described below. “Change in Control” generally includes the occurrence of any of the following events or circumstances: | (i) | the acquisition of 20% or more of the outstanding shares of PPG or the voting power of the outstanding voting securities of PPG, other than any acquisition from or by PPG or any PPG-sponsored employee benefit plan; |
| (ii) | the individuals who, as of the date of the agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date of the agreement whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board are considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; |
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| (iii) | shareholder approval of a reorganization, merger or consolidation or sale of substantially all of the assets of PPG, unless following such transaction PPG’s historic shareholders retain at least 60% ownership of the surviving entity, no shareholder acquires a 20% or more ownership interest in the surviving entity and a majority of the surviving entity’s board of directors were members of our Board at the time such transaction was approved; |
| (iv) | shareholder approval of a dissolution or liquidation of PPG; or |
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| (v) | a determination by a majority of our Board that a change in control has occurred. |
“Cause” generally means (i) the willful and continued failure of the officer to perform their duties; or (ii) the willful engaging by the officer in illegal conduct or gross misconduct that is materially and demonstrably injurious to PPG. “Good reason” generally means (i) the assignment of duties inconsistent with the officer’s position, authority, duties or responsibilities in effect at the time of the change in control, or any other action resulting in a diminution in such position, authority, duties or responsibilities, other than isolated and inadvertent action not taken in bad faith that is remedied promptly; (ii) failure to provide the employment compensation and benefits required under the change in control agreement, other than an isolated and inadvertent failure not occurring in bad faith that is remedied promptly; or (iii) a relocation or substantial change in the officer’s workplace or the company’s requiring the officer to travel on company business to a substantially greater extent than required immediately prior to the change in control. Changes to Form of Change in Control Agreement. The Human Capital Management and Compensation Committee has made modifications to the form of change in control agreement for officers in response to current trends in executive compensation and to a shareholder proposal that was supported by shareholders at the 2007 Annual Meeting of Shareholders. PPG began entering into the revised agreements in 2008 with certain newly hired or promoted officers. Key revisions include: | ● | Modification of the definition of “change in control” to require “consummation” of a reorganization, merger or consolidation or sale of substantially all of the assets of PPG. |
| ● | Modification of the definition of “compensation” to include “target” bonus instead of the “highest” bonus over the last three years. This change affects the cash payment and the Pension Differential calculation. |
●�� | Modification of certain termination provisions, including elimination of the window period termination. |
| ● | Modification of the excise tax and gross-up provision to replace the full gross up with a “conditional” gross up, which provides for a reduction in change in control payments if such payments trigger an excise tax by a limited amount. |
| ● | Elimination of the provisions providing for the payment of financial counseling and legal expenses. |
In subsequent years, the Human Capital Management and Compensation Committee made additional modifications to the form of change in control agreement for officers in response to current trends in executive compensation. The key revisions include: | ● | Elimination of the excise tax gross-up entirely. |
| ● | Including a “conditional” payment limitation, which provides for a reduction in change of control payments if such payments would trigger an excise tax, unless a larger amount would be received on an after-tax basis without a payment reduction. |
| ● | Modification of the definition of Retirement and the associated benefits related to retirement to ensure that all applicable provisions are applied properly for executives who only participated in the former PPG Defined Contribution Retirement Plan and non-U.S. executives who do not participate in either Retirement Plan CF or the former Defined Contribution Retirement Plan. |
| ● | Elimination of potential double payments under other PPG severance provisions or statutory requirements and the change in control agreement. |
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Change in Control
Involuntary or Good Reason Termination (2022)(2023) | | | | | | | | | | | INVOLUNTARY OR | | | INVOLUNTARY OR | | | | GOOD REASON | | | GOOD REASON | | | | TERMINATION | | | TERMINATION | | M. H. McGarry | | | | | | | | | Financial Counseling | | $ | 41,705 | | | $ | 3,509 | | Lump Sum Payment | | | | | | | — | | Base Salary | | | 4,020,000 | | | | 4,020,000 | | Bonus | | | 6,750,000 | | | | 8,820,000 | | Health & Welfare Benefits | | | 54,117 | | | | — | | Accelerated Vesting of LTI | | | 16,435,383 | | | | 20,099,436 | | Total | | $ | 27,301,205 | (1) | | $ | 32,942,945 | (1) | T. M. Knavish | | | | | | | | | Financial Counseling | | $ | 41,705 | | | $ | 44,245 | | Lump Sum Payment | | | | | | | — | | Base Salary | | | 2,700,000 | | | | 3,600,000 | | Bonus | | | 2,970,000 | | | | 3,600,000 | | Health & Welfare Benefits | | | 62,775 | | | | 65,145 | | Accelerated Vesting of LTI | | | 2,207,929 | | | | 14,085,112 | | Total | | $ | 7,982,409 | (1) | | $ | 21,394,502 | (1) | V. J. Morales | | | | | | | | | Financial Counseling | | $ | 41,705 | | | $ | 44,245 | | Lump Sum Payment | | | | | | | — | | Base Salary | | | 2,325,000 | | | | 2,415,000 | | Bonus | | | 2,325,000 | | | | 2,415,000 | | Health & Welfare Benefits | | | 62,775 | | | | 63,839 | | Accelerated Vesting of LTI | | | 3,336,559 | | | | 9,707,684 | | Total | | $ | 8,091,039 | (1) | | $ | 14,645,768 | (1) | A. M. Foulkes | | | | | | | | | Financial Counseling | | $ | 41,705 | | | $ | 44,245 | | Lump Sum Payment | | | | | | | — | | Base Salary | | | 1,740,000 | | | | 1,815,000 | | Bonus | | | 1,392,000 | | | | 1,633,500 | | Health & Welfare Benefits | | | 54,117 | | | | 53,712 | | Accelerated Vesting of LTI | | | 1,358,868 | | | | 3,321,915 | | Total | | $ | 4,586,690 | (1) | | $ | 6,868,372 | (1) | R. Vadlamannati | | | | | | | | | Financial Counseling | | | | 43,974 | | Lump Sum Payment | | | | | | | — | | Base Salary | | $ | 1,680,000 | | | $ | 1,764,000 | | Bonus | | | 1,176,000 | | | | 1,234,800 | | Health & Welfare Benefits | | | 56,695 | | | | 65,800 | | Accelerated Vesting of LTI | | | 1,126,284 | | | | 3,333,351 | | Total | | $ | 4,038,979 | | | $ | 6,441,925 | | A. Ericson | | | | | | Financial Counseling | | | $ | 44,245 | | Lump Sum Payment | | | | — | | Base Salary | | | | 1,701,000 | | Bonus | | | | 1,190,700 | | Health & Welfare Benefits | | | | 80,857 | | Accelerated Vesting of LTI | | | | 2,738,379 | | Total | | | $ | 5,755,181 | (1) |
| (1) | This officer is eligible to commence a retirement benefit under the Non-Qualified Pension Plan based on the officer’s age and years of service as of December 31, 20222023 upon any termination of the officer’s employment. The estimated lump-sum present value under the Non-Qualified Pension Plan to which this officer would be entitled is presented in the Pension Benefits Table. |
Equity Acceleration In the event of a change in control of PPG, the Company stock plans and award agreements provide that an executive must be terminated (or have a substantial diminution of job duties) to be entitled to full vesting acceleration of unvested | | | |
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stock options, TSR awards and restricted stock units. The table below reflects the calculation of the aggregate dollar values related to acceleration of vesting of the incentive equity awards held by the executive officers named in the Summary Compensation Table in the event of a termination following a change in control, and the total is reflected in the “Accelerated Vesting of LTI” row for each officer in the table above. The stock option value was calculated by multiplying the number of unvested shares by the difference between the grant price and the closing stock price on December 31, 20222023 ($125.74)149.55). If any stock options were underwater as of December 31, 2022,2023, no value was assigned to such options. The TSR share and restricted stock unit value was calculated by multiplying the target number of unvested shares by the closing stock price on December 31, 2022,2023, except as otherwise noted. | | |
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Change in Control
Accelerated Vesting of Outstanding Equity (2022)(2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TOTAL SHAREHOLDER RETURN | | | | | | | | | | | | TOTAL SHAREHOLDER RETURN | | | | | | | RESTRICTED STOCK UNITS | | SHARES | | | | | | RESTRICTED STOCK UNITS | | SHARES | | | | | | | 2021 - 2023 | | 2022 - 2024 | | | | 2021 - 2023 | | 2022 - 2024 | | | | | | 2022 - 2024 | | 2023 - 2025 | | | | 2022 - 2024 | | 2023 - 2025 | | | | | STOCK | | PERFORMANCE | | PERFORMANCE | | TIME | | PERFORMANCE | | PERFORMANCE | | | | STOCK | | PERFORMANCE | | PERFORMANCE | | TIME | | PERFORMANCE | | PERFORMANCE | | | EXECUTIVE | | OPTIONS ($) | | PERIOD ($)(1) | | PERIOD ($)(1) | | VESTED ($) | | PERIOD ($)(2) | | PERIOD ($)(2) | | TOTAL ($) | | OPTIONS ($) | | PERIOD ($)(1) | | PERIOD ($)(1) | | VESTED ($) | | PERIOD ($)(2) | | PERIOD ($)(2) | | TOTAL ($) | M. H. McGarry | | 8,980,510 | | 3,041,902 | | 2,905,977 | | — | | — | | 1,506,994 | | 16,435,383 | | 13,360,713 | | 3,456,250 | | — | | — | | 3,282,473 | | — | | 20,099,436 | T. M. Knavish | | 405,949 | | 566,333 | | 813,664 | | — | | — | | 421,983 | | 2,207,929 | | 3,084,812 | | 967,738 | | 3,166,422 | | — | | 919,134 | | 5,947,005 | | 14,085,111 | V. J. Morales | | 1,268,388 | | 744,255 | | 871,755 | | — | | — | | 452,161 | | 3,336,559 | | 4,074,435 | | 1,036,830 | | 1,252,930 | | — | | 984,787 | | 2,358,703 | | 9,707,685 | A. M. Foulkes | | 473,281 | | 355,970 | | 348,677 | | — | | — | | 180,940 | | 1,358,868 | | 765,657 | | 414,702 | | 606,276 | | — | | 393,915 | | 1,141,366 | | 3,321,916 | R. Vadlamannati | | 361,282 | | 323,655 | | 290,585 | | — | | — | | 150,762 | | 1,126,284 | | 1,494,335 | | 345,610 | | 404,234 | | — | | 328,262 | | 760,910 | | 3,333,351 | A. Ericson | | | 1,083,159 | | 311,064 | | 363,855 | | — | | 295,361 | | 684,939 | | 2,738,378 |
| (1) | The PBRSUs for the 20212022 - 20232024 performance period reflect an estimated payout of 100.0%. The PBRSUs for the 20222023 - 20242025 performance period reflect an estimated payout of 100.0%. |
| (2) | The TSRs for the 2021 - 2023 performance period reflect an estimated payout of 0.0%. The TSRs for the 2022 - 2024 performance period reflect an estimated payout of 54.6%100.0%. The TSRs for the 2023 - 2025 performance period reflect an estimated payout of 200.0%. |
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PAY RATIO The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires most companies with publicly traded stock in the United States to identify the median total compensation of their worldwide employee population (other than the chief executive officer)Chief Executive Officer) and to compare that amount with the total compensation of their chief executive officer.Chief Executive Officer. Total compensation amounts are required to be calculated using the Securities and Exchange Commission’s compensation disclosure rules applicable to reporting compensation in the Summary Compensation Table of the Proxy Statement. Median employee compensation used to calculate the pay ratio is required to be the total compensation paid to an actual employee of the Company. We may identify our median employee for purposes of providing pay ratio disclosure once every three years to calculate and disclose total compensation for that employee each year as long as there was no material change in the employee population or employee compensation during the last completed fiscal year and we reasonably believe would not result in a significant change to the prior year’s CEO pay ratio disclosure. We identified our median employee using our total employee population as of October 1, 2022 by applying a consistently applied compensation measure across our global employee population. For our consistently applied compensation measure, we used annual base salary as it represents the primary compensation component paid to all of our employees. As a result, annual base salary provides an accurate depiction of total earnings for the purpose of identifying our median employee. We then calculated the median employee’s total annual compensation in accordance with the requirements of the Summary Compensation Table. We did not use any material estimates, assumptions, adjustments or statistical sampling to determine the worldwide median employee. The methodology we used to determine the median employee was unchanged from 2021.2022. Our median employee’s total 20222023 compensation was $35,600. The total 2022 compensation of our Executive Chairman, who$49,519. Mr. Knavish served as our Chief Executive Officer during 2022,in 2023, serving as President and Chief Executive Officer from January 1, 2023 to September 30, 2023 and as Chairman and Chief Executive Officer beginning on October 1, 2023. Mr. Knavish’s 2023 total compensation was $8,867,377,$12,472,955, as reported in the Summary Compensation Table. Accordingly, our 20222023 Chief Executive Officer to Median Employee Pay Ratio was 249:252:1. The annual salary of the median employee in 20222023 was comparable to thetheir annual salary of the median employee in 2021. The lower amount of the median employee’s total compensation for 2022 was the result of a lower bonus payout received by the median employee in 2022 versus 2021. In addition, the median employee in 2022 did not receive any Company contributions under the Employee Savings Plan.2022. Each individual’s total annual compensation can be comprised of different compensation elements and is dependent on where the individual works globally. Please keep in mind that under Securities and Exchange Commission’s rules and guidance, there are numerous ways to determine the compensation of a company’s median employee, including the employee population sampled, the elements of pay and benefits used, any assumptions made and the use of statistical sampling. In addition, no two companies have identical employee populations or compensation programs, and pay, benefits and retirement plans differ by country even within the same company. As such, our pay ratio may not be comparable to the pay ratio reported by other companies. | | | |
| 20232024 Proxy Statement 7173
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PAY VERSUS PERFORMANCE Securities and Exchange Commission rules adopted in 2022 pursuant to the Dodd-Frank Act require most companies with publicly traded stock in the United States to describe the relationship between compensation actually paid (“CAP”) to their named executive officers, as calculated in accordance with the Securities and Exchange Commission's rules, and the Company’s performance represented by total shareholder return (“TSR”), net income and a Company-selected financial performance measure. To determine the executive compensation that is “actually paid” for the principal executive officer (“PEO”) and non-PEO named executive officers (“non-PEO NEOs”) in a given year, companies are required to make certain adjustments to the total executive compensation reported in the summary compensation table (“SCT”) (see page 58)60) for pension and equity awards that are calculated in accordance with U.S. GAAP. | ● | For the pension adjustment, the aggregate change in the pension value as reflected in the summary compensation table is deducted and the service cost and prior service cost for the year is included. |
| ● | For equity awards, the grant date value as reported in the summary compensation table is subtracted and a new value is added, which is calculated as follows: the year-end fair value of awards granted in the current fiscal year plus or minus the annual change in fair value as of the year-end for any unvested awards or as of vesting for awards vested in the current year. |
The Pay Versus Performance table below presents this information for PPG. The significant reductionincrease in the compensation actually paid for 20222023 is due to (a) the Company’s stock price at December 31, 20222023 versus December 31, 20212022 and (b) the Company’s TSR share payout percentage for the three performance periods outstanding at December 31, 20222023 compared to the fair value of these awards when granted. The TSR shares for the 2020-20222021-2023 performance period reflect a payout of 0.0%. The TSR shares for the 2021-2023 performance period reflect an estimated payout of 0.0%55.2%. The TSR shares for the 2022-2024 performance period reflect an estimated payout of 54.6%100.0%. The TSR shares for the 2023-2025 performance period reflect an estimated payout of 200.0%. Pay Versus Performance Table (2020-2022)(2020-2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | COMPANY | | | | | | | | | AVERAGE | | | AVERAGE | | | | | | | | | | | SELECTED | | | | | | | | AVERAGE | | | AVERAGE | | | | | | | | | | | SELECTED | | | | | | | | | SUMMARY | | | COMP. | | VALUE OF INITIAL FIXED $100 | | | | | MEASURE: | | | | | | | | SUMMARY | | | COMP. | | VALUE OF INITIAL FIXED $100 | | | | | MEASURE: | | | | | | | COMP. TABLE | | ACTUALLY PAID | | INVESTMENT BASED ON: | | | | ADJUSTED | | | | | | COMP. TABLE | | ACTUALLY PAID | | INVESTMENT BASED ON: | | | | ADJUSTED | | | SUMMARY | | COMP. | | TOTAL FOR | | TO NON-PEO | | | | PEER GROUP(3) | | | | EARNINGS | | SUMMARY | | COMP. | | TOTAL FOR | | TO NON-PEO | | | | PEER GROUP(3) | | | | EARNINGS | | | COMP. TABLE | | ACTUALLY | | NON-PEO NAMED | | NAMED | | TOTAL | | TOTAL | | NET | | PER | | COMP. TABLE | | ACTUALLY | | NON-PEO NAMED | | NAMED | | TOTAL | | TOTAL | | NET | | PER | | | TOTAL FOR | | PAID TO | | EXECUTIVE | | EXECUTIVE | | SHAREHOLDER | | SHAREHOLDER | | INCOME | | DILUTED | | TOTAL FOR | | PAID TO | | EXECUTIVE | | EXECUTIVE | | SHAREHOLDER | | SHAREHOLDER | | INCOME | | DILUTED | YEAR | | PEO(1) | | PEO(1) | | OFFICERS(2) | | OFFICERS(2) | | RETURN | | RETURN | | (in millions) | | SHARE | | PEO(1) | | PEO(1) | | OFFICERS(2) | | OFFICERS(2) | | RETURN | | RETURN | | (in millions) | | SHARE | 2023 | | | $ | 12,472,955 | | $ | 15,222,098 | | $ | 4,903,304 | | $ | 6,491,421 | | $ | 120 | | $ | 120 | | $ | 1,270 | | $ | 7.50 | 2022 | | $ | 8,867,377 | | $ | 238,659 | | $ | 2,280,483 | | $ | (26,911) | | $ | 99 | | $ | 101 | | $ | 1,028 | | $ | 6.22 | | $ | 8,867,377 | | $ | 238,659 | | $ | 2,280,483 | | $ | (26,911) | | $ | 99 | | $ | 101 | | $ | 1,028 | | $ | 6.22 | 2021 | | $ | 13,199,616 | | $ | 22,568,453 | | $ | 3,035,088 | | $ | 5,267,224 | | $ | 133 | | $ | 135 | | $ | 1,420 | | $ | 6.77 | | $ | 13,199,616 | | $ | 22,568,453 | | $ | 3,035,088 | | $ | 5,267,224 | | $ | 133 | | $ | 135 | | $ | 1,420 | | $ | 6.77 | 2020 | | $ | 15,903,993 | | $ | 16,689,353 | | $ | 3,607,399 | | $ | 3,526,539 | | $ | 110 | | $ | 112 | | $ | 1,056 | | $ | 6.12 | | $ | 15,903,993 | | $ | 16,689,353 | | $ | 3,607,399 | | $ | 3,526,539 | | $ | 110 | | $ | 112 | | $ | 1,056 | | $ | 6.12 |
| (1) | The principal executive officer was Mr. McGarry for each ofyears 2020-2022 and the years shown.principal executive officer for 2023 was Mr. Knavish. |
| (2) | The non-principal executive officer named executive officers were Mr. Morales, Mr. Knavish, Ms. Liebert and Ms. Foulkes for each ofyears 2020-2022. For 2023 the years shown.non-principal executive officer named executive officers were Mr. VadlamannatiMcGarry, Mr. Morales, Ms. Foulkes and Mr. Vadlamannati. Ms. Ericson was included as a non-principal executive officer named executive officer for 2022.2023. |
| (3) | The peer group consists of: 3M Co., Akzo Nobel N.V., Axalta Coatings Systems Ltd., Dow, Inc., Dupont de Nemours, Inc., Eastman Chemical Co., Masco Corp., RPM International Inc., and The Sherwin-Williams Co. See Exhibit 13.1 of our Form 10-K for the year ended December 31, 2022.2023. |
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A reconciliation of PEO SCT total compensation to CAP is provided in the following table. PEO SCT Total Compensation to CAP Reconciliation (2020-2022)(2020-2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PLUS CHANGE | | | | | | | | | | | | | | | | | | | | | PLUS CHANGE | | | | | | | | | | | | | | | | | | | | | | | FROM BOY TO | | PLUS CHANGE | | | | | | | | | | | | | | | | | | | | FROM BOY TO | | PLUS CHANGE | | | | | | | | | | | | | | | | | | PLUS EOY | | EOY IN FAIR | | IN FAIR VALUE | | | | | | | | | | | | | | | | | PLUS EOY | | EOY IN FAIR | | IN FAIR VALUE | | | | | | | | | | | | | | | | | | FAIR VALUE | | VALUE OF | | FROM BOY TO | | | | | | | | | | | | | | | | | FAIR VALUE | | VALUE OF | | FROM BOY TO | | | | | | | | | | | | | | | | | | OF EQUITY | | AWARDS | | VESTING DATE | | | | | | | | | | | | | | | | | OF EQUITY | | AWARDS | | VESTING DATE | | | | | | | | | | | | | | | | | | AWARDS | | GRANTED IN | | OF AWARDS | | | | | | | | | | | | | | | | | AWARDS | | GRANTED IN | | OF AWARDS | | | | | | | | | | | | | | | | | | GRANTED | | ANY PRIOR | | GRANTED IN | | | | | | | | | | | | | | | | | GRANTED | | ANY PRIOR | | GRANTED IN | | | | | | | | | | | PLUS | | | | | DURING YEAR | | YEAR | | ANY PRIOR | | | | | | | | | | PLUS | | | | | DURING YEAR | | YEAR | | ANY PRIOR | | | | | | | | | MINUS SCT | | PENSION | | | | | THAT ARE | | THAT ARE | | YEAR THAT | | | | | | | | MINUS SCT | | PENSION | | | | | THAT ARE | | THAT ARE | | YEAR THAT | | | | | | SCT | | CHANGE IN | | VALUE | | | | OUTSTANDING | | OUTSTANDING | | VESTED | | | | | SCT | | CHANGE IN | | VALUE | | | | OUTSTANDING | | OUTSTANDING | | VESTED | | | | | | TOTAL FOR | | PENSION | | SERVICE | | MINUS SCT | | AND UNVESTED | | AND UNVESTED | | DURING | | PEO | | TOTAL FOR | | PENSION | | SERVICE | | MINUS SCT | | AND UNVESTED | | AND UNVESTED | | DURING | | PEO | YEAR | | PEO | | VALUE | | COST | | EQUITY | | AT EOY | | AT EOY | | THE YEAR | | CAP | | PEO | | VALUE | | COST | | EQUITY | | AT EOY | | AT EOY | | THE YEAR | | CAP | 2023 | | | $ | 12,472,955 | | $ | (312,592) | | $ | — | | $ | (7,499,749) | | $ | 9,111,166 | | $ | 744,589 | | $ | 705,729 | | $ | 15,222,098 | 2022 | | $ | 8,867,377 | | $ | 4,368,862 | | $ | — | | $ | (10,000,026) | | $ | 7,834,096 | | $ | (4,197,554) | | $ | (6,634,096) | | $ | 238,659 | | $ | 8,867,377 | | $ | 4,368,862 | | $ | — | | $ | (10,000,026) | | $ | 7,834,096 | | $ | (4,197,554) | | $ | (6,634,096) | | $ | 238,659 | 2021 | | $ | 13,199,616 | | $ | 218,598 | | $ | — | | $ | (9,400,002) | | $ | 10,917,328 | | $ | 4,275,913 | | $ | 3,357,000 | | $ | 22,568,453 | | $ | 13,199,616 | | $ | 218,598 | | $ | — | | $ | (9,400,002) | | $ | 10,917,328 | | $ | 4,275,913 | | $ | 3,357,000 | | $ | 22,568,453 | 2020 | | $ | 15,903,993 | | $ | (4,289,632) | | $ | 180,279 | | $ | (8,249,709) | | $ | 11,073,569 | | $ | 1,559,781 | | $ | 511,072 | | $ | 16,689,353 | | $ | 15,903,993 | | $ | (4,289,632) | | $ | 180,279 | | $ | (8,249,709) | | $ | 11,073,569 | | $ | 1,559,781 | | $ | 511,072 | | $ | 16,689,353 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | "EOY" = end of Year; "BOY" = Beginning of Year | "EOY" = end of Year; "BOY" = Beginning of Year | | | | | | | | | "EOY" = end of Year; "BOY" = Beginning of Year | | | | | | | | |
| | | 72 2023 Proxy Statement
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A reconciliation of average non-PEO SCT total compensation to CAP is provided in the following table. Average Non-PEO NEOs SCT Total Compensation to CAP Reconciliation (2020-2022)(2020-2023) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PLUS CHANGE | | | | | | | | | | | | | | | | | | | | | | | | | | PLUS CHANGE | | | | | | | | | | | | | | | | | | | | | | | | | | | FROM BOY TO | | PLUS CHANGE | | MINUS FAIR | | | | | | | | | | | | | | | | | | | | FROM BOY TO | | PLUS CHANGE | | MINUS FAIR | | | | | | | | | | | | | | | | | | PLUS EOY | | EOY IN FAIR | | IN FAIR VALUE | | VALUE AT | | | | | | | | | | | | | | | | | PLUS EOY | | EOY IN FAIR | | IN FAIR VALUE | | VALUE AT | | | | | | | | | | | | | | | | | | FAIR VALUE | | VALUE OF | | FROM BOY TO | | BOY OF | | | | | | | | | | | | | | | | | FAIR VALUE | | VALUE OF | | FROM BOY TO | | BOY OF | | | | | | | | | | | | | | | | | | OF EQUITY | | AWARDS | | VESTING DATE | | AWARDS | | | | | | | | | | | | | | | | | OF EQUITY | | AWARDS | | VESTING DATE | | AWARDS | | | | | | | | | | | | | | | | | | AWARDS | | GRANTED IN | | OF AWARDS | | GRANTED | | | | | | | | | | | | | | | | | AWARDS | | GRANTED IN | | OF AWARDS | | GRANTED | | | | | | | | | | | | | | | | | GRANTED | | ANY PRIOR | | GRANTED IN | | IN PRIOR | | | | | | | | | | | | | | | | GRANTED | | ANY PRIOR | | GRANTED IN | | IN PRIOR | | | | | | | | | | | PLUS | | | | | DURING YEAR | | YEAR | | ANY PRIOR | | YEAR THAT | | | | | | | | | | PLUS | | | | | DURING YEAR | | YEAR | | ANY PRIOR | | YEAR THAT | | | | | | SCT | | MINUS SCT | | PENSION | | | | | THAT ARE | | THAT ARE | | YEAR THAT | | WERE | | | | | SCT | | MINUS SCT | | PENSION | | | | | THAT ARE | | THAT ARE | | YEAR THAT | | WERE | | | | | | TOTAL FOR | | CHANGE IN | | VALUE | | | | OUTSTANDING | | OUTSTANDING | | VESTED | | FORFEITED | | NON-PEO | | TOTAL FOR | | CHANGE IN | | VALUE | | | | OUTSTANDING | | OUTSTANDING | | VESTED | | FORFEITED | | NON-PEO | | | NON-PEO | | PENSION | | SERVICE | | MINUS SCT | | AND UNVESTED | | AND UNVESTED | | DURING | | DURING | | NEOs | | NON-PEO | | PENSION | | SERVICE | | MINUS SCT | | AND UNVESTED | | AND UNVESTED | | DURING | | DURING | | NEOs | YEAR | | NEOs | | VALUE | | COST | | EQUITY | | AT EOY | | AT EOY | | THE YEAR | | THE YEAR | | CAP | | NEOs | | VALUE | | COST | | EQUITY | | AT EOY | | AT EOY | | THE YEAR | | THE YEAR | | CAP | 2023 | | | $ | 4,903,304 | | $ | (245,779) | | $ | — | | $ | (2,279,917) | | $ | 2,546,287 | | $ | 753,488 | | $ | 814,038 | | $ | — | | $ | 6,491,421 | 2022 | | $ | 2,280,483 | | $ | 846,793 | | $ | — | | $ | (1,970,003) | | $ | 1,253,448 | | $ | (546,994) | | $ | (815,908) | | $ | (1,074,730) | | $ | (26,911) | | $ | 2,280,483 | | $ | 846,793 | | $ | — | | $ | (1,970,003) | | $ | 1,253,448 | | $ | (546,994) | | $ | (815,908) | | $ | (1,074,730) | | $ | (26,911) | 2021 | | $ | 3,035,088 | | $ | 105,473 | | $ | — | | $ | (1,724,948) | | $ | 2,003,403 | | $ | 1,388,365 | | $ | 459,843 | | $ | — | | $ | 5,267,224 | | $ | 3,035,088 | | $ | 105,473 | | $ | — | | $ | (1,724,948) | | $ | 2,003,403 | | $ | 1,388,365 | | $ | 459,843 | | $ | — | | $ | 5,267,224 | 2020 | | $ | 3,607,399 | | $ | (995,665) | | $ | 117,478 | | $ | (1,399,950) | | $ | 1,879,152 | | $ | 201,719 | | $ | 116,406 | | $ | — | | $ | 3,526,539 | | $ | 3,607,399 | | $ | (995,665) | | $ | 117,478 | | $ | (1,399,950) | | $ | 1,879,152 | | $ | 201,719 | | $ | 116,406 | | $ | — | | $ | 3,526,539 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | "EOY" = end of Year; "BOY" = Beginning of Year | "EOY" = end of Year; "BOY" = Beginning of Year | | | | | | | | | | | | | | | "EOY" = end of Year; "BOY" = Beginning of Year | | | | | | | | | | | | | | |
The three items listed below represent the most important financial performance measures used by PPG to link compensation actually paid to our named executive officers for 20222023 to the Company’s performance: | MOST IMPORTANT PERFORMANCE MEASURES | Adjusted earnings per diluted share | Cash flow return on capital | Total shareholder return |
Please see “Annual Compensation” and “Long-Term Incentive Compensation” on pages 4850 through 5657 for a description of how these metrics are used in our executive compensation program. | | | |
| 2024 Proxy Statement 75 |
As shown in the chart below, the Company’s TSR performance for the immediately preceding three years was aligned with the companies included in the peer group, and when the six-year TSR is compared to peers, the Company has outperformed the peers. 
The peer group consists of: 3M Co., Akzo Nobel N.V., Axalta Coatings Systems Ltd., Dow, Inc., Dupont de Nemours, Inc., Eastman Chemical Co., Masco Corp., RPM International Inc., and The Sherwin-Williams Co. As shown in the chart below, the PEO and other NEOs’ CAP amounts are aligned with the Company’s TSR. This is due primarily to the Company’s use of equity incentives, which are tied directly to stock price in addition to the Company’s financial performance.
As shown in the chart below, the PEO and other NEOs’ CAP amounts are aligned with the Company’s net income. This is due in large part to the significant emphasis the Company places on equity incentives, which are sensitive to changes | | |
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| 2023 Proxy Statement 73
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As shown in the chart below, the PEO’s and the Non-PEO NEOs’ CAP amounts are aligned with the Company’s TSR. This is primarily due to the Company’s use of equity incentives, which are tied directly to stock price in addition to the Company’s financial performance.
As shown in the chart below, the Company’s CAP is aligned with the Company's net income. The Company does not use net income to determine compensation levels or incentive plan payouts.
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in stock price. In addition, the Company does not use net income to determine compensation levels or incentive plan payouts. 
The chart below which compares the PEO’sPEO and the other non-PEO NEOs’ CAP to PPG’s company-selected measure, adjusted earnings per diluted share, which indicates that there is a very strong relationship between adjusted earnings per diluted share and CAP. This is due primarily due to the Company'sCompany’s use of equity incentives, which are tied directly to stock price and earnings growthper share in addition to the Company's financialCompany’s stock price and cash flow performance.  
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| 20232024 Proxy Statement 7577
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PROPOSAL 2: Advisory Vote on Approval 3:Proposal to Amend the Articles of Incorporation to Provide Shareholders with the Right to Call a Special Meeting PPG’s Board of Directors has unanimously approved and is recommending that shareholders approve an amendment to PPG’s Restated Articles of Incorporation, as amended, to provide shareholders holding a combined 25% of the CompensationCompany’s outstanding voting power to call a special meeting of the Named Executive Officersshareholders. As required bypart of our continuous evaluation of corporate governance practices, the rulesBoard regularly reviews our governing documents and considers possible changes. Our shareholders do not have the right to request that the Company call a special meeting of shareholders. In evaluating the advisability of a special meeting request right, including a shareholder proposal received this year, which the Securities and Exchange Commission we are including inallowed PPG to exclude from this Proxy Statement due to the inclusion of this Proposal 3, the Nominating and Governance Committee and Board of Directors considered certain principal positions for and against such a non-binding, advisoryright, shareholder vote on our executive compensation as describedfeedback, and corporate governance trends and best practices. Currently, over half of the companies listed in this Proxy Statement (commonly referred to as “say-on-pay”). Based upon the vote of our shareholders at the 2011 and 2017 Annual Meetings and the Board’s recommendation, PPG has provided this advisory vote on an annual basis. We encourageS&P 500 allow their shareholders to review the section of this Proxy Statement relating to executive compensation on pages 39 through 70.call a special meeting. The Board believes that the ability of shareholders to call a special meeting would enhance the ability of our shareholders to engage with the Company on significant issues facing the Company.
The Board recognizes that many companies allow a group of shareholders holding less than 25% of their common stock or voting power to call a special meeting. PPG is incorporated in Pennsylvania. Section 2521 of the Pennsylvania Business Corporation Law provides that Pennsylvania-incorporated, public companies like PPG only may allow shareholders holding a combined 25% or more of the company’s outstanding voting power to call a special meeting of shareholders (other than in the case of certain business acquisitions). Therefore, this proposal to allow 25% of the holders of PPG’s executive compensation program alignsvoting power to call a special meeting includes the lowest level of share ownership allowed under Pennsylvania law. While the right to call special meetings is viewed by some of our shareholders as a helpful governance practice, the Board believes that special meetings of shareholders should be extraordinary events held only when strategic concerns or other similar considerations require that the matters to be addressed not be delayed until the Company’s next annual meeting. Special meetings impose significant costs, both administrative and operational, and our Board, management, and employees would need to devote significant time and attention to preparing for a special meeting of our shareholders, which takes their time and attention away from the oversight and operation of our business and overall goal of creating long-term shareholder value. As such, the Board believes that special meetings should only be convened in special or extraordinary circumstances, compelled by fiduciary, strategic, material or similar considerations that should be addressed immediately, not delayed until the next annual meeting, and are of interest to a broad base of shareholders. After reviewing this proposal and the considerations discussed above, the Nominating and Governance Committee recommended to the Board that the Company provide shareholders with the right to call a special meeting. Based on this recommendation and in the belief that the proposal is in the best interests of our executives with thosethe Company, the Board adopted a resolution approving an amendment to the Company’s Articles of our shareholders. Executive compensation is based on our pay-for-performance philosophy, which emphasizes executive performance measuresIncorporation to add the following Article 5.5 to the Articles of Incorporation: FIFTH, 5.5. A special meeting of shareholders may be called by shareholders, but only if called by shareholders entitled to cast 25% or more of the votes that correlate closelyall shareholders would be entitled to cast at the meeting. Vote Required The affirmative vote of more than one-half of the shares present, either in person or by proxy, and entitled to vote and voting (excluding abstentions) at the Annual Meeting will be required for approval of this proposal. If approved, the amendment of the Articles of Incorporation will become effective upon its filing with the achievementSecretary of both shorter-term performance objectives and longer-term shareholder value. Tothe Commonwealth of Pennsylvania, which we intend to do following the Annual Meeting. If this end, a substantial portionproposal is not approved, the Articles of our executives’ annual and long-term compensation is performance-based, with the payment being contingent on the achievement of performance goals. We believe our program strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our executives to dedicate themselves fully to value creation for our shareholders. This balance is evidenced by the following:Incorporation will remain unchanged. ● | THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE In 2022, the Company delivered record net sales despite the global COVID-19 pandemic and ongoing raw material, labor and transportation availability challenges, and geopolitical challenges which significantly impacted the Company’s 2022 performance. Record total net sales for 2022 were approximately $17.7 billion, up 5% compared to 2021. The Company’s 2022 full-year reported net income from continuing operations was $1.0 billion, or $4.33 per diluted share versus $1.4 billion, or $5.93 per diluted share, in 2021. Full-year 2022 adjusted earnings per diluted share from continuing operations decreased 11% year-over-year to $6.05 compared with $6.77 in 2021. Adjusted net income from continuing operations for 2022 was $1.4 billion, versus $1.6 billion in 2021.FOR THE AMENDMENT OF PPG'S ARTICLES OF INCORPORATION TO PROVIDE FOR THE RIGHT OF SHAREHOLDERS TO CALL A SPECIAL MEETING. |
● | In 2022, the Company generated approximately $1.0 billion of reported cash flow from operations and $1.1 billion of adjusted cash flow from operations, which is lower than 2021 primarily due to a larger increase in working capital in 2022 compared to the prior year, which reflects the impact of higher raw material costs on inventories and higher selling prices on trade receivables. We made solid progress in the second half of 2022 lowering our inventories on a sequential basis. |
● | As the year progressed, year-over-year segment margins improved. |
● | Our business portfolio continued to demonstrate its resiliency with record full year net sales, up 5% compared to the prior year. |
● | Selling prices increased 11% compared to prior year. |
● | Organic sales increased 8% driven by pricing realization of 11%, partially offset by 3% lower sales volumes. |
● | Operating working capital as a percentage of sales as of December 2022 was higher than December 2021 by 300 basis points. Selling, general and administrative costs as a percentage of sales decreased by nearly 1%. |
● | In September, the Company raised the per-share dividend by 5%—paying approximately $570 million in dividends in 2022. The Company also repurchased $190 million of stock in 2022. |
● | We continued the integration of our recent acquisitions, including timely realization of acquisition-related synergies. These businesses are all executing well and will provide the Company with increased organic growth prospects in the next few years. |
● | Cost savings from restructuring actions and acquisition-related synergies totaled about $110 million. |
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PROPOSAL 4:Proposal to Amend the Articles of Incorporation to Provide for the Exculpation of Officers of the Company PPG’s Board of Directors has unanimously approved and is recommending that shareholders approve an amendment to PPG’s Restated Articles of Incorporation, as amended, to provide for the exculpation of the officers of the Company. Article Eighth of our Restated Articles of Incorporation, as amended, currently exculpates the Company’s directors from monetary liability in the event they are found to have breached their duty of care to the Company consistent with the exculpatory provisions for directors set forth in the Pennsylvania Business Corporation Law. This protection has long been afforded to directors in Pennsylvania. The Commonwealth of Pennsylvania, which is the Company’s state of incorporation, recently added Section 1735 to the Pennsylvania Business Corporation Law to authorize Pennsylvania corporations also to provide exculpation for their officers in addition to their directors. Specifically, Section 1735 extends the opportunity for Pennsylvania corporations to exculpate their officers for personal, monetary liability for breaching their duty of care in certain circumstances. Section 1735 does not allow exculpation from liability for acts or omissions not taken in good faith, acts that involve intentional misconduct or a violation of law, any transaction in which the officer derived an improper personal benefit, or the officer’s failure to pay taxes. The Board strongly believes that the company’s officers should be held to the highest standards when carrying out their duties to the Company and our shareholders. Nevertheless, the potential for officers to have personal liability for decisions made or actions taken on behalf of the Company, including for unintentional mistakes, could adversely affect the ability of our officers to make decisions that are most appropriate for the Company. Having an officer exculpation provision could also decrease the likelihood of litigation against the Company and its officers or could decrease the costs of defending against such litigation. In addition, the Board believes that it is necessary to provide protection to officers to the fullest extent permitted by law to attract and retain top talent who may be enticed to work for another company that provides for exculpation of its officers. After reviewing this proposal and the reasons discussed above, the Board adopted a resolution approving an amendment to the Company’s Articles of Incorporation to add the following Article Ninth to the Articles of Incorporation: NINTH. To the fullest extent that the laws of the Commonwealth of Pennsylvania, as in effect on January 4, 2023, or as thereafter amended, permit the elimination or limitation of the liability of officers, no officer of the corporation shall be personally liable for monetary damages as such for any action taken, or any failure to take any action, as an officer. This Article Ninth shall not apply to any actions filed prior to [the effective date of amendment], nor to any breach of performance of duty or any failure of performance of duty by any officer occurring prior to [the effective date of amendment]. The provisions of this Article Ninth shall be deemed to be a contract with each officer of the corporation who serves as such at any time while such provisions are in effect, and each such officer shall be deemed to be serving as such in reliance on such provisions. Any amendment to or repeal of this Article Ninth, or adoption of any other Article or Bylaw of the corporation which has the effect of increasing officer liability shall operate prospectively only and shall not have effect with respect to any action taken, or any failure to act, by an officer prior thereto. Vote Required The affirmative vote of more than one-half of the shares present, either in person or by proxy, and entitled to vote and voting (excluding abstentions) at the Annual Meeting will be required for approval of this proposal. If approved, the amendment of the Articles of Incorporation will become effective upon its filing with the Secretary of the Commonwealth of Pennsylvania, which we intend to do following the Annual Meeting. If this proposal is not approved, the Articles of Incorporation will remain unchanged. | THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE AMENDMENT OF PPG'S ARTICLES OF INCORPORATION TO PROVIDE FOR THE EXCULPATION OF OFFICERS OF THE COMPANY. |
The following charts contain adjusted earnings per diluted share from continuing operations, net sales and adjusted net income from continuing operations as used for determining the compensation of our executive officers for each of the last five fiscal years:
| | | Adjusted Earnings Per Diluted Share
from Continuing Operations
| Net Sales
(In Millions USD)
| Adjusted Net Income from Continuing
Operations (In Millions USD)
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*2019 Adjusted Earnings Per Diluted Share includes $0.16 for the year-over-year impact of foreign currency translation. **Beginning in 2021, the Company reports adjusted net income and adjusted earnings per diluted share excluding amortization expense relating to intangible assets from completed acquisitions. Adjusted earnings per diluted share for 2020 has been recast to exclude acquisition-related amortization expense.***Beginning with the calculation of the 2022 annual incentive award, adjusted net income from continuing operating as used for determining compensation excludes one half of the full year earnings impact of foreign currency translation versus the Company’s 2022 plan. As such, 2022 adjusted earnings per diluted share includes a benefit of $0.17 representing one half of the effect of foreign currency translation versus plan.
Adjusted earnings per diluted share from continuing operations and adjusted net income from continuing operations are not recognized financial measures determined in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and should not be considered a substitute for earnings per diluted share or net income or other financial measures as computed in accordance with U.S. GAAP. PPG’s management considers this information useful in providing insight into the Company’s ongoing performance because it excludes the impact of items that cannot reasonably be expected to recur on a quarterly basis or that are not attributable to our primary operations. A Regulation G reconciliation of adjusted earnings per diluted share from continuing operations and adjusted net income from continuing operations to reported earnings per diluted share from continuing operations and net income from continuing operations is included in Annex A to this Proxy Statement.
● | We had a solid performance in 2022 despite a weakening demand environment, as geopolitical issues in Europe, COVID-19-related impacts in China, a strong dollar and continued input and other cost inflation weighed on our business results. We achieved our 2022 target for price increases, but we did not achieve our adjusted earnings per diluted share from continuing operations, adjusted cash flow from operating activities and sales volume growth targets. As a result, annual incentive awards were paid to executive officers ranged from 63% to 89% of target. Our total shareholder return over the past three years when measured against the S&P 500 was in the 28th percentile resulting in the payment of long-term TSR share awards at 0.0% of target. |
● | Between 71% and 90% of the named executive officers’ target total direct compensation opportunity for 2022 was in the form of performance-based variable compensation and long-term incentives motivating them to deliver strong business performance and create shareholder value. |
● | Base salary and annual incentive targets for our executive officers are established annually to maintain parity with the competitive market for executives in comparable positions. Target total annual compensation for each position is set at or near the market median. |
● | PPG’s compensation programs are reviewed annually to identify any inherent material risks to PPG created by these programs. Based on the results of the 2022 review, we concluded that the design of our compensation programs does not encourage our employees to take unnecessary or excessive risks that could harm the long-term value of PPG. |
● | At the 2022 Annual Meeting, we held a shareholder advisory vote on the compensation of our named executive officers, commonly referred to as a say-on-pay vote. Our shareholders overwhelmingly approved the compensation of our named executive officers, with approximately 95% of shareholder votes cast in favor of our 2022 say-on-pay resolution. Following its review of this vote, the Human Capital Management and Compensation Committee recommended to the full Board that we retain our general approach to executive compensation, with an emphasis on short-term and long-term incentive compensation that rewards our executive officers when they deliver value for our shareholders. Consistent with this philosophy: |
| ● | Our performance metrics are focused on increasing shareholder value and are tied to measures impacting both shorter-term and longer-term performance. Shorter-term performance metrics include adjusted earnings per diluted share from continuing operations, cash flow from operating activities, earnings before interest and taxes, working |
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| | capital reduction, price increase and sales volume growth. Longer-term performance metrics include total shareholder return, adjusted earnings per diluted share growth, cash flow return on capital and stock price appreciation. |
| ● | Payment of long-term incentive awards is based solely on Company performance. We have three-year award and payout cycles for both performance-based restricted stock units, or PBRSUs, and total shareholder return shares, or TSR shares. We also have three-year vesting for stock options. |
● | We provide very limited perquisites to our executive officers. |
● | Our officers are subject to stock ownership requirements. Our Executive Chairman and our President and Chief Executive Officer must own shares of PPG common stock with a value of six times their base salary, and the other executive officers must own shares of PPG common stock with a value of three times their base salary. Officers are expected to meet these ownership requirements within five years of election. Those officers who have not yet met this requirement are paid 20% of their annual incentive in PPG stock, which is restricted from sale for a period of two to five years. In addition, for officers who have been subject to the policy for more than five years at their current requirement level and have not met the ownership requirement, 100% of the vested shares delivered from the PBRSU award and TSR share award must be held by the officer for a minimum of one year and until the requirement is met. All executive officers named in the Summary Compensation Table have met their ownership requirement. |
● | Our officers may not engage in transactions that are contrary to the interests of shareholders, such as “short sales,” “short sales against the box,” “put” and “call” options and hedging transactions designed to minimize an executive’s risk inherent in owning PPG stock. In addition, officers may not hold PPG stock in a margin account and may not pledge PPG stock as collateral for a loan. |
● | Executive officers are subject to a “clawback” policy that is designed to recoup incentive compensation when a financial restatement occurs and certain other conditions exist. |
● | We do not provide tax gross-ups on perquisites to our named executive officers. |
Accordingly, youPROPOSAL 5:Ratification of Independent Registered Public Accounting Firm
The Audit Committee of the Board of Directors has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2024. Representatives of PricewaterhouseCoopers LLP are askedexpected to vote onbe present at the following resolution:Annual Meeting and, while they do not plan to make a statement (although they will have the opportunity if they desire to do so), they will be available to respond to appropriate questions from shareholders. RESOLVED: The Board strongly endorses the Company’s executive compensation program and recommendsIt is intended that the shareholders voteshares represented by each proxy will be voted, in favorthe discretion of the following resolution: thatpersons appointed as proxies, FOR the shareholders approveratification. If the compensationselection of PricewaterhouseCoopers LLP is not ratified, the Audit Committee will reconsider the appointment of the Company’s named executive officers as describedindependent registered public accounting firm. Even if the selection of PricewaterhouseCoopers LLP is ratified by our shareholders, the Audit Committee in this Proxy Statement on pages 39 through 70its discretion could decide to terminate the engagement of PricewaterhouseCoopers LLP and disclosed in accordance with rules ofengage another firm if the Securities and Exchange Commission, including the Compensation Discussion and Analysis and the tabular and narrative disclosure contained therein.
Because the vote is advisory, it will notcommittee determines such action to be binding upon the Boardnecessary or the Human Capital Management and Compensation Committee, and neither the Board nor the Human Capital Management and Compensation Committee will be required to take any action as a result of the outcome of the vote on this proposal. However, the Human Capital Management and Compensation Committee will carefully consider the outcome of the vote when considering future executive compensation programs.desirable.
Vote Required AdoptionThe ratification of the resolution approving the compensation of the Company’s named executive officersPricewaterhouseCoopers LLP as our independent registered public accounting firm for 2024 will require the affirmative vote of more than one-half of the shares present, either in person or by proxy, and entitled to vote and voting (excluding abstentions) at the Annual Meeting.
| THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FORTHE APPROVAL
RATIFICATION OF THE
COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
PRICEWATERHOUSECOOPERS LLP AS DESCRIBED IN THIS PROXY STATEMENT. |
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PROPOSAL 3: Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation
The Dodd-Frank Act requires that we include in this Proxy Statement the advisory vote on executive compensation (commonly referred to as "say-on-pay") appearing in Proposal 2. In addition, the Dodd-Frank Act requires that companies provide their shareholders with a separate non-binding shareholder vote every six years to advise the Board on whether the say-on-pay vote should occur every one, two or three years. You have the option to vote for any one of the three options or to abstain on the matter.
In 2017, the Company last asked its shareholders to recommend the frequency of future say-on-pay votes. At that time, the Board recommended and shareholders agreed that PPG should hold a say-on-pay vote annually. In keeping with that recommendation, the Company has held a say-on-pay vote annually. Since 2023 marks the sixth year since the last shareholder recommendation, the Company is required to ask its shareholders again to recommend the frequency of future say-on-pay votes. As it did in 2011 and 2017, the Board has determined that an advisory vote on executive compensation every year is the best approach for the Company based on a number of considerations. An annual advisory vote on the compensation of our named executive officers allows us to obtain information on shareholders' views of the compensation of our named executive officers on a more consistent basis. In addition, an annual advisory vote on the compensation of our named executive officers aligns more closely with our objective to engage in regular dialogue with our shareholders on corporate governance matters, including our executive compensation philosophy, policies and programs. We understand that our shareholders may have different views as to what is the best approach for PPG, and we look forward to hearing from our shareholders on this proposal.
The proxy card provides shareholders with the opportunity to choose one of four options (holding the vote every one, two or three years, or abstaining) and, therefore, shareholders will not be voting to approve or disapprove the Board's recommendation but to convey their recommendation to the Board as to how frequently the Company should hold future advisory votes on executive compensation.
Although this advisory vote regarding the frequency of say-on-pay votes is non-binding on the Board, the Board and the Human Capital Management and Compensation Committee will review the voting results and take them into consideration when making a determination concerning the frequency of future advisory votes on executive compensation.
Vote Required
The frequency of the advisory vote on executive compensation (every one, two or three years) receiving a plurality of the votes cast, either in person or by proxy, and entitled to vote and voting (excluding abstentions) at the Annual Meeting will be considered the frequency recommended by the Company's shareholders.
| THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE TO CONDUCT AN ADVISORY VOTE ON EXECUTIVE COMPENSATION EVERY YEAR.OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2024.
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Service Fees Paid to the Independent Registered Public Accounting Firm
In 2021 and 2022, we retained PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm. In 2021 and 2022, PricewaterhouseCoopers LLP provided services in the following categories and amounts:
| | | | | | | | | MILLIONS OF DOLLARS | | | 2022 | | 2021 | Audit fees(1) | | $ | 10.0 | | $ | 10.1 | Audit-related fees(2) | | $ | 0.2 | | $ | 0.4 | Tax fees(3) | | $ | 1.1 | | $ | 1.2 | All other fees(4) | | $ | 0.1 | | $ | 0 | Total All Fees | | $ | 11.4 | | $ | 11.8 |
(1) | Fees related to the audit of the consolidated financial statements and internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, comfort letters, statutory and regulatory audits, consents, quarterly reviews and consultations concerning financial accounting and reporting standards arising during the audits. |
(2) | Fees related to non-recurrent projects, including certain agreed-upon procedures, and in 2021 reimbursement of legal fees incurred by PricewaterhouseCoopers LLP. |
(3) | Fees related to tax compliance, planning and advice. |
(4) | Fees related to seminars and the use of accounting research and reporting tools. |
The services performed by PricewaterhouseCoopers LLP in 2022 were pre-approved in accordance with the Audit Committee pre-approval policy and procedures adopted at its July 19, 2017 meeting. Additional services were approved during the year as needed, in accordance with this policy. In so doing, the committee determined that the provision of these services is compatible with maintaining the principal accountant’s independence. In 2022, no services were provided by PricewaterhouseCoopers LLP that were approved by the committee after such services were performed.
Audit Committee Pre-approval Policy The pre-approval policy describes the permitted audit, audit-related, tax and other services that PricewaterhouseCoopers LLP may perform and lists a range of fees for these services (referred to as the Service List). The services listed in the pre-approval policy are pre-approved by the Audit Committee. If a type of service to be provided by PricewaterhouseCoopers LLP is not included in the Service List, the committee must specifically pre-approve it. Normally, pre-approval is provided at regularly scheduled meetings. However, the authority to pre-approve engagements has been delegated to the committee chair to accommodate time sensitive service proposals. Any pre-approval decisions made by the chair must be communicated to the full committee at the next scheduled meeting. Service Fees Paid to the Independent Registered Public Accounting Firm
In 2022 and 2023, we retained PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm. In 2022 and 2023, PricewaterhouseCoopers LLP provided services in the following categories and amounts: | | | | | | | | | MILLIONS OF DOLLARS | | | 2023 | | 2022 | Audit fees(1) | | $ | 10.5 | | $ | 10.0 | Audit-related fees(2) | | $ | 0.1 | | $ | 0.2 | Tax fees(3) | | $ | 1.7 | | $ | 1.1 | All other fees(4) | | $ | 0.2 | | $ | 0.1 | Total All Fees | | $ | 12.5 | | $ | 11.4 |
| (1) | Fees related to the audit of the consolidated financial statements and internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, comfort letters, statutory and regulatory audits, consents, quarterly reviews and consultations concerning financial accounting and reporting standards arising during the audits. |
| (2) | Fees related to non-recurrent projects, including certain agreed-upon procedures. |
| (3) | Fees related to tax compliance, planning and advice. |
| (4) | Fees related to seminars and the use of accounting research and reporting tools. |
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The services performed by PricewaterhouseCoopers LLP in 2023 were pre-approved in accordance with the Audit Committee pre-approval policy and procedures adopted at its July 19, 2017 meeting. Additional services were approved during the year as needed, in accordance with this policy. In so doing, the committee determined that the provision of these services is compatible with maintaining the principal accountant’s independence. In 2023, no services were provided by PricewaterhouseCoopers LLP that were approved by the committee after such services were performed. PROPOSALAUDIT COMMITTEE REPORT TO SHAREHOLDERS 4:Ratification of Independent Registered Public Accounting Firm
The primary role of the Audit Committee is to oversee and review on behalf of the Board of Directors has appointedPPG’s processes to provide for the reliability and integrity of the Company’s financial reporting, including the Company’s disclosure practices, risk management processes and internal controls. The Audit Committee operates under a written charter adopted by the Board of Directors. The Audit Committee is responsible for the appointment of the independent registered public accounting firm and PPG’s lead internal auditor, the Director of Corporate Audit Services. In addition, the Audit Committee led the appointment and retention of PricewaterhouseCoopers LLP as ourPPG’s independent registered public accounting firm for 2023. Representatives of PricewaterhouseCoopers LLP are expected to be present atFor the Annual Meeting and, while they do not plan to make a statement (although they will havework performed on the opportunity if they desire to do so), they will be available to respond to appropriate questions from shareholders. It is intended that the shares represented by each proxy will be voted, in the discretion of the persons appointed as proxies, FOR the ratification. If the selection of PricewaterhouseCoopers LLP is not ratified,2023 audit, the Audit Committee will reconsider the appointment ofdiscussed and evaluated PricewaterhouseCoopers’ performance, which included an evaluation by the Company’s independent registered public accounting firm. Even if the selectionmanagement of PricewaterhouseCoopers LLP is ratified by our shareholders, thePricewaterhouseCoopers’ performance. The Audit Committee in its discretion could decide to terminateis responsible for the engagementcompensation of PricewaterhouseCoopers LLP and engage another firm if the committee determines such action to be necessary or desirable.
Vote Required
The ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm and has reviewed and approved in advance all services performed by PricewaterhouseCoopers.
The Audit Committee discussed with, and received regular status reports from, the Director of Corporate Audit Services and PricewaterhouseCoopers on the overall scope and plans for their audits, their plans for evaluating the effectiveness of PPG’s internal control over financial reporting and the coordination of efforts between them. The Audit Committee reviewed and discussed the key risk factors used in developing PPG’s internal audit and PricewaterhouseCoopers’ audit plans. The Audit Committee also reviewed with the Company’s management PPG’s risk management practices and an assessment of significant risks. The Audit Committee met separately with the Vice President and Controller, the Director, Corporate Audit Services and PricewaterhouseCoopers, with and without management present, to discuss the results of their examinations, their audits of PPG’s financial statements and internal control over financial reporting and the overall quality of PPG’s financial reporting. The Audit Committee also met separately with the Company’s Senior Vice President and Chief Financial Officer and with the Company’s Senior Vice President and General Counsel. The Audit Committee annually reviews its performance and receives feedback on its performance from the Company’s management and PricewaterhouseCoopers, when appropriate. The Company’s management is responsible for the preparation and accuracy of PPG’s financial statements. The Company is also responsible for establishing and maintaining adequate internal control over financial reporting. In 2023, will requirePPG’s independent registered public accounting firm, PricewaterhouseCoopers, was responsible for auditing the affirmative voteconsolidated financial statements and expressing an opinion as to their conformity with generally accepted accounting principles, as well as expressing an opinion on the effectiveness of more than one-halfPPG’s internal control over financial reporting. In carrying out its responsibilities, the Audit Committee discussed and reviewed with the Company’s management the process to assemble the financial statements, including the Company’s internal controls and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The Audit Committee reviewed and discussed the audited consolidated financial statements as of and for the year ended December 31, 2023 and management’s report on internal control over financial reporting with management and with PricewaterhouseCoopers. The Audit Committee also discussed with PricewaterhouseCoopers the matters required by the applicable requirements of the shares present, either in person orPublic Company Accounting Oversight Board and the Securities and Exchange Commission. The Audit Committee has received the written independence disclosures and letter from PricewaterhouseCoopers required by proxy,applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and entitledhas discussed with PricewaterhouseCoopers its independence. In addition, the Audit Committee considered whether PricewaterhouseCoopers’ provision of non-audit services to vote and voting (excluding abstentions) at the Annual Meeting. | THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023.
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PPG is compatible with maintaining its independence.
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PROPOSAL 5:Shareholder Proposal for an IndependentBased upon these reviews and discussions, the Audit Committee recommended to the Board Chair
The AFL-CIO Equity Reserve Funds,that the owner of 66,248 shares of PPG stock, has advised us that it intends to present the shareholder proposal below for action ataudited financial statements be included in the Annual Meeting. The shareholder proposal andReport on Form 10-K for the supporting statement are presented exactly as received from the proponent in accordanceyear ended December 31, 2023 for filing with the rules of the Securities and Exchange Commission, and we disclaim any responsibility for their content.Commission.
Shareholder ProposalThe Audit Committee:
RESOLVED: Shareholders of PPG Industries, Inc. (the “Company”) urge the Board of Directors (the “Board”) to adopt a policy to require that the Chair of the Board (the “Chair”) shall be an independent director who has not previously served as an executive officer of the Company.Kathlen A. Ligocki
This policy shall apply prospectively so as not to violate any contractual obligations, with amendmentsMichael T. Nally
Guillermo Novo Christopher N. Roberts III Catherine R. Smith (Chair) Notwithstanding anything to the Company's governing documentscontrary set forth in any of our previous filings under the Securities Act of 1933, as needed. The policy should also specifyamended, or the process for selecting a new independent Chair if the current Chair ceases to be independent between annual meetingsSecurities Exchange Act of shareholders. Compliance with the policy may be excused if no independent director is available and willing to be Chair. SUPPORTING STATEMENT
We believe1934, as amended, that an independent Chair will enhance the independent leadership of the Board. In our opinion, the Board’s oversight of management can be diminished when the Board Chair is not an independent director. We favor having an independent Board Chair to provide a more robust oversight of riskincorporate future filings, including of environmental, social, and governance issues. Independent board chain have become more common in recent years. In 2021, 37 percent of S&P 500 boards were chaired by an independent director, compared to 21 percent a decade ago.1
Our Company has announced that Michael McGarry intends to retire as Executive Chairman of the Company on October 1, 2023. Prior to Tim Knavish’s appointment as Company CEO, Mr. McGarry had served as Chair and CEO since 2016. In our view, this leadership transition provides the opportunity for the Board to appoint an independent director as Chair. We note that Mr. McGarry joined the Company in 1981 and Mr. Knavish joined the Company in 1987. While this long service with the Company is commendable, we believe that having an independent director serve as Chair will bring a valuable outside perspective to Board deliberations.
According to Institutional Shareholder Services, “boards with independent leadership (either via an independent Chair or a Lead Director) are more likely to be more diverse, have more balance tenure, are more responsive to shareholders, while their CEO pay levels are less likely to be excessive relative to peers.”2 According to Glass Lewis, “shareholders are better served when the board is led by an independent chairman who we believe is better able to oversee the executives of the Company and set a pro-shareholder agenda without management conflicts that exist when the CEO or other executive also serves as a chairman.”3
For these reasons, we urge shareholders to vote FOR this resolution.
Board of Directors’Proxy Statement, in Oppositionwhole or in part, the foregoing Audit Committee Report to the Shareholder ProposalShareholders shall not be incorporated by reference into any such filings.
PPG’s Board believes that the interests of its shareholders are best served when the Board has the flexibility to determine PPG’s leadership structure.
Under the Company's Corporate Governance Guidelines, the Board has the authority to determine whether the positions of Chair of the Board and Chief Executive Officer should be held by the same or different persons. The shareholder proposal seeks to mandate one rigid leadership structure for all circumstances and would therefore prevent our directors from determining the most appropriate leadership structure for PPG’s Board at any given time. The Board believes that the Company and its shareholders are best served when the Board holds the ability to determine its own leadership structure. At the Company’s 2021 Annual Meeting, a similar shareholder proposal requiring the appointment of an independent Chair was not approved by the Company’s shareholders.
The Board has determined that the appropriate structure for the Board at this time is for Mr. McGarry, our former Chief Executive Officer, to serve as Executive Chairman of the Board, while also providing for the counterbalance of a strong
1Spencer Stuart, 2021 U.S. Spencer Stuart Board Index, 2021, https://www.spencerstuart.com//media/2021/october/ssbi2021/us-spencer-stuart-board-index-2021.pdf
2Institutional Shareholder Services, Independent Board Leadership Matters: Evidence from Governance Practices, November 9, 2018, https://www.issgovernance.com/library/indcpcndent-board-leadership-matters/
3Glass Lewis, In-Depth: Independent Board Chairman, March 2016, https://www.g]asslewis.com/wpcontent/uploads/2016/03/2016-In-Depth-Report-INDEPENDENT-BOARD-CHAIRMAN.pdf.
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independent Lead Director, fully independent Board committees, and other good governance practices as described below and elsewhere in this Proxy Statement.
The Board believes that Mr. McGarry is the best person to serve as Chairman because he is the director most familiar with our business and industry and the director most capable of identifying strategic priorities, communicating these to the Board and executing our business strategy. The Board believes Mr. McGarry’s service as Executive Chairman creates a highly effective bridge between the Board and management and provides the leadership to execute our business strategy and create shareholder value. In addition, having Mr. McGarry continue to serve as Executive Chairman demonstrates to our employees, suppliers, customers, shareholders and other stakeholders that PPG has undertaken a thoughtful and measured leadership transition. Mr. McGarry’s Board leadership will allow for the continued, orderly transition of the Chief Executive Officer role to Mr. Knavish and will allow Mr. McGarry to continue to mentor Mr. Knavish as he begins his tenure as PPG’s Chief Executive Officer. Having Mr. McGarry serve as Executive Chairman also provides the Board time to consider the best Board leadership approach for PPG after Mr. McGarry retires based on the Company’s current circumstances. This flexibility would not be possible in the future if the shareholder proposal is approved.
At least annually, the Board reexamines our corporate governance policies and Board leadership structure to ensure that it provides the optimal structure for PPG given the circumstances at the time. While the Board has believed that the combined role of the Chair and Chief Executive Officer strikes an appropriate balance that does not constrain independent oversight of the Company, the Board recognizes that in the future there may be circumstances under which an independent Board Chair would be appropriate.
PPG’s Board has implemented robust governance structures and practices that provide for accountability, strong independent leadership, and effective independent oversight of the Company.
● | The Board has appointed an independent Lead Director with broad responsibilities that are clearly defined in our Corporate Governance Guidelines, including: |
| ● | serving as Chair of the meetings of the independent directors and all meetings of the Board at which the Executive Chair is not present; |
| ● | authority to call meetings of the independent directors; |
| ● | facilitating communications and serving as a liaison between the Executive Chairman, the Chief Executive Officer and the independent directors; |
| ● | communicating to the Executive Chairman and the Chief Executive Officer any suggestions, views or concerns expressed by the independent Directors and being available to consult with the Executive Chairman and the Chief Executive Officer about the concerns of the Board; |
| ● | approving Board meeting agendas and other types of information sent to the Board and facilitating efficient and effective Board functioning; |
| ● | approving meeting schedules to assure that there is sufficient time for discussion of all agenda items; |
| ● | being available for consultation and direct communication with major shareholders as appropriate; |
| ● | participating in the identification and evaluation of director candidates and facilitating director development; |
| ● | establishing a close relationship and trust with the Chief Executive Officer and acting as a resource for and advisor to the Chief Executive Officer; |
| ● | unless otherwise directed by the Board, serving as the independent directors’ representative in extraordinary matters such as significant corporate transactions and crisis situations; |
| ● | recommending to the Board the formation and membership of ad-hoc committees of the Board to oversee extraordinary matters such as significant corporate transactions and crisis situations; and |
| ● | authorizing the retention of outside advisors and consultants who report directly to the Board on Board-wide issues. |
Through these responsibilities, the Lead Director provides independent oversight of management and meaningful coordination between our Executive Chairman and our independent directors.
● | With the exception of Mr. McGarry and Mr. Knavish, the Board is comprised entirely of independent directors, as determined under the rules of the New York Stock Exchange and the categorical independence standards adopted by the Board in PPG’s Corporate Governance Guidelines. Our independent directors collectively bring to the Board vast leadership experience, industry expertise, and other critical skills, and they have individually demonstrated the willingness to think and act independently on behalf of our shareholders. The Board continually reviews its composition with a focus on refreshing necessary skill sets to oversee management’s execution of the Company’s strategy, and we have added nine new independent directors since the end of 2014. |
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● | Each of the Audit Committee, Nominating and Governance Committee, Human Capital Management and Compensation Committee and Sustainability and Innovation Committee is comprised solely of independent directors. This means only the independent directors oversee critical matters such as the quality and integrity of our financial statements; our compliance with legal and regulatory requirements; corporate governance; the performance and compensation of our executive officers, including our Executive Chairman and our Chief Executive Officer; the nomination of directors; the evaluation of the Board and its committees; and our sustainability initiatives. |
● | In 2022, we amended our Articles of Incorporation and Bylaws to provide for the annual election of our directors and to replace the supermajority voting requirements in our governing documents with a simple majority vote. |
● | As required by our Corporate Governance Guidelines, our independent directors meet separately, without management present, at each meeting of the Board. In addition, our Board committees meet in executive session on a regular basis without the presence of management. |
● | All directors have the ability to suggest items for inclusion on the agenda and may raise at any Board meeting subjects that are not on the agenda for that meeting. All directors also have complete access to management, and the Board and its committees have the authority to retain legal, accounting and other outside consultants to advise the Board or committees as they deem appropriate. |
Because of these strong governance structures, the Board does not believe that a policy mandating an independent Chair is necessary to achieve effective independent leadership and management oversight.
It is instructive that over 60% of S&P 500 companies do not require an independent chair of the board as required by the shareholder proposal. According to the Spencer Stuart U.S. Board Index 2021, only 36% of S&P 500 companies have an independent chair of the board (available at https://www.spencerstuart.com/research-and-insight/us-board-index).
The Board believes that having the flexibility to appoint a single leader for the Company, coupled with an independent Lead Director with significant responsibilities, makes it unnecessary to have an absolute requirement that the Chair be an independent director.
PPG’s Board believes that an independent Chair is not required to oversee PPG’s environmental, social and governance (“ESG”) risks.
In its supporting statement, the proponent states, “We favor having an independent Board Chair to provide a more robust oversight of risk including of environmental, social, and governance issues.” Like the proponent, the Board of Directors recognizes the importance of independent oversight of the Company’s ESG programs and risks. The Board is actively engaged in PPG’s ESG programs and initiatives, and significant ESG risks are reviewed and evaluated by the Board and its committees as part of its ongoing oversight of the Company’s risk management.
In 2021, the Board conducted a comprehensive review of its oversight of the Company’s ESG programs and practices to ensure that the Board or one of its committees has oversight responsibility for each of the ESG programs and practices that is significant to PPG. As a result of this review, the Board in 2021 revised our Corporate Governance Guidelines and the charters of each committee to more clearly specify the ESG programs and practices overseen by the Board and each of its committees. For more information about how the Board oversees PPG’s ESG programs, see “Corporate Governance—The Board’s Role in ESG.”
Given the strong independent Board oversight of the Executive Chairman, the Chief Executive Officer and management and the Company’s robust corporate governance structures, including an empowered and effective independent Lead Director and effective Board oversight of PPG’s ESG efforts, the Board does not believe that a fixed policy requiring an independent Chair is in the best interests of PPG’s shareholders.
Vote Required
Adoption of the shareholder proposal requesting the Board of Directors to adopt a policy to require that the Chair of the Board shall be an independent director who has not previously served as an executive officer of the Company will require the affirmative vote of more than one half of the shares present, either in person or by proxy, and entitled to vote and voting (excluding abstentions) at the Annual Meeting.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THIS SHAREHOLDER PROPOSAL
IF IT IS PROPERLY PRESENTED AT THE ANNUAL MEETING.
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EQUITY COMPENSATION PLAN INFORMATION The following table provides information as of December 31, 20222023 regarding the number of shares of PPG common stock that may be issued under PPG’s equity compensation plans: | | | | | | | | | | | | | | | | | | | | | NUMBER OF SECURITIES | | | | | | | NUMBER OF SECURITIES | | | | | | | | REMAINING AVAILABLE FOR | | | | | | REMAINING AVAILABLE FOR | | | | | | | | FUTURE ISSUANCE | | | | | | FUTURE ISSUANCE | | | NUMBER OF SECURITIES | | WEIGHTED-AVERAGE | | UNDER EQUITY | | NUMBER OF SECURITIES | | WEIGHTED-AVERAGE | | UNDER EQUITY | | | TO BE ISSUED UPON EXERCISE | | EXERCISE PRICE OF | | COMPENSATION PLANS | | TO BE ISSUED UPON EXERCISE | | EXERCISE PRICE OF | | COMPENSATION PLANS | | | OF OUTSTANDING OPTIONS, | | OUTSTANDING OPTIONS, | | (EXCLUDING SECURITIES | | OF OUTSTANDING OPTIONS, | | OUTSTANDING OPTIONS, | | (EXCLUDING SECURITIES | | | WARRANTS AND RIGHTS | | WARRANTS AND RIGHTS | | REFLECTED IN COLUMN (A)) | | WARRANTS AND RIGHTS | | WARRANTS AND RIGHTS | | REFLECTED IN COLUMN (A)) | PLAN CATEGORY | | (A) | | (B) | | (C)(2) | | (A) | | (B) | | (C)(2) | Equity compensation plans approved by security holders(1) | | 4,159,011 | | $ | 117.16 | | 8,051,415 | | 4,003,071 | | $ | 122.00 | | 7,476,043 | Equity compensation plans not approved by security holders(3) | | — | | $ | — | | — | | — | | $ | — | | — | Total | | 4,159,011 | | $ | 117.16 | | 8,051,415 | | 4,003,071 | | $ | 122.00 | | 7,476,043 |
| (1) | All securities were granted under the PPG Industries, Inc. Amended and Restated Omnibus Incentive Plan. |
| (2) | Represents securities remaining available for future issuance under the PPG Industries, Inc. Amended and Restated Omnibus Incentive Plan and includes 285,525 securities that represent the incremental increase above target for a maximum payout. |
| (3) | Excluded from the information presented here are common stock equivalents held under the PPG Industries, Inc. Deferred Compensation Plan and the PPG Industries, Inc. Deferred Compensation Plan for Directors, neither of which are equity compensation plans. As supplemental information, there were 492,037471,485 common stock equivalents held under such plans as of December 31, 2022.2023. |
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BENEFICIAL OWNERSHIP Beneficial Ownership Tables As of the close of business on the record date, February 17, 2023,16, 2024, there were outstanding 235,357,983235,361,146 shares of PPG common stock, par value $1.66⅔ per share. Set forth below is certain information concerning the beneficial owners of more than 5% of PPG’s outstanding shares: | | | | | | | | | | | | | NUMBER OF SHARES | | PERCENT OF | | | NUMBER OF SHARES | | PERCENT OF | | NAME AND ADDRESS OF BENEFICIAL OWNER | | BENEFICIALLY OWNED | | SHARES OUTSTANDING | | | BENEFICIALLY OWNED | | SHARES OUTSTANDING | | BlackRock, Inc. | | 20,729,550 | (1) | 8.8 | % | | 19,546,603 | (1) | 8.3 | % | and/or certain other entities | | | | | | | | | | | 55 East 52nd Street | | | | | | | | | | | New York, NY 10055 | | | | | | | | | | | JPMorgan Chase & Co. | | 17,752,958 | (2) | 7.5 | % | | 14,203,705 | (2) | 6.0 | % | and/or certain other entities | | | | | | | | | | | 383 Madison Avenue | | | | | | | | | | | New York, NY 10179 | | | | | | | | | | | Massachusetts Financial Services Company | | 14,451,181 | (3) | 6.1 | % | | and/or certain other entities | | | | | | | 111 Huntington Avenue | | | | | | | Boston, MA 02199 | | | | | | | The Vanguard Group, Inc. | | 20,701,127 | (4) | 8.8 | % | | 24,479,533 | (3) | 10.4 | % | and/or certain other entities | | | | | | | | | | | 100 Vanguard Boulevard | | | | | | | | | | | Malvern, PA 19355 | | | | | | | | | | | Wellington Management Group LLP | | 15,255,645 | (5) | 6.5 | % | | and/or certain other entities | | | | | | | 280 Congress Street | | | | | | | Boston, MA 02210 | | | | | | |
| (1) | Based solely on a Schedule 13G/A filed with the Securities and Exchange Commission on January 25, 2023,2024, BlackRock, Inc. and/or certain affiliated entities reported aggregate beneficial ownership of 20,729,55019,546,603 shares of PPG common stock as of December 31, 2022.2023. Blackrock, Inc. reported that it possessed sole voting power over 18,709,38617,500,937 shares and sole dispositive power over 20,729,55019,546,603 shares. BlackRock, Inc. also reported that it did not possess shared voting or shared dispositive power over any shares beneficially owned. |
| (2) | Based solely on a Schedule 13G/A filed with the Securities and Exchange Commission on January 25, 2023,2024, JPMorgan Chase & Co. and/or certain affiliated entities reported aggregate beneficial ownership of 17,752,95814,203,705 shares of PPG common stock as of December 31, 2022.2023. JPMorgan Chase & Co. reported that it possessed sole voting power over 15,771,51211,974,955 shares, sole dispositive power over 17,681,71114,156,749 shares, shared dispositive power over 68,79344,877 shares and shared voting power over 68,72147,540 shares. |
| (3) | Based solely on a Schedule 13G/A filed with the Securities and Exchange Commission on February 8, 2023, Massachusetts Financial Services Company (“MFS”) and/or certain affiliated entities reported aggregate beneficial ownership of 14,451,181 shares of PPG common stock as of December 31, 2022. MFS reported that it possessed sole voting power over 13,351,207 shares and sole dispositive power over 14,451,181 shares. MFS also reported that it did not possess shared voting or shared dispositive power over any shares beneficially owned. |
(4) | Based solely on a Schedule 13G/A filed with the Securities and Exchange Commission on February 9, 2023,January 10, 2024, The Vanguard Group and/or certain affiliated entities reported aggregate beneficial ownership of 20,701,12724,479,533 shares of PPG common stock as of December 31, 2022.2023. The Vanguard Group reported that it possessed sole voting power over 0 shares, sole dispositive power over 19,763,02023,520,094 shares, shared dispositive power over 938,107959,439 shares and shared voting power over 325,713290,303 shares. |
(5) | Based solely on a Schedule 13G filed with the Securities and Exchange Commission on February 6, 2023, Wellington Management Group LLP and/or certain affiliated entities reported aggregate beneficial ownership of 15,255,645 shares of PPG common stock as of December 31, 2022. Wellington Management Group LLP reported that it possessed shared voting power over 14,019,556 shares and shared dispositive power over 15,255,645 shares. Wellington Management Group LLP also reported that it did not possess sole voting or sole dispositive power over any shares beneficially owned. |
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The following table sets forth all shares of PPG common stock beneficially owned, as of February 17, 2023,16, 2024, by each director and each executive officer named in the Summary Compensation Table, as well as all directors and all executive officers of the Company as a group. | | | | | | | | | | | | | | | SHARES OF BENEFICIALLY OWNED COMMON STOCK | | SHARES OF BENEFICIALLY OWNED COMMON STOCK | | | AND COMMON STOCK EQUIVALENTS(1) | | AND COMMON STOCK EQUIVALENTS(1) | | | BENEFICIALLY OWNED | | COMMON STOCK | | | | BENEFICIALLY OWNED | | COMMON STOCK | | | NAME OF BENEFICIAL OWNER | | COMMON STOCK(2) | | EQUIVALENTS(3) | | TOTAL(4) | | COMMON STOCK(2) | | EQUIVALENTS(3) | | TOTAL(4) | Stephen F. Angel | | 1,000 | | 36,073 | | 37,073 | | Hugh Grant | | 1,000 | | 79,685 | | 80,685 | | Melanie L. Healey | | 5,112 | | 2,449 | | 7,561 | | 6,344 | | 2,491 | | 8,835 | Gary R. Heminger | | 500 | | 6,365 | | 6,865 | | 500 | | 7,736 | | 8,236 | Timothy M. Knavish | | 70,066 | | 10,253 | | 80,319 | | 95,166 | | 10,775 | | 105,941 | Michael W. Lamach | | 1,000 | | 9,332 | | 10,332 | | 1,000 | | 10,754 | | 11,754 | Kathleen A. Ligocki | | 106 | | 2,701 | | 2,807 | | 106 | | 4,009 | | 4,115 | Michael H. McGarry | | 725,066 | | 5,330 | | 730,396 | | 696,237 | | 5,682 | | 701,919 | Michael T. Nally | | 264 | | 2,092 | | 2,356 | | 264 | | 4,121 | | 4,385 | Guillermo Novo | | 274 | | 2,967 | | 3,241 | | 274 | | 5,010 | | 5,284 | Martin H. Richenhagen | | 28,076 | | — | | 28,076 | | 29,308 | | — | | 29,308 | Christopher N. Roberts III | | | 100 | | 3 | | 103 | Catherine R. Smith | | 3,886 | | — | | 3,886 | | 5,118 | | — | | 5,118 | Amy R. Ericson | | | 50,012 | | — | | 50,012 | Anne M. Foulkes | | 30,529 | | 557 | | 31,086 | | 46,338 | | 264 | | 46,602 | Rebecca B. Liebert | | 24,693 | | — | | 24,693 | | Vincent J. Morales | | 122,588 | | 15,929 | | 138,517 | | 151,001 | | 17,411 | | 168,412 | Ramaprasad Vadlamannati | | 64,919 | | — | | 64,919 | | 79,129 | | — | | 79,129 | All Directors and Executive Officers as a Group(5) | | 1,116,250 | | 173,733 | | 1,289,983 | | 1,238,350 | | 68,607 | | 1,306,957 |
| (1) | Each of the named beneficial owners has sole voting power and sole investment power as to all the shares beneficially owned by them with the exception of (i) shares held by certain of them jointly with, or directly by, their spouses and children and (ii) the common stock equivalents shown in the second column, and described more fully below, which have no voting power. |
| (2) | Shares of common stock considered to be “beneficially owned” include both common stock actually owned and shares of common stock as to which there is a right to acquire ownership on, or within 60 days after, February 17, 2023.16, 2024. These amounts reflect shares subject to options exercisable within 60 days of February 17, 2023:16, 2024: as follows: Mr. McGarry, 512,335;456,006; Mr. Knavish, 40,892;60,821; Ms. Ericson, 33,519; Ms. Foulkes, 12,159; Ms. Liebert, 0;24,686; Mr. Morales, 91,628114,121; and Mr. Vadlamannati, 34,721.46,109. These amounts also include shares held in the PPG Industries Employee Savings Plan as of February 17, 202316, 2024 as follows: Mr. McGarry, 15,586;13,791; Mr. Knavish, 5,052;5,141; Ms. Foulkes, 6,105;6,212; and Mr. Morales, 8,295.8,441. In April 2022,2023, each director received 1,2321,174 time-based restricted stock units. The directors’ restricted stock units granted in 20222023 vest on April 19, 202317, 2024 and are not included in the table because these restricted stock units do not vest within 60 days of February 17, 2023.16, 2024. To the Company’s knowledge, none of the shares reflected in the table have been pledged. |
| (3) | Certain directors hold common stock equivalents in their accounts in the Deferred Compensation Plan for Directors, which is described under “Deferred Compensation.” Certain executive officers hold common stock equivalents in their accounts in the Deferred Compensation Plan, which is described under “PPG Industries Employee Savings Plan and Deferred Compensation Plan.” Common stock equivalents are hypothetical shares of common stock having a value on any given date equal to the value of a share of common stock. Common stock equivalents earn dividend equivalents that are converted into additional common stock equivalents, but carry no voting rights or other rights afforded to a holder of common stock. Upon leaving the Company, the common stock equivalents are made available for distribution, and all distributions are made in the form of one share of PPG common stock for each common stock equivalent credited to the person’s deferred account. |
| (4) | This is the sum of the beneficially owned common stock and the common stock equivalents as shown in the previous two columns. None of the identified beneficial owners holds more than 1.0% of the voting securities of PPG outstanding. The beneficial owners as a group hold less than 1.0% of the voting securities of PPG outstanding. |
| (5) | The group consists of 1718 persons: the directors and executive officers named in this Proxy Statement and PPG’s remaining executive officer: Ms. Amy R. Ericson.officers: K. Henrik Bergström, Kevin D. Braun and Chancey E. Hagerty. |
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GENERAL MATTERS When and where is the Annual Meeting? The Annual Meeting will be held on Thursday, April 20, 2023,18, 2024, at 11:00 a.m., Eastern Time. This year’s Annual Meeting will be a virtual shareholders meeting held via the Internet which you can attend by visiting https://www.cesonlineservices.com/ppg23_vm.ppg24_vm. There will be no physical location for in-person attendance at the Annual Meeting. Why am I receiving these proxy materials? In connection with the solicitation of proxies by our Board of Directors to be voted at the 20232024 Annual Meeting of Shareholders, these materials have been made available to you on the Internet or, upon your request or under certain other circumstances, have been delivered to you by mail in printed form. If your shares were registered directly in your name with our transfer agent, Computershare Investor Services, as of the close of business on February 17, 2023,16, 2024, you are considered a shareholder of record, and we have sent you these proxy materials. If your shares were held in the name of a bank, brokerage account or other nominee as of the close of business on February 17, 2023,16, 2024, you are considered a beneficial owner of the shares held in street name. Your bank, broker or other nominee has sent you these proxy materials. You should direct your bank, broker or other nominee on how to vote your shares, and we encourage you to make such direction. If you do not make a direction with respect to Proposals 1, 2, 3 or 5,4, your bank, broker or other nominee will not be able to vote your shares on your behalf with respect to such proposals. What is included in these materials? These proxy materials include: | ● | Our Notice of Annual Meeting and Proxy Statement for the 20232024 Annual Meeting; and |
| ● | Our 20222023 Annual Report to shareholders, which includes our audited consolidated financial statements. |
If you received printed versions of these materials by mail, these materials also include the proxy card or vote instruction form for the Annual Meeting. Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of printed proxy materials? In accordance with the rules of the Securities and Exchange Commission, instead of mailing a printed copy of our proxy materials to our shareholders, we have elected to furnish these materials by providing access to these documents over the Internet. Accordingly, on or about March 9, 2023,7, 2024, we sent a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) to our shareholders of record and beneficial owners. All shareholders have the ability to access the proxy materials on a website referred to in the Notice of Internet Availability. What does it mean if I receive more than one set of proxy materials? It means you have multiple accounts at the transfer agent or with banks, brokers or other nominees. If you received more than one Notice of Internet Availability, you may need to enter separate electronic control voting numbers when voting by the Internet to ensure that all of your shares have been voted. If you received more than one proxy card or vote instruction form, please complete and provide your voting instructions for all proxy cards and vote instruction forms that you receive. How can I get electronic access to the proxy materials? The Notice of Internet Availability provides you with instructions regarding how to (1) view our proxy materials for the Annual Meeting on the Internet; (2) vote your shares after you have viewed our proxy materials; and (3) request a printed copy of the proxy materials. Our proxy materials are also available online at investor.ppg.com. | | | 88 2023 Proxy Statement
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What am I voting on? You are voting on five proposals. Details of each proposal are included in this Proxy Statement. | ● | Proposal 1: To elect as directors the fivefour nominees named in this Proxy Statement as directors to serve in a class whose term expires in 2025: Stephen F. Angel, Hugh Grant, Melanie L. Healey, Timothy M. KnavishMichael W. Lamach, Martin H. Richenhagen, Christopher N. Roberts III and Guillermo Novo;Catherine R. Smith; |
| ● | Proposal 2: To vote on a nonbinding resolution to approve the compensation of the Company’s named executive officers on an advisory basis; |
| ● | Proposal 3: To vote on an amendment to the frequencyCompany’s Articles of future advisory votes on executive compensation on an advisory basis;Incorporation to provide shareholders with the right to call a special meeting; |
| ● | Proposal 4: To vote on an amendment to the Company’s Articles of Incorporation to provide for the exculpation of officers of the Company; and |
| ● | Proposal 5: To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2023; and |
● | Proposal 5: To vote on a shareholder proposal to adopt a policy requiring an independent board chair, if properly presented.2024. |
What are the Board’s recommendations on how I should vote my shares? The Board of Directors recommends that you vote your shares as follows: | ● | Proposal 1: FOR the election of fivefour directors to serve in a class whose term expires in 2025; |
| ● | Proposal 2: FOR the approval of the compensation of the Company’s named executive officers on an advisory basis; |
| ● | Proposal 3: EVERY YEAR onFOR the frequencyamendment to the Company’s Articles of future advisory votes on executive compensation on an advisory basis;Incorporation to provide shareholders with the right to call a special meeting; |
| ● | Proposal 4: FOR the amendment to the Company’s Articles of Incorporation to provide for the exculpation of officers the Company; and |
| ● | Proposal 5: FOR the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2023; and |
● | Proposal 5: AGAINST the shareholder proposal to adopt a policy requiring an independent board chair.2024. |
What are my choices when voting? | ● | Proposal 1: You may cast your vote in favor of or against election of each of the nominees or you may elect to abstain from voting your shares. Abstentions and broker non-votes will not be taken into account to determine the outcome of the election of directors. |
| ● | Proposals 2, 3, 4 and 5: You may cast your vote in favor of or against each proposal, or you may elect to abstain from voting your shares. Abstentions and broker non-votes will have no effect on the outcome of these proposals. |
● | Proposal 3: You may cast your vote in favor of every one year, two years or three years or abstain from voting your shares. Abstentions and broker non-votes will have no effect on the outcome of this proposal. |
What vote is needed for the proposals to be adopted? As of the record date, February 17, 2023,16, 2024, there were 235,357,983235,361,146 shares of PPG common stock issued and outstanding. Each shareholder is entitled to one vote for each share of common stock held. | ● | Quorum: In order to conduct the Annual Meeting, more than one-half of the outstanding shares must be present or be represented by proxy. This is referred to as a quorum. If you vote by Internet or by telephone, or submit a properly executed proxy card or vote instruction form, you will be considered part of the quorum. Abstentions and broker non-votes on any proposal to be acted on by shareholders will be treated as present at the Annual Meeting for purposes of a quorum. |
| ● | Proposal 1: Each director nominee who receives a majority of the votes cast (the number of shares voted “for” the director must exceed 50% of the votes cast with respect to that director) at the Annual Meeting will be elected as a director. |
| ● | Proposal 2: More than one-half of the shares present, either in person or by proxy, and entitled to vote and voting (excluding abstentions) at the Annual Meeting must vote for the proposal for it to be adopted. The advisory vote on this proposal is nonbinding. However, the Human Capital Management and Compensation Committee will take into account the outcome of the vote on this proposal when making future decisions about the Company's executive |
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| compensation arrangements, policies and procedures. Abstentions and broker non-votes will have no effect on the outcome of this proposal. |
| ● | Proposal 3: The frequency of the advisory vote on executive compensation (every one, two or three years) receiving a plurality of the votes cast, either in person or by proxy, and entitled to vote and voting (excluding abstentions) at the Annual Meeting will be considered the frequency recommended by the Company's shareholders. The advisory vote on this proposal is nonbinding. However, the Board and the Human Capital Management and Compensation Committee will review the voting results and take them into consideration when making a determination concerning the frequency of future advisory votes on executive compensation. |
● | Proposals 3, 4 and 5: More than one-half of the shares present, either in person or by proxy, and entitled to vote and voting (excluding abstentions) at the Annual Meeting must vote for theeach proposal for it to be adopted. Abstentions and broker non-votes will have no effect on the outcome of these proposals. |
How do I vote? You may vote your shares by any one of the following methods: | ● | By Internet: Log onto the website indicated in the Notice of Internet Availability or on the proxy card or vote instruction form. |
| ● | By telephone: Call the toll-free number shown on the proxy card or vote instruction form and follow the voice prompts. |
| ● | By mail: Mark your votes, sign and return the proxy card or vote instruction form in the postage-paid envelope provided. |
| ● | By ballot: Attend the Annual Meeting virtually and vote online during the meeting. |
If you vote by the Internet or by telephone, you do not need to send in a proxy card or vote instruction form. The deadline for Internet and telephone voting will be 11:59 p.m., Eastern Time, on April 19, 2023.17, 2024. If your shares are held in the name of a bank, broker or other nominee, and you wish to vote your shares online while attending the virtual Annual Meeting, you will need to contact your bank, broker or other nominee to obtain a legal proxy form that you must submit to Corporate Election Services when you register to attend the meeting. What happens if I do not give specific voting instructions? The Board of Directors is asking for your proxy. Giving us your proxy means that you authorize us to vote your shares at the Annual Meeting in the manner you direct. If you (1) choose the “submit your vote” option without voting on each individual proposal when voting on the Internet or by telephone or (2) if you are a shareholder of record and sign and return a proxy card without giving specific voting instructions, then your shares will be voted in the manner recommended by our Board on all matters presented in this Proxy Statement. If your shares are held by a broker, bank or other nominee, the broker, bank or nominee will ask you how you want to vote your shares. If you give the broker, bank or nominee instructions, your shares will be voted as you direct. If you do not give instructions, your broker, bank or nominee may vote your shares in its discretion for the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 20232024 (Proposal 4)5), but your broker, bank or nominee will not vote your shares at all with respect to any of the other proposals. We encourage you to provide instructions to your bank, broker or nominee by carefully following the instructions provided. This will ensure that your shares are voted at the Annual Meeting as you direct. How can I change or revoke my vote after I have voted? You have the right to change your vote or revoke your proxy before it is exercised at the Annual Meeting. You may vote again on a later date on the Internet or by telephone (only your latest Internet or telephone proxy submitted prior to the Annual Meeting will be counted), by signing and returning a new proxy card or vote instruction form with a later date, or by attending the virtual Annual Meeting and voting online during the meeting. However, your attendance at the Annual Meeting will not automatically revoke your proxy unless you vote again at the Annual Meeting or specifically request in writing that your prior proxy be revoked. Please note that any re-votes by mail or proxy revocations must be received by our corporate secretary at PPG Industries, Inc., One PPG Place, Pittsburgh, Pennsylvania 15272 prior to the Annual Meeting in order to be effective. | | | 90 2023 Proxy Statement
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How will shares in employee benefit plans be voted? This Proxy Statement is being used to solicit voting instructions from you with respect to shares of PPG common stock that you own, but which are held by the trustees of a retirement or savings plan for the benefit of you and other plan participants. Shares held in the benefit plans that are entitled to vote will be voted by the trustees pursuant to your instructions. Shares held in any employee benefit plan that you are entitled to vote, but do not vote, will not be voted by the trustees. You must instruct the trustees to vote your shares by utilizing one of the voting methods described above. | | | |
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Who will count and certify the votes? Representatives of Corporate Election Services and the staff of our corporate secretary and Investor Relations offices will count the votes and certify the election results. The results will be publicly filed with the Securities and Exchange Commission on a Form 8-K within four business days after the Annual Meeting. How can I attend the virtual Annual Meeting? This year’s Annual Meeting will be held in a virtual format through a live webcast which you can attend by visiting https://www.cesonlineservices.com/ppg23_vm.ppg24_vm. Shareholders of PPG as of the close of business on February 17, 2023,16, 2024, the record date, or those that hold a valid proxy for the meeting, are entitled to participate in and ask questions at the Annual Meeting. All shareholders wishing to attend the virtual Annual Meeting must pre-register no later than 5:00 p.m., Eastern Time, on April 19, 2023.17, 2024. Registered Shareholders Shareholders of record as of the record date may register to participate in the Annual Meeting by visiting the website https://www.cesonlineservices.com/ppg23_vm.ppg24_vm. Please have your proxy card or Notice of Internet Availability containing your 11-digit control number available and follow the instructions to complete your registration request. After registering, you will receive a confirmation email with a link and instructions for accessing the virtual Annual Meeting. Beneficial Shareholders Shareholders whose shares are held through a broker, bank or other nominee as of the record date may register to participate in the virtual Annual Meeting by visiting the website https://www.cesonlineservices.com/ppg23_vm.ppg24_vm. Please have your voting instruction form, Notice of Internet Availability, or other communication containing your control number available and follow the instructions to complete your registration request, including uploading a copy of one of these documents. After registering, you will receive a confirmation email with a link and instructions for accessing the virtual Annual Meeting. If you are a beneficial shareholder and you wish to vote your shares online during the virtual Annual Meeting, rather than submitting your voting instructions before the Annual Meeting, you will need to contact your bank, broker or other nominee to obtain a legal proxy form that you must submit when voting online during the Annual Meeting. Listen-Only, Live Webcast A listen-only, live webcast of the virtual Annual Meeting will also be available to all shareholders and guests who do not pre-register at https://www.cesonlineservices.com/ppg23_vm. Pre-registration is required to vote and submit questions during the meeting. We encourage you to access the virtual Annual Meeting or live, listen-only webcast 15 to 30 minutes before it begins. Online check-in will start at approximately 10:30 a.m. Eastern Daylight Time on April 20, 2023.18, 2024. If you have difficulty accessing the meeting, please follow the instructions contained in the reminder email you will receive the evening before the meeting. We will have technicians available to assist you. How can I ask questions at the virtual Annual Meeting? We will have a question and answer session during the Annual Meeting. To ask a question during the Annual Meeting, you must be a shareholder and have pre-registered for the Annual Meeting as discussed above under “How can I attend the virtual Annual Meeting.” The question and answer session will answer questions submitted live during the Annual Meeting. Questions may be submitted during the Annual Meeting on the Annual Meeting website and shareholders may be limited to two questions. Substantially similar questions will be answered once to avoid repetition and allow more time for other questions. Questions pertinent to meeting matters will be answered during the Annual Meeting, subject to time constraints. If there are questions pertinent to meeting matters that are not answered during the meeting due to time constraints, management will post answers to a representative set of such questions on our | | |
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Investor Relations website at investor.ppg.com. These questions and answers will be available as soon as practicable after the meeting. How do I obtain a copy of materials related to corporate governance? Our Corporate Governance Guidelines, charters of each standing committee of our Board of Directors, Global Code of Ethics, Code of Ethics for Senior Financial Officers and other materials related to our corporate governance are published on the Corporate Governance section of our website at investor.ppg.com. | | | 88 2024 Proxy Statement |
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Who is soliciting my vote and what are the solicitation expenses? This solicitation is being made on behalf of our Board of Directors, but may also be made without additional compensation by our directors, officers or employees by telephone, facsimile, e-mail or personal interview. We will bear the expense of the preparation, printing and mailing of the Notice of Internet Availability and these proxy materials. We have hired D.F. King & Company to help us send out the proxy materials and to solicit proxies for the Annual Meeting, the estimated cost of which is approximately $17,500 plus reimbursement of certain additional out of pocket expenses. We will request brokers, banks and other nominees who hold shares of PPG common stock in their names to furnish proxy materials to beneficial owners of the shares. We will reimburse these brokers, banks and nominees for their reasonable out of pocket expenses incurred in forwarding solicitation materials to such beneficial owners. How can I submit a proposal for consideration at the 2024 Annual Meeting of Shareholders? To be considered for the 20242025 Annual Meeting, shareholder proposals must be submitted in writing to our corporate secretary at PPG Industries, Inc., One PPG Place, Pittsburgh, Pennsylvania 15272. No proposal can be included in our Proxy Statement for the 20242025 Annual Meeting unless it is received by our corporate secretary no later than November 10, 2023.7, 2024. The proposal must also comply with the rules of the Securities and Exchange Commission relating to shareholder proposals. Any shareholder whose proposal is not included in our Proxy Statement relating to the 20242025 Annual Meeting and who intends to present business for consideration at the 20242025 Annual Meeting must give notice to our corporate secretary in accordance with Section 1.5 of our Bylaws (which are available on the Corporate Governance section of our website at investor.ppg.com) and such business must otherwise be a proper matter for shareholder action. If, as expected, the 20242025 Annual Meeting of Shareholders is held on April 18, 2024,17, 2025, then the notice must be received by our corporate secretary on or before January 19, 2024.17, 2025. How can I recommend someone as a candidate for director? A shareholder who wishes to recommend or nominate a candidate for director of PPG may write to the chair of the Nominating and Governance Committee of the Board of Directors, in care of our corporate secretary at PPG Industries, Inc., One PPG Place, Pittsburgh, Pennsylvania 15272. To be effective for consideration at the 20242025 Annual Meeting, the recommendation or nomination must be received by our corporate secretary by the deadlines set forth in our Bylaws and must include information required under our Bylaws, including information about the nominating shareholder and information about the nominee that would be required to be included in a Proxy Statement under the rules of the Securities and Exchange Commission. Director nominations submitted pursuant to PPG’s proxy access Bylaw for consideration at the 20242025 Annual Meeting must be received by PPG no earlier than October 11, 20238, 2024 and no later than November 10, 2023.7, 2024. For additional information regarding the nomination procedure, see “Corporate Governance—Shareholder Recommendations or Nominations for Director and Proxy Access.” | | | 92 2023 Proxy Statement
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OTHER INFORMATION Householding Information PPG and some banks, brokers and other nominees are participating in the practice of “householding” proxy materials. This means that shareholders who share the same address may not receive separate copies of proxy materials, unless we have received instructions to the contrary. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate set of the proxy materials, or if you are receiving multiple copies of the proxy materials and wish to receive only one, please notify your bank, broker or other nominee if your shares are held in a brokerage account or us if you hold registered shares. We will promptly deliver an additional copy of the proxy materials to you, without charge, if you write to Investor Relations at PPG Industries, Inc., One PPG Place, Pittsburgh, Pennsylvania 15272, or call us at (412) 434-3318. Other Matters So far as is known, no matters other than those described herein are expected to come before the Annual Meeting. It is intended, however, that the proxies solicited hereby will be voted on any other matters that may properly come before the Annual Meeting, or any adjournment thereof, in the discretion of the person or persons voting such proxies unless the shareholder has indicated on the proxy card that the shares represented thereby are not to be voted on such other matters. Pittsburgh, Pennsylvania March 9, 20237, 2024 | | | 90 2024 Proxy Statement
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ANNEX A RECONCILIATION OF NON-GAAP FINANCIAL MEASURES PPG believes investors' understanding of the Company’s performance is enhanced by the disclosure of net income from continuing operations and earnings per diluted share from continuing operations adjusted for certain items. PPG’s management considers this information useful in providing insight into the Company’s ongoing performance because it excludes the impact of items that cannot reasonably be expected to recur on a quarterly basis or that are not attributable to our primary operations. Net income from continuing operations and earnings per diluted share from continuing operations adjusted for these items are not recognized financial measures determined in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and should not be considered a substitute for net income and earnings per diluted share or other financial measures as computed in accordance with U.S. GAAP. In addition, adjusted net income and adjusted earnings per diluted share from continuing operations may not be comparable to similarly titled measures as reported by other companies. Net income from continuing operations (attributable to PPG) and earnings per share – assuming dilution (attributable to PPG) are reconciled to adjusted net income from continuing operations (attributable to PPG) and adjusted earnings per share – assuming dilution below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | 2021 | | 2020 | | 2019 | | 2018 | 2023 | | 2022 | | 2021 | | 2020 | | 2019 | FOR THE YEAR-ENDED | | NET INCOME | | NET INCOME | | NET INCOME | | NET INCOME | | NET INCOME | NET INCOME | | NET INCOME | | NET INCOME | | NET INCOME | | NET INCOME | (MILLIONS, EXCEPT PER SHARE AMOUNTS) | | $ | | EPS(1) | | $ | | EPS(1) | | $ | | EPS(1) | | $ | | EPS(1) | | $ | | EPS(1) | $ | | EPS(1) | | $ | | EPS(1) | | $ | | EPS(1) | | $ | | EPS(1) | | $ | | EPS(1) | Net income from continuing operations (attributable to PPG) | | $ | 1,028 | | $ | 4.33 | | $ | 1,420 | | $ | 5.93 | | $ | 1,056 | | $ | 4.44 | | $ | 1,243 | | $ | 5.22 | | $ | 1,323 | | $ | 5.40 | $ | 1,270 | | $ | 5.35 | | $ | 1,028 | | $ | 4.33 | | $ | 1,420 | | $ | 5.93 | | $ | 1,056 | | $ | 4.44 | | $ | 1,243 | | $ | 5.22 | Impairment and other related charges, net(2) | | | 214 | | 0.90 | | | 12 | | 0.05 | | | 64 | | 0.27 | | | — | | — | | | 11 | | 0.05 | | 160 | | | 0.67 | | | 214 | | 0.90 | | | 12 | | 0.05 | | | 64 | | 0.27 | | | — | | — | Acquisition-related amortization expense(3) | | | 126 | | 0.53 | | 130 | | 0.55 | | 99 | | 0.42 | | — | | — | | — | | — | | 121 | | | 0.51 | | 126 | | 0.53 | | 130 | | 0.55 | | 99 | | 0.42 | | — | | — | Business restructuring-related costs, net(4) | | | 56 | | 0.24 | | 20 | | 0.08 | | 166 | | 0.70 | | 168 | | 0.71 | | 53 | | 0.21 | | 34 | | | 0.14 | | 56 | | 0.24 | | 20 | | 0.08 | | 166 | | 0.70 | | 168 | | 0.71 | Transaction-related costs, net(5) | | | 12 | | 0.05 | | 69 | | 0.29 | | 7 | | 0.03 | | 13 | | 0.05 | | 4 | | 0.02 | | Portfolio Optimization(5) | | | 58 | | | 0.24 | | 12 | | 0.05 | | 69 | | 0.29 | | 7 | | 0.03 | | 13 | | 0.05 | Pension settlement charges | | | — | | — | | 36 | | 0.15 | | — | | — | | — | | — | | — | | — | | 144 | | | 0.61 | | — | | — | | 36 | | 0.15 | | — | | — | | — | | — | Net charges related to environmental remediation and other costs | | | — | | — | | | 26 | | 0.11 | | | 19 | | 0.08 | | | 47 | | 0.20 | | | 58 | | 0.24 | | 23 | | | 0.10 | | | — | | — | | | 26 | | 0.11 | | | 19 | | 0.08 | | | 47 | | 0.20 | Argentina currency devaluation losses(8) | | | 24 | | | 0.10 | | — | | — | | — | | — | | — | | — | | — | | — | Insurance recoveries(9) | | | (12) | | | (0.05) | | — | | — | | — | | — | | — | | — | | — | | — | Net tax charge related to UK statutory rate change | | | — | | — | | 22 | | 0.09 | | — | | — | | — | | — | | — | | — | | — | | | — | | — | | — | | 22 | | 0.09 | | — | | — | | — | | — | Expenses incurred due to natural disasters | | | — | | — | | | 13 | | 0.06 | | | 13 | | 0 | | | — | | — | | | — | | — | | — | | | — | | | — | | — | | | 13 | | 0.06 | | | 13 | | 0.06 | | | — | | — | Change in allowance for doubtful accounts related to COVID-19 | | | — | | — | | | (11) | | (0.05) | | | 23 | | 0.10 | | | — | | — | | | — | | — | | — | | | — | | | — | | — | | | (11) | | (0.05) | | | 23 | | 0.10 | | | — | | — | Income from legal settlements | | | — | | — | | (17) | | (0.07) | | — | | — | | — | | — | | — | | — | | — | | | — | | — | | — | | (17) | | (0.07) | | — | | — | | — | | — | Asbestos-related claims reserve adjustment(6) | | | — | | — | | (101) | | (0.42) | | — | | — | | 9 | | 0.04 | | — | | — | | Asbestos-related claims reserve adjustment | | | — | | | — | | — | | — | | (101) | | (0.42) | | — | | — | | 9 | | 0.04 | Charge related to early retirement of debt | | | — | | — | | — | | — | | 5 | | 0.02 | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | 5 | | 0.02 | | — | | — | Net charges related to litigation matters | | | — | | — | | — | | — | | — | | — | | — | | — | | 19 | | 0.08 | | Net tax charge related to U.S. Tax Cuts and Jobs Act | | | — | | — | | | — | | — | | | — | | — | | | — | | — | | | (13) | | (0.05) | | Gains from the sale of non-operating assets | | | — | | — | | | — | | — | | | — | | — | | | — | | — | | | (20) | | (0.08) | | Charges related to a customer assortment change | | | — | | — | | — | | — | | — | | — | | — | | — | | 14 | | 0.05 | | Adjusted net income from continuing operations (attributable to PPG)(7) | | $ | 1,436 | | $ | 6.05 | | $ | 1,619 | | $ | 6.77 | | $ | 1,452 | | $ | 6.12 | | $ | 1,480 | | $ | 6.22 | | $ | 1,449 | | $ | 5.92 | | Adjusted net income from continuing operations (attributable to PPG)(10) | | $ | 1,822 | | $ | 7.67 | | $ | 1,436 | | $ | 6.05 | | $ | 1,619 | | $ | 6.77 | | $ | 1,452 | | $ | 6.12 | | $ | 1,480 | | $ | 6.22 |
| (1) | Earnings per diluted share is calculated based on unrounded numbers. Figures in the table may not recalculate due to rounding. |
| (2) | (2)In the firstfourth quarter 2023, the Company recorded impairment and other related charges due to goodwill impairment recognized for the traffic solutions reporting unit as a result of its annual goodwill impairment test. The fair value of the traffic solutions reporting unit decreased primarily due to increases in the cost of capital (discount rate assumption) and declines in the reporting unit’s long-term forecast driven by challenges at its operations in Argentina due to the highly inflationary environment and changes to the reporting unit’s global footprint, including the fourth quarter 2023 divestiture of its European and Australian businesses. In 2022, the Company recorded impairment and other related charges due to the wind down of the company’s operationsCompany's operation in Russia. Subsequently, the Company released a portion of the previously established reserves for Receivables and Inventories due to the collection of certain trade receivables and the realization of certain inventories. Also in 2022, impairment and other related charges were recorded for the write-down of certain assets and liabilities related to the planned sale of a non-core business and for certain asset write downs. In 2021, an impairment charge was recorded for the write-down of certain assets related to the previously planned sale of certain smaller entities in non-strategic regions. |
| (3) | Beginning in 2021, the Company reports adjusted earnings per diluted share excluding amortization expense relating to intangible assets from completed acquisitions. Adjusted earnings per diluted share for 2020, as shown in the table above, has been recast to exclude acquisition-related amortization expense. |
| (4) | Included in businessBusiness restructuring-related costs, net areinclude business restructuring charges, accelerated depreciation of certain assets and other related costs, offset by releases related to previously approved programs.programs, which are included in Other charges/(income), net on the consolidated statement of income, accelerated depreciation of certain assets, which is included in Depreciation on the consolidated statement of income, and other restructuring-related costs, which are included in Cost of sales, exclusive of depreciation and amortization and Selling, general and administrative on the consolidated statement of income. |
| (5) | Transaction-related costs,Portfolio optimization includes losses on the sale of non-core assets, including the losses recognized on the sales of the Company's European and Australian traffic solutions businesses in 2023, which are included in Other charges/(income), net includein the consolidated statement of income, accelerated amortization expense recognized in 2023 related to the exit of a non-core business, which is included in Amortization in the consolidated statement of income, and the impact for the step up to fair value of inventory acquired in certain acquisitions, which is included in Cost of sales, exclusive of depreciation and amortization in the consolidated statement of income. Portfolio optimization also includes advisory, legal, accounting, valuation, other professional or consulting fees, and certain internal costs directly incurred to effect acquisitions. Transaction-relatedacquisitions, as well as similar fees and other costs net also includeto effect divestitures and other portfolio optimization exit actions. These costs are included in Selling, general and administrative expense in the impact for the step up to fair valueconsolidated statement of inventory acquired in certain acquisitions.income. |
| (6) | In the fourth quarter 2021, the reserve2023, PPG purchased group annuity contracts that transferred pension benefit obligations for asbestos-related claims was reduced to reflectcertain of the Company’s current estimate of potential liability for these claims.retirees in the U.S. to third-party insurance companies, resulting in a non-cash pension settlement. |
| (7) | As discussed withinEnvironmental remediation charges represent environmental remediation costs at certain legacy PPG manufacturing sites. These charges are included in Other charges/(income), net in the "Compensation Discussion and Analysis" sectionconsolidated statement of income. |
| (8) | In December 2023, the 2023 Proxy Statement, full year 2022central bank of Argentina adjusted net income and adjusted earnings per share from continuing operations as calculatedthe official foreign currency exchange rate for purposes of determining incentive compensation excluded $41 million and $0.17, respectively, which represents one half of the full year earnings impact ofArgentine peso, significantly devaluing the currency relative to the United States dollar. Argentina currency devaluation losses represent foreign currency translation versuslosses recognized during December 2023 related to the Company's 2022 plan. In 2019, adjusteddevaluation of the Argentine peso, which is included in Other charges/(income), net income and adjusted earnings per share from continuing operations as calculated for purposesin the consolidated statement of determining incentive compensation excluded $39 million and $0.16, respectively, which represents the year-over-year impact of foreign currency translation on earnings.income. |
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| 20232024 Proxy StatementA-1
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| (9) | In the first quarter 2023, the Company received reimbursement under its insurance policies for damages incurred at a southern U.S. factory from a winter storm in 2020. In the fourth quarter 2023, the Company received reimbursement for a previously approved insurance claim under a policy covering legacy asbestos-related matters. These insurance recoveries are included in Other charges/(income), net in the consolidated statement of income. |
| (10) | As discussed within the "Compensation Discussion and Analysis" section of the 2024 Proxy Statement, full year 2023 and 2022 adjusted net income and adjusted earnings per share from continuing operations as calculated for purposes of determining incentive compensation excludes one half of the full year earnings impact of foreign currency translation versus the Company’s plan, which represented an exclusion of $43 million and $0.17 per share, respectively, for 2023 and $41 million and $0.17 per share, respectively, for 2022. |
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| NOTE: At least one registered owner must sign exactly as their name appears above. Give full title if signing for a corporation or partnership or as attorney, agent or in another representative capacity. V OTE BY T ELEPHONE Have your proxy card available when you call the Toll-Free number 1-888-693-8683 using a touch-tone telephone and follow the simple instructions to record your vote. V OTE BY I NTERNET Have your proxy card available when you access the website www.cesvote.com and follow the simple instructions to record your vote. V OTE BY M AIL Please mark, sign and date your proxy card and return it in the postage-paid envelope provided or return it to: Corporate Election Services, PO Box 1150, Pittsburgh, PA 15230. Vote by Telephone Call Toll-Free using a touch-tone telephone: 1-888-693-8683 Vote by Internet Access the Website and cast your vote: www.cesvote.com Vote by Mail return your proxy card in the postage-paid envelope provided QR Code Scan with a mobile device Vote 24 hours a day, 7 days a week. If you vote by telephone or Internet, please do not send your proxy by mail. PPG INDUSTRIES, INC. One PPG Place Pittsburgh, PA 15272 THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1, 2, AND3, 4 “1 YEAR” FOR PROPOSAL 3 AND “AGAINST” PROPOSAL 5. 1. APPROVE THE ELECTION OF DIRECTORS TO SERVE IN THE CLASS WHOSE TERM EXPIRES IN 2025: FOR AGAINST ABSTAIN (1) STEPHEN F. ANGELMICHAEL W. LAMACH (2) HUGH GRANTMARTIN H. RICHENHAGEN (3) MELANIE L. HEALEYCHRISTOPHER N. ROBERTS III (4) TIMOTHY M. KNAVISH (5) GUILLERMO NOVOCATHERINE R. SMITH 2. APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS ON AN ADVISORY BASIS FOR AGAINST ABSTAIN 3. PROPOSAL TO RECOMMENDAPPROVE AN AMENDMENT TO THE FREQUENCYCOMPANY’S ARTICLES OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATIONINCORPORATION TO PROVIDE SHAREHOLDERS WITH THE RIGHT TO CALL A SPECIAL MEETING 1 YEARFOR 2 YEARS 3 YEARSAGAINST ABSTAIN 4. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION TO PROVIDE FOR THE EXCULPATION OF OFFICERS OF THE COMPANY FOR AGAINST ABSTAIN 5. RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023 FOR AGAINST ABSTAIN 5. SHAREHOLDER PROPOSAL TO ADOPT A POLICY REQUIRING AN INDEPENDENT BOARD CHAIR, IF PROPERLY PRESENTED2024 FOR AGAINST ABSTAIN SIGNATURE(S) DATE: Please fold and detach card at perforation before mailing. PPG Industries, Inc. P. O. Box 1150 Pittsburgh, PA 15230 |
 
| THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PPG INDUSTRIES, INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 20, 2023.18, 2024. The undersigned, having received the Notice of Annual Meeting of Shareholders and Proxy Statement, each dated March 9, 2023,7, 2024, hereby appoints T.M. Knavish, A.M. Foulkes and J.R. Gette, or any of them, with full power of substitution to each, proxies to represent the undersigned and to vote all of the shares of the Common Stock of PPG Industries, Inc. (the “Company”) that the undersigned would be entitled to vote if personally present at the 20232024 Annual Meeting of Shareholders of the Company, or any adjournment thereof, as directed on the reverse side hereof and in their discretion on such other matters as may properly come before the meeting or any adjournment thereof. The shares represented by this proxy will be voted as directed on the reverse side hereof. If no direction is given, however, the shares represented by this proxy will be voted FOR the proposal to approve the election of Stephen F. Angel, Hugh Grant, Melanie L. Healey, Timothy M. KnavishMichael W. Lamach, Martin H. Richenhagen, Christoper N. Roberts III and Guillermo NovoCatherine R. Smith to serve in the class whose term expires in 2025, FOR the proposal to approve the compensation of the Company’s named executive officers on an advisory basis, ONE YEAR onFOR the proposal to amend the Company’s Articles of Incorporation to provide shareholders with the right to call a nonbinding resolutionspecial meeting, FOR the proposal to recommendamend the frequency with which shareholders shall be entitledCompany’s Articles of Incorporation to have an advisory vote on executive compensation,provide for the exculpation of officers of the Company, and FOR the proposal to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2023, and AGAINST the shareholder proposal to adopt a policy requiring an independent board chair, if properly presented.2024. This card votes all of the shares of the Common Stock of the Company held under the same registration in any one or more of the following manners: as a shareholder of record; in the shareholder Investor Services Program; in the PPG Industries Employee Savings Plan; in the PPG Canada Inc. Retirement Savings Plan; and in the PPG Puerto Rico Employee Savings Plan. Please complete, sign and date this card on the reverse side and return it promptly in the enclosed reply envelope if you do not vote by telephone or over the Internet. Please fold and detach card at perforation before mailing. |
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