The Committee identifies and recommends Board candidates it determines are qualified and suitable to serve as a director consistent with the criteria for selection of directors adopted by the Board, including seeking a variety of perspectives, professional experience, education, skills and other individual qualities and attributes. A copy of the Company’s Director Selection Criteria is attached as Appendix A to this proxy statement. Recommendations for Board candidates may be made to the Committee by the Company’s President and Chief Executive Officer, other current Board members and Company shareholders. The Committee also from time to time utilizes the services of third-party search firms. Once appropriate candidates are identified, the Committee evaluates their qualifications to determine which candidate best meets the Company’s Director Selection Criteria, without regard to the source of the recommendation. Recommendations by shareholders for director nominees should be forwarded to the Secretary of the Company, who will relay such information to the Committee Chair. The recommendations should identify the proposed nominee by name, should describe every arrangement or understanding with such person, should describe how the nominee would contribute to the variety of perspectives, professional experience, education, skills or other individual qualities and attributes of Sensient’s Board and should provide at least the questionnaire, nominee affirmations and other materials specified in the Bylaws, including the detailed information about the nominee that is required by SEC rules for the solicitation of proxies for election of directors. Shareholders should look to the information required pursuant to the Company’s Bylaws for shareholder nominations and to the information included in this proxy statement regarding directors and nominees as a guide to the information required. Shareholders also have the right to directly nominate a person for election as a director so long as the advance notice, nominee affirmations and informational requirements contained in the Bylaws and applicable law are satisfied. All nominees must affirm that they have truthfully completed a directors’ and officers’ questionnaire; that they meet the Company’s Director Selection Criteria; that they are not an employee, director or affiliate of a competitor; that they will protect confidential information and serve the interests of Sensient and its shareholders collectively; and that they will comply with applicable law and Sensient’s Code of Conduct and other policies and guidelines. See “Future“Future Shareholder Proposals and Nominations” below.

The Scientific Advisory Committee of the Board of Directors, whichmet twice during 2015. This Committee currently consists of Drs. Carleone, Clydesdale (Chairman), Ferruzzi, Landry and Wedral, Messrs. Brown, Cichurski, Croft, Kenneth Manning, and Paul Manning and Ms.Mses. McKeithan-Gebhardt and Whitelaw, met twice during 2013.and additional members that are not directors or officers of the Company.

Among other functions, this Committee:

The Charters for the Audit, Compensation and Development, and Nominating and Corporate Governance Committees of the Company’s Board of Directors are included in the Company’s Bylaws and are available on the Company’s website (www.sensient.com).

The Company is strongly committed to the highest standards of ethical conduct, and itsconduct. On July 24, 2014, the Board approved certain amendments to the Company’s Code of Conduct for its officers, directors and U.S. employees, Standards of Conduct for International Employees,its international employees, Code of Ethics for Senior Financial Officers Corporate Governance Guidelines, Stock Ownership Guidelinesand Procedures for ElectedReporting Complaints or Concerns Regarding Accounting, Auditing and Other Compliance Matters, which included combining the existing Code of Conduct, Standards of Conduct, Code of Ethics for Senior Financial Officers and Stock Ownership GuidelinesProcedures for Independent Directors areReporting Complaints or Concerns Regarding Accounting, Auditing and Other Compliance Matters into a single, comprehensive Code of Conduct for all Company officers, directors and employees. The Company’s Code of Conduct is also posted on the Company’s website. If there are any amendments to the Code of Conduct, the Standards of Conduct, the Code of Ethics, the Corporate Governance Guidelines or the Stock Ownership Guidelines, or if waivers from any of them are granted for executive officers or directors, those amendments or waivers also will be posted on the Company’s website.

The Board’s leadership structure is driven by the needs of the Company at any point in time and has varied over time. The Company does not have a policy requiring a combination or separation of the Chief Executive Officer and Chairman of the Board roles and the Company’s governing documents do not mandate a particular structure. This allows the Board the flexibility to establish the most appropriate structure for the Company at any given time. The Board has determined that the Company and its shareholders are currently best served by having a separation of the Chief Executive Officer and Chairman of the Board roles.

The Company’s non-management directors meet at regularly scheduled executive sessions without management not less frequently than three times per year. The independent directors must meet in executive session at least once per year without any other non-management directors present. In 2013,2015, all of the Company’s non-management directors were also independent directors, andexcept for Mr. Kenneth Manning. During 2015, the non-management independent directors held three executive sessions, during 2013. Becauseincluding one executive session attended only by the Company’s Chairman of the Board was also its Chief Executive Officer until February 1, 2014 and therefore did not attend any of the 2013 executive sessions, the responsibility for presiding atindependent directors. Dr. Wedral, as Lead Director, presided over these meetings was rotated among all independent members of the Board of Directors in alphabetical order.meetings.

The separation of the Chief Executive Officer and Chairman of the Board roles, the use of executive sessions of the Board, the Board’s strong committee system, and substantial majority of independent directors and the service of our Lead Director, allows the Board to maintain effective risk oversight and provides that independent directors oversee the Company’s financial statements, the executive compensation program, the selection and evaluation of directors and the development and implementation of our corporate governance programs.

This proxy statement describes our philosophy, policies and practices regarding corporate governance, risk management and executive compensation. Interested parties who wish to make their views or concerns known regarding these matters may communicate with management or with any non-management or independent directors or the Board as a whole in writing addressed to the attention of the Company Secretary. The Company’s Corporate Governance Guidelines provide that all communications to Board members will be relayed by the Company Secretary to the appropriate Board members unless the content is obviously inappropriate for Board review.

As noted above, Sensient is convinced that long-term, sustainable value creation and preservation are possible only through the prudent assumption and management of both risks and potential rewards, and Sensient’s Board as a whole takes a leading role in establishing the Company’s overall risk tolerances as a part of the strategic planning process and in overseeing the Company’s management of strategic risks. The Board has delegated to the Audit Committee primary responsibility for overseeing the executives’management’s risk assessments and implementation of appropriate risk management policies and guidelines generally, including those related to financial reporting and regulatory compliance, provided that itcompliance. The Board has delegated to the Compensation and Development Committee primary oversight responsibility to insureensure that compensation programs and practices do not encourage unreasonable or excessive risk-taking and that any risks are subject to appropriate controls. The Board has delegated to the Finance Committee primary oversight responsibility with respect to each of Sensient’s capital structure, its types and amounts of insurance and its foreign currency management. The Board and these committees receive periodic reports on these matters from management and the Company personnel in charge of the related risk management activities.

The Company’s Corporate Governance Guidelines provide guidelines for determining whether a director is independent from management. For a director to be considered independent, the Board must make an affirmative determination that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). The guidelines contain the following specific criteria, which reflect the currently applicable SEC and New York Stock Exchange rules, to assist the Board in determining whether a director has a material relationship with the Company. A director is not considered independent if:

In addition, the guidelines state that no director shall be independent unless he or she shall meet the requirements for independence under applicable securities laws. Members of the Audit Committee and of the Compensation and Development Committee are subject to additional independence requirements. For purposes of determining independence, the “Company” includes any parent or subsidiary in a consolidated group with the Company.

Based on these criteria, the Board has affirmatively determined that Messrs. Brown, Cichurski and Croft, and Hickey, Drs. Carleone, Clydesdale, Ferruzzi, Landry and Wedral and Ms.Mses. McKeithan-Gebhardt and Whitelaw (who constitute all of the director nominees and current members of the Board except Mr. Kenneth Manning and Mr. Paul Manning) are independent under the applicable rules of the New York Stock Exchange and the SEC and the Company’s independence criteria. In making this determination, the Board reviewed information provided by each of the nominees to the Company. The Company has no relationships with any of the independent nominees (other than as a director and a shareholder), except that: (1) Sealed Air Corporation, of which Mr. HickeyBrown was, Chief Executive Officer until March 1, 2013, wasand Mr. Kenneth Manning is, a director, until December 19, 2013,purchased $357,971 and of which Messrs. Brown and Kenneth Manning are directors, purchased $170,008 and $130,076$270,809 in colors from one or more units of the Company in 20132015 and 2012,2014, respectively; and (2) a Sensient subsidiaryand its subsidiaries purchased $355,161$236,195 and $217,849$307,215 in packaging or industrial cleaner from Sealed Air Corporation in 20132015 and 2012, respectively, and (3) Mr. Cichurski provided accounting consulting services to the Company from 2007 until his 2013 nomination as a director in exchange for a consulting fee of $35,000 per annum.2014, respectively. These amounts are immaterial in size to both Sensient and the other parties involved, and the Board determined that these relationships did not impair the independence of the applicable nominees.

Directors who are not employees of the Company are entitled to receive an annual retainer of $40,000$75,000 and fees of $1,500 for each Board and Committee meeting attended ($3,000 per meeting attended in the case of the Scientific Advisory Committee) in addition to reimbursable expenses for such attendance. Each Committee chairperson is entitled to receive an additional $8,000 annually for serving in that capacity, except that the chairperson of the Audit Committee is instead entitled to receive $12,000 annually for serving in that capacity, and the Lead Director is entitled to receive an additional $10,000 annually for serving in that capacity.

TheUntil June 30, 2014, the Company hashad an unfunded retirement plan for non-employee directors who havehad completed at least one year of service with the Company as a director. The plan provides a benefit equal to the base annual retainer for directors (without including additional amounts received for services as Chairman or an advisor) in effect at the time of the director’s departure from the Board. This benefit, payable only during the lifetime of the participant, continues for a period equal to the amount of time the individual was an active non-employee director. During the benefit period, the participant must be available to the Chairman of the Board for consultation. The Plan was terminated effective as of June 30, 2014, but that termination did not impair the rights of currently active or past living eligible directors to receive or continue to receive the payments to which the eligible director would have been entitled through the termination date.

The Company has a Directors’ Deferred Compensation Plan available to any director who is entitled to compensation as a Board member. Under this plan, the maximum amount that is eligible to be deferred is the total of all fees paid to the director by reason of his or her membership on the Board or any Committee thereof. The plan provides that directors may defer all or part of their director fees and the deferral maymust be in cash or Common Stock. The fees deferred in cash are credited to individual deferred compensation accounts that bear interest at the ratebalance of 8.0% per annum. The amounts deferredshares accrued pursuant to this plan will be paiddistributed either: (i) in a lump sumsingle distribution on January 31st of the calendar year following the year in which the director ceases to be a director or on January 31st of any year thereafter; or (ii) in five equal consecutive annual installments commencing on January 31st of the first calendar year after the director ceases to serve as a director. In the event of death, the balance of shares in a director’s account will be paiddistributed in a lump sumsingle distribution to a designated beneficiary or to the director’s estate.

The Company has a director stock plan for any director who is not an employee of the Company. For 20142016 the director stock plan provides for an annual grant of 1,800 shares of the Company’s common stockCommon Stock in a number of shares with a value of $90,000 on the grant date to each non-employee director on the Annual Meeting date. The shares vest in increments of one-third of the total grant on each of the first, second and third anniversaries of the date of grant. Even after vesting, the shares are subject to Sensient’s stock ownership guidelines for non-employee directors, including a requirement that directors hold at least 75% of future awards (net of taxes and any exercise price) until separation from the Board, with limited exceptions for exercise and sale of shares from stock options expiring within one year and for sale of up to 50% of vesting restricted stock to permit payment of related taxes.

As previously announced, the Company entered into a compensatory arrangement with Mr. Kenneth Manning in consideration of the duties he will perform and the additional advisory services that he will provide as Sensient’s non-employee Chairman of the Board and Advisor to the Company, which commenced on February 2, 2014.2014 and will terminate on April 21, 2016 when he steps down as Chairman and as a member of the Board. The compensatory arrangement was approved by the Board consistent with the recommendation of the Nominating and Corporate Governance Committee and a proposal prepared by Towers Watson, Sensient’sthe Compensation Committee’s independent compensation consultant, based on a review of competitive practices with regard to compensation levels and structures for employee and non-employee chairman roles at other public companies. Mr. Kenneth Manning’s duties as non-employee Chairman of the Board and his additional advisory services will include administering Board activities; providing strategic planning and support, including providing input on the global economy, preparing strategic memoranda and conducting annual strategy meetings; reviewing and advising training programs, including conducting General Manager training sessions and the annual review of training programs; continuing to act as a liaison to Wall Street analysts; advising on and participating in activities related to mergers and acquisitions; serving on the Company’s Executive Committee and Scientific Advisory Committee; chairing the Sensient Foundation; advising on industry and technical matters; and being available to the successor Chief Executive Officer as required. In consideration for his services as non-employee Chairman of the Board and Advisor to the Company and until Mr. Kenneth Manning’s retirement from the Board, the Company will provide (in lieu of the annual retainer fee set forth above) to Mr. Kenneth Manning total direct compensation of approximately $850,000$885,000 annually, which consists of a $205,000$240,000 annual retainer and $530,000 in annual advisory fees, with the remainder being comprised of meeting fees, pension benefits and long-term incentive awards applicable to all non-employee members of the Board.

Set forth below is a summary of the compensation paid to each non-employee director in fiscal 2013:2015:

In accordance with itsThe duties and responsibilities of the Audit Committee of the Board are set forth in a written charter adopted by the Board, as set forth in the Company’s Bylaws and on the Company’s website at www.sensient.com. The Audit Committee reviews and reassesses this charter annually and recommends any changes to the Board for approval.  In accordance with its charter, the Audit Committee of the Board of Directors (the “Committee”) assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Company. During 2013,2015, the Audit Committee met tennine times. The Audit Committee discussed the financial information contained in each quarterly earnings announcement and in each of the Company’s Forms 10-Q and 10-K with the Company’s Senior Vice President and Chief Financial Officer, its Vice President, Controller and Chief Accounting Officer and its independent auditors prior to release of the earnings announcement and prior to filing the Company’s Forms 10-Q and 10-K with the Securities and Exchange Commission, respectively. During each fiscal quarter of 2013,2015, the Audit Committee reviewed the procedures undertaken in connection with the Chief Executive Officer and Chief Financial Officer certifications for Forms 10-Q and 10-K, were reviewed, including the Company’s disclosure controls and procedures and internal controls.

In discharging its oversight responsibility as to the audit process, the Audit Committee obtained from the independent auditors a formal written statement describing all relationships between the auditors and the Company that might bear on the auditors’ independence and information required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and discussed with the auditors any relationships that may impact their objectivity and independence. The Audit Committee has also considered whether the provision of any non-audit services by the auditors is compatible with maintaining the auditors’ independence. The Audit Committee is satisfied as to the auditors’ independence. The Audit Committee also discussed with management, the Company’s Director, Internal Audit and the independent auditors the quality and adequacy of the Company’s internal controls and the internal audit function’s organization, responsibilities, budget and staffing. The Audit Committee reviewed the audit plans, audit scopes and identification of audit risks with both the independent auditor and the Director, Internal Audit.

The Audit Committee discussed and reviewed with the independent auditors all communications required by the Public Company Accounting Oversight Board, including those described in AU-C Section 260, “The Auditor’s Communication with Those Charged with Governance” and SEC Regulation S-X, Rule 2-07, “Communication with Audit Committees” and, with and without management present, discussed and reviewed the results of the independent auditors’ examination of the financial statements. The Audit Committee also discussed the results of the internal audit examinations and met separately with the Company’s Director, Internal Audit.

During the years ended December 31, 20132015 and 2012,2014, aggregate fees (including expenses) for the annual audit of the Company’s financial statements were approximately $2,758,100$2,873,000 and $2,406,200,$2,729,000, respectively. Audit fees include fees for the audit of the Company’s consolidated financial statements, fees for statutory audits of foreign entities, fees for quarterly review services and fees related to the Company’s SEC filings.

During the years ended December 31, 20132015 and 2012,2014, aggregate fees (including expenses) for audit-related services provided by the independent auditors were approximately $62,000$2,000 and $56,700,$78,000, respectively. Audit-related fees include fees for audits of the Company’s employee benefit plans in 2014, and non-audit related accounting consultations, including due diligence.

During the years ended December 31, 20132015 and 2012,2014, aggregate fees (including expenses) for tax services provided by the independent auditors were approximately $220,600$402,000 and $256,900,$237,400, respectively. Tax services include tax compliance, tax advice and tax planning.

No other fees were paid to the Company’s auditors in 20132015 or 2012.

20132015 Say-on-Pay Vote. At the 20132015 Annual Meeting of Shareholders, we held our thirdfifth annual advisory vote to approve named executive officer compensation. Approximately 54%98% of the votes cast voted in favor of our executive compensation as disclosed in our 20132015 Proxy Statement. While representing majority shareholder support forThe Compensation Committee and the named executive officer compensation,Board are pleased with the vote result was significantly lower than the vote results from our 2012 Annual Meetingand level of Shareholders (where approximately 89%support of the votes cast voted in favor of ourCompany’s executive compensation as disclosed in our 2012 Proxy Statement) and lower than what we would deem satisfactory. We were disappointed in our vote result and recognized the need to better understand our shareholders’ concerns.practices.

During 2013, both before and after the 2013 Annual Meeting of Shareholders, membersMembers of our senior management engaged directlyregularly engage with key stakeholders to gather theirand solicit feedback regarding our executiveon compensation programs as disclosed in our 2013 Proxy statement.and governance matters. This included over a dozenengagement takes the form of telephone and face-to-face meetings with institutional shareholders, (representing over 40% of our total outstanding shares and over 50% of our shares held by institutional shareholders), internal discussions with senior management and employees, analysis of market practices and advice from Towers Watson, the Compensation Committee’s independent compensation consultant and discussions with proxy advisory services.consultant. The Compensation Committee further reviewed the results of our Say-on-Pay votes, feedback from institutional shareholders, advice from Towers Watson, input from proxy advisory services and management recommendations based on Sensient’s strategic direction and market practices.

AsThe Compensation Committee and the Board believe that the overwhelming shareholder support in the Company’s 2015 Say-on-Pay vote was a direct result of their review, we determined that shareholdersthe Company’s significant actions beginning in 2013 and other key stakeholders wantedcontinued in 2014 and 2015 to see an enhancedincrease the linkage of pay and performance embedded in the design of our compensation programs. Specifically, shareholdersprograms, refresh the Board and other key stakeholders asked usenhance corporate governance practices, including the following actions:

Increased Direct Linkage Between Executive Compensation and Company Performance. As a result of the Company’s implementation of 50% performance equity awards in 2013 and 100% performance equity in 2014, executive compensation washas become even more closely linked to the Company’s financial performance. This is reflected in the following pie chartschart detailing the components of named executive officer compensation in 20122015 (which excludes the 2015 changes in pension values and 2013 (assumingincludes 2015 performance stock units at grant date fair market value assuming target performance levels):

Compensation Aligned with Shareholder Interests. The Company’s compensation policies for 2015 continue to strongly emphasize alignment with shareholder returns. The pie chart above for 2012 (which excludes the change in pension values from 2012 executive compensation to provide a better comparison to the components of 2013 executive compensation) illustrates that 22%70% of the average compensation for 2012 to Sensient’s named executive officers (excluding change in pension values)values and including performance stock units at grant date fair market value assuming target performance levels) was based on achieving the Company’s performance goals under our annual incentive program. The pie chart above for 2013 shows that 52% of the average compensation for 2013 to Sensient’s named executives officers, based on awards at target under each of our annual cashmanagement incentive plan and the performance component of our long-term equity incentive plan, was contingent upon the Company’s financial performance. As a result, theplan. The amount of average executive average compensation directly linked to Company performance has significantly increased since 2012 (when 22% of Sensient’s average executive compensation was performance based) and it is anticipated that a similar percentage of executive compensation will consist of at-risk compensation that is directly linked to Company performance in 20142016 and beyond.

Sensient’s Relative Performance and Chief Executive Officer Compensation. For those who wish to consider total shareholder return when evaluating chief executive officer compensation, the graph below compares Sensient’s one-year and annualized three-year total shareholder returns on common stockCommon Stock with the annualized total returns of the Standard & Poor’s Midcap 400 Specialty Chemicals index (of which Sensient is a component) and the median of Sensient’s peer group (which consists of the companies listed in the Comparable Company Data under the section “Compensation Committee Practices” below).

For the one year and three years ended December 31, 2013,2015, Sensient’s total return to shareholders significantly outperformed the return earned by the Standard & Poor’s Midcap 400 Index and by our peer group. For the three years ended December 31, 2013, Sensient’s annualized total return to shareholders fell below the returns earned by the Standard & Poor’s Midcap 400 IndexSpecialty Chemicals index and by the median of our peer group.

During the five-year period ending December 31, 2012 (the most recent year for which this information was available),2015, Sensient’s total direct compensation (salary, annual cash incentive bonusaward and equity awards) for our Chief Executive Officer and our five named executive officers as a group were atwas below the 63rd and 67th percentilesmedian of our peer group, respectively.group. Our former Chief Executive Officer’s total compensation at target levels and at the amount actually awarded in 2015, as reported in the Summary Compensation Table, has beenis appropriate and in alignment withreflects the returns earned by shareholders over this five-year period. The compound annual rate of change in the former Chief Executive Officer’s total compensation over the five-year period ending December 31, 2013 reflects an annual increase in total pay of 2.6%. The total returns to our shareholders over this same five-year period equated to a positive compound annual rate of return of 18.2%.one- and three-year periods.

Sensient’s Executive Compensation Program Highlights. Sensient’s executive compensation program features the following shareholder favorable “best practices”:

Executive Compensation Flows Directly From Sensient’s Business Strategies and Investments Focus on Value Creation, Primarily Over the Long Term. Our approach to executive compensation flows directly from our approach to value creation for the Company and our shareholders. Although all timeframes are relevant, Sensient is primarily focused on long-term investments both in our employees and through acquisitions and strategic capital investments in state-of-the-art facilities and equipment designed to produce the highest quality products efficiently and with product safety and regulatory compliance in mind. As evidenced by our strong 2013 performance, we have begun to see the returns from our past and continuing substantial investments in new product development, much of which is proprietary, and expanded distribution capabilities, domestically and around the world. Our equity compensation program and our robust stock ownership guidelines and hold-to-retirement policy are designed to align our executive compensation program with this long-term value creation focus.

Our Management and Compensation Philosophy DemandsMeasures and Rewards Excellence.Performance. Sensient’s management and compensation philosophy demands excellencemeasures and rewards performance from each of its executive officers and from the management team as a whole. Sensient has relatively few high level executives and operateswe believe we operate with an extremely lean staff compared to our peer group. As a result, the executives we do have are required to assume greater levels of responsibility and accountability than executives who operate with larger staffs in matrix organizations. Additionally, Sensient’s named executive officers have been carefully selected through a unique and rigorous succession planning process and are continually evaluated through rigorous performance assessment and succession planning processes over the length of their careers with the Company. Sensient'sSensient’s compensation program reflects these realities by providing for compensation which correlates closely with the performance of the executive and when evaluating compensation datathe Company.

The pages below discuss the Compensation Committee takes into consideration this and other differences between Sensientthe processes and its peer group, including complexity of operationsprocedures used by the Compensation Committee in reviewing and tenure of officers.determining executive compensation.

The Compensation Committee is composed entirely of independent, non-employee directors, as determined using New York Stock Exchange listing standards both for directors generally and for compensation committee members. The Committee oversees Sensient’s executive compensation programs and monitors incentives for risk-taking from compensation programs for all employees. See “Committees“Committees of the Board of Directors — Compensation and Development Committee” above for a description of the Committee’s responsibilities. This discussion and analysis is designed to assist your understanding of Sensient’s compensation objectives and philosophy, the Compensation Committee’s practices, and the elements of compensation for the named executive officers.

Sensient’s compensation program is designed:

The Committee determines specific compensation levels for Sensient’s executive officers based on several factors, including:

In sum, the Committee intends that Sensient’s compensation programs both help the Company to attract and retain key executives and other employees, provide for effective succession planning and give the executive officers and other employees appropriate and meaningful incentives to achieve superior corporate and individual performance without undertaking unnecessary or excessive risks.

The Committee determines the amounts and mixture of compensation for Sensient’s executives based on the compensation design and other factors described above, including the philosophy of demandingmeasuring and rewarding excellence.performance. Sensient reviews its compensation awards compared to compensation levels for comparable positions at Sensient’s stable peer group of competing public companies of similar size and complexity as well as published survey data, adjusted as described below (together, the “Comparable Company Data”), using regression analysis for the survey data because of differences in size between the comparable companies and the Company. This review is performed to ensure that Sensient’s compensation programs are reasonably applied and also to ensure that they are competitive for purposes of attracting and retaining key executives. The selection of our peer group and each material element of compensation are discussed further below.

Key elements of the executive compensation program tie a significant portion of executive compensation to the Company’s performance and success in meeting specified financial goals and objectives. The Committee also considers other compensation and amounts payable to executive officers, including retirement compensation and potential payments in a situation involving a change of control of the Company. Retirement compensation is intended both to recognize, over the long term, services rendered to the Company as well as the practice that employers provide employees with retirement benefits. The supplemental retirement arrangements adopted by the Company also reflect a decision that limitations on covered compensation and potential benefits which would apply under the Internal Revenue Code generally ought not limit the retirement benefits that would otherwise apply to the Company’s most highly compensated employees and that our executive officers should have protections regarding increases in interest rates and individual income tax rates in order to avoid incentives for earlier retirement.

The Committee also recognizes that situations involving a potential change of control of a company can be very disruptive to all of its employees, including executive officers, because a change of control could affect the employees’ job security, authority or compensation. To help address the inherent potential conflict of interest between executive officers’ personal interests and other interests of the Company and its shareholders, since 1988 we have provided key decision-making officers with agreements that will help mitigate their concerns about such personal matters in the case of a change of control and thereby assure that management provides objective guidance to the Board and shareholders that is divorced from such concerns.shareholders. Change of control agreements can also help insureensure that the management team stays intact before, during and after a change of control, thereby protecting the interests of not only the target company’s shareholders but also those of any acquirer. These change of control agreements remain important to the Company and therefore we have continued them, although in 2010 we revised them to remove the right for the executive to receive specified benefits in the event that he or she chooses to leave the Company during the 13th month following a change of control. We also changed our policy so that change of control agreements entered into during 2010 and thereafter did not and will not include excise tax gross-up payments in connection with a change of control. In 2013 we entered into new change of control agreements with those executive officers that entered into change of control agreements before 2010 to eliminate all excise tax gross-up payments to executives in the event of a change of control.

Finally, as with most companies, the Company provides various other benefits to its employees, including its executive officers. Many of these benefits, such as health insurance, are provided on the same basis to all salaried employees. In many respects, the types and amounts of those benefits have historically been driven by reference to the Company’s past practices. The Committee regularly reviews these and other benefits, including special benefits or “perks,” for executive officers. In 2014 the Committee and Board eliminated all tax gross-up payments on perks paid to named executive officers.

Each year the Committee conducts a review of the Company’s executive compensation program. As required by Section 14A of the Securities Exchange Act, the Company obtained formal shareholder advisory votes regarding executive compensation at the 2011, 2012, 2013, 2014 and 20132015 Annual Meetings of Shareholders, and we will obtain a new advisory vote at the 20142016 Annual Meeting of Shareholders and annually thereafter. The Committee considers the results of the recent shareholder advisory votes regarding executive compensation in determining its ongoing compensation policies and decisions. To better understand the concerns of its shareholders and to give them an opportunity to make more specific recommendations, the Company initiated annual discussions of its compensation policies with some of its larger shareholders beginning in 2011.2011 and, as a result of such discussions, the Company has initiated several key changes to its compensation practices. The Company’s executive compensation clawback policy, its higher executive and director stock ownership requirements, its revised policies generally requiring executives and directors to retain their Sensient stock ownership until retirement, (with limited exceptions for Rule 10b5-1 sales by executives approaching retirement), its new performance stock units, its issuance of an equal mix of time-vesting restricted stock awards and performance stock unit awards under the Company’s long-term equity incentive plan, its modification of the performance metrics used to determine annual cash incentive awards, and its elimination of tax gross-ups from change of control agreements and from perks paid to named executive officers (each of which is described elsewhere in this proxy statement) were all influenced by the Company’s belief that these revisions would strengthen the alignment of the interests of our executives and directors with the interests of our shareholders and therefore should be viewed favorably by the Company’s shareholders and their advisors. We believe that our hold-to-retirement policy is unique within our peer group.

Generally, the Committee begins its consideration of annual cash and long-term equity incentive compensation at its Fall meeting to preliminarily discuss related considerations and to receive and beginin connection with its review of the Comparable Company Data discussed above.below. Final determinations of salaries, annual cash incentive awards and long-term equity incentive compensation awards are made at the Committee’s meeting in connection with concurrence by the Board’sBoard during its regular meeting in December. Generally, salary changes become effective on January 1 of the following year. Most restricted stock awards (and starting in 2013, our awards of performance stock units) are granted effective as of the December meeting date. Sensient has not granted stock options to its executive officers in recent years (relying instead on awards of restricted stock and, beginning inprior to 2013, an equal mix of time-based restricted stock awards and performance stock unit awards)awards in 2013, and 100% performance stock unit awards beginning in 2014).

As part of its annual review of the Company’s executive compensation program, the Committee retains a consultant who, among other things, prepares a report comparing Sensient’s executive compensation to the Comparable Company Data. The Comparable Company Data ordinarily includes information that is from the year prior to the date of the analysis.

Establishing a stable and appropriate peer group for the Company has been challenging because Sensient has few direct competitors of similar size that are publicly traded in the United States. The colors and flavors and fragrances industries are highly fragmented geographically and are diversified among product lines. In light of these challenges, Sensient has determined the appropriate peer group by considering:

The peer group is reviewed annually and while companies are added or removed as circumstances warrant, the Compensation Committee believes it is beneficial to keep the peer group fairly stable from year to year for comparison purposes.

The Comparable Company Data included in the 20102012 analysis that was considered by the Compensation Committee in making decisions for 20102012 restricted stock awards, 20112013 base salaries and 20112013 annual management incentive plan awards was based in part on published survey data of a broad group of public and private companies and in part on an analysis of the proxy statements of a peer group of 19 public companies. Data regarding the same group of 19 public companies was considered when making Compensation Committee decisions in 2011 relating to 2011 restricted stock awards, 2012 base salaries and 2012 annual incentive plan awards, and again in 2012 when making Compensation Committee decisions relating to 2012 restricted stock awards, 2013 base salaries and 2013 annual incentive plan awards. The peer group of 19 public companies included in these years2012 was:

Alberto-Culver Company and Arch Chemicals were both acquired in 2011 and are no longer publicly traded entities. Accordingly, dataData regarding themthe same group of 19 public companies was not available in 2012also considered when making Compensation Committee decisions in 2013 relating to 20122013 restricted stock awards, 2013 performance stock unit awards, 2014 base salaries and 20132014 annual management incentive plan awards. For that reason

In December 2014, the Compensation Committee reviewed and updated the peer group used in 2012 consisted of the remaining 17 public companies plusby removing Olin Corp. and Revlon,Penford Corporation (announced sale in 2014) and by adding Rockwood Holdings, Inc., a chemical companyKraton Performance Polymers Inc., OM Group Inc., OMNOVA Solutions Inc., Innophos Holdings Inc. and a beauty care and personal products company, respectively.Innospec Inc. These two additions to the peer group were selected because they each possess businessto better balance the spread of revenue sizes in the peer group and competitive profiles that are similar todecrease the companies that were displaced frommedian revenue size of the peer group. The relevant financial characteristics of these companies that were added to the peer group also fell within an acceptable range in relation to Sensient’s own financial characteristics. Data regarding the samepeer group of the remaining 17following 23 public companies plus Olin Corp. and Revlon, Inc. was also considered when making Compensation Committee decisions in 20132014 when making Compensation Committee decisions relating to 2013 restricted stock awards, 20132014 performance stock unit awards, 20142015 base salaries and 20142015 annual management incentive plan awards.awards:

This public company peer group is comparable to Sensient in complexity and market challenges. Although Sensient’s 2012 revenues2015 market capitalization and operating income were belowslightly above the median of the peer companies (ranking at the 30th percentile), our market capitalization72nd and operating income were at or near the median (ranking at the 52nd and 47th51st percentiles, respectively) and our net income wasSensient’s 2015 revenue ranked at the median (at the 50th percentile). Using generally the same peer companies for the past several years should minimize any shareholder concerns that Sensient’s selection35th percentile of peer companies could be outcome oriented.

The Compensation Committee has the sole authority to retain and terminate a compensation consulting firm to assist it in the evaluation of compensation of the Chief Executive Officer and other executives and employees of the Company and the sole authority to approve the consultant’s fees and other retention terms. The Compensation Committee is directly responsible for the oversight of the work of any compensation consulting firm retained by the Compensation Committeeit to assist it byin compiling the Comparable Company Data. The Compensation Committee may select a compensation consultant only after taking into consideration all factors relevant to that person’s independence from management, including the following: (A) the provision of other services to the corporation or its affiliates by the person that employs the compensation consultant; (B) the amount of fees received from the corporation or its affiliates by the person that employs the compensation consultant, as a percentage of the total revenue of the person that employs the compensation consultant; (C) the policies and procedures of the person that employs the compensation consultant that are designed to prevent conflicts of interest; (D) any business or personal relationship of the compensation consultant with a member of the Committee; (E) any corporation stock owned by the compensation consultant; and (F) any business or personal relationship of the compensation consultant with an executive officer of the corporation.

As part of the process to retain Towers Watson, the Compensation Committee evaluated the independence of that firm and its advisers by considering the factors listed above (among other factors that the Committee considered relevant) (1) what other services Towers Watson has provided to Sensient, (2) the amount of fees Towers Watson has received for those services as a percentage of its total revenue, (3) the policies and procedures of Towers Watson that are designed to prevent conflicts of interest, (4) any business or personal relationships between Sensient’s advisers and members of the Committee or other directors or between Sensient executives and Towers Watson or its advisers, (5) the advisers’ holdings of Sensient stock, if any, and (6) the factors set forth in Rule 10C-1(b) of the Securities Exchange Act of 1934, as amended.. The Compensation Committee considered that the Company has also used Towers Watson for certain other services and that the compensation to Towers Watson for these other services for recent years has not exceeded $120,000 annually. On the basis of the Compensation Committee’s evaluation of the factors listed above, the Committee determined that the advisers’ relationships and other services did not create conflicts of interest and did not adversely affect Towers Watson’s independence and advice.

The Company’s Senior Vice President, Administration customarilymanagement assists the Compensation Committee in its determinations by helping compile and organize information, arranging meetings and acting as Company support for the Compensation Committee’s work. He also serves as the Compensation Committee’s officer contact, butThe Company’s management has no decision-making authority on the Compensation Committee. In reviewing the performance and establishing the compensation levels of other elected officers, the Compensation Committee also takes into account the recommendations of the Company’s Chief Executive Officer.

The following table summarizes the components of our executive compensation and benefits programs for named executive officers in 2014.officers. Each component is designed to align the interests of our named executive officers with the Company and our shareholders and is discussed in further detail below.

As with most companies, base salary is one of the key elements in attracting and retaining Sensient’s key officers. When determining the amount of base salary for a particular executive, the Committee considers prior salary (and the proposed percentage change in salary), job responsibilities and changes in job responsibilities, individual experience, demonstrated leadership, performance potential, Company and individual performance, retention considerations, years of service at Sensient, years in the officer’s current position, and market data regarding salary changes for similar positions.positions and the responsibilities of operating in a lean corporate environment. These factors ordinarily are not specifically weighted or ranked; instead they are considered in a holistic way.

For 2013,2015, the Committee began with market data (comprised of the Comparable Company Data) indicating that base salaries of executives at similar companies were generally expected to increase from 20122014 levels by approximately 3%, and then determined actual base salaries for Sensient’s executives after considering management’s recommendations. The Company continues to believe that the unique skills and qualifications of its executive officers are important to the ongoing growth and success of the Company. The annual salary increase for 20122014 to 20132015 given to most of the named executive officers was between 3%1.5% and 4.5%5.0%.  In one instance an increase of 10.0% was awarded in anticipation of an executive’s promotion to a new position with increased responsibilities.

In December 2013,2015, Sensient issued annual cash incentive awards which are to be based on performance during 20142016 and which are calculated using a weighted average of the Company’s achievement of three performance goals – local currency adjusted earnings per share (50%(60% weight), adjusted gross profit as a percentage of revenue (30%(20% weight) and adjusted cash flow (20% weight). The annual cash incentive bonusesawards are subject to a target level for each of the three performance goals, with bonusesawards for the named executive officers in the range of 50%65% to 85% of annual base salary (depending on the officer’s position in the Company) paid if the target levels are achieved with respect to each performance goal. Performance in excess of the targeted levels allows for an increased award, but awards are capped at 200% of the bonusaward at the targeted levels. Performance below the targeted levels can result in a reduced award, or no award at all if none of the minimum threshold levels are achieved. The particular targets and financial goals used are those which the Compensation Committee determines best reflect or which are important to achieving increased shareholder value over the long term without undertaking unnecessary or excessive risks. The Compensation Committee generally sets target bonus award levels that keep Sensient’s levels at least competitive with its industry and provide meaningful incentives for superior performance. The Committee has discretion to reduce any award by up to 20% if the Committee determines a reduction to be appropriate, such as if the Committee determines that the executive caused the Company to take unreasonable or unnecessary risks.

In light of the foregoing, the Company’s objective is to set incentive goals that are quantitative and measurable and that represent meaningful improvement from the prior year while still being capable of achievement at the “target” level. See page 40 for a detailed description of the current targets. Each of these targets is an objective measure of performance that we believe is widely accepted by investors. After the end of the year, the Company compares Sensient’s actual annual performance against the goals for each of the performance measures to determine the amount (if any) that it pays the eligible executive officers under the annual management incentive plan applicable for the year, subject to Committee discretion to reduce the awards as described above. For example, in 20142016 the Chief Executive Officer can earn an incentive payment equal to 85% of base salary under the annual management incentive plan applicable to him if “target” performance is achieved for each of the local currency adjusted earnings per share, adjusted gross profit as a percentage of revenue and adjusted cash flow performance measures during the fiscal year. The other named executive officers currently would earn 65% of their base salaries in the case of “target” local currency adjusted earnings per share, adjusted gross profit as a percentage of revenue and adjusted cash flow performance. Performance in excess of the targeted level in any performance goal results in a payment of up to double the weighted amount of that performance goal if a specified “maximum” is achieved. For example, performance in excess of the targeted level of adjusted cash flow (which is given 20% weight in the formula) could result in a maximum of 40% (200% of the 20% weight) of the award being earned for the adjusted cash flow performance goal. Lower performance in one or more performance goals can result in a reduced award, subject to a specified “minimum” level for each of local currency adjusted earnings per share, adjusted gross profit as a percentage of revenue and adjusted cash flow. The Committee determined that these levels of annual incentive bonusesawards were appropriate based on analysis of the most recent Comparable Company Data. Nonetheless, the target percentage payout may vary from year to year. The amount Sensient pays will also increase or decrease from year to year in accordance with measuring actual performance against our target performance measures.

For awards made in 20122014 to be based on performance during 2013,2015, amounts paid under the bonus planannual cash incentive awards were based on the performance goals and specific targets described in the table below for Sensient as a consolidated whole, subject to adjustment for excluded items as provided in the plan.

On December 5, 2013,3, 2015, the Compensation Committee set the performance goals under our annual cash incentive plans for fiscal 2014.2016. For awards made in 20132015 to be based on performance during 2014,2016, amounts paid under the bonus planannual cash incentive award will be based on a weighted average of the performance goals and specific targets described in the table below for Sensient as a consolidated whole, subject to adjustment for excluded items as provided in the plan.

For 20132015 and 2014,2016, the named executive officers except Mr. Geraghty and Mr. Wilkins received or will receive incentive compensation opportunities based on the performance of the Company as a whole, rather than on the performance of any specific business unit of the Company. Mr. Geraghty’s incentive compensation was and will be based 70% on the performance of the Color Group and 30% on the performance of the Company as a whole. Mr. Wilkins’ incentive compensation was and will be based 70% on the performance of the Asia Pacific Group and 30% on the performance of the Company as a whole.

In December 2011, Sensient adopted a new clawback policy, effective January 1, 2012, for the recovery of equity-based and other incentive compensation from the offending officer or officers if Sensient is required to prepare an accounting restatement due to Sensient’s material noncompliance with any financial reporting requirements under the securities laws as a result of misconduct from a current or former executive officer. Under the clawback policy, the Compensation Committee has discretion to recover any bonus or other incentive-based or equity-based compensation received by the offending officer during the 12-month period following the first public issuance or filing of the noncompliant financial document and any profits realized by the offending officer from the sale of Sensient securities during that 12-month period. Although it appears likely that a three-year clawback policy will be required under future SEC regulations and NYSE listing standards called for by the Dodd-Frank Act, those specific requirements have not yet been proposed or adopted. The Company decided to adopt a clawback policy even before the SEC requirements become effective in order to minimize any investor concerns in this regard. When the SEC requirements become effective, we expect to amend our policy to comply with those requirements.

In recent years, Sensient has provided equity incentive compensation to its executive officers primarily through the Company’s 1998 and 2002 Stock Option PlansPlan and the 2007 Stock Plan (collectively, the “Plans”).Plan. We believe that including a significant level of equity-based awards aligns the financial interests of our management with those of Sensient’s shareholders as well as with the long-term strategic objectives of the Company since the ultimate value of equity-based awards is tied to the value of Sensient’s stock over the long term and these awards provide executives with a further equity stake in the Company. This is especially true in light of the Company’s robust stock ownership and “hold-to-retirement” requirements for executives, discussed below.

Sensient’s long-term equity incentive compensation for its principalnamed executive officers in recent years has been composed entirely of restricted stock awards and performance stock units, with no stock options. The 2007 Stock Plan authorizes the Committee to make restricted stock grants that may include both time vesting and performance-based elements.

In December 2013,2015, the Compensation Committee introduced newawarded performance stock units that are calculated based on future performance over a two-yearthree-year performance period and which are based on a weighted average of two performance metrics – adjusted EBIT growth (70% weight) and adjusted return on invested capital (30% weight). These performance stock units, if earned, only vest after a three year period of restriction (i.e., one additional year after the two year performance period). In December 2013,2015, the equity awards to the named executive officers consisted 50%100% of the new performance stock units and 50% of traditional time-vesting restricted stock.units. The new performance stock units, if earned, will vest (i.e., become freely transferable) after three yearsyears. If the individual’s employment terminates because of death, disability or if the individual attainsretirement after reaching retirement age, 65 before the end of the three-year vestingperformance period, on the latera prorated portion of the endperformance stock units (calculated by dividing the number of months of the two-year performance period and the datethat the individual attains age 65. The time-vesting restricted stockworked for the Company by thirty-six), if earned, will vest after three years or when the individual attains age 65 (if earlier).years. For awards granted in 20132015 and based on two-yearour three-year performance during 2014 and 2015,2016-2018, the new performance stock units are based on a weighted average of the performance goals and specific targets described in the table below for Sensient as a consolidated whole, subject to adjustment for excluded items as provided in the applicable Plan.plan.