UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) of the
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INGEVITY CORPORATION
(Name of Registrant as Specified Inin Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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MESSAGE FROM OUR CEOJohn C. Fortson | March 11, 2024 |
Dear Ingevity Stockholders:
It is our pleasure to invite you to attend ourthe 2024 annual meeting of stockholders which is to(the “Annual Meeting”) of Ingevity Corporation (“Ingevity,” the “Company” or “us”). The Annual Meeting will be held virtually via live audio webcast on April 25, 2019 at The Daniel Island Club, 600 Island Park Drive, Charleston, South Carolina. The meeting will begin23, 2024, at 9:30 a.m., local time. The following Notice Eastern Time.
You can participate in the Annual Meeting, submit questions and vote your shares of the 2019 Annual Meeting of Stockholders outlinesCompany’s common stock (the “Common Stock”) by visiting www.virtualshareholdermeeting.com/NGVT2024. Further details regarding participation, voting and the business to be conducted at the meeting.
2023 was a busy year as Ingevity accelerated the implementation of several key strategic initiatives that broaden our capabilities and diversify our product portfolio to meet the needs of global customers across all our businesses. In an environment that remained dynamic and challenging, our team doubled down on our commitment to being an innovative, forward thinking, best-in-class specialty chemicals business, and I am incredibly proud of their performance. We are utilizing Internet deliveryexcited about where we’re heading.
Our carbon and pavement businesses led the way in delivering record performance. Performance Materials delivered record revenue and segment EBITDA* and continued to see strong segment growth as global auto production recovered from diminished coronavirus pandemic era production levels over the course of the year. Advanced Polymer Technologies (“APT”), formerly known as our primary meansEngineered Polymers business, continued strong business development, expanding into growth markets such as apparel and agriculture. Our Performance Chemicals segment was a tale of distributingtwo businesses in 2023 as we worked through the impacts of unprecedented crude tall oil price levels on our legacy Industrial Specialties business while Pavement Technologies, hereafter Road Technologies, continued its strong performance and had another record year.
We made significant investments in growth initiatives for our future. We fully integrated Ozark Materials into our newly formed Road Technologies business to broaden our impact in the pavement industry, opened a new APT Innovation Center in Warrington, United Kingdom to support technology development, and launched a repositioning plan for our Performance Chemicals segment to enable Ingevity to produce a more diverse portfolio of renewable raw material-based products and expand into oleochemical growth markets such as soy, palm and canola oils. Additionally, we advanced our strategic investment in Nexeon to identify more opportunities to support the electric battery industry using our carbon and our production and engineering capabilities.
Our world class team remains focused on continuous improvement to prioritize employee safety and strategic growth. In 2023 we launched a global Safety Pledge campaign, reaffirming each employee’s commitment to our collective responsibility to prioritize the well-being and care of every individual at Ingevity. We added international marketing and business strategy development expertise to our board of directors (the “Board”) by electing Bruce Hoechner to the Board, and also invested in talent to support our oleochemicals transition and battery technology initiatives.
We advanced our purpose to be a responsible company that purifies, protects, and enhances the world around us. Ingevity received a Silver rating from EcoVadis in 2023, placing us in the top quartile of all responding companies, and took steps to offset Scope 2 emissions related to our United States manufacturing locations by entering into a renewable product purchase agreement to advance the Company toward greenhouse gas reduction targets. In addition to growing our portfolio of renewably based products in 2023, we achieved key biodegradability and compostability certifications for our Capa® portfolio that further endorse the sustainable nature of our Company and our products.
INGEVITY | 2024 Proxy Statement | 1 |
Thank you for your interest and investment in Ingevity. We hope you share our enthusiasm for Ingevity and the exciting opportunities ahead as we advance bold plans to better ourselves, our Company and our communities. We are excited about the future and confident in our ability to be a best-in-class specialty chemicals company that is a leader in sustainability and our markets.
A notice of internet availability of proxy materials or proxy card is being mailed, and the attached proxy statement is being made available, beginning on March 11, 2024, to our stockholders this year. Accordingly, most stockholders will not receive paper copieseach holder of our proxy materials. We will instead send stockholders a notice with instructionsrecord of Common Stock as of the record date, February 26, 2024. Please see “Questions and Answers about the Annual Meeting, Proxy Solicitation and Voting Information” for accessing the proxy materials and voting via the Internet. The notice also providesadditional information onabout how to attend, vote, onlineexamine the list of stockholders and how to obtain paper copies of our proxy materials if you so choose.
Whether or not you plan to attend the Annual Meeting pleasevirtually, we urge you to vote as soon as possible to ensure thatand submit your shares will be represented and voted. You may vote via the Internet, by telephone or, if you elect to receive a paper proxy card in the mail, by mailing the completed proxy card. If you attendadvance of the Annual Meeting you may vote your sharesby one of the methods described in person even if you have previously voted by proxy.
Best regards,
John C. Fortson
President and CEO
* Reconciliation of these non-GAAP financial measures can be found in person.
INGEVITY | 2024 Proxy Statement | 2 |
NOTICEof 2024 Annual Meeting of Stockholders of Ingevity Corporation |
How to the 2019 Annual Meeting of Stockholders of Ingevity Corporation (the "Company".) We will hold the meeting at the time and place noted above. At the meeting, we will ask you to:
Online Before the Annual Meeting, vote online at www.proxyvote.com | |
By phone Call 1-800-690-6903 | |
By mobile device Scan the QR code on your proxy card or Notice | |
By mail If you received a printed version of the proxy materials, you may vote by mail | |
During the virtual meeting See “Questions and |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be heldHeld on April 25, 2019:
DATE Tuesday, 9:30 a.m. |
LIVE AUDIO WEBCAST www.virtualshareholder meeting.com/NGVT2024 To be admitted, enter the control number found on your proxy card or Notice regarding the availability of | RECORD February 26, 2024 Holders of |
To allow our stockholders received a Notice Regarding the Availability of Proxy Materials (the “Notice”) instead of a full set of printed proxy materials. The Notice providesgreater access to the meeting and lower the barriers to stockholder participation, our Proxy MaterialsAnnual Meeting will be held in a fast and efficient manner via the Internet. This reduces the amountvirtual format only with no physical meeting location.
Items of paper necessary to produce these materials, as well as costs associated with mailing these materials to stockholders. On or around March [ ], 2019, we began mailing the Notice to our stockholders of
At the Annual Meeting, our proxy statement forstockholders will be asked to act on the Annual Meeting (the “Proxy Statement”) and our 2018 annual report to stockholders (the “Annual Report”), which includes our Annual Report on Form 10-K for the year ended
■ | Elect the nine (9) director nominees named in the proxy statement; | |
■ | Approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers; | |
■ | Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2024; | |
■ | Approve the amendment to the Company’s Certificate of Incorporation to provide for the exculpation of certain officers from liability in limited circumstances; and | |
■ | Consider any other business properly brought before the meeting. |
Additional information
Whether or a beneficial owner.
By Order of time.
Stacy L. Cozad
Secretary
INGEVITY | 2024 Proxy Statement | 4 |
Table of Contents
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This summary highlights information about Ingevity Corporation and certain information contained elsewhere in this proxy statement (the “Proxy Statement”) for our 2024 Annual Meeting of Stockholders (the “Annual Meeting”). This summary does not contain all of the information that you should consider in deciding to vote. Please read the entire Proxy Statement carefully before voting.
Proposal | Board Vote Recommendation | Page |
Proposal 1: Election of Directors | FOR each nominee | 15 |
Proposal 2: Advisory vote on compensation of our Named Executive Officers (Say-on-Pay) | FOR | 38 |
Proposal 3: Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2024 | FOR | 77 |
Proposal 4: Amendment to the Company’s Certificate of Incorporation to provide for the exculpation of certain officers from liability in limited circumstances | FOR | 80 |
INGEVITY | 2024 Proxy Statement | 8 |
INGEVITY | 2024 Proxy Statement | 9 |
Advancing Environmental Stewardship
■ | Entered into a renewable product purchase agreement to produce renewable energy to offset Scope 2 emissions related to Ingevity’s United States manufacturing locations and advance the company toward greenhouse gas (“GHG”) reduction targets | |
■ | Capa® portfolio earned additional sustainability certifications including compostable certification from the Biodegradable Products Institute, the elite OK biodegradable WATER and SOIL certifications from TÜV Austria Bureau of Inspection and Certification and ISCC+ certification for the production of ‘mass-balance’ materials that increase the content of renewable raw materials in Capa products | |
■ | Completed lifecycle analysis that studied CTO from cradle to the completion of the distillation process of 21 of Ingevity’s CTO distillate products and concluded that, due to their temporary storage of biogenic carbon, the carbon negative properties of the CTO distillate products completely offset GHG emissions released with the energy and land use outputs associated with production and distillation, leaving negative carbon footprints for all 21 products at the factory gate |
Committed to Social Responsibility
■ | Ingevity and our employees donated over $1.5 million and 4,200 volunteer hours through our IngeviCares philanthropy program in 2023 in support of our sustainability goal to make a positive impact in the communities where we operate | |
■ | Honored as a leading employee benefits provider in 2023, receiving benefits industry awards in recognition of Ingevity’s robust programs and campaigns to inform employees about financial wellness and retirement benefits | |
■ | Celebrated recognition as one of 60 companies in North America honored with Talent Board’s Global Candidate Experience Award for excellence in talent acquisition practices | |
■ | Incorporated the concept of belonging into our diversity, equity, and inclusion program, now called “DEIB,” to promote and foster day-to-day experiences that enable our employees to feel safe and bring their full, authentic selves to work | |
■ | Advanced our DEIB priorities by adding iVet, a new veterans employee resource group (“ERG”), and expanding programming for existing ERGs |
INGEVITY | 2024 Proxy Statement | 10 |
Corporate Governance
■ | Achieved the silver rating for sustainability by EcoVadis®, an independent organization that provides evidence-based sustainability assessments for companies within global supply chains, placing Ingevity in the top quartile of all responding companies | |
■ | Placed in the 91st percentile among our industry peers in the 2023 S&P Global Corporate Sustainability Assessment ranking | |
■ | Earned a first-time score from the Carbon Disclosure Project (commonly known as CDP), the global disclosure system for investors, companies, cities, states and regions that helps identify ways to manage environmental risks and opportunities and provide vital information back to Ingevity’s stakeholders | |
■ | Continued refreshment of our Board with the election of Bruce Hoechner | |
■ | Completed centralization of Ingevity’s sustainability data in the Dakota Scope 5 platform to enhance environmental performance data tracking and forecasting toward GHG goals |
INGEVITY | 2024 Proxy Statement | 11 |
Name | Age | Director Since | Principal Occupation | Independent | Committee Memberships* | Other Public Company Boards | |||||||
JEAN S. BLACKWELL (CHAIR) | 69 | 2016 | Retired; Former Senior Executive at Cummins Inc. | – T&C – N&G – Executive (Chair) | 2 | ||||||||
LUIS FERNANDEZ-MORENO | 61 | 2016 | Sole Member and Manager, Strat and Praxis LLC; Former Senior Executive at Ashland Inc. | – N&G (Chair) – S&S – Executive | 1 | ||||||||
JOHN C. FORTSON | 56 | 2020 | President and CEO, Ingevity Corporation | ||||||||||
DIANE H. GULYAS | 67 | 2019 | Retired; Former President, DuPont Performance Polymers, E.I. du Pont de Nemours | – T&C (Chair) – N&G – Executive | 1 | ||||||||
BRUCE D. HOECHNER | 64 | 2023 | Retired; Former CEO, Rogers Corporation | – T&C – N&G | 1 | ||||||||
FREDERICK J. LYNCH | 59 | 2016 | Operating Partner, AEA Investors LP; Former President and CEO, Masonite International Corporation | – Audit – T&C | |||||||||
KAREN G. NARWOLD | 64 | 2019 | Retired; Former EVP, Chief Administrative Officer, General Counsel and Corporate Secretary, Albemarle Corporation | – Audit – S&S (Chair) – Executive | |||||||||
DANIEL F. SANSONE | 71 | 2016 | Retired; Former EVP, Strategy and CFO, Vulcan Materials Company | – Audit (Chair) – T&C – Executive | 1 | ||||||||
BENJAMIN G. (SHON) WRIGHT | 49 | 2022 | Vice President, Cummins & President, Cummins Engine Components | – Audit – S&S |
* | Audit – Audit Committee |
T&C – Talent and Compensation Committee | |
N&G – Nominating and Governance Committee | |
S&S – Sustainability and Safety Committee | |
Executive – Executive Committee |
62.2 years | 4 years | 3 new | 3/9 | 2/9 | 3/5 | 8/9 | ||||||
AVERAGE AGE | MEDIAN TENURE | DIRECTORS ADDEDSINCE 2022(1) | DIRECTORS AREWOMEN | DIRECTORSIDENTIFY AS RACIALLY OR ETHNICALLY DIVERSE | COMMITTEESAND BOARD CHAIRED BY WOMEN | DIRECTORS AREINDEPENDENT |
(1) | William J. Slocum will not stand for reelection at the Annual Meeting. |
INGEVITY | 2024 Proxy Statement | 12 |
We recognize that strong corporate governance practices contribute to long-term stockholder value. We are a stockholder of record, you may revoke your proxycommitted to sound governance practices, including those described below.
Board Independence, Composition, and Accountability | ■ 8 of 9 directors are independent, including the Chair ■ Separate Chair and CEO ■ Five fully independent Board committees ■ Regular Board and committee executive sessions ■ Diverse Board in terms of gender, race, ethnicity, experience, and skills ■ Director overboarding policy ■ Directors shall not stand for re-election in the Board service year after they reach 72 years of age (unless waived by the Board on a case-by-case basis) | |
Best Practices | ■ Active stockholder engagement program ■ Annual Board and committee self-evaluations ■ Annual director evaluations ■ Board leadership role in CEO and executive succession planning ■ Robust risk management program that includes Board oversight of key risk areas, including cybersecurity ■ Board oversight of environmental and sustainability matters (primarily through the Sustainability and Safety Committee) ■ Annual Sustainability Report containing measurable sustainability goals ■ Comprehensive new director orientation ■ Policy prohibiting officers, directors, and employees from hedging and pledging our Common Stock ■ Policy to include candidates identifying as gender-diverse and racially/ethnically-diverse among the pool of potential new director candidates ■ Significant Board refreshment, with three new directors added since 2022(1) ■ Robust stock ownership guidelines applicable to executives and directors ■ Comprehensive Code of Conduct and Ethics and Compliance Program | |
Stockholder Rights | ■ Annual election of all directors ■ Majority voting with director resignation policy (plurality in contested elections) ■ Stockholder right to call special meetings ■ No poison pill or dual-class shares ■ One share, one vote standard ■ No supermajority voting requirements |
(1) | William J. Slocum will not stand for reelection at the Annual Meeting. |
INGEVITY | 2024 Proxy Statement | 13 |
The T&C Committee continues to implement and change your vote beforemaintain practices in our compensation programs and related areas that reflect responsible corporate governance and compensation policies. These practices include the polls closefollowing:
What We Do | What We Don’t Do | |||
Use performance metrics to align pay with Companyfinancial performance | No repricing, backdating or discounting of stockoptions | |||
Balance short-term and long-term incentives throughfocused use of performance metrics | No hedging, pledging or short sales of Common Stockby any director, executive officer or other employee | |||
Emphasize stock ownership with long-term incentivesbeing paid in Common Stock and meaningful Common Stock ownership guidelines | No excise tax gross-ups for change of control payments | |||
Maintain a “clawback” policy for executive incentivecompensation in the event of a restatement of financial results regardless of fault | No excessive perquisites | |||
Use “double trigger” change of control (with respect toreplacement awards) for severance and equity vesting provisions | No tax gross-ups on perquisites other than inconnection with relocation benefits | |||
Engage an independent consultant to advise the T&CCommittee | ||||
Discourage excessive risk taking by offering a balanced compensation program that uses multiple incentivemetrics that balance focus on achievement of long-and short-term goals | ||||
Pay dividend equivalents only on stock unit awards thatvest, if any |
INGEVITY | 2024 Proxy Statement | 14 |
PROPOSAL 1 |
OUR BOARD RECOMMENDS A VOTE FOREACH NOMINEE. |
Our Nominating & Governance Committee has recommended, and the Board has nominated nine incumbent directors for election at the Annual Meeting by doing one of the following:
Each director elected at the Annual Meeting will not be included in determining whether a quorum is present at such meeting.
The information below summarizes the particular experience, qualifications, attributes and skills of each nominee. The Nominating & Governance Committee and the Board believe that, as a group, these nominees provide our Board with a strong balance of experience, leadership, qualifications, attributes and skills, and that each individual nominee can make a significant contribution to the Board and should serve as a director of the Company.
At any meeting of stockholders for the election of directors at which a quorum is present, the election will be determined by a majority of the votes cast by the stockholders entitled to vote in the election, except that in the case of a contested election, the election will be determined by a plurality of the votes cast by the stockholders entitled to vote in the election.
THE BOARD RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES NAMED IN THIS PROXY STATEMENT. |
INGEVITY | 2024 Proxy Statement | 15 |
Back to Contents |
JEAN S. BLACKWELL | ||||
BOARD COMMITTEES ■ T&C ■ Nominating & Governance ■ Executive (Chair) | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ Johnson Controls International plc (since 2018) ■ Celanese Corporation (since 2014) | |||
Age: 69 Director since: Independent chair | SKILLS AND EXPERIENCE Ms. Blackwell has substantial experience in the areas of finance and law, and also as to matters of corporate responsibility, sustainability and human resources, having served both as a public company Chief Financial Officer and General Counsel, among other corporate leadership roles. She also has significant oversight and governance expertise as an experienced public company board member, having served in a number of committee chair roles. From 2016 until she took over as Board chair in 2021, Ms. Blackwell served as the chair of our Audit Committee. ADDITIONAL INFORMATION Ms. Blackwell has served as a director on numerous non-profit boards. Ms. Blackwell holds a bachelor’s degree in economics from The College of William and Mary and a juris doctor degree from the University of Michigan. | PROFESSIONAL HIGHLIGHTS Chief Executive Officer of Cummins Foundation and Executive Vice President of Corporate Responsibility for Cummins Inc. (“Cummins”) from 2008 until her retirement in 2013. Previous positions with Cummins (joined in 1997) included Chief Financial Officer; Vice President, business services; Vice President, human resources; and General Counsel. Earlier experience includes Budget Director for the State of Indiana; Executive Director of the Indiana State Lottery Commission, and Partner at the law firm of Bose McKinney & Evans, LLC. PRIOR PUBLIC COMPANY DIRECTORSHIPS ■ Essendant Inc. (formerly, United Stationers Inc.) (former public company) (2007-2018) ■ The Nassau Companies of New York (formerly Phoenix Companies, Inc.) (former public company) (2004-2009) |
INGEVITY | 2024 Proxy Statement | 16 |
LUIS FERNANDEZ-MORENO | ||||
BOARD COMMITTEES ■ Nominating & Governance (Chair) ■ Sustainability & Safety ■ Executive | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ Select Energy Services, Inc. (since 2022) | |||
Age: 61 Director since:2016 | SKILLS AND EXPERIENCE Mr. Fernandez-Moreno has over thirty years of executive and operational experience in the performance materials, specialty chemicals and coatings industries. He has significant mergers and acquisitions (“M&A”) and international business experience, having held leadership roles in complex global business operations in the United States, Mexico, Brazil, France and the United Kingdom. Mr. Fernandez also has extensive expertise in the area of sustainability with a focus on integrating responsible environmental, social and governance principles and metrics into global business strategies to maximize stakeholder value. ADDITIONAL INFORMATION Mr. Fernandez-Moreno has served as a member of several private and non-profit company boards including Hasa, Inc., a portfolio company of Wind Point Partners (commencing in 2023); Huber Engineered Materials, a portfolio company of J.M. Huber Corporation, since 2019; Ascensus Specialties International Company, a portfolio company of Wind Point Partners (2017-2021); and OQ Chemicals GmbH (formerly Oxea S.a.r.l.), a subsidiary of OQ, an integrated energy company, owned by the Oman government, from 2018 to 2023. Mr. Fernandez-Moreno holds a bachelor’s degree in chemical engineering from Universidad Iberoamericana in Mexico City, Mexico, and is a graduate of the Wharton Management Certificate Program at the University of Pennsylvania. | PROFESSIONAL HIGHLIGHTS Sole Manager and Member of Strat and Praxis LLC, a consulting services company, since June 2018. Executive Advisor, Wind Point Partners (since December 2023). Senior Vice President of Ashland Inc. (“Ashland”) (2012-2017), including serving as President of its Chemicals Group (2015-2017); President, Ashland specialty ingredients (2013-2015); and President, Ashland water technologies (2012-2013). Previous experience included 27 years at Rohm & Haas Company and, after its acquisition, with The Dow Chemical Company. He also served as Executive Vice President at Arch Chemicals until its acquisition by Lonza Group AG (2010-2011). |
INGEVITY | 2024 Proxy Statement | 17 |
JOHN C. FORTSON | ||||
SKILLS AND EXPERIENCE Mr. Fortson has served as our President and Chief Executive Officer since September 2020. From 2015 to April 2021, he served as the Company’s Chief Financial Officer, and from 2015 to February 2021, he served as the Company’s Treasurer. Mr. Fortson has more than 23 years of experience in executive, management, strategic planning, financial, M&A and sustainability matters and has held leadership positions in the chemicals, manufacturing, global aerospace and defense industries. ADDITIONAL INFORMATION Mr. Fortson has served as a member of private and non-profit company boards, including as a member of the board of the American Chemistry Council (2021-present), and as a member of the Medical University of South Carolina Heart and Vascular Advisory Board (2017-present). Mr. Fortson has a bachelor’s degree from the United States Military Academy at West Point and a master’s degree in business administration from Duke University’s Fuqua School of Business. | PROFESSIONAL HIGHLIGHTS President and Chief Executive Officer of Ingevity since September 2020. Served as Chief Financial Officer and Treasurer of Ingevity from 2015-2021. Vice President, Chief Financial Officer, and Treasurer, AAR Corporation (2013–October 2015). Managing Director, Bank of America Merrill Lynch (2007–2013). | |||
Age: 56 Director since: |
DIANE H. GULYAS | ||||
BOARD COMMITTEES ■ T&C (Chair) ■ Nominating & Governance ■ Executive | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ Expeditors International of Washington, Inc. (since 2015) | |||
Age: 67 Director since: 2019 | SKILLS AND EXPERIENCE Ms. Gulyas’ qualifications to serve as a director include her extensive executive experience at one of the world’s largest chemical companies, as well as her extensive experience in international operations, sustainability, global manufacturing and sales, including in the automotive parts industry. Ms. Gulyas also has significant oversight and governance expertise as an experienced public company board member. ADDITIONAL INFORMATION Ms. Gulyas has served on the boards of several non-profit and private companies, including as chair of the board of directors of the Ladies Professional Golfing Association (2016-2022). Ms. Gulyas has a bachelor’s degree in chemical engineering from the University of Notre Dame. | PROFESSIONAL HIGHLIGHTS President, Performance Polymers business of E.I. du Pont de Nemours (“du Pont”) from 2009 until her retirement in 2014. Previous positions in her thirty-five year du Pont career include Global Chief Marketing and Sales Officer (2004-2006); Group Vice President of the electronic and communication technologies platform (2002-2004); and Vice President and General Manager of the advanced fiber business (1997-2001). PRIOR PUBLIC COMPANY DIRECTORSHIPS ■ W.R. Grace & Co. (former public company) (2015-2021) ■ Mallinckrodt Pharmaceuticals (2013-2018) ■ Navistar International Corporation (2009-2012) ■ Viasystems (former public company) (2003-2009) |
INGEVITY | 2024 Proxy Statement | 18 |
BRUCE D. HOECHNER | ||||
BOARD COMMITTEES ■ T&C ■ Nominating & Governance | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ Curtiss Wright Corp. (since 2017) | |||
Age: 64 Director since: 2023 | SKILLS AND EXPERIENCE Mr. Hoechner has experience leading a publicly traded, global manufacturing company and has significant expertise in international marketing and business strategy development. Mr. Hoechner has significant oversight and governance expertise as an experienced public company board member, having served on governance and finance committees. ADDITIONAL INFORMATION Mr. Hoechner has served on non-profit boards. He holds a Bachelor of Science degree in chemical engineering from Pennsylvania State University and is a graduate of the Wharton Management Certificate Program at the University of Pennsylvania. | PROFESSIONAL HIGHLIGHTS President & CEO of Rogers Corporation from 2011 until his retirement in 2022. Director of Rogers Corporation from 2017 until 2023. Various positions of increasing responsibility with Rohm and Haas Company for whom he worked for 28 years and with The Dow Chemical Company (after its acquisition of Rohm and Haas), including over ten years spent living and working in Asia, culminating as President, Asia Pacific Region, Dow Advanced Materials Division (2009-2011). |
FREDERICK J. LYNCH | ||||
BOARD COMMITTEES ■ T&C ■ Audit | ||||
Age: 59 Director since: 2016 | SKILLS AND EXPERIENCE Mr. Lynch served as President and Chief Executive Officer of a public, global manufacturing company for twelve years until his retirement in 2019, also having served as a director for that organization. He also brings substantial prior executive experience in the chemicals industry, and in-depth knowledge of global business, manufacturing, supply chain management, sustainability and strategic planning. He is an “audit committee financial expert” under SEC rules. ADDITIONAL INFORMATION Mr. Lynch has served on the board of several non-profit and private companies. Mr. Lynch has a bachelor’s degree in chemical engineering from Villanova University and a master’s degree in business administration from Temple University. | PROFESSIONAL HIGHLIGHTS Operating Partner, AEA Investors, LP, a global private investment firm (since 2020); Board Chair, Verdesian Life Sciences (since 2023); Director of TileBar (since 2023), Ascential Technologies (since 2022), Traeger Grills (2020-2021), and Process Sensing Technologies (since 2020) (portfolio companies of AEA Investors, LP). President and CEO of Masonite International Corporation, a global manufacturer of doors and door systems from 2006 until his retirement in 2019. Previous experience includes President of human generics division and Senior Vice President of global supply chain for Alpharma, Inc. (2003-2006), and eighteen years at Honeywell International, including Vice President and General Manager of its specialty chemicals business. PRIOR PUBLIC COMPANY DIRECTORSHIPS ■ Masonite International Corporation (2009-2019) |
INGEVITY | 2024 Proxy Statement | 19 |
KAREN G. NARWOLD | ||||
BOARD COMMITTEES ■ Audit ■ Sustainability & Safety (Chair) ■ Executive | ||||
Age: 64 Director since: 2019 | SKILLS AND EXPERIENCE Ms. Narwold has over thirty years of executive, management, legal and compliance experience in chemicals and manufacturing, including as Chief Administrative Officer and General Counsel of several public companies. Her areas of expertise include law, corporate governance, compliance, executive compensation, risk oversight, strategic planning, M&A and cybersecurity. Ms. Narwold also has expertise in the area of sustainability with a focus on leveraging best-in-class benchmarking to drive corporate accountability and reporting. ADDITIONAL INFORMATION Ms. Narwold has bachelor’s degree in political science from the University of Connecticut and a juris doctor degree from the University of Connecticut School of Law. | PROFESSIONAL HIGHLIGHTS Executive Vice President, Chief Administrative Officer, General Counsel, and Corporate Secretary of Albemarle Corporation (“Albemarle”), a global specialty chemicals company, from 2010 until her retirement in 2023, including leadership of the legal, public affairs (government and regulatory affairs and communications) and compliance organizations. She was also a member of Albemarle’s Enterprise Risk Management and Disclosure Committees. Previously held various leadership roles at Symmetry Holdings (2007-2010) and Barzel Industries (2008-2009), including for both as General Counsel, and at GrafTech International (1990-2006), a global graphite and carbon manufacturer and former subsidiary of Union Carbide, including serving as Vice President, human resources, General Counsel and Secretary. |
DANIEL F. SANSONE | ||||
BOARD COMMITTEES ■ Audit (Chair) ■ T&C ■ Executive | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ AdvanSix Inc. (since 2016) | |||
Age: 71 Director since: 2016 | SKILLS AND EXPERIENCE Mr. Sansone has extensive executive and general management experience and substantial financial expertise, including service as Chief Financial Officer and Treasurer at a global manufacturing public company and is an “audit committee financial expert” under SEC rules. Given his level of financial expertise, Mr. Sansone is well qualified to chair the Company’s Audit Committee. He also brings expertise in the asphalt and paving markets. ADDITIONAL INFORMATION Mr. Sansone has a bachelor’s degree in finance from John Carroll University and a master’s degree in business administration from the Illinois Institute of Technology. | PROFESSIONAL HIGHLIGHTS Executive Vice President and Chief Financial Officer at Vulcan Materials Company (“Vulcan”), an S&P 500 company and the largest U.S. producer of aggregate-based construction materials, including asphalt, from 2005 until his retirement in 2014. Other roles at Vulcan included President, southern and gulf coast division; President, Gulf Coast Materials; EVP, Strategy; Treasurer; and Corporate Controller. Before joining Vulcan, Mr. Sansone held positions domestically and internationally at Monroe Auto Equipment (now Tenneco Inc.), FMC Corporation (1978-1986), and Kraft Inc. (1976-1978). |
INGEVITY | 2024 Proxy Statement | 20 |
BENJAMIN G. (SHON) WRIGHT | ||||
BOARD COMMITTEES ■ Audit ■ Sustainability & Safety | ||||
Age: 49 Director since: 2022 | SKILLS AND EXPERIENCE Mr. Wright is an executive with extensive international manufacturing experience with industrial and chemical companies. As President of Cummins Engine Components, he is responsible for approximately 7,000 employees and 14 manufacturing locations. Mr. Wright also holds a certification in cybersecurity oversight from Carnegie Mellon University’s Software Engineering Institute. ADDITIONAL INFORMATION Mr. Wright has served on non-profit and private company boards, including as a member of the Board of Trustees at The Children’s Museum of Indianapolis (from 2019-2021). He holds a Bachelor of Science degree in chemical engineering from the University of South Carolina, and a Master of Business Administration degree from Harvard Business School. | PROFESSIONAL HIGHLIGHTS Vice President, Cummins Incorporated & President, Cummins Engine Components; various positions of increasing responsibility over a 19-year career at Cummins. Chemical Engineer, British Petroleum (1997-2002) |
INGEVITY | 2024 Proxy Statement | 21 |
The Company’s Board consists of a diverse group of respected leaders who possess the requisite skills, experience and character to effectively oversee Ingevity’s evolving needs and strategy. The following chart summarizes the core competencies that the Board considers valuable for effective governance and oversight and illustrates how the current Board members individually and collectively represent these key competencies.
Skill/Experience | Blackwell | Fernandez- Moreno | Fortson | Gulyas | Hoechner | Lynch | Narwold | Sansone | Wright | |
Industry or Market Experience | ||||||||||
C-Suite Experience | ||||||||||
Other Public Company Board Experience | ||||||||||
International Manufacturing Experience (P&L) | ||||||||||
Executive Compensation/Human Capital Management | ||||||||||
SEC Financial Expert* | ||||||||||
Enhances Diversity | ||||||||||
Substantial M&A/Joint Venture Experience | ||||||||||
Compliance/Legal Experience | ||||||||||
Environmental, Safety & Sustainability Experience | ||||||||||
Cybersecurity Experience | ||||||||||
Risk Management |
* | While each of Ms. Blackwell, Mr. Fortson, and Mr. Hoechner meet the qualifications of an audit committee financial expert under the SEC rules, none of them presently serve on the Audit Committee or are formally designated as an audit committee financial expert for the Company. |
In addition, many of our directors have experience as members of non-profit, academic and philanthropic institutions, which adds additional perspective to their roles at Ingevity.
INGEVITY | 2024 Proxy Statement | 22 |
The Board is responsible for overseeing and providing guidance on the Company’s strategy, business and performance, and protecting stockholder interests and value. In addition, the Board is responsible for appointing, overseeing and evaluating the executive officers who manage the Company’s day-to-day operations. The Board oversees management’s activities to ensure that the Company’s assets are properly safeguarded; that the Company maintains appropriate financial and other internal controls; and that the Company complies with responsible corporate governance practices, and applicable laws, regulations and ethical standards. One of the Compensation Committee,Board’s most important functions is oversight of risk management, including cybersecurity. This is discussed further below under the section titled “Board’s role in risk oversight.”
The Board actively oversees the development and Chairexecution of the Nominatingour strategies, including those related to business, operations and Governance Committee of Celanese Corporation, a global technology and specialty materials company since March 2014. Since June 2018, she has served as a member of the Board of Directors, and a member of the Compensation Committee, of Johnson Controls International PLC, a global diversified technology and multi-industrial leader. From 2007 through 2018, Ms. Blackwell served as a member of the Board of Directors of Essendant Inc. (formerly United Stationers Inc.), a leading national wholesale distributor of business products, where she was a member of the Audit and Governance Committees, having previously served as Chair of the Governance Committee and as Chair of the Compensation Committee. She has also served as a member of the Board of Directors and Chair of the Audit Committee of Phoenix Companies, Inc., a life insurance company. Ms. Blackwell served as CEO of Cummins Foundation and Executive Vice President of Corporate Responsibility of Cummins Inc. from 2008 until her retirement in 2013. At Cummins she previously served as Executive Vice President and CFO, Vice President, Cummins Business Services, Vice President, Human Resources, and Vice President and General Counsel. Prior to joining Cummins, Ms. Blackwell served as the Budget Director for the State of Indiana, and as the Executive Director of the Indiana State Lottery Commission. Prior to her service on the State Lottery Commission, Ms. Blackwell was a partner at Bose McKinney & Evans LLP, where she practiced in the area of financial and real estate transactions. Ms. Blackwell has served, and continues to serve, on various non-profit boards.
In carrying out its predecessor, Westvaco Corporation, from 2001 to 2015. He has served as a member ofresponsibilities, the Board of Directors of PNC Financial Services Group, Inc. since 2002,has created and Commercial Metals Company since 2010,
■ | The Audit Committee; | |
■ | The Talent and Compensation Committee (the “T&C Committee”); | |
■ | The Nominating and Governance Committee; | |
■ | The Sustainability and Safety Committee; and | |
■ | The Executive Committee. |
Each committee’s responsibilities are described under Chapter 11 of the U.S. Bankruptcy Code on March 16, 2009 and emerged from reorganization proceedings on June 9, 2009. Mr. Lynch joined Masonite from Alpharma Inc., where he served as President of the human generics division and Senior Vice President of global supply chain. Prior to joining Alpharma, Mr. Lynch spent nearly 18 years at Honeywell International Inc., last serving as Vice President and General Manager of its specialty chemical business. Mr. Lynch serves on various non-profit boards.
The Board is committed to sound corporate governance policies and practices that are designed to enable Ingevity to operate responsibly and with integrity, to compete effectively, to sustain its business and to build long-term stockholder value. Our Board-approved Corporate Governance Guidelines (the “Governance Guidelines”“Guidelines”) setting forth certain corporate governance practices. The Governance Committee is responsible for reviewing periodically the Governance Guidelines and
The Guidelines form a transparent framework for the effective governance of Ingevity, addressing matters such as the respective roles and responsibilities of the Board and management, the Board’s leadership structure, director independence and Board and committee membership criteria. The Guidelines are reviewed at least annually by the Nominating & Governance Committee in light of changing regulations, evolving best practices and other governance developments.
INGEVITY | 2024 Proxy Statement | 23 |
Our Board annually conducts an assessmentregularly reviews its leadership structure, how the structure is functioning, and whether the structure continues to be in the best interest of our stockholders. The Company’s current Board leadership structure consists of the following:
INDEPENDENT CHAIR | JEAN S. BLACKWELL | |
Main Responsibilities: ■ Presides over Board and stockholder meetings ■ Provides advice and counsel to CEO ■ Acts as liaison between independent directors and CEO ■ Provides input to the T&C and Nominating & Governance Committees regarding the annual CEO performance evaluation, Board evaluation, and succession planning ■ Chairs the Executive Committee | ||
PRESIDENT & CEO | JOHN C. FORTSON | |
Main Responsibilities: ■ Manages Ingevity’s day-to-day business and operations ■ Manages and develops Ingevity’s executive leadership team ■ Ensures proper execution of Ingevity’s corporate strategy | ||
Our Guidelines do not contain a firm policy regarding separation of the offices of CEO and Chair. Instead, the Guidelines give the Board flexibility to make the determination that is in the best interests of the stockholders based on applicable circumstances at the time of the decision. Except in connection with a leadership transition in 2020, the Company has always separated the roles of Chair and CEO. The Board believes that separating the positions of CEO and Chair allows for clear delineation of the role of the Chair and minimizes duplication of effort between the CEO and the Chair. The separation of roles also allows the CEO to focus on executing Ingevity’s strategic plan and managing its operations and performance, and facilitates effective oversight by the Chair and improved communications and relations between the Board, the CEO, and other senior leaders of the Company.
The Guidelines provide that if the Chair is not independent, the Board must appoint a Lead Independent Director. During the leadership transition in 2020, Mr. Lynch served as the Lead Independent Director.
Ms. Blackwell has served as Independent Chair of the Board since February 2021. Our Board Chair is elected to serve a two-year term, unless otherwise determined by the Board. Upon the recommendation of the Nominating & Governance Committee and following its own review, the Board elected Ms. Blackwell in February 2023 to continue her service as Board Chair for another two-year term. Because Ms. Blackwell is an independent director, the Board has not deemed it necessary to appoint a lead independent director.
Our Board has established five standing committees to help the Board fulfill its responsibilities. Committee members are elected annually by the Board based on the recommendations of the Nominating & Governance Committee. Each committee operates under a charter, all of which are available at https://ir.ingevity.com/corporate-governance/corporate-governance-documents.
The Board has determined that each member of its standing committees is independent under the relevant SEC and New York Stock Exchange (“NYSE”) standards, including the heightened independence standards required for members of audit and compensation committees. For more information on independence standards, see “Director independence.”
INGEVITY | 2024 Proxy Statement | 24 |
AUDIT COMMITTEE | 2023 Meetings: 9 Average attendance in 2023: 93% | ||
CHAIR Daniel F. Sansone* | MEMBERS Frederick J. Lynch* Karen G. Narwold William J. Slocum* Benjamin G. (Shon) Wright * Audit Committee Financial Expert | PRIMARY RESPONSIBILITIES: 1. Assist the Board with overseeing the integrity of the Company’s financial statements; 2. Review management’s assessments and reports relating to the effectiveness of the Company’s internal control over financial reporting; 3. Appoint, oversee, and evaluate the qualifications, performance, and independence of the independent auditor; 4. Oversee and evaluate the effectiveness of the Company’s internal audit function; 5. Review the overall adequacy and effectiveness of the Company’s legal, regulatory, and ethics and compliance programs; 6. Review significant legal, compliance, or regulatory matters; and 7. Review the Company’s financial risk exposures and mitigating actions. | |
ADDITIONAL GOVERNANCE MATTERS: | |||
The Board has determined that each member of the Audit Committee is independent in accordance with the heightened independence standards established by the Securities and Exchange Act of 1934 (the “Exchange Act”) and adopted by the NYSE for audit committee members. The Board has also determined that each Audit Committee member is financially literate, as such qualification is interpreted by the Board in its business judgement, and that each of Messrs. Lynch, Sansone and Slocum is an “audit committee financial expert” under SEC rules. No member of our Audit Committee serves on the audit committee of more than three public companies. The Audit Committee’s report for December 31, 2023, appears under “Audit Committee Report.” William J. Slocum will not stand for reelection at the Annual Meeting. |
TALENT AND COMPENSATION COMMITTEE | 2023 Meetings: 7 Average attendance in 2023: 100% | ||
CHAIR Diane H. Gulyas | MEMBERS Jean S. Blackwell Bruce D. Hoechner Frederick J. Lynch Daniel F. Sansone | PRIMARY RESPONSIBILITIES: 1. Evaluate the CEO’s performance and determine the CEO’s compensation based on such evaluation; 2. Review and approve the compensation of other executive officers; 3. Review and recommend to the Board for its approval Non-employee director compensation; 4. Administer the Company’s equity and other compensation plans and programs; 5. Review and make recommendations to the Board with respect to talent development and succession planning, diversity, equity, inclusion, and belonging programs, employee engagement initiatives, and corporate culture; and 6. Review incentive compensation arrangements to confirm that incentive pay aligns with Company goals and outcomes and does not encourage inappropriate risk-taking. | |
ADDITIONAL GOVERNANCE MATTERS: | |||
The Board has determined that each member of the T&C Committee is (i) an “outside director” under Section 162(m) of the Internal Revenue Code, as amended (the “Code”) and (ii) a “non-employee director” under Section 16b-3(b)(3)(i) promulgated under the Exchange Act. The T&C Committee’s report for December 31, 2023, appears under “Talent and Compensation Committee Report.” In July 2023, the T&C Committee changed its name from the Leadership Development & Compensation Committee to the Talent & Compensation Committee and made other amendments to its charter to emphasize its role in talent development, employee engagement and corporate culture in addition to its traditional executive compensation oversight role. |
INGEVITY | 2024 Proxy Statement | 25 |
NOMINATING AND GOVERNANCE COMMITTEE | 2023 Meetings: 5 Average attendance in 2023: 100% | ||
CHAIR Luis | MEMBERS Jean S. Blackwell Diane H. Gulyas Bruce D. Hoechner | PRIMARY RESPONSIBILITIES: 1. Identify individuals qualified to become Board members and recommend nominees for election to the Board; 2. Make recommendations to our Board concerning the composition and needs of the Board and its committees; 3. Maintain a Board succession plan; 4. Advise our Board on corporate governance matters; 5. Oversee the annual Board and committee self-evaluation process; and 6. Review related party transactions. | |
SUSTAINABILITY AND SAFETY COMMITTEE | 2023 Meetings: 5 Average attendance in 2023: 100% | ||
CHAIR Karen G. Narwold | MEMBERS Luis Fernandez-Moreno William J. Slocum Benjamin G. (Shon) Wright | PRIMARY RESPONSIBILITIES: 1. Oversee and review Ingevity’s integration of economic, environmental, and social principles into its business strategy and decision making; 2. Oversee Ingevity’s policies, procedures and performance with respect to environmental and corporate social responsibility and sustainability programs; 3. Review Ingevity’s annual Sustainability Report; 4. Review and monitor Ingevity’s policies, procedures, and performance relating to matters affecting employee, public, process, and product safety; and 5. Review and monitor the Company’s policies, procedures, and performance relating to matters affecting community engagement. | |
ADDITIONAL GOVERNANCE MATTERS: | |||
William J. Slocum will not stand for reelection at the Annual Meeting |
EXECUTIVE COMMITTEE | 2023 Meetings: 1 Average attendance in 2023: 100% | |
CHAIR Jean S. Blackwell | MEMBERS Luis Fernandez-Moreno Diane H. Gulyas Karen G. Narwold Daniel F. Sansone | PRIMARY RESPONSIBILITIES AND LIMITATIONS: The Executive Committee is authorized to exercise certain powers of the Board not otherwise prohibited by law or Ingevity’s Guidelines or governing documents between Board meetings when a meeting of the full Board is impractical or not warranted under the circumstances. |
Each of the Audit Committee, T&C Committee, Nominating & Governance Committee, and Sustainability & Safety Committee is responsible for annually reviewing their charter and performance. The Nominating & Governance Committee further reviews each of the committee charters annually, including the Executive Committee charter.
The Board strives to select as director candidates a mix of individuals with experience at policy-making levels in substantive areas that are relevant to the Company’s activities, as well as other characteristics that will contribute to the overall ability of the Board to perform its duties and meet changing conditions.
INGEVITY | 2024 Proxy Statement | 26 |
The Nominating & Governance Committee is responsible for evaluating and recommending qualified director candidates to the Board for its consideration. In evaluating potential director nominees, the Nominating & Governance Committee considers the following, among other things:
■ | independence and other related requirements for service on committees; | |
■ | the number of public company boards on which the nominee serves; | |
■ | conflicts of interest and other legal and ethical issues that would interfere with the proper performance of the responsibilities of a director (recognizing that some directors may also be executive officers of the Company); | |
■ | the nominee’s commitment to discharging the duties of a director in accordance with the Guidelines and applicable law and to serving on the Board for an extended period of time; | |
■ | the nominee’s available time and energy to carry out his or her duties effectively; | |
■ | experience that would enable the nominee to meaningfully participate in deliberations of the Board and committees and to otherwise fulfill his or her duties; and | |
■ | whether the nominee will enhance the diversity of the Board based on his or her educational and professional background, experience, racial and ethnic makeup, gender, viewpoints or perspectives. |
In addition, the Nominating & Governance Committee also considers character, financial literacy, and relevant skills in light of the Board’s needs.
The Nominating & Governance Committee considers recommendations for director candidates from Board members, stockholders, and other third parties, such as search firms that are engaged to identify candidates. The Nominating & Governance Committee evaluates candidates recommended by stockholders using the same criteria it uses for all other candidates. Any stockholder wishing to recommend a director candidate should provide the Nominating & Governance Committee with the information required by the Company’s Bylaws to be provided with respect to director nominees submitted by stockholders. For more information, see “Questions and Answers Regarding Stockholder Communications, Stockholder Proposals, and Company Documents.”
During 2023, the Board appointed one new director (Bruce D. Hoechner). Mr. Hoechner was recommended by a third-party search firm.
Our Guidelines and the NYSE require that a majority of our Governance Guidelines,directors be independent under the applicable rules and regulations of the SEC and the general listing standards of the NYSE. TheOur Board, with the assistance of the Nominating & Governance Committee, annually (or more frequently if circumstances require) assesses the independence of each director.
In conducting its independence assessment, the Board reviews all relevant facts and circumstances, including each director’s independence by reviewing anyaffiliations and relationships, potential conflicts of interest, and significant outside relationships. In determining each director’s independence, the Board broadly considers all relevant facts and circumstances, including specific criteria included in the NYSE’s general listing standards. For these purposes, the NYSE requires the Board to consider certain relationships that existed during a three-year look-back period. The Board considers the materiality and importance of such relationships not merely from the standpoint of the
In February 2024, the Nominating & Governance Committee and Board conducted their review of each director’s affiliations that are relevant to independence. These affiliations were provided by the directors in their responses to annual questionnaires distributed by the Company in December 2023. Once the Company received the list of affiliations, it conducted additional diligence on each relationship and ran searches against the Company’s books and records to determine whether any financial transactions existed with the affiliates. Results of the diligence and searches were reported to the Nominating & Governance Committee and the Board.
After reviewing the affiliations and report described above, upon the recommendation of ourthe Nominating & Governance Committee, the Board has affirmatively determined that all directors other than Mr. Fortson (Ingevity’s President and CEO) are independent, in accordance with the exception of Mr. Wilson, Ingevity’s Chief Executive Officer (“CEO”), eachapplicable rules and regulations of the remaining directors — Mses. Blackwell, Gulyas,SEC and Narwold,the general listing standards of the NYSE.
INGEVITY | 2024 Proxy Statement | 27 |
The Nominating & Governance Committee assists the Board in annually assessing the effectiveness of the Board, its committees, and Sansone, is independent.
Format | Topics | Presentation of Findings | Feedback Incorporated | |||
The Nominating & Governance Committee determines the format of the evaluations, and annually considers the effectiveness of the evaluation process. Under the current process, each director completes a written questionnaire to provide feedback on various aspects of the Board and the committees on which such director serves, and to provide general feedback on each director. The chair of the Nominating & Governance Committee then reviews each questionnaire with the director who completed it to ensure the feedback given is well understood and to ensure that each director is given the opportunity to provide comprehensive feedback. | Evaluation topics generally include, among other matters: ■ Board composition and structure; ■ Board culture; ■ Information flow and processes; ■ Board oversight of risk management and strategic planning; ■ Compliance and ethics program effectiveness; ■ Succession planning; ■ Access to management; and ■ Individual director effectiveness. | The Nominating & Governance Committee evaluates the findings and then presents to the Board and each committee chair the results of the evaluations. The Board and committees discuss the results to identify opportunities to enhance effectiveness. | The Board and/or committees implement enhancements and other modifications to their respective policies and procedures as appropriate. |
Examples of actions the Board Meetings
■ | establishment of the Sustainability & Safety Committee; | |
■ | assigning oversight of matters relating to the attraction, development, and retention of the Company’s leadership to the T&C Committee; | |
■ | rotating the Chair of the T&C Committee; | |
■ | running certain committee meetings concurrently to maximize Board time at regular meetings; | |
■ | modifying committee meeting content and length to reflect input from committee members; and | |
■ | streamlining the agenda of the Board’s final meeting of the year. |
Our Board meets on a regularly scheduled basis during the year to review significant developments affecting our CompanyIngevity and to act on matters requiring board approval, andBoard approval. The Board may hold special meetings between scheduled boardBoard meetings when
The Board met sixten times during fiscal year 2018. All directors2023. Each director attended 75 percentat least 75% of the aggregate of (i) the number of meetings of the Board held during the period he or moreshe was a director and (ii) the number of these meetings and of the meetings of all committees of the Board on which they served that were held during fiscal year.
Our Governance Guidelines require that the non-management members of our Board meet in executive session without management participationpresent at each regularly scheduled Board meeting. These
INGEVITY | 2024 Proxy Statement | 28 |
The Board, acting as a year.
Ingevity’s enterprise risk management (“ERM”) to focus the Board and management on areas of ethical risk, provide guidance to personnel to help them recognize and deal with ethical issues, provide mechanisms to report unethical conduct, and help to foster a culture of honesty and accountability. The Codes of Ethics include:
Set forth below are key areas of risk overseen by the Board, directly or through its committees.
Our Board, both directly and through the Audit Committee, receives regular updates on various legal, compliance and regulatory matters, such as developments in litigation, compliance risks and our compliance programs. In addition, regular updates provided to the Audit Committee by our General Counsel, Chief Compliance Officer, and internal audit function provide insight into our risk assessment and risk management policies and oversight. Our Board meets with our CEOprocesses.
The Audit Committee assists our Board in fulfilling its oversight responsibilities with respect to riskoversees the management in the areas of financial, accounting, internal controls, and procedures, information technologyliquidity risks. This oversight includes interaction at Audit Committee meetings with the Chief Financial Officer; management from our financial, accounting, internal audit, and cyber security risktreasury functions; and legal and regulatory compliance.
The CompensationNominating & Governance Committee oversees risks related to Board organization, Board membership (including director refreshment and succession), Board structure and other corporate governance matters.
The T&C Committee assists our Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs and with respect to succession planning for key management. For more information, see “Compensation Discussion and Analysis.”
The GovernanceSustainability & Safety Committee assistsreviews and monitors our corporate responsibility and sustainability programs, including environmental, social and governance (“ESG”) matters and oversight of people, product and process safety risk. In addition to reporting to the Sustainability & Safety Committee, management’s practice is to periodically review corporate responsibility and sustainability matters, including ESG programs and policies, in joint session with the full Board. As shown below, although the Sustainability & Safety Committee has primary responsibility for these matters, other committees, and occasionally the full Board, in fulfillingoversee specific sustainability-related matters.
INGEVITY | 2024 Proxy Statement | 29 |
Sustainability Report/ Other Area for Review | Committee | |||||
Item Description | BoD | S&S | N&G | Audit | T&C | |
Commitment to Sustainability | Sustainability Rating Agencies, Reporting and Sustainability Groups | |||||
Sustainability Materiality Refresh | ||||||
Goal Setting and Tracking Progress | ||||||
Manufacture Responsibly | Responsible Care Policy/Program | |||||
Prioritize People | Employee Experience | |||||
Safety | ||||||
Personal/Employee Safety | ||||||
Process Safety | ||||||
Public Safety/Environmental Sustainability | ||||||
Emergency Response and Crisis Communication Plans | ||||||
Culture of Inclusion/Diversity, Equity, Inclusion & Belonging | ||||||
Talent Attraction | ||||||
Compensation and Talent Management | ||||||
Employee Development | ||||||
Health and Wellness | ||||||
Supporting our Communities/Community Engagement | ||||||
Ingevicares/Philanthropic Giving | ||||||
Pursue Excellence | Commitment to Integrity and Ethical Behavior | |||||
Compliance & Ethics – Program Effectiveness, Complaints, Investigations, Financial Related Concerns, Compliance Program | ||||||
Code of Conduct | ||||||
Supplier Principles of Conduct, Diversity and Sustainability | ||||||
Cybersecurity | ||||||
Intellectual Property | ||||||
Financial Performance | ||||||
Governance | ||||||
Embrace Innovation | Business and Segment Innovation | |||||
Other | Emerging Issues, regulations in Sustainability and Safety | |||||
Alignment of sustainability and safety programs to company strategy | ||||||
Enterprise Risk Management |
INGEVITY | 2024 Proxy Statement | 30 |
The Board oversees our cybersecurity program and management of the associated risks. The Board receives updates at least twice a year from management, including our Chief Information Security Officer, on cybersecurity matters and our risk management program. The Board also receives updates periodically from third-party cybersecurity experts on the risk landscape generally. Cybersecurity risk and risk management is also integrated into our broader enterprise risk management plans and processes to ensure that cybersecurity matters are considered, and our IT department is consulted, during key business decisions that we make.
Under its oversight responsibilitiescharter, the Sustainability & Safety Committee has responsibility for overseeing and reviewing the Company’s integration of economic, environmental and social principles into its business strategy and decision making; reviewing and monitoring Ingevity’s policies, procedures and performance with respect to environmental, corporate responsibility and sustainability programs, matters affecting employee, public, process and product safety and matters affecting community engagement; reviewing the Company’s annual Sustainability Report; and making recommendations to the Board regarding the foregoing matters as the Sustainability & Safety Committee deems appropriate. In addition to the reviews completed by the Sustainability & Safety Committee, Ingevity’s management of risks associated withalso presents on ESG matters to the full Board organization, membershipat least once annually.
Our latest Sustainability Report and structure, corporate governanceother information regarding our ESG initiatives and progress are available on our website at https://www.ingevity.com/about/sustainability.
One of our Board’s most critical functions is executive succession planning, which is reviewed at least once annually and more often as needed. The T&C Committee, which has the primary responsibility for overseeing the development of succession plans for all of our directors. While executive officers, regularly discusses succession in collaboration with our CEO and CHRO, and reports on the discussions to the Board.
Under its charter, the T&C Committee is responsible for assistingoverseeing and reviewing Ingevity’s policies and programs related to DEIB, and human capital matters, including employee engagement initiatives. The T&C Committee receives periodic updates from management on, and discusses, the Company’s DEIB vision and strategy. At least once a year, the T&C Committee reviews matters related to the Company’s culture, including benefits offered, talent development, and workforce priorities. The T&C Committee also receives updates on the Company’s implementation of the IngeviWay, a framework which sets forth our purpose, vision and values and guides our behaviors and decision-making, to ensure alignment.
Additional information regarding DEIB and human capital matters are available on our website at https://www.ingevity.com/diversity-equity-inclusion and https://www.ingevity.com/the-ingeviway/.
Each director receives educational information about the Company and expectations of their role as part of an orientation upon joining the Board. Once on the Board, directors participate in evaluating certain risksan ongoing education program that incorporates site visits; management presentations; presentations by the Company’s independent auditors, investment banks and overseeinginternal and external legal counsel; third-party expert speakers on various topics; and the managementdistribution of analyst reports and pertinent articles on the Company’s business and industry. The Nominating & Governance Committee annually reviews the Board education program and recommends changes that it deems appropriate.
INGEVITY | 2024 Proxy Statement | 31 |
Under our Guidelines, a director may not stand for reelection for any service year after such risks, our entiredirector turns 72 in the interest of facilitating Board is regularly informed through managementrefreshment. The Board will determine on a case-by-case basis whether to grant an exception to this limitation taking into account such factors as the then current needs of the Board and any particular expertise or unique attributes of the director.
The Board has not established a policy enforcing a term limit because it believes that, on balance, such a policy would sacrifice the contribution of directors who have been able to develop, over a period of time, extensive insight into the Company and its operations. The Board annually evaluates each director’s contributions during the Board and committee reportsevaluation process.
Our Guidelines require any director who has a significant change in his or her full-time job responsibilities to submit a resignation. The Board then considers whether to accept any such resignation taking into account all relevant factors.
The Guidelines provide that independent directors generally may not serve on more than five public company boards (including Ingevity’s Board). However, a director who is actively employed as a CEO of a public company may not serve on more than three public company boards (including Ingevity’s Board), and a director who serves as an officer (other than CEO) at another public company may not serve on more than four public company boards (including Ingevity’s Board).
We value and are committed to regular, meaningful engagement with our stockholders and other stakeholders, including customers, suppliers, employees and our communities. In 2023, we hosted 97 calls with stockholders and potential stockholders and discussed a variety of topics, including capital allocation and leverage, strategy, key raw material costs, and financial results. Senior leadership participated in roughly a third of the calls. In May 2023, we hosted an Investor Day to drive further engagement with our stockholders and to speak with them directly about such risks and steps takenour strategic initiatives.
97 CALLS WITH | 99 MEETINGS WITH |
In 2023, we also attended 10 conferences/roadshows hosted by analysts resulting in 99 meetings with stockholders or potential stockholders.
INGEVITY | 2024 Proxy Statement | 32 |
Interested parties, including stockholders, may communicate by mail with all or selected members of the Board. Board as follows:
Via Email: | Via Mail: | ||
corporatesecretary@ingevity.com | C/O Corporate Secretary | ||
Ingevity Corporation | |||
4920 O’Hear Ave, Suite 400 | |||
N. Charleston, SC 29405 |
Correspondence should be addressed to the Board or any individual director(s) or group or committee of directors either by name or title (for example, “Chairman“Chair of the Board,” “Chair of the Nominating and& Governance Committee”Committee,” or “All Non-ManagementIndependent Directors”). All such correspondence should be sent via U.S. Mail to: Ingevity Corporation, 5255 Virginia Ave, N. Charleston, SC 29406, Attn:
Our Code of Conduct applies to all Ingevity-controlled entities and their respective employees, officers and directors, including the Board. It emphasizes our Board
The Code of Conduct focuses the Board, has three standing committees that met during fiscal year 2018:management and our employees on areas of ethical risk, provides guidance and examples to help personnel recognize and deal with ethical issues, prominently features mechanisms to report unethical conduct, and helps to foster a culture of honesty and accountability. The Code of Conduct is available on our website at http:// ir.ingevity.com/governance/codes-of-conduct. All employees, including executives, and all non-employee directors are required annually to review the Audit Committee,Code of Conduct and to participate in Code of Conduct training.
Any waiver for directors or executive officers from the provisions of the Code of Conduct must be made by the Nominating & Governance Committee and the Compensation Committee. Each of these committees is composed entirely of directors who have been determinedor by the Board to be independent under current NYSE standards. Each committee operates under a charter approved byat the Board setting out the purposes and responsibilities of the committee.
We have provided employees with a number of avenues to report ethics and adopted by the NYSE for audit committee members.
We maintain several governance documents on our website, which are listed below.
Our Code of Conduct is available at: https://ir.ingevity.com/corporate-governance/codes-of-conduct
The following materials are available at https://ir.ingevity.com/corporate-governance/corporate-governance-documents:
■ | Certificate of Incorporation; | |
■ | Bylaws; | |
■ | Governance Guidelines; | |
■ | Committee charters; | |
■ | Anti-Hedging Policy; and | |
■ | Stock Ownership Guidelines. |
INGEVITY | 2024 Proxy Statement | 33 |
The following materials are available at: https://www.ingevity.com/about/sustainability/:
■ | Sustainability Reports; | |
■ | Ingevity’s alignment with ten of the United Nations’ Sustainable Development Goals; | |
■ | Human Rights Policy; | |
■ | Modern Slavery Policy; | |
■ | Quality Policy; | |
■ | Responsible Care® Policy; and | |
■ | Supplier Principles of Conduct. |
These materials are also available in print at no charge to any stockholder who requests a copy by writing to Corporate Secretary, Ingevity Corporation, 4920 O’Hear Ave, Suite 400, N. Charleston, SC 29405, or by email to: corporatesecretary@ingevity.com.
The Board evaluates related party transactions consistent with Item 404 of Regulation S-K. Under its charter, the Nominating & Governance Committee is charged with reviewing all potential related party transactions and evaluation of: (1) the integrity of our financial statements; (2) our system of internal control over financial reporting; (3) the performance of our internal audit function; (4) the independence, qualifications and performance of our independent auditor; (5) our risk review and system of compliance with legal and regulatory requirements; (6) our
Based on a review of the transactions and affiliations reported by the Company’s directors, director nominees, and executive officers beginning in December 2023, the Nominating & Governance Committee has advised the Board that it has not identified any related party transactions since the beginning of the fiscal year ended December 31, 2023, and Mr. Fitzpatrick serves as the Chair. none are currently proposed.
INGEVITY | 2024 Proxy Statement | 34 |
The Board has determined that all membersannually reviews and approves non-employee director compensation at the recommendation of the Governance CommitteeT&C Committee. This review involves a survey of director compensation at peer companies and other similarly situated companies and a discussion with our independent compensation consultant, Pearl Meyer, regarding director compensation practices.
The 2023 non-employee director compensation program consisted of the following:
Standard Compensation | ||||
Cash Retainer | $ | 90,000 | ||
Restricted Stock Unit Award | $ | 118,000 | ||
TOTAL | $ | 208,000 | ||
Additional Cash Retainers for Leadership | ||||
Board Chair | $ | 100,000 | ||
Lead Independent Director* | $ | 25,000 | ||
Audit Committee Chair | $ | 20,000 | ||
T&C Committee Chair | $ | 15,000 | ||
Nominating & Governance Committee Chair | $ | 12,000 | ||
Sustainability & Safety Committee Chair | $ | 12,000 |
* | The Company did not have a Lead Independent Director in 2023. |
Cash retainers are independent as definedpaid to the non-employee directors quarterly in advance. Non-employee directors may elect to receive their annual cash retainer (both standard and leadership retainers) in the applicable listing standardsform of deferred stock units (“DSUs”) in lieu of cash under the 2016 Omnibus Incentive Plan, as amended, and the Non-Employee Director Deferred Compensation Plan (“Director DCP”). If a director makes such an election, the cash retainer is converted into an amount of DSUs using the closing price of the NYSE.
INGEVITY | 2024 Proxy Statement | 35 |
Each non-employee director receives an annual award grant of Ingevity restricted stock units (“RSUs”DRSUs”) under the 2016 Omnibus Incentive Plan, as amended, equivalent to $95,000approximately $118,000 at the time of grant. In 2018,The grant date for the RSU awards were made to non-employee directors underDRSUs is the Company's 2016 Omnibus Incentive Plan (the "Omnibus Plan") and underbusiness day after the terms and conditions applicable to their grants.annual stockholders meeting. The directors become vested in their RSUsDRSUs vest on the first anniversary of the award date. Forgrant date, and shares of Common Stock underlying DRSUs are delivered to the fiscal year ended 2018,directors as soon as practicable thereafter. DRSUs do not confer voting rights but are entitled to dividend-equivalents, which accrue from the grant date and are delivered in cash when the underlying DRSUs are settled.
If a director with DRSUs ceases to be a director before the vesting date other than due to death, disability, or termination for cause, the director will vest and settle in a pro rata number of RSUs granted was determined based on the closing price ofDRSUs (rounded up to the Company’s Common Stock as traded onnearest whole number) unless otherwise approved by the NYSE on April 26, 2018.
Non-employee directors have the option tomay elect to receive their annual cash retainer (both regular annual retainer for Board service, Board Chair retainer and Committee Chair retainer) in the form of deferred
Directors are entitled to reimbursement for out-of-pocket expenses incurred in connection with their Board service. Ingevity does not provide perquisite allowances to non-employee director must make his or her election to receive DSUs (in lieu of cash or RSUs) by December 31 of the calendar year preceding the year in which the compensation is earned, or within thirty days of becoming a director. No changes to the DSU distribution date are permitted absent a hardship.
Under our stock ownership guidelines, areeach non-employee director is expected to hold an amount of Common Stock equal to five times the annual base cash retainer. SharesFor 2023, the holding amount is $450,000. Non-employee directors have five years from the date they join the Board to meet the requirement.
Common Stock owned outright by thea director or his or her immediate family members residing in the same household, either outright or in family trusts, and sharesCommon Stock held in retirement plan accounts are deemed to be owned shares for purposes of these guidelines, as well asare vested and nonvested RSUsunvested DRSUs and DSUs. Until a
A non-employee director meetsin the first five years of service on the Board who has not yet met these guidelines he or she
As of RSUs.
Our directors are not permitted to engage in hedging activities with respect to our stock. See “Compensation Discussion and Analysis – Other Compensation Policies and Practices – Anti-hedging” for more information about the ownership goal.
INGEVITY | 2024 Proxy Statement | 36 |
The following table includes information concerning compensation for service as a director paid to or earned by the people listed in the table who served asour directors during the fiscal year ended December 31, 2018:
Name | Fees earned or paid in cash ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Non-equity incentive plan compensation ($) | Change in pension value and nonqualified deferred compensation ($) | Total ($) | ||||||
Richard B. Kelson | 170,000 | 95,055 | — | — | — | 265,055 | ||||||
Jean S. Blackwell | 105,000 | 95,055 | — | — | — | 200,055 | ||||||
Luis Fernandez-Moreno | 85,000 | 95,055 | — | — | — | 180,055 | ||||||
J. Michael Fitzpatrick | 97,000 | 95,055 | — | — | — | 192,055 | ||||||
Frederick J. Lynch | 100,000 | 95,055 | — | — | — | 195,055 | ||||||
Daniel F. Sansone(3) | — | 180,225 | — | — | — | 180,225 | ||||||
D. Michael Wilson | — | — | — | — | — | — |
2023 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE | ||||
Fees Paid in | Stock | All Other | Total | |
Cash(1) | Awards(2) | Compensation(3) | Compensation | |
Name | ($) | ($) | ($) | ($) |
Jean S. Blackwell | 190,000 | 118,012 | — | 308,012 |
Luis Fernandez-Moreno | 102,000 | 118,012 | — | 220,012 |
Diane H. Gulyas | 105,000 | 118,012 | — | 223,012 |
Bruce D. Hoechner | 90,000 | 147,597 | — | 237,597 |
Frederick J. Lynch | 90,000 | 118,012 | — | 208,012 |
Karen G. Narwold | 102,000 | 118,012 | — | 220,012 |
Daniel F. Sansone | 110,000 | 118,012 | — | 228,012 |
William J. Slocum | — | 208,106 | — | 208,106 |
Benjamin G. (Shon) Wright | 90,000 | 118,012 | — | 208,012 |
(1) | |
(2) |
remaining 1,645 will vest on April 28, 2024. | |
(3) |
INGEVITY | 2024 Proxy Statement | 37 |
PROPOSAL 2 |
OUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL. |
In accordance with the exceptionrequirements of Mr. Wilson, who is also a director and is discussed above. Each of the following executive officers has served in their positions with the Company since its separation from its former parent company, WestRock Corporation (“WestRock”) in May 2016 (the “Separation”), except for Mr. Smith, who joined the Company in June 2016 and was promoted to his current position in January 2017.
Title of Class | Name and Address of Beneficial Owners | Number of Shares | Percent of Class | ||
Common Stock | BlackRock Inc. 55 East 52nd Street New York, New York 10055 | 6,054,180 | (1) | [ ]% | |
Common Stock | The Vanguard Group 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 4,399,552 | (2) | [ ]% |
RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of February 25, 2019. Beneficial ownership is a technical term broadly defined by the SEC to mean more than ownership in the usual sense. In general, beneficial ownership includes any shares a director or officer can vote or transfer and any security the director or officer has the right to vote
In considering this proposal, we encourage you to review the Compensation Discussion and Analysis (“CD&A”) and the tabular compensation disclosures and accompanying narrative discussion that follow. The CD&A describes our executive officerscompensation philosophy, programs, and objectives, while the tabular compensation disclosures and accompanying narrative discussion provide detailed information on the compensation of our NEOs.
We believe our compensation policies and procedures are competitive, focused on pay-for-performance principles, and strongly aligned with the long-term interests of our stockholders. Our executive compensation philosophy is based on the belief that compensation should be set at levels that enable us to attract and retain employees who are committed to achieving high performance and who demonstrate the ability to do so. We strive to provide executive compensation packages that are driven by Ingevity’s overall financial performance, stockholder value, the success of areas of our business directly impacted by each executive’s performance, and the performance of the individual executive. We view our compensation program as a group beneficially own less than one percentstrategic tool that supports the successful execution of our business strategy and reinforces a performance-based culture. To that end, our executive compensation program emphasizes long-term compensation over short-term compensation, with a significant portion weighted toward equity awards. This approach strongly aligns our executives’ compensation with the interests of our stockholders.
Because your vote is advisory, it will not be binding upon the Board. However, the Board and T&C Committee value stockholders’ opinion as expressed through their votes on this proposal, and will carefully consider the outcome of this proposal in connection with their ongoing evaluation of the Company’s executive compensation program.
An affirmative vote of the majority of the shares of Common Stock outstanding aspresent in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal is required to approve, on an advisory basis, the compensation paid to Ingevity’s NEOs.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ADOPTION OF THIS RESOLUTION TO APPROVE, ON AN ADVISORY BASIS, THE COMPANY’S EXECUTIVE COMPENSATION AS DESCRIBED IN THIS PROXY STATEMENT. |
INGEVITY | 2024 Proxy Statement | 38 |
This section outlines the Company’s executive compensation programs and practices for our NEOs, who are listed below.
MARY DEAN HALL | STACY L. COZAD | S. EDWARD | RICHARD A. WHITE | |||||
Executive Vice President & | Executive Vice | WOODCOCK | Senior Vice President | |||||
Chief Financial Officer | President, | Executive Vice President & | President, Performance | |||||
and Director | General Counsel and | President, Performance | Chemicals | |||||
Secretary | Materials |
INGEVITY | 2024 Proxy Statement | 39 |
Our business was significantly impacted by the extreme price volatility during 2023 of CTO, a key raw material used in our Performance Chemicals (“PC”) segment.
We recognize that a rapid transition to alternative raw materials is essential for the long-term growth of our PC segment, and we took decisive action during 2023 to reduce our exposure to the CTO price volatility, including:
■ | Diversifying our feedstocks and focusing on high-margin, high-growth markets, | |
■ | Announcing the closure of our DeRidder, Louisiana, manufacturing site in 2024, which predominately serves lower margin, cyclical markets, | |
■ | Transitioning our Crossett, Arkansas, manufacturing site to produce products derived from alternative feedstocks and enable entry into new markets, and | |
Implementing significant cost savings actions, which helps support the repositioning of our |
We were also impacted by the prolonged industrial slowdown across our many end markets and regions. Despite lower volumes from industrial weakness, our Advanced Polymers Technologies (“APT”) segment delivered double-digit segment EBITDA growth through cost initiatives and lower input costs. We remain focused on improving APT’s profitability and driving caprolactone adoption in the Performance Chemicals segment by focusing on higher-margin applications, containing costs and synergy capture
Our Performance Materials (“PM”) segment relatedachieved record results as auto production rebounded close to automotive applications while continuing to advocatepre-2020 levels, and consumer preference for more stringent gasoline vapor emission control and proactively defending intellectual property
Based on our three business segments’ performance and the challenging business conditions noted above, our consolidated sales increased 1% to $1.69 billion while adjusted EBITDA* decreased 12% to $396.8 million.
For additional information on Ingevity’s performance in Changshu, China
The following summarizes the key compensation decisions for our NEOs for fiscal 2023:
Base Salary: The T&C Committee approved increases to the base salaries for Mr. Fortson and filed five new patent applicationsMr. Woodcock of 6% and 8%, respectively, to better align Mr. Fortson with the market median and to recognize Mr. Woodcock’s individual performance and deep industry expertise. None of the other NEOs received base salary adjustments in 2023.
Short-Term Incentive Plan Awards: Based on our 2023 STIP Adjusted EBITDA* and STIP Adjusted Revenue* results, as well as each NEO’s individual performance achievements, the T&C Committee approved STIP payouts to our NEOs ranging from 15% to 84% of target.
2023 Long-Term Incentive Plan Compensation: In February 2023, our NEOs were granted annual long-term incentive awards comprised of 60% in Performance Chemicals
2023 PC Transformation Award: Effective May 1, 2023, Mr. White, our PC segment leader, and 34 other members of the PC team were granted a performance-based equity award (the “PC Transformation Award”) to retain, incentivize, and align the awardees to the critical strategic transformation of our PC segment. As noted earlier, the extreme volatility of CTO prices has impacted Ingevity’s business significantly. Rapid transition to a broader based oleochemical product line model is essential for the long-term growth of the PC segment. This will require a unique and significant end-to-end transformational realization in a short timeframe. The PC Transformation Award has a two-year and eight month performance period from May 1, 2023 through June 30, 2025 with
* | See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures. |
INGEVITY | 2024 Proxy Statement | 40 |
the following weighted measures:
■ | 50% Oleochemical /alternative fatty acid product volume (“AFA Product Volume”); and | |
■ | 50% AFA EBITDA Margin (“AFA EBITDA Margin”*) |
The maximum payout under the PC Transformation Award is 100% of the target PSUs.
Payout of 2021 PSU Award: The PSU awards granted in 2021 had Average ROIC* and Cumulative EPS* as the performance metrics for the 2021-2023 performance period. Based on our performance relative to the pre-established targets, the NEOs earned 67% of their target PSUs.
Ingevity’s executive compensation program reflects the Company’s non-GAAP“pay-for-performance” philosophy. Compensation is directly linked to business plans and individual performance, with short- and long-term incentive programs based on metrics tied to the achievement of key financial measure Adjusted EBITDA forobjectives and individual performance. We are focused on achieving long-term, sustainable stockholder value.
We designed our executive compensation program to attract, motivate, and retain highly talented executives. In setting compensation, the T&C Committee considers both fiscal years 2018our peer group and 2017, please see “Management’s Discussionnational survey data (“Comparative Compensation Data”). We also consider other factors, including each executive’s role and Analysislevel of Financial Condition and Results of Operation - Use of Non-GAAP Financial Measures” on page 48responsibility, the importance of the 2018 Form 10-K.
The Company’s executive compensation program is designed to:
SUPPORT OUR BUSINESS STRATEGY | PAY FOR PERFORMANCE | PAY COMPETITIVELY | ALIGN NEOS’ AND STOCKHOLDERS’ INTERESTS | DISCOURAGE EXCESSIVE RISK-TAKING |
Our program aligns with our business strategy, which is focused on long-term earnings, revenue growth and sustained growth in stockholder value, by providing our NEOs with long-term incentives tied to growth and value creation. | A large portion of our executive pay is dependent upon the achievement of corporate and business unit goals and individual performance. We pay higher compensation when goals are exceeded and lower compensation when goals are not met. | We use the market median based on our Comparative Compensation Data as the main reference point for target compensation. Compensation targets for individual executives may differ from the market median based on roles and responsibilities, performance, strategic impact, experience, internal pay equity, special hiring situations, retention concerns, succession planning needs and other relevant considerations. | We provide a significant portion of our NEOs’ overall compensation opportunity in the form of equity-based compensation, including performance stock units with multi-year performance goals that align with the long-term interests of our stockholders. | Our program includes balanced short- and long-term, cash and equity, along with fixed and variable elements to discourage excessive risk-taking. |
* | See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures |
INGEVITY | 2024 Proxy Statement | 41 |
The major elements of our executive compensation program are summarized below.
Base Salary | Fixed cash compensation that recognizes level of responsibilities, contributions towards meeting the Company’s goals and objectives, individual performance and experience, internal pay equity, the economic and business environment in which the Company operates, and other relevant considerations. | Mr. Fortson and Mr. Woodcock were the only NEOs who received base salary adjustments in 2023 of 6% and 8%, respectively, to better align Mr. Fortson with the market median and to recognize Mr. Woodcock’s individual performance and deep industry expertise. None of the other NEOs received base salary adjustments in 2023. | |
Short-term Incentive Plan (“STIP”) | Performance-based cash compensation that rewards achievement of key annual financial performance targets for the full Company (in the case of our corporate leadership--CEO, CFO, GC, and CHRO), and a blend of our full Company and applicable business segment results (in the case of our segment presidents) along with achievement of individual performance goals. | 2023 STIP performance metrics for corporate leadership were Company STIP-Adjusted EBITDA* (50%), Company STIP-Adjusted Revenue* (30%) and Individual Performance (20%). 2023 STIP performance metrics for the business segment leadership were Company STIP-Adjusted EBITDA* (25%), BU STIP-Adjusted EBITDA* (25%), Company STIP-Adjusted Revenue* (15%), BU STIP-Adjusted Revenue* (15%) and Individual Performance (20%). | |
Equity compensation that promotes achievement of long-term strategic objectives and ■ 60% - Performance Stock Units (“PSUs”) ■ 40% - Service-Based Restricted Stock Units (“RSUs”) | 2023 PSU performance metrics are Average ROIC* (30%) and Cumulative EPS* (70%). We added a +/-15% relative total shareholder return (“rTSR”) modifier to enhance alignment with stockholder value. The rTSR modifier increases the LTIP payout if we achieve a greater than 75th percentile rTSR as compared with our chosen S&P indices and decreases the LTIP payout if we are below the 25th percentile as compared with such indices. | ||
* | Definitions and reconciliations, if applicable, of the non-GAAP financial measures shown in this column can be found in Appendix A. |
INGEVITY | 2024 Proxy Statement | 42 |
The mix of compensation elements awarded in 2023 to our CEO, Mr. Fortson, and the other NEOs is illustrated below. The chart reflects base salary and target STIP and LTIP, and does not include “All Other Compensation” shown in the “Summary Compensation Table” or the one-time PC Transformation Award to Mr. White described above.
CEO | Other NEOs |
* | Other NEO chart reflects the |
The T&C Committee values the input received from our stockholders on the Company’s executive compensation practices. At the 2023 annual stockholders’ meeting, our stockholders approved the compensation of our NEOs on an advisory basis by 93.6% of the votes cast.
Although the vote was non-binding, the T&C Committee considered the approval rate as an indication that Ingevity stockholders support the Company’s executive compensation philosophy and decisions.
CEO compensation
The T&C Committee, on behalf of the Board, is responsible for assistingreviewing and approving the goals and objectives of Ingevity’s CEO, evaluating the CEO’s performance in light of such goals and objectives, and setting the CEO’s compensation based on such evaluation. The T&C Committee meets with the CEO to discuss his performance and compensation and seeks feedback on the CEO’s performance from the full Board and from senior management, including the officers that report to the CEO. Ultimately, decisions regarding the CEO’s compensation are made by the T&C Committee, meeting in executive session, without the CEO or any other executive present. In setting compensation for the CEO, the T&C Committee also takes into account other considerations as the committee deems appropriate, including overall leadership and external survey data compiled from our peer group of companies by Pearl Meyer, the T&C Committee’s independent compensation consultant (the “Compensation Consultant”), other Comparative Compensation Data, and the advice of the Compensation Consultant.
INGEVITY | 2024 Proxy Statement | 43 |
Compensation for other executives
The T&C Committee, on behalf of the Board, in fulfilling its responsibilities with respect tois also responsible for reviewing and approving the compensation of senior executives reporting to the Company’sCEO, including the other NEOs. In approving compensation for the other NEOs, the T&C Committee takes into account the assessment of their performance by the CEO and other senior executives,key internal stakeholders, addressing such factors as achievement of individual goals and objectives, contribution to Ingevity’s performance and corporate goals, and other considerations as the committee deems appropriate, including Comparative Compensation Data and the NEOs. Theadvice of the Compensation Committee’s role includes oversight and risk management relatingConsultant. In making his recommendations to the Company’s equityT&C Committee, the CEO is also supported by the CHRO.
The CompensationT&C Committee has retained Pearl Meyerthe Compensation Consultant as its independent compensation consultant.consultant to advise the T&C Committee on the composition of the compensation peer group, specific compensation levels for the NEOs, and whether the compensation program is appropriately designed to discourage excessive risk-taking, among other compensation related services. The Compensation Consultant also compiles the Comparative Compensation Data. The T&C Committee has the sole discretion and is directly responsible for the appointment, termination, compensation, and oversight of the work of Pearl Meyer. the Compensation Consultant.
Although the CompensationT&C Committee retains Pearl Meyerthe Compensation Consultant directly, in carrying out assignments, Pearl Meyerthe Compensation Consultant also interacts with Ingevity management when appropriate. Specifically, Pearl Meyerthe Compensation Consultant interacts with the CHRO, other leaders in the Company’s Chief Human Resources Officerhuman resources organization, and other members of management with respect to compensation and benefits data, best practices, peer group developments, and executive compensation trends. In addition, Pearl Meyerthe Compensation Consultant may also seek input and feedback from members of management regarding its consulting work product prior to presentationbefore presenting it to the CompensationT&C Committee for example to confirm its alignment with Ingevity’s business strategy, determine what additional data may need to be gathered,needed, or identify other issues.
The T&C Committee regularly meets with the Compensation Consultant in executive session independent of management. Further, the T&C Committee Chair speaks on occasion with the Compensation Consultant on executive compensation matters independently of management.
The Compensation Consultant does not provide any services to Ingevity other than its consulting services to the CompensationT&C Committee related to executive and director compensation. The CompensationT&C Committee determined that, in fiscal 20182023, the work performed for the CompensationT&C Committee by Pearl Meyerthe Compensation Consultant did not raise any conflict of interest. In making its determination, the CompensationT&C Committee considered the independence of Pearl Meyer in light ofthe Compensation Consultant considering SEC rules and regulations and NYSE listing standards.
Consistent with Ingevity’s goal to provide compensation that remains competitive, the CompensationT&C Committee considers, among other mattersthings, the executive compensation practices of companies in a peer group selected bybased on recommendations from the Compensation Committee based on recommendation of its compensation consultant.Consultant. In selecting the peer group for 2023 executive compensation, the CompensationT&C Committee considered such factors as: (i) revenue size and profit margins; (ii) industry and business characteristics comparable to Ingevity; (iii) location and geographic reach, including global operations and/or distribution; (iv) competition for talent; and (v) data availability.
i. | revenue size and profit margins; | |
ii. | industry and business characteristics; | |
iii. | location and geographic reach, including global operations and/or distribution; | |
iv. | competition for talent; and | |
v. | data availability. |
The CompensationT&C Committee generally targets compensation tocommensurate with the market median within the peer group when determining a NEO’s compensation. However, market data provided by the peer group is only one of several
INGEVITY | 2024 Proxy Statement | 44 |
The peer group is reviewed periodically for appropriateness and comparability.
AdvanSix Inc.* | Innospec Inc. | |
Ashland Inc.* | Koppers Holdings Inc.* | |
Avient Corp.* | Mativ Holdings, Inc.* | |
Balchem Corp. | Minerals Technologies Inc. | |
Cabot Corp. | Orion S.A.* | |
Ecovyst Inc. | Quaker Chemical Corp. | |
Element Solutions Inc* | Sensient Technologies Corp. | |
H.B. Fuller Co. | Stepan Co. | |
Hexcel Corp. | Tronox Holdings |
* | Newly added in 2023 and will be used to evaluate 2024 NEO compensation. | |
(1) | The T&C Committee excluded the following companies that were part of the Company’s 2022 peer group: CMC Materials, Ferro Corp, and GCP Applied Technologies, Inc. | |
When taken as a whole, along with short and long term incentive programs based on achievementother elements of key financial metrics and individual performance. We are focused on achieving long-term, sustainable stockholder value.
Base salaries are intended to provide a level of fixed compensation sufficient to attract and retain an effective management team when considered in combination with the long-term and short-term incentive awards and other elements of our executive compensation program. The relative levels of base salary for executive officers are designed to reflect each executive officer’s scope of responsibility, experience and performance, competitive pay levels, market trends, economic conditions, and other relevant factors.
The T&C Committee generally reviews and approves base salaries annually in February, with new salaries effective as of February 1 of the same year. The T&C Committee may make other salary adjustments accountabilityperiodically in connection with promotions or changes in role or responsibilities, to reward individual performance, for reasons related to retention, or to ensure market competitiveness. The committee’s review focuses on whether base salaries are equitably aligned within Ingevity and economic factors.are at sufficiently competitive levels to attract and retain top talent. In addition, consideration is given to Comparative Compensation Data and such other factors as the T&C Committee considers appropriate. The T&C Committee also reviews base salary compensation with the Compensation Consultant.
INGEVITY | 2024 Proxy Statement | 45 |
Our CEO’s base salary was increased to align his pay more closely to the median CEO pay based on our peer group and Comparative Compensation Data. Mr. Woodcock’s salary was increased in acknowledgement of his extensive tenure in the role and deep industry expertise. All other NEO base salaries were unchanged from 2022.
The full-year base salaries for our NEOs in 2023 were as follows:
NEO | 2023 Annual Base Salary ($) | 2022 Annual Base Salary ($) | % Change | ||
John C. Fortson | 1,000,000 | 940,000 | 6.0% | ||
Mary Dean Hall | 510,000 | 510,000 | 0.0% | ||
Stacy L. Cozad | 470,000 | 470,000 | 0.0% | ||
S. Edward Woodcock | 475,000 | 435,000 | 8.4% | ||
Richard A. White(1) | 460,000 | 460,000 | 0.0% |
(1) | Mr. White’s 2022 annual base salary was set at $380,000 effective January 1, 2022 and was increased to $460,000 effective November 1, 2022. |
Ingevity’s short-termSTIP consists of an annual cash incentive plan ("STIP")that is designed to provide both an incentive to achieve, and a reward participants for achieving ourIngevity’s annual financial performance targets.targets and their individual performance goals.
The incentive award range that each NEO may earn is determined near the beginning of the year and expressed as a percentage of such NEO’s base salary. STIP payouts may never exceed 200% of base salary.
For 2023, the T&C Committee established the following threshold, target, and maximum STIP incentive opportunities for the NEOs:
NEO | Threshold (as a percentage of base salary)* | Target (as a percentage of base salary)* | Maximum (as a percentage of base salary)* | |||
Mr. Fortson | 25.0% | 100% | 200% | |||
Ms. Hall | 17.5% | 70% | 140% | |||
Ms. Cozad | 16.25% | 65% | 130% | |||
Mr. Woodcock | 16.25% | 65% | 130% | |||
Mr. White | 15.0% | 60% | 120% |
* | Linear interpolation is used to determine awards for performance between the threshold, target, and maximum goals. |
The T&C Committee selected the following metrics as the basis for 2023 STIP because the committee believes they are important and effective measures of short-term performance. The T&C Committee continued to emphasize individual accountability with the inclusion of a 20% individual performance component to STIP, which considers an individual’s success in meeting Company and individual short-term goals.
INGEVITY | 2024 Proxy Statement | 46 |
Company-Wide Metrics | Segment Metrics | Individual Performance | ||||||||
NEO | STIP-Adjusted EBITDA* | STIP-Adjusted Revenue* | BU STIP-Adjusted EBITDA* | BU STIP-Adjusted Revenue* | ||||||
Mr. Fortson | 50% | 30% | 0% | 0% | 20% | |||||
Ms. Hall | 50% | 30% | 0% | 0% | 20% | |||||
Ms. Cozad | 50% | 30% | 0% | 0% | 20% | |||||
Mr. Woodcock (Performance Materials Segment) | 25% | 15% | 25% | 15% | 20% | |||||
Mr. White (Performance Chemicals Segment) | 25% | 15% | 25% | 15% | 20% |
* | See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures. |
In 2023, the Company moved its engineered polymers business line from the Performance Chemicals segment into its own segment designated as Advanced Polymer Technologies. The performance targets for the Performance Chemicals segment reflect this change. At the time the T&C Committee set the target performance levels for the Company and each yearbusiness unit, the goals were believed to be challenging but achievable, and the maximum level of performance was believed to be achievable but only with exceptional performance. During 2023, the Performance Chemicals segment was impacted by Compensation Committee determination. If funded, payout runs between 50 percentthe unprecedented and material regulatory-driven cost increase to 200 percentCTO, a key raw material for its industrial specialties product line. The dramatic cost increase caused a disproportionately negative impact to Performance Chemicals’ and corporate financial results. The terms of the STIP target incentive potential. permit the T&C Committee to make certain discretionary adjustments to exclude the effect of certain non-recurring items of gain or loss, or other adjustments reflecting substantial out of the ordinary matters.
The 2023 STIP will only be fundedtargets and actual performance and payouts are set forth below.
Company STIP-Adjusted EBITDA* | Company STIP-Adjusted Revenue* | |||||||||||||||
Performance Level | Payout Range (% of target award) | Goals(1) | Actual Performance | % of Target Achieved/ Payout | Goals(1) | Actual Performance(1) | % of Target Achieved/ Payout | |||||||||
Threshold** | 25% | $ | 405.0 | $ 398.3 | 0.0% | $ | 1,690.0 | $ 1,688.2 | 0.0% | |||||||
Target | 100% | $ | 500.0 | $ | 1,937.0 | |||||||||||
Maximum | 200% | $ | 600.0 | $ | 2,173.0 | |||||||||||
Performance Chemicals BU STIP-Adjusted EBITDA* | Performance Chemicals BU STIP-Adjusted Revenue* | |||||||||||||||
Performance Level | Payout Range (% of target award) | Goals(1) | Actual Performance(1) | % of Target Achieved/ Payout | Goals(1) | Actual Performance(1) | % of Target Achieved/ Payout | |||||||||
Threshold** | 25% | $ | 130.0 | $ 64.9 | 0.0% | $ | 940.0 | $ 900.9 | 0.0% | |||||||
Target | 100% | $ | 170.0 | $ | 1,067.0 | |||||||||||
Maximum | 200% | $ | 230.0 | $ | 1,213.0 |
(1) | Amounts expressed in millions |
* | See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures. |
** | No payout is earned on a metric if results are below threshold. |
INGEVITY | 2024 Proxy Statement | 47 |
Performance Materials BU STIP-Adjusted EBITDA* | Performance Materials BU STIP-Adjusted Revenue* | |||||||||||||||||
Performance Level | Payout Range (% of target award) | Goals(1) | Actual Performance | % of Target Achieved/ Payout | Goals(1) | Actual Performance | % of Target Achieved/ Payout | |||||||||||
Threshold** | 25% | $ | 240.0 | $ | 288.8 | 162.5% | $ | 530.0 | $ | 586.0 | 90.0% | |||||||
Target | 100% | $ | 275.0 | $ | 595.0 | |||||||||||||
Maximum | 200% | $ | 300.0 | $ | 650.0 |
* | See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures. |
** | No payout is earned on a metric if results are below threshold. |
(1) | Amounts expressed in millions |
Individual performance
Performance goals are typically established near the beginning of the year and generally include both leadership objectives and strategic business objectives. Individual NEO performance is evaluated by the T&C Committee by comparing actual performance to the pre-established individual goals, as well as by considering individual accomplishments and other relevant performance criteria.
Against the challenging backdrop of 2023, and based on individual achievements against their goals, the T&C Committee approved STIP funding for any given year if the Company meets these pre-established financialindividual performance targets. NEO individualcomponent of the NEOs STIP awards which are paid in cash, are also adjustedranging from 75% to 150% of target. A description of each NEO’s individual performance achievements with respect to 2023 is set forth below under “NEO Performance and Compensation Decisions.”
2023 STIP Payouts
STIP payouts for performance against individual goals, subject to a 200 percent maximum payout.
NEO | STIP | 2023 Target(1) | Company STIP- Adjusted EBITDA Funding(2) | BU STIP- Adjusted EBITDA Funding(2) | Company STIP- Adjusted Revenue Funding(2) | BU STIP- Adjusted Revenue Funding(2) | Total 2023 STIP Payout for Financial Metrics(2),(3) | Individual Performance Funding | Total 2023 STIP Payout, Reflecting Financial and Individual Performance Metrics(3) | Total 2023 STIP Payout(4) | |||||||||||
Mr. Fortson | $ | 995,000 | 0.0% | 0.0% | 0.0% | 85.0% | 17.0% | $ | 169,150 | ||||||||||||
Ms. Hall | $ | 357,000 | 0.0% | 0.0% | 0.0% | 100.0% | 20.0% | $ | 71,400 | ||||||||||||
Ms. Cozad | $ | 305,500 | 0.0% | 0.0% | 0.0% | 100.0% | 20.0% | $ | 61,100 | ||||||||||||
Mr. Woodcock | $ | 306,584 | 0.0% | 162.5% | 0.0% | 90.0% | 67.6% | 150.0% | 84.1% | $ | 257,780 | ||||||||||
Mr. White | $ | 276,000 | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 75.0% | 15.0% | $ | 41,400 |
(1) | Target represents the target STIP opportunity percentage for each NEO described above multiplied by the amount of salary paid in 2023. |
(2) | Percentages reported are equal to the percentage of target achieved for each metric (as shown in the table above). See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures. |
(3) | Total 2023 STIP Payout, Reflecting Financial and Individual Performance Metric presents the total 2023 STIP payout percentage for each NEO after weighting the financial metrics percentage at 80% and the individual performance metric at 20%. |
(4) | To obtain “Total 2023 STIP Payout,” multiply “2023 STIP Target” by “Total 2023 STIP Payout, Reflecting Financial and Individual Performance Metrics.” Calculated scores are rounded up to the nearest $10. |
Ingevity’s long-term incentive plan ("LTIP")LTIP is designed to recognize the performance of our
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For 2023, the awards granted annually under the Company’s LTIP were delivered in two forms, as described below.
Type of Award | Percentage of Total LTIP Opportunity | Vesting and Payment Terms | ||
PSUs | 60% | PSUs vest upon certification by the T&C Committee of the achievement of certain pre-determined performance targets over a three-year performance period, provided the recipient meets the requisite terms, including continued service. Payouts depend on the level of achievement of the performance targets set by the T&C Committee for the related three-year performance period. PSU payouts may be modified +/-15% by the Company’s rTSR performance. The performance metrics and targets and the rTSR modifier are described below. | ||
RSUs | 40% | RSUs granted for the annual LTIP opportunity vest ratably in three annual increments beginning on the first anniversary of the grant date, provided the recipient meets the terms, including continued service. |
The CompensationT&C Committee removed options as a form of award under our LTIP for 2023 and reallocated the respective LTIP compensation value between PSUs and RSUs. The result is a plan that is less dilutive to stockholders and more compelling for attracting, retaining, and motivating executives while also considers peer group data forrewarding business outcomes aligned to the stockholder experience. The T&C Committee believes that the current LTIP equity allocation provides a general understandinggood balance of industry equity practicesperformance and retention oriented elements.
The target values of individual NEO awards are expressed as well as equity plan share usagea percentage of base compensation and dilutionare set early each year by the T&C Committee. The number of RSUs and Company expense. 50 percentPSUs awarded is based on the closing price of the annualCompany’s Common Stock on the grant date.
Each NEO’s 2023 total LTIP opportunity prior to application of the rTSR modifier and the breakdown of the LTIP components are shown below.
NEO | Base Salary | Target LTIP Opportunity | RSUs (40%) | PSUs at Target* (60%) | ||||||||||||
Mr. Fortson | $ | 1,000,000 | 400% | $ | 1,600,000 | $ | 2,400,000 | |||||||||
Ms. Hall | $ | 510,000 | 200% | $ | 408,000 | $ | 612,000 | |||||||||
Ms. Cozad | $ | 470,000 | 165% | $ | 310,200 | $ | 465,300 | |||||||||
Mr. Woodcock | $ | 475,000 | 150% | $ | 285,000 | $ | 427,500 | |||||||||
Mr. White | $ | 460,000 | 150% | $ | 276,000 | $ | 414,000 |
* | PSUs are shown at target but may pay out from 0-230% based on performance and positive application of the rTSR modifier (as further described below) is the only circumstance under which PSUs may pay out in excess of 200%. See “Performance-Based Restricted Stock Units” for more information. |
The following performance metrics apply with respect to the PSU awards granted in 2023:
70% - Adjusted three-year cumulative earnings per share (“Cumulative EPS”*); and
30% - Average adjusted return on invested capital (“Average ROIC”*).
Actual PSUs earned are subject to the rTSR modifier based on the percentile ranking of our TSR over the three-year performance period relative to that of the companies comprising the S&P 1000 Chemicals Index. The rTSR modifier increases the PSU payout by 15% if we achieve a greater than 75th percentile rTSR as compared with the S&P 1000 Chemicals Index, and decreases the PSU payout by 15% if we are below the 25th percentile as compared with the S&P 1000 Chemicals Index. The rTSR modifier is not interpolated for performance between the 25th and 75th percentiles. The rTSR modifier is intended to emphasize the importance of maximizing stockholder returns while moderating payouts when financial metrics are achieved but the Company underperforms the market.
The T&C Committee, in consultation with the Compensation Consultant, believes that the performance metrics of Cumulative EPS and Average ROIC*, together with the rTSR modifier, closely align executives’ interests with those of our stockholders and incentivizes long-term value creation.
* | See Appendix A for definitions and reconciliations, if applicable, of these non-GAAP financial measures to the nearest GAAP measures. |
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The T&C Committee established threshold, target, and maximum performance targets for the three-year performance period from January 1, 2023, through December 31, 2025, with respect to each metric. At the time the performance levels were set, the target level of performance was believed to be challenging but achievable, and the maximum level was believed to be achievable, but only with exceptional performance. The 2023 PSU awards will vest (or not) after the T&C Committee certifies Ingevity’s performance at the end of the performance period.
There is no payout for performance below threshold. Payout at threshold is at 25% of PSUs granted, at target is 100% of PSUs granted, and at maximum is 200% of PSUs granted. Linear interpolation is used to determine award payouts between these pre-determined points. Payout of PSUs based on performance against the metrics for the performance period is then subject to the rTSR modifier described above. The application of the rTSR modifier could result in payment below 25% of PSUs granted at threshold performance or up to 230% of PSUs granted at maximum performance.
Under the Omnibus Plan, the T&C Committee may adjust results for PSU metrics from time to time to exclude the effect of certain non-recurring items of gain or loss or other significant out of the ordinary matters (such as mergers, acquisitions, and dispositions; entry into joint ventures; significant restructurings; or changes in accounting rules or tax codes) if they had not been factored in when performance targets were established. Any such adjustments are made to ensure that executives are neither unduly rewarded nor penalized for successfully implementing Board-approved strategic initiatives, or as a result of external events that were unforeseen or outside their control.
In April 2023, Mr. White was granted, along with 34 other members of the PC team, a performance-based equity award (the “PC Transformation Award”) to reward and align the awardees to the strategic transformation of our PC segment. The volatility of CTO pricing has impacted Ingevity’s business significantly. Rapid transition to a broader based oleochemical product line model is essential for the long-term growth of the PC segment. This will require a unique and significant end-to-end transformational realization in a short time-frame by key members of the PC team. To appropriately incentivize and reward this critical segment transformation, the T&C Committee granted a performance-based equity award opportunity that is intended to attract and retain key business, technical, and operational employees and incentivize them to effect the required transformation and drive behaviors aligned with meeting the extraordinary challenge.
Mr. White received a PC Transformation Award effective May 1, 2023 of 13,969 PSUs, with a grant date fair value of $1,000,041. The maximum payout under the PC Transformation Award is 100% of the target PSUs. The T&C Committee believes that Mr. White is critical to the success of the business transformation initiative as the leader of the PC segment, and that his PC Transformation Award is an appropriate acknowledgement of the significant challenge involved in driving both volume growth and margin in the new oleochecmical product line across new markets in a condensed window of time.
The PC Transformation Award has a two-year and eight month performance period from May 1, 2023 through June 30,2025, and is based on the following performance metrics with respect to Mr. White’s grant:
50% - Oleochemical/alternative fatty acid product volume (“AFA Product Volume”); and
50% - AFA EBITDA Margin (“AFA EBITDA Margin”*).
* | See Appendix A for definitions and reconciliations, if applicable, of these non-GAAP financial measures to the nearest GAAP measures. |
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The T&C Committee established challenging goals for each of our NEOsthe performance metrics so that only extraordinary results will result in a payout. The T&C Committee will certify performance results for the established metrics and, if the committee determines that any PSUs are earned as a result, the earned PSUs will vest (if at all) one year from the date that the performance is allocatedcertified, provided that the awardee continues to PSUs,be employed by the Company through the vesting date. Note that, if the threshold metrics are met sooner than the end of the performance period, the T&C Committee may certify the results at such time.
The PC Transformation Award grant to Mr. White, which is detailed above, is included in the “Summary Compensation Table” and the other fifty percent is allocated equally to service-based restricted stock units ("RSUs"“Grant of Plan-Based Awards in 2023” table.
The PSU awards granted in 2021 (“2021 PSU Awards”) had Average ROIC* and non-qualified stock options.
The T&C Committee approved payment to the NEOs of the 2021 PSU Awards, based upon the achievement of Average ROIC* and Cumulative EPS* performance goals at or around the threshold level for Cumulative EPS* and at or around the target level for Average ROIC*. As a result, these PSUs are pre-established each year by the Compensation Committee. PSU awards will only be earned if these pre-established financial performance metrics are satisfied. If earned, payout runs between 50 percent to 200 percentwere paid at 67% of the target numberamount.
Actual performance, as certified by the T&C Committee is reflected below:
Metric | Threshold | Target | Maximum | Actual Performance | Payout | |||||
Cumulative EPS* 50% | $15.05 | $16.73 | $18.06 | $15.11 | 67% | |||||
Average ROIC* 50% | 9.4% | 12.4% | 13.1% | 12.5% |
* | See Appendix A for more details on the calculation of actual performance on the Cumulative EPS and Average ROIC. |
The payment calculation for the 2021 PSU Awards that settled in February 2024 is shown below:
NEO | Target PSUs | Percentage Payable | PSUs Payable* | |||
Mr. Fortson | 17,811 | 67% | 11,934 | |||
Ms. Hall | 2,324 | 67% | 1,558 | |||
Ms. Cozad | 3,973 | 67% | 2,662 | |||
Mr. Woodcock | 3,824 | 67% | 2,563 | |||
Mr. White | 1,260 | 67% | 845 |
* | The Company does not issue fractional shares. Any fractional amount of PSUs are paid out to the next whole share. |
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The T&C Committee generally targets executive compensation commensurate with the market median based on our Comparative Compensation Data. For this reason, Mr. Fortson’s base salary was raised 6% and his LTIP target increased from 300% to 400% of PSUs.his base salary in 2023. The T&C Committee set Mr. Fortson’s compensation using the pay elements described below to strike a balance between providing competitive compensation to Mr. Fortson and aligning his pay with stockholder interests and the stockholder experience.
Mr. Fortson’s total compensation package for 2023 includes a mix of long- and short-term variable pay elements that put 84% of his compensation at risk. These pay elements create a compensation structure that ensures a high correlation between ultimate payouts and individual and business performance. In 2023, approximately 68% of Mr. Fortson’s realized pay was delivered in the form of long-term incentives, which strongly aligns his compensation to stockholder interests.
A significant portion of Mr. Fortson’s target direct compensation is comprised of potential pay that could be realized in future years, depending on our performance against pre-established metrics. Due to this variable element, the T&C Committee finds it instructive to review Mr. Fortson’s realized pay against his target compensation to ensure that pay is appropriately aligned with performance and stockholder value creation. Realized pay is comprised of actual pay earned, including base salary and STIP payouts, plus the value of stock awards that vested, and options that were exercised, during the period.
The chart below shows that Mr. Fortson’s realized pay in 2023 was approximately 60 percent of his target direct compensation, which illustrates how the “at-risk” nature of a substantial portion of his compensation strongly aligns with Company performance.
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A description of the performance highlights for 2023 of each NEO and related compensation decisions is set forth below.
John C. FORTSON, President, Chief Executive Officer, and Director | ||
Age: 56 | ■ Delivered full-year revenue of $1.69B and EBITDA* of $397M, which were both ahead of market estimates ■ Increased sales by 1.4% year over year despite the difficult economic landscape in 2023, including achievement of record results in Performance Materials and Road Technologies ■ Took decisive action to mitigate the impact of unfavorable market conditions by implementing global cost containment strategies ■ Led the strategy transformation efforts to guide the Company in the identification of future growth paths for each business segment ■ Spearheaded Company-wide adoption of a new safety initiative that resulted in a substantial increase in safety hazard identification and near miss reporting ■ Finalized capacity expansion at the Company’s plant in Warrington, UK to deliver significantly more polyol capacity to fuel future growth ■ Drove the Company to place in the 91st percentile among our industry peers in the 2023 S&P Global Corporate Sustainability Assessment ranking | |
Base Salary: Mr. Fortson’s base salary increased 6.0% to $1,000,000 STIP: Mr. Fortson received a STIP award of $169,150, representing a 17% payout against target. Mr. Fortson’s STIP target remained at 100% of base salary for fiscal year 2023 LTIP: Mr. Fortson’s LTIP target increased from 300% to 400% of base salary for fiscal year 2023 |
*See Appendix A for definitions and reconciliations, if applicable, of these non-GAAP financial measures to the nearest GAAP measures
Mary Dean HALL, Executive Vice President & Chief Financial Officer | ||
Age: 67 | ■ Led the realignment of the Company’s segment reporting structure to move engineered polymers into its own reportable segment, Advanced Polymer Technologies, increasing transparency into how segment operating performance is measured for investors ■ Oversaw the successful completion of the SAP S/4 migration across the Company on schedule and under budget with minimal business disruption ■ Led timely comprehensive and rigorous cost-savings financial analysis, ensuring the ability of management to make sound decisions regarding the business transformation and cost mitigation efforts ■ Redesigned the supply chain function to leverage global footprint and successfully drove significant cost savings initiatives and process efficiency ■ Enhanced risk identification and management processes by implementing a co-sourcing model for internal audit, adding experienced staff, and integrating risk management processes across the Company into a holistic risk management framework, including cybersecurity and enterprise risk management | |
Base Salary: Ms. Hall’s base salary remained at $510,000 STIP: Ms. Hall received a STIP award of $71,400, representing a 20% payout against target. Ms. Hall’s STIP target remained at 70% of base/salary for fiscal year 2023 LTIP: Ms. Hall’s LTIP target increased from 160% to 200% of base salary for fiscal year 2023 |
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Stacy L. COZAD, Executive Vice President, General Counsel and Secretary | ||
Age: 53 | ■ Led improvements in the areas of intellectual property protection and data privacy ■ Oversaw legal, compliance, and government affairs efforts to successfully navigate the restructuring of Performance Chemicals ■ Matured the Company’s ethics and compliance program ■ Ensured strong regulatory advocacy strategies for key opportunities across all three business segments ■ Drove re-envisioning of the Company’s sustainability strategy, including concentrating efforts on customer-focused innovation | |
Base Salary: Ms. Cozad’s base salary remained at $470,000 STIP: Ms. Cozad received a STIP award of $61,100, representing a 20% payout against target. Ms. Cozad’s STIP target remained at 65% of base salary for fiscal year 2023 LTIP: Ms. Cozad’s LTIP target increased from 130% to 165% of base salary for fiscal year 2023 |
S. Edward WOODCOCK, Executive Vice President and President, Performance Materials | ||
Age: 58 | ■ Delivered record financial results despite significant market volatility ■ Oversaw the business segment with the lowest total case incident rate (TCIR) level across the Company’s U.S. locations, demonstrating an excellence in safety culture ■ Advanced the path to successful commercialization of the Nexeon alternative carbon use diversification opportunity ■ Delivered significant annual cost savings by transitioning the U.S. Performance Materials warehouse operations to a new in-house operating model ■ Developed opportunities and broadened sustainability benefits for NeuFuel™ by partnering with American CNG and school districts nation-wide to outfit school bus fleets with technology that enables diesel vehicles to run on natural gas to reduce fleet GHG emissions and operating costs | |
Base Salary: Mr. Woodcock’s base salary increased 8.4% to $475,000 STIP: Mr. Woodcock received a STIP award of $257,780, representing an 84.1% payout against target. Mr. Woodcock’s STIP target remained at 65% of base salary for fiscal year 2023 LTIP: Mr. Woodcock’s LTIP target increased from 130% to 150% of base salary for fiscal year 2023 |
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Richard A. WHITE, Senior Vice President, and President, Performance Chemicals | ||
Age: 61 | ■ Drove record financial performance for Road Technologies business ■ Navigated the Performance Chemicals segment through a challenging year and outlined a path to transform the segment and position it for future growth ■ Oversaw the successful transformation of the Crossett, Arkansas plant from production of CTO-based products to production of oleochemical-based products ■ Led the integration of Ozark Materials and Ozark Logistics into the Ingevity core business | |
Base Salary: Mr. White’s base salary was remained at $460,000 STIP: Mr. White received a STIP award of $41,400, representing a 15% payout against target. Mr. White’s STIP target remained at 60% of base salary for fiscal year 2023 LTIP: Mr. White’s LTIP target increased from 100% to 150% of base salary for fiscal year 2023. In addition, Mr. White received the one-time PC Transformation Award (see “PC Transformation Award” described above). |
The Company has entered into an offer letter with each of Executive Compensationthe following NEOs regarding employment terms (“Offer Letters”): Mr. Fortson, Ms. Hall, Ms. Cozad, and Mr. White. The Offer Letters generally list the compensation arrangements for the applicable NEO, including the STIP and LTIP details, details regarding sign-on or one-time equity or cash compensation, and details on stock ownership guidelines and other applicable Company policies. Offer Letters for Mses. Hall and Cozad include assistance with relocation benefits.
The Company has a Severance and Change of Control agreement with each of the NEOs. The purpose of the agreements is to ensure that Ingevity:
(a) | offers benefits that provide an overall compensation package that is competitive with that offered by other companies with which Ingevity competes for talent; | |
(b) | can retain and rely upon the undivided focus of its senior executives during and following a change of control; and | |
(c) | diminishes the inevitable distraction our NEOs will experience due to personal uncertainties and risks created by the potential job loss following a change of control. |
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The following is a summary of the benefits provided for upon termination under the Severance and Change of Control agreements.
Involuntary Termination by Company other than for Cause and Absent a Change of Control | Involuntary Termination of Employment other than for Cause, or Termination for Good Reason, in Each Case within two years of a Change of Control | Retirement, Death, Disability, or Termination for Cause or Without Good Reason following a Change of Control | ||
■ Base salary through date of termination; ■ Prorated target STIP for the calendar year in which the termination occurs; ■ Accrued unpaid vacation pay; ■ Severance payment of the following: – Mr. Fortson: Two times sum of base salary and target STIP; – All other NEOs: Sum of base salary and target STIP; ■ Health benefits – cost of health coverage for: – Mr. Fortson: Two years; – All other NEOs: One year; ■ Outplacement services; and ■ All other benefits in accordance with the terms of the applicable plans. | ■ Base salary through date of termination; ■ Prorated target STIP for the calendar year in which the termination occurs; ■ Accrued unpaid vacation pay; ■ Severance payment of the following: – Mr. Fortson: Three times sum of base salary and target STIP; – All other NEOs: Two times sum of base salary and target STIP; ■ Health benefits – cost of health coverage for: – Mr. Fortson: Three years; – All other NEOs: Two years; ■ Outplacement services; and ■ All other benefits in accordance with the terms of the applicable plans, provided that, for any PSU award, the applicable performance goals will be deemed achieved at the greater of target or actual performance levels (if actual performance is determinable by the T&C Committee) with no proration. | No benefits other than outstanding base salary through the date of termination. |
The agreements also include one-year post-termination restrictive covenants in the form of non-solicitation of customers and employees and non-competition provisions. All severance payable is further subject to time, the Compensation Committee may authorizeNEO signing an appropriate release of claims. None of the agreements include any tax gross-ups arising from any excise tax imposed by the Code on excess parachute payments. The benefits to be received are further described under “Potential Payments Upon Certain Termination Events or a specialChange of Control.”
The treatment of Ingevity’s equity awards in the event of a change of control is governed by the award under circumstancesagreements and our Omnibus Plan. In particular, in the event of a change of control where the Committee deemsNEO receives a “replacement award,” there will be no accelerated vesting, exercisability, or payment of an outstanding award unless the NEO’s employment is terminated without Cause (as defined below), other than as a result of death or disability, or the NEO resigns for Good Reason (as defined below) within two years of the change of control event. In such cases, upon the second trigger, NEO holders of such awards will be entitled to accelerated vesting; awards will be exercisable and/or will be settled. If a NEO does not receive a replacement award or if an award appropriate andis not otherwise assumed by the acquirer, then upon the occurrence of a change of control, all outstanding unvested awards will be fully vested (with the exception of PSUs, which will vest on a pro-rata basis as further described in the best intereststable below) and exercisable.
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A summary of the treatment upon certain termination scenarios appears below.
Type of Award | Upon Involuntary Termination by the Company (other than Change of Control, for Cause, or for Poor Performance) | Termination by Executive due to Retirement (Absent Cause or Poor Performance) | Death or Disability | Change of Control with Qualified Termination, Assuming Replacement Awards are Issued | Change of Control, Assuming No Replacement Awards are Issued | |||||
Options | Vest on a pro rata bases beginning on or after the first anniversary of the Award Date. However, Mr. Woodcock’s and Ms. Hall’s options will vest in full because they are each retirement-eligible. | Immediately vest in full. | ||||||||
PC Transformation Award PSUs | Vest immediately after the first anniversary of the Award Date and after actual performance is certified by the T&C Committee. | No vesting | Vest immediately after the first anniversary of the Award Date and after actual performance is certified by the T&C Committee. | Immediately vest in full. | Vest on a pro rata basis, subject to actual performance through the date of the change of control, or based on target performance, if higher than actual performance. | |||||
RSUs (3-year ratable vest and 3-year cliff vesting) | Vest on a pro rata basis beginning on or after the first anniversary of the Award Date. | Immediately vest in full. | ||||||||
PSUs | Vest on a pro rata basis beginning on or after the first anniversary of the Award Date, subject to actual performance as certified by the T&C Committee following the end of the performance period. | Immediately vest in full. | Vest on a pro rata basis, subject to actual performance through the date of the change of control, or based on target performance, if higher than actual performance. |
Relevant definitions:
■ | Retirement is defined as a termination by the grantee, not for Cause or certain other circumstances, upon the date that the grantee reaches Retirement Age. Commencing with awards granted in 2021, “Retirement Age” means on or after age 55 (with at least 20 years of service) or age 65 (with at least 5 years of service) for the participants who received non-grandfathered language. However, certain participants received grandfathered language in their 2021 awards whereby Retirement Age is defined as age 65 (or 55 with at least 20 years of service), which is the same definition in effect for awards issued prior to 2021. Both Mr. Woodcock and Ms. Hall have reached Retirement Age. |
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■ | Cause is defined as: (a) the willful or gross neglect by the executive to perform his or her employment duties with the Company (or its affiliates) in any material respect; (b) a plea of guilty or nolo contendere to, or conviction for, the commission of a felony offense by the executive; (c) a material breach by the executive of a fiduciary duty owed to the Company (or its affiliates); (d) a material breach by the executive of any nondisclosure, non-solicitation or non-competition obligation owed to the Company (or its affiliates); (e) a clearly established, willful and material violation by the executive of the Company’s Code of Conduct; or (f) a willful and material act by the executive that represents a gross breach of trust that is inconsistent with the executive’s position of authority with the Company and is materially and demonstrably injurious to the Company, including through potential loss of reputation. | |
■ | Good Reason (but only after a change of control during the requisite period) means: (a) a material diminution in the executive’s annual base salary; (b) a material diminution in the executive’s authority, duties, or responsibilities; (c) a material change in the geographic location at which the executive must perform services for the Company; or (d) any other action or inaction that constitutes a material breach by the Company of the award agreement. | |
■ | Poor Performance is defined as the continuing failure by the executive to perform the executive’s duties in any material respect, as determined in the sole discretion of the Company, provided, however, that the executive shall be given notice and an opportunity effectuate a cure as determined by the Company in its sole discretion. | |
■ | Qualified Termination means a termination of employment by the Company without Cause, other than as a result of death or disability, or a termination of employment by the executive for Good Reason. |
Benefits to be received are further described under “Potential Payments Upon Certain Termination Events or a Change of Control.”
The Company maintains the Ingevity Corporation Retirement Savings Plan, adopted as of January 1, 2016 (as amended, the “RSP”). The RSP allows participants to make pay contributions on a pre-tax, Roth, and after-tax basis. The RSP provides for examplea Company match of up to recognize extraordinary performance and/or to enhance retention.
The Company maintains a Retirement Restoration Plan that mirrors benefits provided under the WestRock Pension Plan, a qualified defined benefit plan sponsored and maintained by our former parent company, WestRock (the “WestRock Pension Plan”).
The Company maintains the Ingevity Corporation Deferred Compensation Plan, effective January 1, 2016 (the “DCP”). The purpose of the DCP is to attract and retain key employees by enabling participants to defer voluntarily the receipt of certain amounts, including compensation not otherwise eligible for deferral under the RSP, to provide matching contributions on certain deferrals, to restore lost defined contribution benefits programsdue to Code limits, and to provide retirement and other benefits to participants through an individual account program. The DCP allows participants to defer up to 80% of their base compensation and 80% of their STIP. The restoration component of the DCP provides for a Company match of up to 6% and an additional 3% automatic non-contributory Company contribution.
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We provide relocation assistance to employees, including our NEOs. Relocation benefits in the amount of $677.00, including a tax-gross up of $177.00, were paid to Ms. Hall related to her move to permanent housing during 2023 as reflected in “All Other Compensation” in the “Summary Compensation Table.” These expenses were paid pursuant to the Company’s broad-based relocation policy that covers all Company salaried employees and includes a gross-up feature. Ms. Hall was granted an extension to secure permanent housing. Certain reimbursable expenses related to the closing of her home purchase in late 2023 are intendedexpected to be competitive with market practice.
In addition, consideration is given to Comparative Compensation Data and such other considerations as the Compensation Committee considers appropriate. The Compensation Committee also reviews base salary compensation with the Compensation Committee’s compensation consultant.
NEO | Percentage Increase | 2018 Annual Base Salary ($) |
D. Michael Wilson | 5.9% | 900,000 |
John C. Fortson | 3.1% | 505,000 |
Katherine P. Burgeson | 8.0% | 390,000 |
Michael P. Smith | 6.6% | 400,000 |
S. Edward Woodcock | 10.0% | 330,000 |
NEO | Threshold (as a percentage of base salary) | Target (as a percentage of base salary) (1) | Maximum (as a percentage of base salary) |
Mr. Wilson | 50% | 100% | 200% |
Mr. Fortson | 35% | 70% | 140% |
Ms. Burgeson | 30% | 60% | 120% |
Mr. Smith | 33% | 65% | 130% |
Mr. Woodcock | 28% | 55% | 110% |
NEO | Target STIP Percentage | Eligible Salary | 2018 STIP Target | 2018 STIP Payout Percentage(1) | 2018 STIP Payout |
Mr. Wilson | 100% | 900,000 | 900,000 | 200% | 1,800,000 |
Mr. Fortson | 70% | 505,000 | 353,500 | 200% | 707,000 |
Ms. Burgeson | 60% | 390,000 | 234,000 | 200% | 468,000 |
Mr. Smith | 65% | 400,000 | 260,000 | 192% | 499,200 |
Mr. Woodcock | 55% | 330,000 | 181,500 | 200% | 363,000 |
2018-2020 PSU Targets (as percent of base salary) | |||
Minimum | Target | Maximum | |
Mr. Wilson | 0% | 137.5% | 275% |
Mr. Fortson | 0% | 87.5% | 175% |
Ms. Burgeson | 0% | 50.0% | 100% |
Mr. Smith | 0% | 55% | 110% |
Mr. Woodcock | 0% | 50% | 100% |
Metric | Performance | Goal before Adjustment | Adjusted Goal |
Cumulative EPS (weighted 50%) | Threshold | 5.92 | 6.56 |
Target | 6.10 | 6.65 | |
Maximum | 6.22 | 6.87 | |
2018 Average ROIC (weighted 50%) | Threshold | 14.00% | 17.24% |
Target | 14.75% | 18.09% | |
Maximum | 15.50% | 18.94% |
Metric | Threshold (50%) | Target (100%) | Maximum (200%) | Actual Performance | Funding |
Cumulative EPS(1) (weighted 50%) - as adjusted | 6.56 | 6.65 | 6.87 | 8.77 | 200% |
2018 Average ROIC(1) (weighted 50%) - as adjusted | 17.24% | 18.09% | 18.94% | 23.78% | 200% |
Name | Units Granted | Percentage Payable | Units Payable |
D. Michael Wilson | 35,466 | 200% | 70,932 |
John C. Fortson | 18,941 | 200% | 37,882 |
Katherine P. Burgeson | 5,322 | 200% | 10,644 |
Michael P. Smith | 2,824 | 200% | 5,648 |
S. Edward Woodcock | 3,813 | 200% | 7,626 |
Our stock ownership guidelines align the long-term interests of our NEOs with those of our stockholders and discourage excessive risk taking.risk-taking. Our guidelines require stock ownership levels as a value of Ingevity sharesCommon Stock equal to a multiple of base salary or retainer for non-employee directors. The Ownership Guidelines require allsalary. NEOs tomust retain 50 percent50% of net shares of Common Stock received under LTIP awards until the following stock ownership levels are met:
Position | Required Base Salary Multiple |
CEO | 5x |
In determining compliance with these guidelines, stock ownership includes sharesfully-vested Common Stock and unvested RSUs. Unvested PSUs and vested but unexercised stock options are not included. Executives generally have five years from the date of their designation to achieve the targeted level of ownership. If the required level of ownership is not achieved within the first five years, the holding requirement increases from 50% to 100% of net shares of Common Stock received under LTIP awards until the ownership levels are met.
As of February 20, 2019,December 31, 2023, Messrs. Wilson and Fortson and Ms. Burgeson have met their respective ownership guidelinesWhite, and the other NEOsMses. Hall and Cozad are on track to achieve their target ownership levels in a timely manner.
Ingevity’s insider trading policy prohibits members of our Board, executive officers, and other employees from entering into any hedgingtrading in options, warrants, puts and calls, or monetization transactions relating to oursimilar instruments involving Company securities or otherwise tradingselling Company securities “short.” The policy also prohibits holding Company securities in any instrument
INGEVITY | 2024 Proxy Statement | 59 |
We maintain a compensation recoupment (or "claw back"policy (“Clawback Policy”) policy covering our NEOs. InNEOs, which was amended in 2023 to comply with recent SEC and NYSE rules. Under our current Clawback Policy, in the event of a material restatement of the Company’s financial statements filed with the SEC the Company’s Board will review the facts and circumstances that leddue to theits material noncompliance with any financial reporting requirement for the restatement. In that review,under securities laws, the Board will consider whetherrequire reimbursement or forfeiture of any covered current or former executive received Incentive Compensation (as defined therein) that was received by any current or former Covered Officers (as defined in the policy)policy and required by the SEC and NYSE) during the three-year period preceding the restatement to the extent that such Incentive Compensation was awarded or paid based in whole or in part on the apparent achievement of financial results that were determined by reference to the originally filed financial information, but which financial results were not achieved underbased on the Company’s restated results. This requirement applies regardless of fault or misconduct on the part of a Covered Officer.
The Board will further consider whether any such current or former executive engaged in Misconduct (as defined in the policy) which resulted in or substantially contributed to the material restatement.
At least annually, the CEO to grant awards to employees who are not executive officers for the purpose of attracting, retaining and motivating such employees.
In conducting this assessment, Pearl Meyerthe T&C Committee reviewed various components and design features of all of the Company’s executive and non-executive plans and programs as presented by management and the Compensation Consultant, and analyzed them in the context of risk mitigation. A summary ofManagement and the findings of the assessment was providedCompensation Consultant presented their conclusions to the CompensationT&C Committee, which concludedwere that Ingevity’s compensation arrangements are not constructed or administered in a way that is likely to create risks that could materially and adversely affect the Company.
Among the factors considered in Pearl Meyer’sthe assessment and reviewed by the CompensationT&C Committee were: (i)
■ the balance of the Company’s overall program design, including the mix of cash and equity compensation; (ii)
■ the mix of fixed and variable compensation; (iii)
■ the balance of short-term and long-term objectives of our incentive compensation; (iv)
■ the performance metrics,
■ the Company’s share ownership guidelines, including share ownership levels, retention practices, and prohibitions on hedging pledging and other derivative transactions related to Ingevity stock; (vi)
■ the CompensationT&C Committee’s ability to exercise negative discretion to reduceregarding the amount of the annual and long-term incentive awards; (vii)
■ the existence of a recoupmentclawback policy; and (viii)
■ internal controls and oversight structures in place at the Company.
Based on Pearl Meyer’sits review, the CompensationT&C Committee’s deliberations, and such other matters as the CompensationT&C Committee deemed relevant, the CompensationT&C Committee believes Ingevity’s well-balanced mix of salary and short-term and long-term incentives, as well as the performance metrics that are included in the incentive programs, are appropriate and consistent with the Company’s risk management practices and overall strategies.
The CompensationT&C Committee considers tax and accounting considerations in structuring our executive compensation program. For example, accounting matters are one of many factors that our Compensation Committee considers in determining compensation mix and amount.
Section 162(m) of the Internal Revenue Code (“Section 162(m)”) was recently amended to significantly expand the disallowance ofgenerally disallows tax deductions tofor compensation paid by public companies to certain executive officers for compensation over $1 million paid forin any fiscal year toyear. Nonetheless, the Company’s covered employees (generally, the chief executive officer, chief financial officer and three most highly compensated executive officers (other than the chief executive officer or chief financial officer). Section 162(m) exempts qualifying performance-based compensation with respect to taxable years beginning on or before December 31, 2017 and payable pursuant to a binding written agreement in effect on November 2, 2017 that is not materially modified after that date. Certain compensation is also "grandfathered" under Section 162(m). While our Compensation Committee structured certain awards to our
INGEVITY | 2024 Proxy Statement | 60 |
The T&C Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the T&C Committee does not anticipate a shift away from variable or performance-based compensation payablerecommended to our NEOsthe Board that the Compensation Discussion and Analysis be included in the future, nor do we anticipate applying less rigor in the process by which we establish performance goals or evaluate performance against such pre-established goals, with respect to compensation paid to our NEOs.
THE TALENT AND COMPENSATION COMMITTEE
Diane H. Gulyas, Chair
Jean S. Blackwell
Bruce D. Hoechner
Frederick J. Lynch
Daniel F. Sansone
INGEVITY | 2024 Proxy Statement | 61 |
The table below includes the total compensation of our Chief Executive Officer, our Chief Financial Officer and the three other most highly compensated executive officers of our Company during 2018, whom we refer to in this proxy statement as NEOs for the fiscal year ended December 31, 2018.
Name and Principal Position | Year | Salary(1) ($) | Bonus(2) ($) | Stock Awards(3) ($) | Option Awards(4) ($) | Non-Equity Incentive Comp.(5) ($) | Change in Pension Value and Nonqualified Deferred Comp. Earnings(6) ($) | All Other Comp.(7) ($) | Total ($) | ||||||||
D. Michael Wilson | 2018 | 895,833 | — | 1,856,270 | 618,771 | 1,800,000 | — | 251,903 | 5,422,777 | ||||||||
President and CEO | 2017 | 845,833 | — | 1,593,778 | 531,253 | 1,700,000 | — | 186,723 | 4,857,587 | ||||||||
2016 | 800,000 | 565,419 | 2,579,160 | 509,157 | 1,029,600 | — | 616,767 | 6,100,103 | |||||||||
John C. Fortson | 2018 | 503,750 | — | 662,879 | 220,942 | 707,000 | — | 124,317 | 2,218,888 | ||||||||
CFO & Treasurer | 2017 | 488,750 | — | 643,534 | 214,493 | 686,000 | — | 100,819 | 2,133,596 | ||||||||
2016 | 475,000 | 197,678 | 1,608,602 | 286,606 | 427,930 | — | 356,169 | 3,351,985 | |||||||||
Katherine P. Burgeson | 2018 | 387,500 | — | 292,598 | 97,525 | 468,000 | — | 84,547 | 1,330,170 | ||||||||
General Counsel | 2017 | 357,500 | — | 229,488 | 76,503 | 360,000 | 131,306 | 68,047 | 1,222,844 | ||||||||
2016 | 325,833 | 89,950 | 269,912 | 80,533 | 209,680 | 642 | 223,525 | 1,200,075 | |||||||||
Michael P. Smith | 2018 | 397,917 | — | 580,103 | 110,025 | 499,200 | — | 75,056 | 1,662,301 | ||||||||
President, Performance Chemicals; EVP, Strategy | 2017 | 369,167 | — | 224,974 | 74,991 | 412,500 | — | 67,722 | 1,149,354 | ||||||||
S. Edward Woodcock | 2018 | 327,500 | — | 247,578 | 82,525 | 363,000 | — | 76,215 | 1,096,818 | ||||||||
President, Performance Materials | 2017 | 297,917 | — | 179,990 | 59,997 | 330,000 | 53,784 | 96,869 | 1,018,557 | ||||||||
2016 | 275,000 | 48,611 | 192,454 | 54,731 | 176,960 | 7,411 | 30,914 | 786,081 |
Name and Principal Position | Year | Salary(1) ($) | Bonus ($) | Stock Awards(2) ($) | Option Awards(3) ($) | Non-Equity Incentive Comp.(4) ($) | Change in Pension Value and Nonqualified Deferred Comp. Earnings ($)(5) | All Other Comp.(6) ($) | Total ($) | |||||||||
John C. Fortson | 2023 | 995,000 | 4,000,032 | 169,150 | 126,880 | 5,291,062 | ||||||||||||
President & Chief Executive Officer
| 2022 | 930,233 | 2,115,062 | 705,003 | 1,525,580 | 118,592 | 5,394,470 | |||||||||||
2021 | 825,000 | 1,856,297 | 618,757 | 1.414,050 | 108,184 | 4,822,288 | ||||||||||||
Mary Dean Hall | 2023 | 510,000 | 1,020,029 | 71,400 | 77,366 | 1,678,795 | ||||||||||||
EVP, Chief Financial Officer & Treasurer
| 2022 | 509,151 | 612,023 | 204,015 | 584,500 | 46,406 | 1,956,096 | |||||||||||
2021 | 352,273 | 1,548,099 | 85,067 | 599,900 | 75,471 | 2,660,809 | ||||||||||||
Stacy L. Cozad | 2023 | 470,000 | 775,569 | 61,100 | 84,649 | 1,391,318 | ||||||||||||
EVP, General Counsel & Secretary
| 2022 | 469,151 | 608,339 | 152,754 | 500,110 | 81,125 | 1,811,478 | |||||||||||
2021 | 421,667 | 350,000 | 914,112 | 138,007 | 498,690 | 123,089 | 2,445,565 | |||||||||||
S. Edward Woodcock | 2023 | 471,667 | 712,658 | 257,780 | 26,704 | 94,358 | 1,563,167 | |||||||||||
EVP & President, Performance Materials
| 2022 | 434,151 | 424,254 | 141,402 | 445,870 | 80,959 | 1,526,636 | |||||||||||
2021 | 425,000 | 898,585 | 132,815 | 250,160 | 156,413 | 1,862,973 | ||||||||||||
Richard A. White | 2023 | 460,000 | 1,690,160 | 41,400 | 74,165 | 2,265,725 | ||||||||||||
SVP & President, Performance Chemicals | 2022 | 392,945 | 285,065 | 95,021 | 389,020 | 72,915 | 1,234,966 |
(1) |
DCP. | |
(2) |
INGEVITY | 2024 Proxy Statement | 62 |
(3) | No options were awarded in 2023 |
(4) |
STIP. | |
The Company does not maintain a qualified defined benefit pension plan for any of our salaried employees, including our NEOs. However, the Company maintains a Retirement Restoration Plan that mirrors benefits provided under a qualified defined benefit plan sponsored and maintained by our former parent company, WestRock. See Pension Benefits Table - |
Amounts shown in |
D. Michael Wilson | John C. Fortson | Katherine P. Burgeson | Michael P. Smith | S. Edward Woodcock | ||||||
Financial Planning/Counseling(a) | 15,228 | 15,000 | 15,325 | 15,231 | 15,228 | |||||
Qualified Savings Plan Contributions(b) | 24,750 | 24,750 | 24,750 | 23,438 | 24,750 | |||||
Non-Qualified Savings Plan Contributions(c) | 208,875 | 82,328 | 42,525 | 34,406 | 34,425 | |||||
Life Insurance Premiums | 1,913 | 1,102 | 810 | 844 | 675 | |||||
Executive Long-Term Disability(d) | 1,137 | 1,137 | 1,137 | 1,137 | 1,137 | |||||
Total Other Compensation | 251,903 | 124,317 | 84,547 | 75,056 | 76,215 |
John C. Fortson ($) | Mary Dean Hall ($) | Stacy L. Cozad ($) | S. Edward Woodcock ($) | Richard A. White ($) | ||||||
Financial Planning/Counseling(a) | 17,285 | 17,693 | 17,693 | 17,693 | 17,603 | |||||
RSP Contributions(b) | 29,700 | 14,694 | 29,700 | 29,700 | 29,700 | |||||
DCP Contributions(c) | 75,450 | 40,994 | 35,250 | 43,936 | 24,104 | |||||
Life Insurance Premiums | 2,487 | 1,349 | 88 | 1,152 | 1,005 | |||||
Executive Long-Term Disability(d) | 1,957 | 1,958 | 1,918 | 1,877 | 1,752 | |||||
Relocation Expenses(e) | 677 | |||||||||
TOTAL OTHER COMPENSATION | 126,880 | 77,366 | 84,649 | 94,358 | 74,165 | |||||
(a) | Company provided financial planning including service fees and travel expenses. | |
(b) | Annual matching and non-contributory contributions by the Company to |
the RSP. | ||
(c) | Annual matching and non-contributory contributions by the Company to |
the DCP. | ||
(d) | Annual long-term disability premium paid by the Company. | |
(e) | Includes tax gross-up of $177 |
INGEVITY | 2024 Proxy Statement | 63 |
The following table reports plan-based awards granted to the NEOs during fiscal 2018.2023. The material terms of our short- and long-term incentive compensation awards are described in “Compensation Discussion and Analysis — Executive Compensation Philosophy andDesign; Pay Elements” beginning on page 22.
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards or Units (# of awards)(3) | All Other Option Awards (# of awards)(4) | Exercise Or Base Price of Option Awards(5) ($) | Grant Date Fair Market Value of Stock & Option Awards(6) ($) | ||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (# of awards) | Target (# of awards) | Maximum (# of awards) | ||||||||||||||
D. Michael Wilson | |||||||||||||||||||
STIP Annual Incentive | 450,000 | 900,000 | 1,800,000 | ||||||||||||||||
PSUs | 2/28/2018 | 8,260 | 16,520 | 33,040 | 1,237,513 | ||||||||||||||
RSUs | 2/28/2018 | 8,260 | 618,757 | ||||||||||||||||
Stock Options | 2/28/2018 | 24,256 | 74.91 | 618,771 | |||||||||||||||
John C. Fortson | |||||||||||||||||||
STIP Annual Incentive | 176,750 | 353,500 | 707,000 | ||||||||||||||||
PSUs | 2/28/2018 | 2,950 | 5,899 | 11,798 | 441,894 | ||||||||||||||
RSUs | 2/28/2018 | 2,950 | 220,985 | ||||||||||||||||
Stock Options | 2/28/2018 | 8,661 | 74.91 | 220,942 | |||||||||||||||
Katherine P. Burgeson | |||||||||||||||||||
STIP Annual Incentive | 117,000 | 234,000 | 468,000 | ||||||||||||||||
PSUs | 2/28/2018 | 1,302 | 2,604 | 5,208 | 195,066 | ||||||||||||||
RSUs | 2/28/2018 | 1,302 | 97,533 | ||||||||||||||||
Stock Options | 2/28/2018 | 3,823 | 74.91 | 97,525 | |||||||||||||||
Michael P. Smith | |||||||||||||||||||
STIP Annual Incentive | 130,000 | 260,000 | 520,000 | ||||||||||||||||
PSUs | 2/28/2018 | 1,469 | 2,937 | 5,874 | 220,011 | ||||||||||||||
RSUs | 2/28/2018 | 4,807 | 360,092 | ||||||||||||||||
Stock Options | 2/28/2018 | 4,313 | 74.91 | 110,025 | |||||||||||||||
S. Edward Woodcock | |||||||||||||||||||
STIP Annual Incentive | 90,750 | 181,500 | 363,000 | ||||||||||||||||
PSUs | 2/28/2018 | 1,102 | 2,203 | 4,406 | 165,027 | ||||||||||||||
RSUs | 2/28/2018 | 1,102 | 82,551 | ||||||||||||||||
Stock Options | 2/28/2018 | 3,235 | 74.91 | 82,525 |
Name | T&C Committee Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | All Other Option Awards: Number of Securities Underlying Options(4) (#) | Exercise Or Base Price of Option Awards ($/ Sh) | Grant Date Fair Market Value of Stock and Option Awards(5) ($) | |||||
Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||
John C. Fortson | ||||||||||||
STIP | 248,726 | 995,000 | 1,989,808 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 7,268 | 29,070 | 58,140 | 2,400,019 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 19,380 | 1,600,013 | ||||||||
Options | ||||||||||||
Mary Dean Hall | ||||||||||||
STIP | 89,250 | 357,000 | 714,000 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 1,853 | 7,413 | 14,826 | 612,017 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 4,942 | 408,012 | ||||||||
Options | ||||||||||||
Stacy L. Cozad | ||||||||||||
STIP | 76,375 | 305,500 | 611,000 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 1,409 | 5,636 | 11,272 | 465,308 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 3,758 | 310,260 | ||||||||
Options | ||||||||||||
S. Edward Woodcock | ||||||||||||
STIP | 76,635 | 306,584 | 613,084 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 1,295 | 5,179 | 10,358 | 427,578 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 3,453 | 285,080 | ||||||||
Options | ||||||||||||
Richard A. White | ||||||||||||
STIP | 69,000 | 276,000 | 552,000 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 1,254 | 5,015 | 10,030 | 414,038 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 3,344 | 276,081 | ||||||||
Options | ||||||||||||
PC Transformation Award PSUs | ||||||||||||
04/07/2023 | 05/01/23 | 11,175 | 13,969 | 13,969 | 1,000,041 |
(1) | |
were actually earned for 2023 performance. | |
(2) |
The PC Transformation Award PSUs columns reflect threshold, target, and maximum number of shares that may be earned by Mr. White if certain performance goals are satisfied as of June 30, 2025, or sooner if the T&C Committee certifies achievement of the performance metrics after the first anniversary of the grant date. The PC Transformation Award PSUs are further described in “Compensation Discussion & Analysis - Other compensation and benefits.” | |
(3) | RSU awards to our executives generally vest ratably in one-third increments over a three-year period from the |
grant date. | |
(4) |
2023 | |
(5) |
INGEVITY | 2024 Proxy Statement | 64 |
The table below shows the equity awards that have been previously awarded by the Company to our NEOs and which remained outstanding as of December 31, 2018.
Option Awards(1) | Stock Awards(2) | ||||||||||||||
Name (a) | Grant Date (b) | Option Awards Number of Securities Underlying Unexercised Options Exercisable (c) (1) | Number of Securities Underlying Unexercised Options Unexercisable (d) | Number of Securities Underlying Unexercised Unearned Options (e) | Option Exercise Price (f) | Option Expiration Date (g) | Stock Awards Number of Shares of Stock that have not yet Vested (h) (2) | Market Value of Unvested Shares of Stock ($) (i) (4) | Equity Incentive Plan Awards: Number of Unearned Unvested Units or Shares (J) (3) | Plan Awards Payout Value of Unearned, Unvested Units or Shares ($) (k) (4) | |||||
D. Michael Wilson | 5/27/16 | 0 | 48,170 | 0 | 27.90 | 5/27/2026 | 91,947 | 7,695,044 | 73,052 | 6,113,722 | |||||
2/27/17 | 0 | 25,652 | 0 | 53.11 | 2/27/2027 | ||||||||||
2/28/18 | 0 | 24,256 | 0 | 74.91 | 2/28/2028 | ||||||||||
John C. Fortson | 5/27/16 | 0 | 27,115 | 0 | 27.90 | 5/27/2026 | 46,750 | 3,912,508 | 27,954 | 2,339,470 | |||||
2/27/17 | 0 | 10,357 | 0 | 53.11 | 2/27/2027 | ||||||||||
2/28/18 | 0 | 8,661 | 0 | 74.91 | 2/28/2028 | ||||||||||
Katherine P. Burgeson | 5/27/16 | 0 | 7,619 | 0 | 27.90 | 5/27/2026 | 13,813 | 1,156,010 | 10,970 | 918,079 | |||||
2/27/17 | 0 | 3,694 | 0 | 53.11 | 2/27/2027 | ||||||||||
2/28/18 | 0 | 3,823 | 0 | 74.91 | 2/28/2028 | ||||||||||
Michael P. Smith | 2/27/17 | 0 | 3,621 | 0 | 53.11 | 2/27/2027 | 12,550 | 1,050,310 | 11,522 | 964,276 | |||||
2/28/18 | 0 | 4,313 | 0 | 74.91 | 2/28/2028 | ||||||||||
S. Edward Woodcock | 5/27/16 | 0 | 5178 | 0 | 27.90 | 5/27/2026 | 10,135 | 848,198 | 8,924 | 746,850 | |||||
2/27/17 | 0 | 2897 | 0 | 53.11 | 2/27/2027 | ||||||||||
2/28/18 | 0 | 3235 | 0 | 74.91 | 2/28/2028 |
Option Awards(1) | Stock Awards | ||||||||||
Name (a) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) (b) | Number of Securities Underlying Unexercised Options Unexercisable (#) (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock that Have Not Vested(2) (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested(3) (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units or Other Rights that Have Not Vested ($) (j) | |
John C. Fortson | |||||||||||
05/27/2016 | 27,115 | 27.90 | 05/27/2026 | ||||||||
02/27/2017 | 10,357 | 53.11 | 02/27/2027 | ||||||||
02/28/2018 | 8,661 | 74.91 | 02/28/2028 | ||||||||
02/28/2019 | 5,792 | 115.22 | 02/28/2029 | ||||||||
02/28/2020 | 14,749 | 45.04 | 02/28/2030 | ||||||||
02/26/2021 | 12,871 | 6,435 | 69.48 | 02/26/2031 | 2,969 | 140,196 | 17,811 | 841,035 | |||
02/28/2022 | 8,426 | 16,852 | 68.23 | 02/28/2032 | 6,888 | 325,251 | 20,666 | 975,849 | |||
02/28/2023 | 19,380 | 915,124 | 29,070 | 1,372,685 | |||||||
Mary Dean Hall | |||||||||||
04/19/2021 | 1,679 | 840 | 73.21 | 04/19/2031 | 387 | 18,274 | 2,324 | 109,739 | |||
04/19/2021 | 4,415 | 208,476 | |||||||||
02/28/2022 | 2,439 | 4,876 | 68.23 | 02/28/2032 | 1,993 | 94,109 | 5,980 | 282,376 | |||
02/28/2023 | 4,942 | 233,361 | 7,413 | 350,042 | |||||||
Stacy L. Cozad | |||||||||||
02/01/2021 | 2,419 | 114,225 | |||||||||
02/26/2021 | 2,871 | 1,435 | 69.48 | 02/26/2031 | 662 | 31,260 | 3,973 | 187,605 | |||
02/28/2022 | 1,826 | 3,651 | 68.23 | 02/28/2032 | 1,492 | 70,452 | 4,478 | 211,451 | |||
02/28/2022 | 2,199 | 103,837 | |||||||||
02/28/2023 | 3,758 | 177,453 | 5,636 | 266,132 |
INGEVITY | 2024 Proxy Statement | 65 |
Back to Contents |
Option Awards(1) | Stock Awards | ||||||||||
Name (a) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) (b) | Number of Securities Underlying Unexercised Options Unexercisable (#) (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock that Have Not Vested(2) (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested(3) (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units or Other Rights that Have Not Vested ($) (j) | |
S. Edward Woodcock | |||||||||||
02/27/2017 | 2,897 | 53.11 | 02/27/2027 | ||||||||
02/28/2018 | 3,235 | 74.91 | 02/28/2028 | ||||||||
02/28/2019 | 2,556 | 115.22 | 02/28/2029 | ||||||||
02/28/2020 | 8,369 | 45.04 | 02/28/2030 | ||||||||
02/26/2021 | 7,197 | 339,842 | |||||||||
02/26/2021 | 2,763 | 1,381 | 69.48 | 02/26/2031 | 637 | 30,079 | 3,824 | 180,569 | |||
02/28/2022 | 1,690 | 3,380 | 68.23 | 02/28/2032 | 1,382 | 65,258 | 4,145 | 195,727 | |||
02/28/2023 | 3,453 | 163,051 | 5,179 | 244,552 | |||||||
Richard A. White | |||||||||||
02/28/2020 | 819 | 45.04 | 02/28/2030 | ||||||||
02/26/2021 | 911 | 455 | 69.48 | 02/28/2031 | 210 | 9,916 | 1,260 | 59,497 | |||
07/01/2021 | 609 | 28,757 | |||||||||
02/28/2022 | 1,136 | 2,271 | 68.23 | 02/28/2032 | 928 | 43,820 | 2,785 | 131,508 | |||
02/28/2023 | 3,344 | 157,904 | 5,015 | 236,808 | |||||||
05/01/2023 | 13,969 | 659,616 |
(1) | Options granted since 2019 vest ratably in |
the third anniversary of the grant date. | |
(2) | The RSU awards reported in column |
(3) | Column |
The number of PSU shares for the awards granted in 2021, 2022, and 2023 shown |
INGEVITY | 2024 Proxy Statement | |
Back to Contents |
This table shows the stock options that were exercised by, and the RSUs that vested for, each of our NEOs during 2018. Option award value realized is calculated by subtracting the aggregate exercise price of the options exercised from the aggregate market value of shares of Common Stock.
Option Awards(1) | Stock Awards(2) | ||||
Number of Shares Acquired on Exercise (#) | Value Realized upon Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized Upon Vesting ($) | ||
D. Michael Wilson | — | — | 22,327 | 2,035,485 | |
John C. Fortson | — | — | 14,252 | 1,182,141 | |
S. Edward Woodcock | — | — | 2,153 | 169,129 | |
Katherine P. Burgeson | 4,376 | 43,769 | 3,986 | 313,120 | |
Michael P. Smith | — | — | 1,009 | 79,262 |
Option Awards | Stock Awards | |||||||||||||
Name | Award | Grant Date | Exercise or Vest Date, As Applicable | Number of Shares Acquired on Exercise (#) | Value Realized Upon Exercise(1) ($) | Number of Shares Acquired on Vesting(2) (#) | Value Realized Upon Vesting(3) ($) | |||||||
John C. Fortson | ||||||||||||||
PSU | 02/28/2020 | 02/16/2023 | 8,835 | 792,234 | ||||||||||
PSU | 09/01/2020 | 02/16/2023 | 10,430 | 935,258 | ||||||||||
RSU | 02/28/2020 | 02/28/2023 | 1,732 | 142,994 | ||||||||||
RSU | 02/26/2021 | 02/26/2023 | 2,968 | 260,620 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 3,445 | 284,419 | ||||||||||
Mary Dean Hall | ||||||||||||||
RSU | 04/19/2021 | 04/19/2023 | 4,415 | 317,218 | ||||||||||
RSU | 04/19/2021 | 04/19/2023 | 387 | 27,806 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 997 | 82,312 | ||||||||||
Stacy L. Cozad | ||||||||||||||
RSU | 02/01/2021 | 02/01/2023 | 2,418 | 200,380 | ||||||||||
RSU | 02/26/2021 | 02/26/2023 | 662 | 58,130 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 747 | 61,672 | ||||||||||
S. Edward Woodcock | ||||||||||||||
PSU | 02/28/2020 | 02/16/2023 | 5,014 | 449,605 | ||||||||||
RSU | 02/28/2020 | 02/28/2023 | 983 | 81,156 | ||||||||||
RSU | 02/26/2021 | 02/26/2023 | 637 | 55,935 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 691 | 57,049 | ||||||||||
Richard A. White | ||||||||||||||
PSU | 02/28/2020 | 02/16/2023 | 1,473 | 132,084 | ||||||||||
RSU | 02/28/2020 | 02/28/2023 | 289 | 23,860 | ||||||||||
RSU | 02/26/2021 | 02/26/2023 | 210 | 18,440 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 465 | 38,390 |
(1) | |
per share. | |
(2) | |
(3) | Column represents the value of the awards |
INGEVITY | 2024 Proxy Statement | 67 |
The following table provides information with respect to the Company’s non-qualified defined benefit plan (which we refer to as the “Retirement Restoration Plan”). The Retirement Restoration Plan provides benefits to only two of our NEOs representing “historic” liabilities assumed by the Company under the terms of the EMA in connection with our separation from our former parent, WestRock. None of our NEOs currently accrues a benefit under this plan with respect to service with the Company.
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit(1) ($) | Payments During Last Fiscal Year ($) | ||
Katherine P. Burgeson | Retirement Restoration Plan | 15.83 | 1,080,148 | — | ||
S. Edward Woodcock | Retirement Restoration Plan | 27.83 | 312,373 | — |
Mr. Woodcock is the only NEO who has a benefit under the Retirement Restoration Plan. None of our other NEOs currently accrues a benefit under this plan with respect to service with the Company.
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit(1) ($) | Payments During Last Fiscal Year ($) | ||||
S. Edward Woodcock | Retirement Restoration Plan | 27.83 | 341,670 | – |
(1) | The accumulated benefits included in this column were computed through December 31, 2023, using the assumptions stated in Note 14 to the Company’s audited consolidated financial statements for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2024. |
The WestRock Pension Plan (now frozen) provides an unreduced benefit payable at age 65 (or 62, if the employee has 20 years of service). The retirement benefit payable is equal to 1.6 percent1.6% of final average earnings (or pay) times years of benefit service (up to a maximum of 40 years), minus an employee’s primary social security benefit multiplied by 1.25
[1.6% x Years of Benefit x Final Average Pay]
Service (up to 40)-
Less
[1.25% x Years of Benefit x Primary Social Security Benefit] Service (up to 40)
The Retirement Restoration Plan mirrors benefits provided under the WestRock Pension Plan following the same formula but recognizing compensation in excess of the Internal Revenue Code limit, which was $275,000 for 2018. Mr.Woodcock and Ms. Burgeson,limits. Mr. Woodcock, while participantsa participant in this plan, no longer accrueaccrues any benefit under this plan. Benefits are payable in annuity form only, and a lump sum is not available.
The Company maintains a non-qualified deferred compensation plan that permits executives to defer up to 80 percent80% of their base salary and 100 percent80% of their short-term incentive compensation. The plan also operates as an excess benefit plan enabling employees to defer salary, Company matching, transition and other non-contributing contributions in excess of Internal Revenue Code limits that apply to the Company’s qualified 401(k) Savings Plan. Amounts contributed may be allocated towards notional accounts intoRSP. The DCP provides for a Company match of up to 16 investment funds as directed by the executive.
There is no guaranteed investment return with respect to any of these funds. The funds mirror those options available to all employees who participate in the Company’s broad-based qualified 401(k) Savings PlanRSP including two additional funds. In 2018, theThe Company adopted the use of a Rabbi Trust, which is funded through the purchase of Company Owned Life Insurance.Company-owned life insurance.
INGEVITY | 2024 Proxy Statement | 68 |
The table below includes information on each of our NEO’s non-qualified deferred compensation plan accounts for 2018.
Name | Executive Contributions in Last Fiscal Year(1) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings (Loss) in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End (3) ($) |
D. Michael Wilson | 428,100 | 208,875 | (95,928) | — | 1,139,187 |
John C. Fortson | 54,885 | 82,328 | (23,326) | — | 292,881 |
Katherine P. Burgeson | 164,125 | 42,525 | (17,923) | — | 342,494 |
Michael P. Smith | 305,729 | 34,406 | (25,543) | — | 357,562 |
S. Edward Woodcock | 97,602 | 70,171 | (17,868) | — | 298,102 |
Executive Contributions in Last Fiscal Year(1) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End(3) ($) | ||||||
John C. Fortson | 50,300 | 75,450 | 156,493 | 1,163,632 | ||||||
Mary Dean Hall | 322,327 | 40,994 | 103,610 | 480,592 | ||||||
Stacy L. Cozad | 47,000 | 35,250 | 23,086 | 169,472 | ||||||
S. Edward Woodcock | 140,900 | 43,936 | 316,622 | 2,131,384 | ||||||
Richard A. White | 38,410 | 24,104 | 9,810 | 260,163 | ||||||
(1) | |
(2) |
(3) |
Please refer to “Compensation Discussion & Analysis – Other Compensation and Benefits – Severance Arrangements” for a discussion of the benefits payable to our NEOs upon certain termination events and the definition of certain capitalized terms below.
The table below shows the severance benefits that would be payable to each of our NEOs if he or she had experienced an involuntarythe termination or change of employment from the Companycontrol events indicated below on December 31, 2018 (absent cause and excluding death,2023. The table below does not include amounts under the RSP or DCP, accrued but unused vacation, disability benefits, or retirement), pursuantother benefits payable to the terms of Severance and Change of Control Agreements.
D. Michael Wilson | John C. Fortson | Katherine P. Burgeson | Michael P. Smith | S. Edward Woodcock | |
Cash Severance(2) | 3,600,000 | 1,287,750 | 936,000 | 660,000 | 511,500 |
Prorated Target Incentive(3) | 900,000 | 353,500 | 234,000 | 260,000 | 181,500 |
Prorated Vesting Options(1), (4) | 2,793,572 | 1,496,268 | 435,088 | 243,335 | 302,925 |
Prorated Vesting RSUs(1), (5) | 529,674 | 251,405 | 77,832 | 55,403 | 58,248 |
Prorated Vesting PSUs(1), (5) | 3,639,427 | 1,802,515 | 539,633 | 371,416 | 397,193 |
Post-Termination Health Care(6) | 41,781 | 31,336 | 30,981 | 20,891 | 20,891 |
Outplacement Services and Financial Planning(7) | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 |
Total | 11,544,454 | 5,262,774 | 2,293,534 | 1,651,045 | 1,512,257 |
CEO Pay Ratio—2023In accordance with SEC rules, we are providing the We calculated each employee’s annual total cash compensation as of December 31,
Our calculation includes all full-time, part-time and temporary employees of the We applied a foreign currency exchange rate as of December 31, 2023 to all compensation elements paid in currencies other than U.S. Dollars. After calculating the The annual total compensation for 2023 is 61:1. We believe this pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K, the Given the Pay Versus PerformanceThe table below includes the compensation of our Diluted EPS
The table below shows the
Descriptions between Compensation Actually Paid and Company and Peer Group Performance The charts below provide an
Tabular List The table below represents the most important financial performance measures used by Ingevity to link compensation
The Audit Committee is directly responsible for appointing, retaining, fixing the compensation of, and overseeing the work of our independent registered public accounting firm. 2024. Although it is not legally required to do so, the Board has elected to seek stockholder ratification of the appointment of Representatives of Vote required:An affirmative vote of the Recommendation of the |
THE BOARD RECOMMENDS A VOTE “FOR”THE RATIFICATION OF THE APPOINTMENT OF PWC AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY. |
INGEVITY | 2024 Proxy Statement | 77 |
The following table shows the fees paid by usthe Company to PricewaterhouseCoopers LLPPwC for audit and other services provided for the fiscal 2018years 2023 and 2017, all of which were preapproved by the 2022.
Amounts Shown in $ | 2023 | 2022 |
Audit Fees | 2,375,000 | 2,551,000 |
Audit-Related Fees | 189,530 | 769,967 |
Tax Fees | - | - |
All Other Fees | 10,000 | 317,778 |
TOTAL | 2,574,530 | 3,638,745 |
2018 | 2017 | |||
Audit Fees | 1,379,000 | 1,132,000 | ||
Audit-Related Fees | 100,000 | 50,000 | ||
Tax Fees | 202,000 | 227,000 | ||
All Other Fees | 10,000 | 15,000 | ||
Total | 1,691,000 | 1,424,000 |
Amount includes fees for professional services performed for the integrated audit of the Company’s annual consolidated financial statements included in the Company’s Form 10-K filing and review of financial statements included in the Company’s Form 10-Q filings. The amountAmount also includes other services that are normally provided by PricewaterhouseCoopers LLPPwC in connection with statutory and regulatory filings or engagements and, for 2018, audit services related to the acquisition of the Georgia-Pacific pine chemicals business.
Amount includes fees paid for services that are reasonably related to the performance of the audit or review of the Company'sCompany’s financial statements. ThisFor 2023 and 2022, amount includes services provided in connection with debt financing transactions.
Amount includes fees and expenses for U.S. federal, state, and international tax planning and tax compliance services.
Amount includes fees for services in connection with attestations by PricewaterhouseCoopers LLPPwC that are required by statute or regulation.
The Audit Committee’s pre-approval policy requires that all services to be performed by the Company’s independent registered public accounting firm be pre-approved either on a case-by-case basis by the Audit Committee or its delegate or on a categorical basis based on the Audit Committee’s prior approval of a
The Audit Committee pre-approved all of the holdersaudit fees, audit-related fees, and all other fees paid to PwC in fiscal 2023.
INGEVITY | 2024 Proxy Statement | 78 |
The Audit Committee has reviewed and discussed the audited consolidated financial statements for the year ended December 31, 2023, including management’s annual assessment of 75 percentand report on the Company’s internal control over financial reporting, with management and with PwC, the Company’s independent auditor. The Audit Committee has discussed with PwC the matters required to be discussed by the applicable requirements of the voting powerPublic Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee also received from PwC the written disclosures and letter required by applicable requirements of the then outstanding sharesPCAOB regarding PwC’s communications with the Audit Committee concerning independence and has discussed with PwC the issue of stock entitledtheir independence from the Company.
Based on the foregoing, the Audit Committee recommended to votethe Board that the audited consolidated financial statements be included in the electionCompany’s Annual Report on Form 10-K for the year ended December 31, 2023, for filing with the SEC.
THE AUDIT COMMITTEE
Daniel F. Sansone, Chair
Frederick J. Lynch
Karen G. Narwold
William J. Slocum
Benjamin G. Wright
INGEVITY | 2024 Proxy Statement | 79 |
PROPOSAL 4APPROVAL OF AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO PROVIDE FOR THE EXCULPATION OF CERTAIN OFFICERS FROM LIABILITY IN LIMITED CIRCUMSTANCES |
OUR BOARD RECOMMENDS A VOTE FORTHE PROPOSED AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION. |
The State of directorsDelaware enacted legislation in 2022 that enables Delaware companies to amendlimit the liability of certain provisionsofficers in the event of our Certificate and By-Laws (the supermajority vote requirement). Our Boarda claim of Directors has voted unanimously to approve, and has recommended thatbreach of the duty of care under limited circumstances. We are asking our stockholders to approve an amendment (the “Charter Amendment”) to Ingevity’s Certificate of Incorporation (our “Charter”) to permit Ingevity to limit the liability of certain of Ingevity’s officers* in the specific circumstances permitted by the recent Delaware law, which is a limit that already applies to Ingevity’s directors under our existing Charter. In addition to the amendment described below, we will also make a minor amendment to update the Company’s registered address within Delaware.
The Delaware legislation only permits exculpation for direct claims for certain breaches of the duty of care does not permit the elimination of liability of certain officers for:
■ | breaches of the duty of loyalty; | |
■ | acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; or | |
■ | any transaction in which the officer derived an improper personal benefit. |
The new law does not affect the right of stockholders to bring derivative claims on behalf of the Company against officers for breach the duty of care. Limiting the scope of liability of certain officers in this manner allows Ingevity to strike an appropriate balance between stockholders’ interest in incentivizing reasonable and sound business decisions and driving accountability on the one hand, and stockholders’ interest in Ingevity being able to attract and retain quality individuals to serve as its officers on the other hand.
The Board believes that the Charter Amendment is advisable and in the best interest of our stockholders because the scope of the limited liability is narrow and it helps protect our officers (in addition to our Certificatedirectors) from the risk of financial ruin from carrying out their duties. Further, the Board believes that the Charter Amendment will enhance Ingevity’s ability to eliminateattract and retain talented officers. In light of the supermajority vote requirementbenefits to Ingevity, its officers and its stockholders, and upon the recommendation of the Nominating & Governance Committee, the Board recommends that the stockholders adopt the Charter Amendment to also removeprovide the exculpation of certain obsolete provisions.officers* to the extent permitted by Delaware law.
INGEVITY | 2024 Proxy Statement | 80 |
The proposed amendment to Article VIII of our Certificate containthe Charter to permit the exculpation discussed above is as follows:
ANo director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a supermajority vote requirementdirector or officer, as applicable, except to amend, modifythe extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment or repeal specific provisions of this Article VIII shall not adversely affect any right or protection of any director or officer of the Corporation existing hereunder in respect of any act or omission occurring prior to such amendment or repeal.
This summary of the proposed amendment is not intended to be complete and is qualified in its entirety by the full text of the Third Amended and Restated Certificate of Incorporation, a copy of which is included as Appendix B to this Proxy Statement.
We ask our stockholders to vote on the following resolution:
“RESOLVED, that the Company’s stockholders approve the Company’s Third Amended and Restated Certificate and By-Laws relating to:
If the proposed Charter Amendment is adopted by the required vote of stockholders, including stockholders’ rights to call such a meeting (Section 1.3it will become effective on the date that the Company’s Third Amended and Restated Certificate of Incorporation reflecting the Charter Amendment is filed with the Secretary of State of the By-Laws);
The affirmative vote of a majority of the shares of Common Stock present in person or by proxy and entitled to removevote on the supermajoritymatter at the Annual Meeting is required for the approval of the Charter Amendment.
THE BOARD RECOMMENDS A VOTE “FOR”THE APPROVAL OF THE CHARTER AMENDMENT. |
* | Officers covered by the limit of liability proposed in the Charter Amendment would include our NEOs, chief accounting officer, treasurer, and certain other officers who have consented (or deemed to have consented) to be identified as an officer and to accept service of process. |
INGEVITY | 2024 Proxy Statement | 81 |
The following table lists any person (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act) who, to our knowledge, was the beneficial owner as of February 26, 2024, of more than 5% of our outstanding Common Stock.
Name and Address of Beneficial Owner | Amount of Common Stock Beneficially Owned | Percentage of our Common Stock | Sole Voting Shares | Shared Voting Shares | Sole Investment Shares | Shared Investment Shares | ||||||
BlackRock, Inc.(1) 55 East 52nd Street New York, New York 10055 | 6,003,674 | 16.6% | 5,934,518 | 6,003,674 | ||||||||
The Vanguard Group(2) 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 3,743,322 | 10.33% | 67,220 | 3,639,887 | 103,435 | |||||||
Inclusive Capital Partners, L.P.(3) Jeffrey W. Ubben 1170 Gorgas Avenue San Francisco, CA 94129 | 2,401,405 | 6.6% | 2,401,405 | 2,401,405 | ||||||||
Wellington Management Group LLP(4) c/o Wellington Management Company LLP 280 Congress Street Boston, MA 02210 | 2,148,379 | 5.93% | 1,905,361 | 2,148,379 | ||||||||
Victory Capital Management Inc.(5) 4900 Tiedeman Road 4th Floor Brooklyn, OH 44144 | 1,854,554 | 5.12% | 1,839,610 | 1,854,554 |
(1) | Information provided is based solely on an amendment to Schedule 13G filed on January 22, 2024. |
(2) | Information provided is based solely on an amendment to Schedule 13G filed on February 13, 2024. |
(3) | Information provided is based solely on an amendment to Schedule 13D filed on May 30, 2023. |
(4) | Information provided is based solely on a Schedule 13G filed on February 8, 2024. |
(5) | Information provided is based solely on a Schedule 13G filed on February 7, 2024. |
INGEVITY | 2024 Proxy Statement | 82 |
The following table shows how much of our Common Stock our current directors, NEOs, and all executive officers and directors as a group beneficially owned as of March 3, 2024. Beneficial ownership is a technical term broadly defined by the SEC to mean more than ownership in the usual sense. In general, beneficial ownership includes any shares of Common Stock a director or officer can vote requirementor transfer and any security the director or officer has the right to vote or transfer within 60 days. Except as described further below, each stockholder listed in this Proposal 4.the table has sole voting and investment power for all shares of Common Stock shown as beneficially owned by him or her. [Individual directors and executive officers as well as directors and executive officers as a group beneficially own less than 1% of the shares of Common Stock outstanding as of March 3, 2024.]
Name of Beneficial Owner | Common Stock Beneficially Owned(1) | Stock Vesting within 60 Days | Options Exercisable within 60 Days | Total Common Stock Beneficially Owned(1) | Vested but Unsettled DSUs (including vesting within 60 days) (“Vested DSUs”)(2) | Total Common Stock Beneficially Owned Plus Vested DSUs(1) | ||||||
Independent Directors | ||||||||||||
Jean S. Blackwell | [xxx] | |||||||||||
Luis Fernandez-Moreno | [xxx] | |||||||||||
Diane H. Gulyas | [xxx] | |||||||||||
Bruce D. Hoechner | [xxx] | |||||||||||
Frederick J. Lynch | [xxx] | |||||||||||
Karen G. Narwold | [xxx] | |||||||||||
Daniel F. Sansone | [xxx] | |||||||||||
William J. Slocum(3) | [xxx] | |||||||||||
Benjamin G. Wright | [xxx] | |||||||||||
Executive Officers | ||||||||||||
John C. Fortson | [xxx] | |||||||||||
Mary Dean Hall | [xxx] | |||||||||||
Stacy L. Cozad | [xxx] | |||||||||||
S. Edward Woodcock | [xxx] | |||||||||||
Richard A. White | [xxx] | |||||||||||
Directors and Officers as a group (16 persons) | [xxx] | [xxx] | [xxx] | [xxx] | [xxx] | [xxx] |
(1) | Includes shares of Common Stock held directly and indirectly. |
(2) | For information on DSU vesting, voting rights, and payment, please see “Director Compensation,” above. |
(3) | Mr. Slocum is deemed to hold the shares of Common Stock listed in the table for the benefit of certain funds managed by Inclusive Capital Partners, L.P. and indirectly, for the benefit of Inclusive Capital Partners, L.P. Mr. Slocum disclaims beneficial ownership of the equity listed in the table, except to the extent of his pecuniary interest therein, if any. |
To the Company’s knowledge, based solely on a review of the copies of the reports furnished to the Company and the reporting persons’ written representations that no additional reports were required, the Company believes that, during 2023, all persons required to report complied with the Section 16(a) requirements.
INGEVITY | 2024 Proxy Statement | 83 |
Important Notice Regarding the Availability of Obsolete Provisions
You received these materials (the “Proxy Materials”) because you owned shares of the Company’s Common Stock, par value $0.01 (the “Common Stock”) as of the close of business on February 26, 2024 (the “Record Date”) and are, therefore, entitled to vote at the Annual Meeting.
Most of our stockholders received a Notice Regarding the Availability of Proxy Materials (the “Notice”) instead of a full set of printed Proxy Materials. The proposed amendmentNotice provides access to our Certificate also removes two obsolete provisionsProxy Materials in Article VIIa fast and efficient manner via the Internet. This reduces the amount of paper necessary to produce these materials, and cuts costs associated with mailing these materials to stockholders. On or around March 11, 2024, we began mailing the Notice to holders of our CertificateCommon Stock as of the Record Date and posted our Proxy Materials on the website referenced in the Notice (www.proxyvote.com). As more fully described in the Notice, stockholders may choose to access our Proxy Materials on the website or may request to receive a printed set of our Proxy Materials. The Notice and website provide information regarding how you may request to receive Proxy Materials in printed form by mail or electronically by email for this Annual Meeting and on an ongoing basis.
The Proxy Materials include the Notice of the Annual Meeting, the Proxy Statement, and our Annual Report. These materials provide you with important information about the Company, the Annual Meeting, and the proposals to be voted on at the Annual Meeting.
A proxy is your legal designation of another person to vote the shares of Common Stock you own as of the Record Date in the manner you direct. The person you designate to vote your shares of Common Stock is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated Stacy L. Cozad, our Executive Vice President, General Counsel, and Secretary, and Ryan C. Fisher, our Vice President and Deputy General Counsel, to serve as proxies for the Annual Meeting. The proxies also may be voted at any adjournments or postponements of the meeting. The Board is soliciting proxies for use at the Annual Meeting. A proxy statement is a document we give you when we are soliciting your vote pursuant to SEC regulations.
If your shares of Common Stock are registered in your name on the books and records of our transfer agent, you are a “stockholder of record.” We therefore sent the Notice or Proxy Materials directly to you.
If your shares of Common Stock are held for you in the name of your broker or bank, your shares are held in “street name” and you are considered the “beneficial owner” of your shares and the broker or bank is considered to be the stockholder of record.
If you are a beneficial owner, the Notice or Proxy Materials have been forwarded to you by the broker or bank that holds your shares of Common Stock, and, as the beneficial owner, you have the right to direct your broker or bank on how to vote your shares by using the voting instruction form provided to you by your broker or bank.
INGEVITY | 2024 Proxy Statement | 84 |
Your voting method depends on whether you are a stockholder of record or a beneficial owner.
If you are a stockholder of record, you may vote using one of the following methods:
ONLINE | BY PHONE | BY MOBILE DEVICE | BY MAIL | DURING THE VIRTUAL MEETING |
Before the Annual Meeting, vote online at www.proxyvote.com | Call 1-800-690-6903 | Scan the QR code on your proxy card or Notice | If you received a printed version of these proxy materials, you may vote by mail | Vote online during the meeting at www.virtualshareholdermeeting.com/ NGVT2024 by entering your 16-digit control number and following the site instructions |
Even if you plan to attend the Annual Meeting virtually, we encourage you to vote your shares ahead of time.
If you are a beneficial owner, you may vote by following the instructions on the voting instruction form or notice provided to you by the bank or broker that holds your shares.
If you are a stockholder of record, you may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting by doing one of the following:
■ | Voting again by telephone or via the Internet prior to 11:59 p.m., Eastern Time, on April 22, 2024; | |
■ | Giving written notice to the Corporate Secretary of the Company; | |
■ | Delivering a later-dated proxy to the Company; or | |
■ | Voting during the Annual Meeting by following the instructions available on the meeting website, www.virtualshareholdermeeting.com/NGVT2024. |
If you are a beneficial owner, please check your voting instruction form or contact the bank or broker that holds your shares for instructions on how to revoke or change your voting instruction.
All Ingevity stockholders who owned Common Stock as of the close of business on the Record Date are entitled to vote at the Annual Meeting.
Each Ingevity stockholder is entitled to one vote for each share of Common Stock owned as of the Record Date. There were 36,247,546 shares of Common Stock outstanding on the Record Date. There is no cumulative voting.
INGEVITY | 2024 Proxy Statement | 85 |
In order to allow greater access to the meeting to our stockholders and lower the barriers to stockholder participation, our Annual Meeting will be held in a virtual meeting format only with no physical meeting location, which will enable stockholders to participate from any location and at no cost.
To participate in the virtual meeting, you will need the 16-digit control number included on your Notice, proxy card or voting instruction form. The meeting will begin promptly at 9:30 a.m., Eastern Time, and we encourage stockholders to access the meeting prior to the start time. Technical assistance will be available on the day of the Annual Meeting. If you experience difficulties joining the Annual Meeting, please call 844-986-0822 in the U.S., or 303-562-9302 for International assistance.
We are committed to ensuring that stockholders will be afforded the same rights and opportunities to participate in the Annual Meeting as they would at an in-person meeting. You will be able to attend the Annual Meeting online, vote your shares of Common Stock electronically, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/NGVT2024 and entering the 16-digit control number included on your Notice, proxy card, or voting instruction form.
We will try to answer as many stockholder-submitted questions as time permits, and in the event we receive more questions than we can answer during our allotted period of time, we will answer them in the order received. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are no longer applicablenot pertinent to meeting matters or relevant. First,Company business, or that do not comply with the proposed amendment removes from Article VII transition provisions relatedAnnual Meeting rules of conduct. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition. To the de-staggeringextent you have a question that was not answered during the Annual Meeting, please contact our Investor Relations team at investors@ingevity.com.
In order for us to conduct the Annual Meeting, a majority of the Company'sshares of Common Stock outstanding as of the Record Date must be present at the meeting (including by proxy). This is referred to as a quorum. If a share is represented for any matter at the Annual Meeting, it is deemed to be present for quorum purposes. Abstentions and shares of Common Stock held of record by a bank or broker or its nominee (“Broker Shares”) that are voted on any matter are included in determining the number of shares present at the Annual Meeting. However, broker non-votes will not be included in determining whether a quorum is present at such meeting.
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The following table summarizes the Board’s voting recommendations for each proposal, the vote required for each proposal to pass, and the effect of abstentions and uninstructed shares on each proposal. If you are a stockholder of record who submits a proxy card without selecting an option for any of the proposals, the proxy holders will vote in accordance with the Board recommendations in the table below.
Proposal | Description | Board Voting Recommendation | Vote Required to Pass(1) | Effect of Abstentions on Votes Cast(2) | Effect of Broker Non-votes(3) | |||||
1 | Election of Nine Directors | FOR all director nominees | Majority of the votes cast | None | None | |||||
2 | Advisory Vote on Compensation of our Named Executive Officers (Say-On-Pay) | FOR | Majority of shares present | Counts as a vote against the proposal | None | |||||
3 | Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2024 | FOR | Majority of shares present | Counts as a vote against the proposal | Broker may vote in its discretion | |||||
4 | Amendment of the Company’s Certificate of Incorporation to provide for the exculpation of certain officers from liability in limited circumstances | FOR | Majority of shares present | Counts as a vote against the proposal | None |
(1) | For Proposal 1, majority of votes cast means that the number of votes cast “for” a director nominee must exceed the number of votes cast “against”the director nominee. For Proposals 2-4, “shares present” includes abstentions. |
(2) | Abstentions are considered present and entitled to vote. |
(3) | Brokers only have authority to vote in their discretion for routine matters. All of the proposals, except for Proposal 3, are considered non-routinematters. If you are a beneficial owner holding shares through a broker and you do not specify a choice to your broker for a non-routine proposal, thebroker is not entitled to vote in its discretion and this is considered a broker non-vote. |
As of the date of this Proxy Statement, we are not aware of any other matter that will be fully implementedproperly brought before the Annual Meeting. If other matters are properly introduced, the persons named in the proxy as the proxy holders will vote on such matters in their discretion using their best judgment.
We will bear the cost of solicitation of proxies by the Board in connection with the Annual Meeting. We will reimburse brokers, fiduciaries, and therefore obsolete ascustodians for reasonable expenses incurred by them in forwarding Proxy Materials to beneficial owners of Common Stock held in their names. Proxies may be solicited by mail, in person, by telephone, facsimile, or other means of communication by our officers and other employees. These people will receive no additional compensation for these services but will be reimbursed for any expenses incurred by them in connection with these services. In addition, Ingevity’s officers, directors, and employees may solicit proxies but will receive no additional or special compensation for such work.
The address of Ingevity’s principal executive office is: 4920 O’Hear Avenue, Suite 400, North Charleston, South Carolina 29405.
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“Householding” refers to a procedure allowed by the SEC to reduce the number of copies of the 2019Notice or Proxy Materials mailed to holders of our Common Stock residing at the same address. Under this procedure, we will deliver one Notice or one set of printed Proxy Materials to beneficial holders of our Common Stock residing at the same address, unless their broker, bank, or other nominee has received contrary instructions from any beneficial holder at that address. Likewise, we will deliver one Notice or one set of printed Proxy Materials to record holders of our Common Stock residing at the same address, unless we receive instructions from such stockholders to the contrary. If you reside at the same address as other stockholders of record and would like to receive a separate Notice or set of Proxy Materials, please contact us at 1-844-643-8489 (1-84-INGEVITY) or at Ingevity Corporation, 4920 O’Hear Avenue, Suite 400, North Charleston, South Carolina 29405, Attn: Corporate Secretary, and we will promptly deliver a separate set to you. If you and other stockholders of record residing at the same address received multiple Notices or sets of the Proxy Materials and would like to receive a single Notice or set in the future, please contact us as described above. Beneficial holders with questions about combined mailings should contact the bank or broker holding their shares.
Any director who is not elected at the Annual Meeting since at such time all of our directors will be electedshall offer to serve one-year terms. Second, the proposed amendment removes a provision prohibiting the removal of a director without cause,
The general descriptions ofCompany will file a Current Report on Form 8-K with the Proposed Amendment set forth above are qualified in their entirety by referenceSEC and post the filing to the text of the Proposed Amendment, which is attached as Appendix A to these proxy materials. Additions to the Certificate are indicated by underlining, and deletions are indicated by strike-outs. If it is approved by the stockholders, this amendment would become effective after the Company files a certificate of amendment with the Secretary of State of Delaware, which would occur promptly afterCompany’s website within four business days following the Annual Meeting.
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We will provide without charge, at the written request of any stockholder of record as of February 25, 2019,the Record Date, a copy of our Annual Report, on Form 10-K, including the financial statements, and financial statement schedule, as filed with the SEC, excluding exhibits. We will provide copies of the exhibits to eligible stockholders making such a request.
Requests for copies of our Annual Report on Form 10-K should be mailed to: Ingevity Corporation, 5255 Virginia Ave, N.4920 O’Hear Avenue, Suite 400, North Charleston, SC 29406,South Carolina 29405, Attn: Katherine P. Burgeson,Corporate Secretary. You may also access a copy of our annual reportAnnual Report via the Internet by visiting our website located at http://ir.ingevity.com under the Financial Information tab.
Under SEC rules, a proposal that a stockholder wishes to include in our proxy statement for the 2020 Annual Meeting2025 annual meeting of stockholders must be received by our Corporate Secretary no later than the close of business on November 12, 2019.10, 2024. Proposals shouldmust be sentin writing and delivered to: Ingevity Corporation, 5255 Virginia Ave, N.4920 O’Hear Avenue, Suite 400, North Charleston, SC 29406,South Carolina 29405, Attn: Katherine P. Burgeson,Corporate Secretary. StockholdersIn addition, proposals must otherwise comply with the requirements of Rule 14a-8 of the Exchange Act. Accordingly, stockholders wishing to submit a proposal should
Under our By-Laws,Bylaws, any stockholder entitled to vote in theof record may nominate persons for election ofas directors at an annual meeting of our stockholders may nominate persons for election as directors by providing written notice of their intent to do so to our Corporate Secretary no lesslater than 90 days and not morethe close of business on the 90th day, nor earlier than 120 daysthe close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting.
In addition to the requirements in the preceding paragraph, stockholders who intend to solicit proxies in support of director nominees other than Ingevity’s nominees through the use of a “universal proxy card” must provide notice that sets forth the information required by Rule 14a-19 of the Exchange Act no later than February 22, 2025, which is 60 days prior to April 23, 2025, the one-year anniversary of the Annual Meeting.
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Under our By-Laws,Bylaws, any stockholder of record wishingwho wishes to present a matter for consideration (other than the nomination of a director or matters that have been submitted for inclusion in our proxy statement for such annual meeting) in person at the 2020 Annual Meetingan annual meeting of our stockholders must provide written notice of their intent to do so to our Corporate Secretary no lesslater than 90 days and not morethe close of business on the 90th day, nor earlier than 120 daysthe close of business on the 120th day, prior to the first
In addition, the Company will only consider proposals from a stockholder who is a stockholder of record: (i) at the time of giving such notice; (ii) on the record date for the determination of stockholders entitled to vote at the annual meeting; and (iii) at the time of the annual meeting.
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This Proxy Statement - 51contains “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements generally include the words “will,” “plans,” “intends,” “targets,” “expects,” “outlook,” “guidance,” “believes,” “anticipates” or similar expressions. Forward-looking statements may include, without limitation, anticipated timing, charges and costs of the closure of our DeRidder, Louisiana plant; the potential benefits of any acquisition or investment transaction, expected financial positions, guidance, results of operations and cash flows; financing plans; business strategies and expectations; operating plans; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost-reduction initiatives, plans and objectives; litigation related strategies and outcomes; and markets for securities. Actual results could differ materially from the views expressed. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, charges, costs or actions, including adverse legal or regulatory actions, resulting from, or in connection with, the closure of our DeRidder, Louisiana plant; losses due to resale of CTO at less than we paid for it; adverse effects from general global economic, geopolitical and financial conditions beyond our control, including inflation and the Russia-Ukraine war and Israel-Gaza war; risks related to our international sales and operations; adverse conditions in the automotive market; competition from substitute products, new technologies and new or emerging competitors; worldwide air quality standards; a decrease in government infrastructure spending; adverse conditions in cyclical end markets; the limited supply of or lack of access to sufficient raw materials, or any material increase in the cost to acquire such raw materials; issues with or integration of future acquisitions and other investments; the provision of services by third parties at several facilities, including the impact of WestRock’s shutdown of its North Charleston paper mill; supply chain disruptions; natural disasters and extreme weather events; or other unanticipated problems such as labor difficulties (including work stoppages), equipment failure or unscheduled maintenance and repair; attracting and retaining key personnel; dependence on certain large customers; legal actions associated with our intellectual property rights; protection of our intellectual property and other proprietary information; information technology security breaches and other disruptions; complications with designing or implementing our new enterprise resource planning system; government policies and regulations, including, but not limited to, those affecting the environment, climate change, tax policies, tariffs and the chemicals industry; and losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes, and the other factors detailed from time to time in the reports we file with the Securities and Exchange Commission (the “SEC”), including those described in Part I, Item 1A. Risk Factors in our most recent Annual Report on Form 10-K as well as in our other filings with the SEC. These forward-looking statements speak only to management’s beliefs as of the date of this Proxy Statement. Ingevity assumes no obligation to provide any revisions to, or update, any projections and forward-looking statements contained in this Proxy Statement.
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Ingevity has presented certain financial measures in this Proxy Statement, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) These financial measures are not meant to be considered in isolation or as a substitute for the most directly comparable financial measure calculated in accordance with GAAP.
Adjusted EBITDA andAdjusted EBITDA Margin | Definitions. “Adjusted EBITDA” is defined as net income (loss) plus interest expense, net, provision (benefit) for incometaxes, depreciation, amortization, restructuring and other (income) charges, net, including inventory lower of cost or market charges associated with restructuring actions, acquisition and other-related (income) costs, litigation verdict charges, gain on sale of strategic investment, loss on CTO resales, and pension and postretirement settlement and curtailment (income) charges, net. “Adjusted EBITDA Margin” is defined as Adjusted EBITDA divided by Net sales. | |
Reason Used. We believe these non-GAAP financial measures provide management as well as investors, potentialinvestors, securities analysts and others with useful information to evaluate the performance of the business, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance and projected future results. We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful measures because they exclude the effects of financing and investment activities as well as non-operating activities. | ||
Reconciliation. The table below reconciles Adjusted EBITDA to net income (loss), the most comparable financialmeasure calculated in accordance with GAAP. | ||
Free Cash Flow | Definition. “Free Cash Flow” is defined as net cash provided by operating activities less capital expenditures. | |
Reason Used. Management believes that free cash flow is an important liquidity measure for the Company and that it is useful to investors and management as a measure of the ability of our business to generate cash. | ||
Reconciliation. The table below reconciles Free Cash Flow to net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP. | ||
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Company STIP-Adjusted EBITDA | Definition. “Company STIP-Adjusted EBITDA” is defined as Adjusted EBITDA (as defined above), plus or minus the impact of certain non-cash gains or charges as determined in the T&C Committee’s sole discretion. Excluded items may include the cumulative effect of accounting changes, the effect of new accounting pronouncements, last-in, first-out (LIFO) adjustment (income) expense, (gain) loss on currency translation and hyperinflation (gain) loss per share, and certain other adjustments reflecting substantial or out of the ordinary matters. | |
Reason Used. Company STIP-Adjusted EBITDA was selected as a performance measure under the 2023 STIP because Adjusted EBITDA is the primary performance measurement of the Company’s earnings guidance and drives behavior consistent with the stockholders’ interests. Additionally, for compensation award purposes, eliminating the other certain non-cash gains or losses was appropriate because the impacts of both were primarily driven by external market conditions and not by decisions management could directly influence. | ||
Reconciliation. The table below reconciles Company STIP-Adjusted EBITDA to net income (loss), the most comparable financial measure calculated in accordance with GAAP. | ||
Business Unit STIP-Adjusted EBITDA (“BU STIP-Adjusted EBITDA”) | Definition. “BU STIP-Adjusted EBITDA” is defined as Segment EBITDA, as defined under ASC 280, plus or minus the impact of certain non-cash gains or charges as determined in the T&C Committee’s sole discretion. Excluded items may include the cumulative effect of accounting changes, the effect of new accounting pronouncements, last-in, first-out (LIFO) adjustment (income) expense, (gain) loss on currency translation and hyperinflation (gain) loss per share, and certain other adjustments reflecting substantial or out of the ordinary matters. | |
Reason Used. BU STIP-Adjusted EBITDA was selected as a performance measure under the 2023 STIP because Segment EBITDA is the primary performance measurement of the Company’s segment earnings and drives behavior consistent with the stockholders’ interests. Additionally, for segment compensation award purposes, eliminating the fair market gain or loss from other certain non-cash gains or losses was appropriate because the impacts of both were primarily driven by external market conditions and not by decisions management could directly influence. | ||
Reconciliation. The table below reconciles Performance Chemicals’ BU STIP-Adjusted EBITDA and Performance Materials’ BU STIP-Adjusted EBITDA to Segment EBITDA, respectively, the most comparable financial measure calculated in accordance with GAAP under ASC 280. | ||
Company STIP-Adjusted Revenue | Definition. Company STIP-Adjusted Revenue is defined as revenue in accordance with GAAP, plus or minus the impact of certain non-recurring items including, without limitation, currency impacts, discontinued or sold operations, acquisition impacts, and new accounting pronouncements. | |
Reason Used. Company STIP-Adjusted Revenue was selected as a performance measure under the 2023 STIP to drive behaviors consistent with our Ingevity 2.0 Strategy, which is to drive sustainable revenue growth to achieve enduring enterprise success and create long-term stockholder value. | ||
Reconciliation. The table below reconciles Company STIP-Adjusted Revenue to the Company’s revenue, the most comparable financial measure calculated in accordance with GAAP. | ||
Business Unit STIP-Adjusted Revenue (“BU STIP-Adjusted Revenue”) | Definition. “BU STIP-Adjusted Revenue” is defined as segment revenue in accordance with GAAP, plus or minus the impact of certain non-recurring items including, without limitation, currency impacts, discontinued or sold operations, acquisition impacts, and new accounting pronouncements. | |
Reason Used. BU STIP-Adjusted Revenue was selected as a performance measure under the 2023 STIP to drive behaviors within each segment consistent with our Ingevity 2.0 Strategy, which is to drive sustainable revenue growth to achieve enduring enterprise success and create long-term stockholder value. | ||
Reconciliation. The table below reconciles Performance Chemicals’ BU STIP-Adjusted Revenue and Performance Materials’ BU STIP-Adjusted Revenue to each segment’s revenue, respectively, the most comparable financial measure calculated in accordance with GAAP. | ||
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Cumulative Earnings(Loss) per Share (“Cumulative EPS”) | Definition. “Cumulative EPS” is defined as continuing operations diluted EPS attributable to Ingevity stockholders plusrestructuring and other (income) charges, net, including inventory lower of cost or market charges associated with restructuring actions, per share, acquisition and other-related (income) costs per share, pension and postretirement settlement and curtailment (income) charges, net per share, loss on CTO resales per share, gain on sale of strategic investment per share, debt refinancing fees per share, litigation verdict charges per share, tax expense (benefit) recorded as a result of legislative tax rate changes and certain discrete tax items such as excess tax benefits on share-based compensation vesting per share, and certain non-cash (income) charges per share (which includes: cumulative effect of accounting changes per share, the effect of new accounting pronouncements per share, last-in, first-out (LIFO) adjustment (income) expense per share, (gain) loss on currency translation and hyperinflation (gain) loss per share, and the income tax expense (benefit) per share on these items. | |
Reason Used. Cumulative EPS was selected as a performance measure because Cumulative EPS is a primaryperformance measurement of the Company’s profitability over the performance period. | ||
Reconciliation. The table below reconciles Cumulative EPS to diluted earnings per share, the most directly comparablefinancial measure calculated in accordance with GAAP. | ||
Average Return onInvested Capital (“Average ROIC”) | Definitions. “Average ROIC” is defined as the average of the Return on Invested Capital (“ROIC”) for each of the three yearswithin the performance period of the PSU award. ROIC is defined as net operating profit after tax (NOPAT) divided by the average Invested Capital for the period using an average ROIC from each of the three plan years. NOPAT is defined as net income (loss) from continuing operations plus interest expense (income), net, restructuring and other (income) charges, including inventory lower of cost or market charges associated with restructuring actions, acquisition and other-related (income) costs, loss on CTO resales, gain on sale of strategic investment, debt refinancing fees, litigation verdict charges, pension settlement and curtailment (gain) loss, and the income tax expense (benefit) on these items, including the tax expense (benefit) recorded as a result of legislative tax rate changes, and certain discrete tax items such as excess tax benefits on share-based compensation vestings. Invested Capital is defined as total debt including financing lease obligations (including the amounts recorded as the result of adoption of new accounting standards), less the financing lease restricted investment plus total Ingevity stockholders’ equity. Average Invested Capital for each year will be defined as a two (2) point average: (beginning calendar year Invested Capital plus end of calendar year Invested Capital) divided by two. | |
Reason Used. Average ROIC has been selected as a performance measure commencing with the 2021 PSUs because italigns with shareholder interests and promotes capital discipline. The T&C Committee believes that the use of an average calculation drives management accountability consistently throughout the performance period. | ||
Reconciliation. The table below calculates the Average ROIC for the 2021 PSUs and reconciles NOPAT (Average ROICnumerator) to net income attributable to Ingevity’s stockholders, the most comparable measure calculated in accordance with GAAP, and calculates Average Invested Capital (Average ROIC denominator) using the balance sheet. | ||
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AFA EBITDA andAFA EBITDA Margin | Definitions. “AFA EBITDA” is defined as net income (loss) plus interest expense, net, provision (benefit) for income taxes,depreciation, amortization, restructuring and other (income) charges, net, including inventory lower of cost or market charges associated with restructuring actions, acquisition and other-related (income) costs, litigation verdict charges, gain on sale of strategic investment, loss on CTO resales, and pension and postretirement settlement and curtailment (income) charges, net for alternative fatty acid (“AFA”) products sold from the Company’s plants in North Charleston, South Carolina and Crossett, Arkansas (together, the “Performance Plants”). “AFA EBITDA Margin” is defined as AFA EBITDA divided by net sales of AFA products from the Performance Plants. | |
Reason Used. AFA EBITDA Margin was selected as a performance measure for the PC Transformation Award PSUsbecause it is a good indicator of whether the Company’s efforts to accelerate the transition of our PC segment to a broader based oleochemical product line is being accomplished on a profitable basis. We believe these non-GAAP financial measures provide management as well as investors, potential investors, securities analysts and others with useful information to evaluate the performance of the strategic transformation of our PC segment to diversify our feedstocks from CTO-based products to oleochemical products, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance and projected future results. We believe AFA EBITDA and AFA EBITDA Margin are useful measures because they exclude the effects of financing and investment activities as well as non-operating activities. | ||
Reconciliation. When performance under the PC Transformation Award PSUs is certified, the Company will provide a tablethat reconciles AFA EBITDA to net income (loss), the most comparable financial measure calculated in accordance with GAAP. | ||
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In millions, unaudited | Year Ending 2023 | Year Ending 2022 | Year Ending 2021 | ||||||
Net income (loss) (GAAP) | (5.4) | $ | 211.6 | $ | 118.1 | ||||
Interest expense | 93.3 | 61.8 | 51.7 | ||||||
Interest income | (6.3) | (7.5) | (4.0) | ||||||
Provision (benefit) for income taxes | (4.7) | 58.0 | 44.7 | ||||||
Depreciation and amortization | 122.8 | 108.8 | 109.9 | ||||||
Restructuring and other (income) charges, net | 189.9 | 13.8 | 16.2 | ||||||
Acquisition and other-related (income) costs | 4.5 | 5.9 | 0.6 | ||||||
Gain on sale of strategic investment | (19.3) | — | — | ||||||
Loss on CTO resales | 22.0 | — | — | ||||||
Litigation verdict charge | — | — | 85.0 | ||||||
Pension and postretirement settlement and curtailment charges (income), net | — | 0.2 | — | ||||||
Adjusted EBITDA (Non-GAAP)(1) | $ | 396.8 | $ | 452.6 | 422.2 | ||||
Certain non-cash charges(2) | 1.5 | (1.7) | 1.8 | ||||||
Company STIP-Adjusted EBITDA (Non-GAAP) | $ | 398.3 | $ | 450.9 | $ | 424.0 | |||
Net Sales | $ | 1,692.1 | $ | 1,668.3 | 1,391.5 | ||||
Adjusted EBITDA Margin (Non-GAAP) | 23.5% | 27.1% | 30.3% |
(1) | For more information on the adjustments from Net income (loss) to Adjusted EBITDA, refer to the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2024, Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
(2) | Represents certain non-cash costs primarily including non-cash income resulting from inventory adjustments recorded during the period in accordance with last-in, first-out (“LIFO”) inventory accounting, certain acquisitions and strategic investments, and non-cash translation impacts associated with currency exchange rate fluctuations. |
In millions, unaudited | Year Ending 2023 | Year Ending 2022 | ||||
Net Cash Provided by Operating Activities (GAAP) | $ | 205.1 | $ | 313.4 | ||
Capital expenditures | (109.8) | (142.5) | ||||
Free Cash Flow (Non-GAAP) | $ | 95.3 | $ | 170.9 |
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Year Ending 2023 | |||||||||||
In millions, unaudited | Performance Chemicals | Performance Materials | Advanced Polymer Technologies | ||||||||
Segment EBITDA (GAAP) | $ | 65.7 | $ | 286.6 | $ | 44.5 | |||||
Certain non-cash charges(1) | (0.8) | 2.2 | 0.1 | ||||||||
BU STIP-Adjusted EBITDA (Non-GAAP) | $ | 64.9 | $ | 288.8 | $ | 44.6 |
(1) | Represents certain non-cash costs primarily including non-cash income resulting from inventory adjustments recorded during the period in accordance with last-in, first-out (“LIFO”) inventory accounting, and translation impacts associated with foreign currency exchange rate fluctuations. |
In millions, unaudited | Year Ending 2023 | ||
Revenue | $ | 1,692.1 | |
Certain non-recurring items(1) | (3.9) | ||
Company STIP-Adjusted Revenue (Non-GAAP) | $ | 1,688.2 |
(1) | Represents certain non-cash income (cost) translation impacts associated with foreign currency exchange rate fluctuations. |
Year Ending 2023 | |||||||||||
In millions, unaudited | Performance Chemicals | Performance Materials | Advanced Polymer Technologies | ||||||||
Segment Revenue (GAAP) | $ | 902.1 | $ | 586.0 | 204.0 | ||||||
Certain non-recurring items(1) | (1.2) | — | (2.7) | ||||||||
BU STIP-Adjusted Revenue (Non-GAAP) | $ | 900.9 | $ | 586.0 | 201.3 |
(1) | Represents certain non-cash income (cost) translation impacts associated with currency exchange rate fluctuations. |
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Shares In millions, unaudited | Year Ending 2023 | Year Ending 2022 | Year Ending 2021 | ||||||||
Diluted earnings (loss) per common share (GAAP) | $ | (0.15) | $ | 5.50 | 2.95 | ||||||
Restructuring and other (income) charges, net | 5.17 | 0.36 | 0.40 | ||||||||
Acquisition and other-related (income) costs | 0.12 | 0.14 | 0.01 | ||||||||
Litigation verdict charge | — | — | 2.12 | ||||||||
Debt refinancing fees | — | 0.13 | — | ||||||||
Pension and postretirement settlement and curtailment charges (income) | — | 0.01 | — | ||||||||
Gain on sale of strategic investment | (0.52) | — | — | ||||||||
Loss on CTO resales | 0.60 | — | — | ||||||||
Tax effect on items above | (1.26) | (0.15) | (0.59) | ||||||||
Tax benefit from legislative tax rate changes, including certain discrete tax items(1) | (0.02) | 0.02 | 0.34 | ||||||||
Diluted adjusted earnings (loss) per share (Non-GAAP) | $ | 3.94 | $ | 6.01 | $ | 5.23 | |||||
Adjustments: | |||||||||||
Certain non-cash (income) charges(2) | 0.04 | (0.17) | 0.04 | ||||||||
Tax effect on items above | (0.01) | 0.04 | (0.01) | ||||||||
Diluted adjusted earnings (loss) per share, net of adjustments | $ | 3.97 | $ | 5.88 | $ | 5.26 | |||||
Cumulative EPS (Non-GAAP)(3) | $ | 15.11 |
(1) | Represents certain discrete tax items such as excess tax benefits on stock compensation and impacts of changes associated with U.S. Tax Reform. Management believes excluding these discrete tax items assists investors, potential investors, securities analysts, and others in understanding the tax provision and the effective tax rate related to continuing operating results thereby providing useful supplemental information about operational performance. |
(2) | Represents certain non-cash costs primarily including non-cash income resulting from inventory adjustments recorded during the period in accordance with last-in, first-out (“LIFO”) inventory accounting, and non-cash translation impacts associated with foreign currency exchange rate fluctuations. |
(3) | Sum of 2021, 2022, and 2023. |
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In millions, unaudited | Year Ending 2023 | Year Ending 2022 | Year Ending 2021 | ||||||
Net income (loss) (GAAP) | $ | (5.4) | $ | 211.6 | $ | 118.1 | |||
Restructuring and other (income) charges, net | 189.9 | 13.8 | 16.2 | ||||||
Acquisition and other-related (income) costs | 4.5 | 5.9 | 0.6 | ||||||
Debt refinancing fees | — | 5.1 | — | ||||||
Pension and postretirement settlement and curtailment charges (income) | — | 0.2 | — | ||||||
Litigation verdict charge | — | — | 85.0 | ||||||
Gain on sale of strategic investment | (19.3) | — | — | ||||||
Loss on CTO resales | 22.0 | — | — | ||||||
Tax effect on items above | (46.4) | (5.9) | (23.8) | ||||||
Tax benefit from legislative tax rate changes, including certain discrete tax items(1) | (0.6) | 0.7 | 13.4 | ||||||
Adjusted earnings (loss) (Non-GAAP) | $ | 144.7 | $ | 231.4 | $ | 209.5 | |||
Adjustments: | |||||||||
Interest expense, net | $ | 87.0 | $ | 49.2 | $ | 47.7 | |||
Certain miscellaneous (income)/charges(2) | 1.5 | (6.6) | 1.8 | ||||||
Tax effect on items above | (20.8) | (10.0) | (0.4) | ||||||
NOPAT (Non-GAAP) (Average ROIC numerator) | $ | 212.4 | $ | 264.0 | $ | 258.6 |
(1) | Represents certain discrete tax items such as excess tax benefits on stock compensation and impacts of changes associated with U.S. Tax Reform. Management believes excluding these discrete tax items assists investors, potential investors, securities analysts, and others in understanding the tax provision and the effective tax rate related to continuing operating results thereby providing useful supplemental information about operational performance. |
(2) | Represents the sum of the following two adjustments: non-cash income resulting from inventory adjustments recorded during the period in accordance with last-in, first-out (“LIFO”) inventory accounting, and non-cash translation impacts associated with currency exchange rate fluctuation. |
December 31, | ||||||||||||
In millions, unaudited | 2023 | 2022 | 2021 | 2020 | ||||||||
Total Ingevity Stockholders’ Equity | $ | 631.4 | $ | 698.3 | $ | 673.8 | $ | 642.1 | ||||
Total Debt including capital lease obligation | 1,472.5 | 1,479.9 | 1,280.5 | 1,306.5 | ||||||||
Less: Restricted Investment, gross of allowance for expected credit losses | (79.3) | (78.6) | (76.6) | (74.5) | ||||||||
Less: Restricted Cash | (0.6) | (0.6) | (0.6) | (0.7) | ||||||||
Invested Capital (Non-GAAP) | $ | 2,024.0 | $ | 2,099.0 | $ | 1,877.1 | $ | 1,873.4 | ||||
Average Invested Capital (Non-GAAP) (Average ROIC denominator) | $ 2,061.5 | $ 1,988.1 | $ 1,875.3 |
INGEVITY | 2024 Proxy Statement | 99 |
In millions, unaudited | 2023 | 2022 | 2021 | ||||||
NOPAT (Non-GAAP) (Average ROIC numerator) | $ | 212.4 | $ | 264.0 | $ | 258.6 | |||
Average Invested Capital (Non-GAAP) (Average ROIC denominator) | 2,061.5 | 1,988.1 | 1,875.3 | ||||||
Period-End ROIC (Non-GAAP) | 10.3% | 13.3% | 13.8% | ||||||
Average ROIC (Non-GAAP) | 12.5% |
INGEVITY | 2024 Proxy Statement | 100 |
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF INGEVITY CORPORATION
The present name of the Company’scorporation is Ingevity Corporation. The corporation was incorporated under the name MWV CATALYST SPINCO, INC. on March 27, 2015 by the filing of its original Certificate of Incorporation with the textSecretary of State of the State of Delaware. This Third Amended and Restated Certificate of Incorporation of the corporation, which both amends and restates the provisions of the corporation’s Second Amended and Restated Certificate of Incorporation was duly adopted in
ARTICLE I
The name of the corporation (which is hereinafter referred to as the “Corporation”) is: Ingevity Corporation
ARTICLE II
The address of the Corporation’s registered office in the State of Delaware is 1521 Concord Pike, Suite 201, Wilmington, New Castle County, Delaware, 19803. The name of the Corporation’s registered agent at such address is United Agent Group Inc.
ARTICLE III
The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized and incorporated under the General Corporation Law of the State of Delaware.
ARTICLE IV
The total number of shares of stock which the Corporation shall have authority to issue is 350,000,000 shares, consisting of 50,000,000 shares of preferred stock, par value $.01 per share (hereinafter referred to as “Preferred Stock”), and 300,000,000 shares of common stock, par value $.01 per share (hereinafter referred to as “Common Stock”).
Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized to provide for the issuance of shares of Preferred Stock in series and, by filing a certificate pursuant to the applicable law of the State of Delaware (hereinafter referred to as a “Preferred Stock Designation”), to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and special rights of the shares of each such series and the qualifications, limitations and restrictions thereof, and increase and decrease the number of shares of any such series (but not below the number of shares thereof then outstanding).
The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. Except as may be provided in the Certificate of Incorporation or in a Preferred Stock Designation, the holders of shares of Common Stock shall be entitled to one vote for each such share upon all questions presented to the stockholders, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, and holders of Preferred Stock shall not be entitled to receive notice of any meeting of stockholders at which they are not entitled to vote.
ARTICLE V
In furtherance of, and not in limitation of, the powers conferred by law, the Board of Directors is expressly authorized and empowered to adopt, amend or repeal the By-Laws of the Corporation; provided, however, that the By-Laws adopted by the Board of Directors under the powers hereby conferred may be amended or repealed by the Board of Directors or by the stockholders having voting power with respect thereto
INGEVITY | 2024 Proxy Statement | 101 |
ARTICLE VI
Any action required or permitted to the contrary in this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any series of Preferred Stock required by law, this Certificate of Incorporation or any Preferred Stock Designation, Section 1.3, Section 2.1, the last sentence of Section 2.2, Section 2.11, Section 2.12 or the last sentence of Section 7.7 of the By-Laws of the Corporation may be modified, amended or repealed, and any By-Law provision inconsistent with such provisions may be adopted,taken by the stockholders of the Corporation only by the affirmative votemust be effected at a duly called annual or special meeting of the holders of at least 75 percent (75%) of the voting power of the then outstanding Voting Stock (as defined in the next sentence), voting together as a single class.
ARTICLE VII shall read as follows:
Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances,
the number of directors constituting the total number of directors which the Corporation would have if there were no vacancies (the “Whole Board”) shall beSubject to the time for which they severally hold office, into three classes, as nearly equal in number as is reasonably possible, with the
Unless and except to eliminate a provisionthe extent that is no longer necessary since allthe By-Laws of the Corporation shall so require, the election of directors willof the Corporation need not be by written ballot.
Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, and unless the Board of Directors otherwise determines, any vacancy resulting from death, resignation, retirement, disqualification, removal from office or other cause, and any newly created directorships resulting from any increase in the same class asauthorized number of directors, may be filled only by the affirmative vote of a majority of the 2019 Annual Meeting,remaining directors, though less than a quorum of the Board of Directors, and to removeany director so chosen shall hold office for the useremainder of the term that was being served by the director whose absence creates the vacancy, or, in the case of a definedvacancy created by an increase in the number of directors, a term expiring at the last sentencenext annual meeting of Article VIIstockholders, and in each case until such director’s successor shall read as follows:
Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the By-Laws.
Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, any director, or the entire Board of Directors, may be removed from office at any time by the affirmative vote of the holders of a majority of the voting power of the then outstanding
ARTICLE VIII
No director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a
INGEVITY | 2024 Proxy Statement | 102 |
ARTICLE IX
Except as may be expressly provided in this Certificate of Incorporation, the Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation or a Preferred Stock Designation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed herein or by applicable law, and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any
This Third Amended and provided, further, that any proposed alteration, amendment or repeal of, or the adoption of any provision inconsistent with, Article V and Article VIII of thisRestated Certificate of Incorporation (in each case, as in effectshall become effective at 11:59 p.m., Eastern Time, on [xxx, 2024] (the “Effective Time”).
IN WITNESS WHEREOF, the date hereof) may only be made by the affirmative voteCorporation has caused this Third Amended and Restated Certificate of shares representing not less than seventy-five percent (75%) of the voting power of all of the Voting Stock, voting together as a single class.
Shares In millions, unaudited | Year Ending 2018 | Year Ending 2017 | Year Ending 2016 | |||
Diluted earnings (loss) per common share (GAAP) | 3.97 | 2.97 | 0.83 | |||
Restructuring and other (income) charges | (0.01 | ) | 0.09 | 0.98 | ||
Separation costs | — | 0.02 | 0.41 | |||
Acquisition and other related costs | 0.28 | 0.17 | — | |||
Pension and postretirement settlement and curtailment charges (income) | 0.01 | — | — | |||
Tax effect on items above | (0.07 | ) | (0.09 | ) | (0.14 | ) |
Tax benefit from U.S. Tax Reform | (0.05 | ) | (0.58 | ) | — | |
Diluted adjusted earnings (loss) per share (Non-GAAP) | 4.13 | 2.58 | 2.08 | |||
Adjustments: | ||||||
Separation-related Reimbursement Awards, net of tax(1) | (0.01 | ) | — | 0.04 | ||
Certain non-cash (income) charges, net of tax(2) | 0.01 | (0.04 | ) | (0.02 | ) | |
Diluted adjusted earnings (loss) per share, net of adjustments | 4.13 | 2.54 | 2.10 | |||
Cumulative EPS (Non-GAAP)(3) | 8.77 |
In millions, unaudited | Year Ending 2018 | Year Ending 2017 | Year Ending 2016 | |||
Net income (loss) (GAAP) | 181.8 | 145.2 | 44.4 | |||
Provision (benefit) for income taxes | 40.0 | 29.6 | 42.6 | |||
Interest expense | 35.0 | 18.1 | 19.3 | |||
Interest income | (5.2 | ) | (2.3 | ) | (1.4 | ) |
Separation costs | 0.0 | 0.9 | 17.5 | |||
Depreciation and amortization | 57.0 | 40.4 | 38.8 | |||
Restructuring and other (income) charges, net | (0.5 | ) | 3.7 | 41.2 | ||
Pension settlement and curtailment (income) charges | 0.2 | 0.0 | 0.0 | |||
Acquisition and other related costs | 12.2 | 7.1 | — | |||
Adjusted EBITDA (Non-GAAP) | 320.5 | 242.7 | 202.4 | |||
Separation-related Reimbursement Awards(1) | (0.3 | ) | 0.3 | 1.6 | ||
Certain non-cash charges(2) | 0.3 | (3.3 | ) | (0.7 | ) | |
Company STIP-Adjusted EBITDA (Non-GAAP) | 320.5 | 239.7 | 203.3 |
In millions, except percentages unaudited | Year Ending 2018 | Year Ending 2017 | Year Ending 2016 | |||
Performance Materials | ||||||
Segment operating profit (GAAP) | 147.2 | 122.0 | 106.9 | |||
Depreciation and amortization | 22.2 | 19.8 | 16.4 | |||
Segment EBITDA (Non-GAAP) | 169.4 | 141.8 | 123.3 | |||
Net Sales | 400.4 | 349.3 | 301.0 | |||
Segment operating margin | 36.8 | % | 34.9 | % | 35.5 | % |
Segment EBITDA margin | 42.3 | % | 40.6 | % | 41.0 | % |
In millions, except percentages unaudited | Year Ending 2018 | Year Ending 2017 | Year Ending 2016 | |||
Performance Chemicals | ||||||
Segment operating profit (GAAP) | 116.3 | 80.3 | 56.7 | |||
Depreciation and amortization | 34.8 | 20.6 | 22.4 | |||
Segment EBITDA (Non-GAAP) | 151.1 | 100.9 | 79.1 | |||
Net Sales | 733.2 | 623.1 | 607.3 | |||
Segment operating margin | 15.9 | % | 12.9 | % | 9.3 | % |
Segment EBITDA margin | 20.6 | % | 16.2 | % | 13.0 | % |
Year Ending 2018(1) | ||||
In millions, unaudited | Performance Chemicals | Performance Materials | ||
Segment operating profit (GAAP) | 116.3 | 147.2 | ||
Depreciation and amortization | 34.8 | 22.2 | ||
Separation-related Reimbursement Awards(2) | (0.3 | ) | 0.0 | |
Certain non-cash charges(3) | 0.4 | 1.4 | ||
STIP-Adjusted EBITDA (Non-GAAP) | 151.2 | 170.8 |
In millions, unaudited | Year Ending 2018 | Year Ending 2017 | ||
Cash Flows from Operating Activities (GAAP) | 252.0 | 174.3 | ||
Capital expenditures | (93.9 | ) | (52.6 | ) |
Free Cash Flow (Non-GAAP) | 158.1 | 121.7 |
INGEVITY CORPORATION | ||
By: /s/ Stacy L. Cozad | ||
Name: Stacy L. Cozad | ||
Title: Executive Vice President, General Counsel and Secretary |
INGEVITY | 2024 Proxy Statement | |
December 31, | ||||
In millions, unaudited | 2018 | 2017 | ||
Total Ingevity Stockholders' Equity | 338.7 | 263.9 | ||
Total Debt including capital lease obligation | 758.9 | 455.0 | ||
Less: Restricted Investment | (71.2 | ) | (71.3 | ) |
Invested Capital | 1,026.4 | 647.6 | ||
Average Invested Capital (Average ROIC denominator) | 837.0 |
In millions, except percentages, unaudited | Funding | Mr. Smith Goal | Mr. Woodcock Goal | ||
Maximum Performance | 200% | 155.0 | 170.0 | ||
Above Target Performance | 150% | 148.0 | 162.0 | ||
Difference | 50% | 7.00 | 8.00 | ||
Additional funding % per $1.0 million Above Target Performance | 7.1% | 6.3% | |||
Actual BU STIP-Adjusted EBITDA | 151.2 | 170.8 | |||
Actual BU STIP-Adjusted EBITDA over Above Target Goal | 3.2 | 8.8 | |||
Additional Funding Above Target Performance | 23% | 55% | |||
BU Funding Percentage (Above Target plus Additional) (1) | 173% | 200% | |||
BU Funding Percentage Allocation (BU Funding Percentage x 30% allocation) | A | 52% | 60% | ||
Company Funding Percentage | 200% | 200% | |||
Company Funding Percentage Allocation (Company Funding Percentage x 70 % allocation) | B | 140% | 140% | ||
BU STIP Payout Percentage | =A+B | 192% | 200% |
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