UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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THE GOODYEAR TIRE & RUBBER COMPANY
(Name of Registrant as Specified In Its Charter)
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Commencing on March 24, 2015, The Goodyear Tire & Rubber Company provided the following information to certain shareholders:
2015 Update on Supermajority Voting Provisions and Corporate Governance Overview |
Current Supermajority Voting Provisions in Goodyear’s Governing Documents 2 Articles of Incorporation (Charter): No express provisions require the vote of more than a majority of our common stock Standard provisions that protect the economic interests of preferred stockholders require a two- thirds vote of our preferred stock No preferred stock is currently issued and outstanding Code of Regulations (Bylaws): To remove all of the directors requires the approval of two-thirds of our common stock To remove less than all of the directors requires the approval of approximately 93% of our common stock, due to a mandatory provision of Ohio law that is intended to protect cumulative voting rights Unless cumulative voting is eliminated, the ability of shareholders to remove a director is illusory To amend these provisions requires the approval of two-thirds of our common stock |
Company Proposals on the 2015 Ballot 3 Proposal 4: Reduces the vote required to remove a director to a majority of our common stock and, to make that change meaningful, eliminates cumulative voting. Also reduces the threshold to make further amendments to these provisions to a majority of our common stock. Substantially implements the shareholder proposal described on Slide 4 Reduces the vote required to the lowest permitted under Ohio law Proposal 5: Reduces the shareholder vote required for mergers, consolidations and sales of substantially all of the Company’s assets from the statutory two-thirds to a majority of our common stock Betters the shareholder proposal and further improves our corporate governance profile Reduces the vote required to the lowest permitted under Ohio law The Board of Directors asks you to vote FOR Proposals 4 and 5 |
The Shareholder Proposal on the 2015 Ballot is Implemented by the Company’s Proposals 4 A shareholder submitted a non-binding proposal requesting that the Board “take the steps necessary so that each voting requirement in our charter [Articles] and bylaws [Regulations] that calls for a greater than simple majority vote be eliminated . . .” We decided to present both proposals for a shareholder vote after the SEC suspended no-action relief for conflicting proposals The Board recommends a vote AGAINST this proposal because: Company Proposal 4 substantially implements the shareholder proposal Company Proposal 5 betters the shareholder proposal by also reducing the shareholder vote required by statute for business combinations to a majority of our common stock The Company Proposals are binding and implement these important governance changes now The Board of Directors asks you to vote FOR Proposals 4 and 5 and AGAINST the Shareholder Proposal (Proposal 6) |
5 Annually elected directors; no classified board Majority voting for the election of directors with a resignation policy Lead independent director with clear, robust responsibilities 100% independent compensation, audit and nominating committees Regular executive sessions of the independent directors Overboarding policy in place for directors Conduct annual Board and Committee evaluations No poison pill in place Shareholders have the right to call a special meeting at 25% Clear and robust corporate governance guidelines 1 2 3 4 5 6 7 8 9 10 Overall Commitment to Good Governance |
6 Board of Directors All directors are independent, except CEO and one labor union-affiliated director Elected by a binding majority vote standard in annual elections of the full board Lead Independent Director Lead independent director has clearly-defined, robust roles and responsibilities Current lead independent director is actively engaged in matters related to compensation Compensation Committee Our Compensation Committee consists of entirely independent directors The Committee has undertaken significant analysis and enhancement of the program in response to investor concerns Independent Advisors Our Compensation Committee has engaged and considers the advice of an independent compensation consultant Ongoing Investor Input and Dialogue Lead independent director and senior management team have engaged with investors and have acted on their feedback regarding Goodyear’s compensation program Continuing to engage extensively with our investors, including, among others: o Large institutional investors o Pension funds o Proxy advisory firms Focused, Engaged, and Independent Oversight of the Compensation Program |
7 Incentive Program Financial Metrics Annual Incentives Annual Performance Plan EBIT (40%) Operating Drivers (20%) - Working Capital Excellence (Average working capital as a % of sales) - Total Delivered Cost Productivity (Cost savings) - New Product Vitality Free Cash Flow from Operations (40%) Long-Term Awards Performance-Based Awards (Paid out in equity and cash) Relative TSR Modifier (+/-20%) Net Income (50%) Stock Options Cash Flow Return on Capital (50%) Pay and Performance are Closely Aligned |
No dividends or dividend equivalents on unearned performance-based equity awards No repricing of options without shareholder approval No pension credit for newly hired executives to make up for service at prior employers Double-trigger change-in-control provisions and no walk-away rights No tax gross-ups Robust stockholding guidelines, including stock retention provisions No hedging or pledging of company stock Robust clawback policy 8 1 2 3 4 5 6 7 8 Sound Executive Compensation Practices |