DEF 14A of OLIN Corp
Filed Mar 15, 2024 · FY20230000074303-24-000083
ITEM 1—PROPOSAL FOR THE ELECTION OF DIRECTORS
ITEM 1—PROPOSAL FOR THE ELECTION OF DIRECTORS
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2025
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2025
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2025
| | Beverley A. Babcock Director Since: June 2019 Independent Age: 63 •Olin Committees: Chair of the Audit Committee; Member of the Executive Committee •‘Audit Committee Financial Expert’ under applicable SEC rules •Former Chief Financial Officer and Senior Vice President, Finance and Administration and Controller of Imperial Oil Limited •Former Assistant Controller and Vice President, Corporate Financial Services of ExxonMobil Corporation •Former Member of NYSE Listed Company Advisory Board •Member of the Chartered Professional Accountants of Canada Ms. Babcock brings a combination of extensive global financial, accounting and treasury management experience, and relevant industry experience to the Olin’s Board. | | | Ms. Babcock retired in May 2018 as Chief Financial Officer and Senior Vice President, Finance and Administration and Controller of Imperial Oil Limited, a publicly-held Canadian petroleum company with 69.6% ownership by ExxonMobil Corporation, a position she held since September 2015. Prior to that, Ms. Babcock served as Vice President, Corporate Financial Services from 2013 to 2015, Assistant Controller, Corporate Accounting Services from 2011 to 2013, and in various other senior leadership positions from 1998 to 2013, all at ExxonMobil Corporation. Earlier in her career, she was an Auditor of Clarkson Gordon, which became part of Ernst & Young. Ms. Babcock is a former member of the NYSE Listed Company Advisory Board and is a member of the Chartered Professional Accountants of Canada. Ms. Babcock serves on the Board of Directors of Westinghouse Air Brake Technologies Corporation. Additionally, Ms. Babcock serves on the Board of Directors of Forté Foundation, a non-profit consortium of leading companies and top business schools working together to launch women into fulfilling, significant careers in business. Ms. Babcock earned a bachelor’s degree from Queen’s University and a master’s degree in business administration from McMaster University. |
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2025
| | C. Robert Bunch Director Since: December 2005 Independent Age: 69 •Olin Committees: Chair of the Compensation Committee; Member of the Executive Committee •Former Chairman of the Board and Chief Executive Officer of Global Tubing •Former Chairman, President and Chief Executive Officer of Maverick Tube Corporation Mr. Bunch brings extensive corporate governance, executive leadership, and business strategy experience to Olin’s Board. Mr. Bunch most recently served as Chairman of the Board and Chief Executive Officer of Global Tubing, LLC, a privately held company which manufactured and sold coiled tubing and related products and services to the energy industry. Previously, he served as Chairman, President and CEO of Maverick Tube Corporation, a producer of welded tubular steel products used in energy and industrial applications. Mr. Bunch served on the Board of Directors of Pioneer Drilling Company from May 2004 until August 2008. He began his career at Input/Output in 1999 as Vice President and Chief Administrative Officer, where he later became President and Chief Operating Officer from 2002 to 2003. He was also an independent oil service consultant. Mr. Bunch serves on the Board of Trustees of Awty International School. Mr. Bunch earned a bachelor’s degree in economics and a master’s degree in accounting from Rice University and a juris doctorate degree from the University of Houston. | | | Matthew S. Darnall Director Since: September 2021 Independent Age: 61 •Olin Committees: Audit Committee and Nominating and Governance Committee •Former Managing Director, Industrials Group of The Goldman Sachs Group, Inc. Mr. Darnall brings significant investment banker expertise and merger and acquisitions, capital structure and allocation, and corporate structure and reorganization experience to Olin’s Board of Directors. Mr. Darnall retired in July 2021 from his position as Managing Director, Industrials Group of The Goldman Sachs Group, Inc. (a leading financial institution), a position he held since 2003. Over a 36-year career at Goldman Sachs, Mr. Darnall advised companies on corporate financial matters and mergers and acquisitions transactions within the Communications, Media and Entertainment Group from 1994 to 2003; Energy and Power Group from 1990 to 1994; Midwest Regional Coverage Group from 1988 to 1990 and as an Analyst in the Mergers and Acquisitions Group from 1985 to 1988. Mr. Darnall serves on the Board of Trustees of DePauw University, and also on the Board of Trustee of Glenwood Academy. Mr. Darnall earned a bachelor’s degree in economics from DePauw University and a master’s degree in business administration from the University of Chicago. |
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2025
| | Kenneth T. Lane New Nominee President and Chief Executive Officer and Director (effective March 18, 2024) Age: 55 •Olin Committees: Executive Committee (effective March 18, 2024) •President and Chief Executive Officer of Olin Corporation (effective March 18, 2024) •Former Executive Vice President Global Olefins and Polyolefins of LyondellBasell Mr. Lane brings substantial global strategic leadership, manufacturing, commercial and operations experience in commodity and specialty chemicals businesses to Olin’s Board. Olin’s Board appointed Mr. Lane as Olin’s President and Chief Executive Officer and Director, effective March 18, 2024. Mr. Lane comes to Olin from LyondellBasell, one of the world’s largest plastic, chemicals, and refining companies, where he most recently served as Executive Vice President, Global Olefins and Polyolefins (O&P). Mr. Lane had manufacturing and commercial responsibility for the O&P Americas and O&P Europe, Asia and International (EAI) segments as well as Global Procurement. Preceding this assignment, Lane served as Executive Vice President of Global O&P for three years and as interim CEO of LyondellBasell in early 2022. Prior to joining LyondellBasell in July 2019, he was with BASF for 13 years, where he held senior executive positions in the Global Polyurethanes Division, and served as President of the Monomers Division and as President of BASF Catalysts. Before BASF, he also served in a variety of operations, strategy and commercial positions at BP Chemicals as well as various technical and operations roles at Amoco Chemical Corporation. Over his career, he has served in leadership roles in the United States, Malaysia, the United Kingdom, China and Belgium. Mr. Lane holds a Bachelor of Science in civil engineering from Clemson University and a Master of Science in management from the University of Alabama in Huntsville. |
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2025
| | Julie A. Piggott Director Since: June 2023 Independent Age: 63 •Olin Committees: Compensation Committee and Nominating and Governance Committee •Former Executive Vice President and Chief Financial Officer of BNSF Railway Company •Director of Arcosa, Inc. Ms. Piggott brings strategic leadership skills and extensive experience in finance, accounting, risk management and business management, as well as a background in the supply chain industry to the Olin board. Ms. Piggott served as Executive Vice President and Chief Financial Officer of BNSF Railway Company ("BNSF"), one of North America's leading freight transportation companies, from 2014 until her retirement in 2021. Ms. Piggott held various other finance and commercial roles with BNSF since joining the company in 1991, including Vice President Planning and Studies, and Controller from 2009 to 2014, Vice President Finance and Treasurer from 2008 to 2009, and Vice President Finance from 2006 to 2008. Prior to her tenure at BNSF, Ms. Piggott's experience included finance, accounting, and audit roles at a private investment management company and Ernst & Young LLP (formerly Ernst & Whinney), a public accounting firm. Ms. Piggott holds an inactive CPA license from the state of Minnesota. Ms. Piggott serves on the Board of Directors of Arcosa, Inc, including its Audit Committee and its Governance and Sustainability Committee and also serves on the board of directors of a non-profit charity. Ms. Piggott holds a Bachelor of Science degree in Accounting from Minnesota State University, Moorhead, Minnesota, and an Executive MBA from Southern Methodist University. |
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2025
| | Earl L. Shipp Director Since: October 2017 Independent Age: 66 •Olin Committees: Audit Committee and Compensation Committee •Former Vice President, US Gulf Coast Operations of The Dow Chemical Company •Former President, Dow Middle East, India & Africa and Former President, Basic Chemicals Group of Dow •Director of National Grid plc and Great Lakes Dredge & Dock Co. •NACD Cyber Security Oversight Certified Mr. Shipp brings substantial chemical industry experience, including chlorine and epoxy business experience, and manufacturing, engineering and operations management experience to Olin’s Board. Mr. Shipp retired in September 2017 from his position as Vice President, US Gulf Coast Operations of The Dow Chemical Company, a diversified chemical manufacturing company, a position he held from November 2010. Prior to that, he served as President of Dow Middle East, India & Africa from June 2006 to October 2010 and as President of the Basic Chemicals Group at Dow from May 2007 to May 2009. During his 36-year history at Dow, he held a variety of leadership and engineering roles, including appointments as VP & Site Director of Louisiana Operations and Global Operations Director for Propylene Oxide/Propylene Glycol, Business Director for Propylene Oxide/Propylene Glycol, and Business Vice President for Oxides and Glycols. Mr. Shipp is a member of the Board of Directors of National Grid plc, and the chair of its Board’s Safety & Sustainability Committee and a member of its Board’s People & Governance Committee. He also serves on the Board of Great Lakes Dredge & Dock Co. and is a member of that Board’s Audit Committee and the Compensation Committee. He is also a member of the Board of Directors and the Executive Committee of The Economic Development Alliance of Brazoria County, Texas. Mr. Shipp earned a bachelor’s degree in chemical engineering from Wayne State University and completed the executive education program at Indiana State University School of Business. |
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2025
| | William H. Weideman Director Since: October 2015 Independent Chairman of the Board Age: 69 •Olin Committees: Chair of the Executive Committee; Audit Committee •‘Audit Committee Financial Expert’ under applicable SEC rules •Former Chief Financial Officer and Executive Vice President of The Dow Chemical Company •Former Director of Dow Chemical Employees’ Credit Union, Mid-Michigan Medical Center and Sadara Chemical Company Mr. Weideman brings valuable financial, audit, and business administration experience to Olin’s Board, as well as extensive knowledge of the businesses Olin acquired from The Dow Chemical Company. Mr. Weideman retired in January 2015 as Chief Financial Officer and Executive Vice President of The Dow Chemical Company, a position he held since March 2010. Prior to that, Mr. Weideman served as an Interim Chief Financial Officer from November 2009 to March 2010, and Executive Vice President of Finance, Dow Agrosciences & Corporate Strategic Development from April 2010 through September 2012, all at Dow. He joined Dow in 1976 as a Cost Accountant in Midland, Michigan and held a variety of accounting and controller roles for different Dow businesses. Mr. Weideman served on the Board of Directors of Mid-Michigan Medical Center and on the Board of Trustees for Central Michigan University through December 31, 2020. From October 30, 2011 through December 2015, he served on the Board of Directors of Sadara Chemical Company, a joint venture between Saudi Aramco and Dow. From August 30, 2000 through December 2015, he was on the Board of Directors of the Dow Chemical Employees’ Credit Union. Mr. Weideman earned a bachelor’s degree in business administration and accounting from Central Michigan University. | | | W. Anthony Will Director Since: September 2021 Independent Age: 58 •Olin Committees: Compensation Committee and Nominating and Governance Committee •President and Chief Executive Officer and Director of CF Industries Holdings Inc. Mr. Will brings significant public company chief executive officer, operations and corporate development experience and risk management, accounting and finance and human capital management experience to Olin’s Board. Mr. Will serves as President and Chief Executive Officer and a member of the Board of Directors of CF Industries Holdings Inc. (a leading global manufacturer of hydrogen and nitrogen products), positions he has held since January 2014. Prior to that, he served as Senior Vice President, Manufacturing and Distribution from January 2012 to January 2014; Vice President, Manufacturing and Distribution from March 2009 through December 2011 and Vice President, Corporate Development from April 2007 to March 2009. Mr. Will served in comparable officer positions with Terra Nitrogen GP Inc., an indirect, wholly-owned subsidiary and the sole general partner of Terra Nitrogen Company, L.P. until purchased by CF Industries in April 2018, and as a member of its Board of Directors from June 2010 until February 2016 and as chairman of the Board from January 2014 to February 2016. Earlier in his career, Mr. Will served as a partner at Accenture Ltd., vice president, business development at Sears, Roebuck and Company, consultant for Egon Zehnder International, vice president, strategy and corporate development at Fort James Corporation, manager at Boston Consulting Group and group leader at Motorola Solutions, Inc. | | | Mr. Will earned a bachelor’s degree in electrical engineering from Iowa State University and a master’s degree in business administration from Northwestern University. |
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2025
| | Carol A. Williams Director Since: October 2015 Independent Age: 66 •Olin Committees: Chair of the Nominating and Governance Committee; Member of the Executive Committee •Former Executive Vice President, Manufacturing and Engineering, Supply Chain and Environmental, Health & Safety Operations of The Dow Chemical Company •Former Vice President, Chlor-alkali Assets Business of Dow, and Senior Vice President of Basic Chemicals •Director of O-I Glass, Inc. Ms. Williams brings extensive management experience in manufacturing, purchasing and supply chain operations, substantial experience in research and development, and comprehensive knowledge of the chlor-alkali and general chemicals industry to Olin’s Board. Ms. Williams retired in 2015 as Special Advisor to the Chief Executive Officer of The Dow Chemical Company, a position she held since January 2015. Prior to this, she served as Dow’s Executive Vice President of Manufacturing and Engineering from September 2011 through December 2014, adding responsibility for Supply Chain and Environmental, Health & Safety Operations in 2012, President of Chemicals & Energy from August 2010 to August 2011, and Senior Vice President of Basic Chemicals from January 2009 through July 2010, all at Dow. During Ms. Williams’ 34-year history at Dow, she assumed increasingly more significant management positions in research and development before becoming operations leader and then Vice President for the global chlor-alkali assets business. Ms. Williams joined the Board of Directors of O-I Glass, Inc. in May 2014 and currently serves on its Nominating/Corporate Governance Committee and its Compensation and Talent Development Committee. She served as its Independent Board Chair from 2015 to 2021. Ms. Williams is a member of the Engineering Advisory Board and Energy Futures Institute Presidential Consultation Committee for Carnegie Mellon University. She served on the Board of Directors of Zep, Inc. from 2012 through June 2015. Ms. Williams earned a bachelor’s degree in chemical engineering from Carnegie Mellon University. |
2023 Results
| Comparator Group |
2023 Results
In designing and implementing our executive compensation programs, it has been our committee’s practice to review compensation data from a peer group that is adjusted periodically in consultation with Exequity. We refer to this group as the “comparator group.” For 2023 compensation decisions, the comparator group referenced by the committee comprised a community of 22 chemicals companies that align reasonably with Olin’s revenues, industry affiliation and corporate structure:
2023 Results
Our committee annually evaluates the comparator group composition and makes adjustments as appropriate. The changes made to the comparator group in 2023 aligned our comparator group with chemicals industry companies of comparable revenue and size to Olin. In 2022, for 2023 compensation decisions, the committee removed W. R. Grace & Co. due to its acquisition, and Ashland Global Holdings, Inc., Ingevity Corporation, and Element Solutions, Inc. due to their relative size to Olin. In addition, the committee added Corteva, Inc., and DuPont de Nemours, Inc. Together, these changes positioned Olin closer to median size statistics, including total revenues and market cap. In 2023, for 2024 compensation decisions, our committee elected to maintain the comparator group. We believe this comparator group aligns with Olin’s revenue position, industry affiliation and corporate structure.
Elements of Compensation
| Compensation Element | Purpose | Factors Used to Determine Amount | | Salary | • Rewards day-to-day value of executives consistent with the market | • Scope of responsibilities • Time in position • Value of the employee in the market • Individual performance | | Short-Term Incentive Program (STIP) | • Ties compensation to the achievement of short-term company goals and objectives • Motivates executives to achieve short-term financial targets and non-financial strategic objectives • Communicates key goals of the company to executives | • Criteria for corporate NEOs: (1)Adjusted EBITDA and Levered Free Cash Flow (2)Performance on key non-financial objectives that we believe are important to our long-term success • Criteria for NEOs with divisional responsibility: (1)Adjusted Division EBITDA and Adjusted Division Cash Flow (2)Overall corporate performance (3)Performance on key non-financial objectives that we believe are important to our long-term success | | Long-Term Incentive (Equity-Based) Compensation (LTIP) | • Ties compensation to investor returns • Motivates executives to achieve long-range goals that benefit shareholders • Aligns financial interests of executives and shareholders | • Performance share payouts for NEOs and other executive officers based on our performance on key metrics (as defined below) | | Other Compensation and Benefits (Retirement and Severance) | • Allows us to retain and compete for strong employee talent • Ensures that executive officers are personally indifferent to the outcome of a transaction in a change in control situation | • Market competitive programs • Employee’s length of service for defined benefits were frozen on 12/31/07 for Olin plans and on 10/5/15 for the former Dow plans, which continue to accrue interest • Salary and cash incentive |
Elements of Compensation
Our committee determines the total target direct compensation level for our CEO, as well as the mix of the compensation elements, referencing comparator group practices. Our CEO relies on comparator group practices to recommend, for our committee’s review and approval, the target levels and mix of elements for the balance of our executive officers. Although our committee is not bound to mirror the comparator group standards when it makes decisions on compensation levels and the mix of elements, our committee generally relies on the identified competitive norms to ensure that we can compete for executive talent. Our committee also reviews the relationship between our CEO’s compensation and the compensation for our other NEOs. In connection with establishing 2023 compensation, our committee determined that internal pay relationships were reasonable and within the market ranges of CEO-NEO pay relationships at other companies. As a guideline, our committee evaluates salaries, total cash compensation (salary and short-term incentive), and total direct compensation opportunities (total cash compensation plus the grant date value of long-term incentive awards) extended to our NEOs as a group relative to the market median of the comparator group. Pay levels for any individual NEO, however, may be below or above the market median of the comparator group for that executive’s particular role. Our committee believes that its approach to managing total target pay allows us to attract, motivate, and retain the quality executive talent Olin needs.
Short-Term Incentive Program (Non-equity Incentive Program Compensation)
Short-Term Incentive Program (Non-equity Incentive Program Compensation) STIP Overview. Our committee makes annual cash awards under our STIP. Actual STIP payouts are determined based on our achievement against our financial performance targets and our non-financial goals, as discussed below. For the financial portion of the STIP award, no payments are made for any financial target if the actual financial performance is below threshold of the target. Payouts for all financial performance metrics under the STIP are discretionary if the Adjusted EBITDA threshold is not met. Achievement of threshold of a financial target results in a 50% unweighted payout of the portion of the target STIP award allocated to that target. For each 1% actual financial performance exceeds the threshold (up to the target level), the STIP payment is increased by approximately 1.79%. In addition, for each 1% by which the actual financial performance exceeds the financial targets (100%), the payout is increased by approximately 6.25%. The total STIP payout for an NEO cannot exceed 200% of that individual’s target STIP award for awards made in 2023. For the non-financial goals related to further supporting our efforts to promote a company culture responsive to the ongoing environmental, social and governance ideals of our employees and shareholders, the committee approved non-financial objectives for the 2023 STIP including the following categories: Safety, Health & Environmental; Sustainability; People; and Valuation. Each division shared equally the accountability for the achievement of the non-financial objectives. Payouts based on achievement of non-financial objectives are independent of achievement of financial targets. For 2023, 80% of the target STIP awards for all officers (including our NEOs) were based on financial targets and 20% of the target STIP awards were based on non-financial objectives. The following table illustrates the portion of each NEO’s target STIP award based on corporate and division financial targets and non-financial objectives for 2023:
Short-Term Incentive Program (Non-equity Incentive Program Compensation)
| | Corporate/Division Financial Targets | Non-Financial Objectives | Total | | NEOs with Corporate-wide Responsibility | 80% / 0% | 20% | 100% | | NEOs with Divisional Responsibility | 20% / 60% | 20% | 100% |
Short-Term Incentive Program (Non-equity Incentive Program Compensation)
As set forth in the table above, for Messrs. Sutton and Slater and Ms. O’Brien, our NEOs with corporate-wide responsibility, target STIP awards were based 80% on corporate financial targets related to Adjusted EBITDA and Levered Free Cash Flow (as defined below) and 20% on non‑financial objectives. For Mr. Schumacher, our NEO with Divisional Responsibility, the target STIP award was based 80% on financial targets and 20% on non-financial objectives. The financial targets were weighted 75% on division financial targets of Division Adjusted EBITDA and Division Adjusted Cash Flow and 25% on corporate financial targets of Adjusted EBITDA and Levered Free Cash Flow. For Mr. Gumpel, our NEO with both corporate-wide and divisional responsibility, the target STIP award was based 80% on financial targets and 20% on non-financial objectives. The financial targets were weighted 50% on division financial targets of Division Adjusted EBITDA and Division Adjusted Cash Flow and 50% on corporate financial targets of Adjusted EBITDA and Levered Free Cash Flow. Financial Targets and Performance Against Objectives. Our committee established goals for each of the performance measures relevant to our NEOs. The table below provides information on each financial performance measure, including a weighting, performance target, performance threshold, performance maximum, 2023 actual performance and related payout percentage earned. In setting the financial targets for the STIP for 2023, the committee sought to establish targets based on the Company’s projected performance at the time goals were being determined. The Committee’s philosophy is to establish performance targets such that if the Company meets expectations, then executives have the opportunity to receive a target payout. Further, performance that exceeds or does not meet expectations shall result in payouts above or below target, respectively. Following record years of performance in 2021 and into 2022, Olin’s businesses began to face headwinds and reductions in demand starting in the third quarter of 2022 and continuing through the end of 2022 and into the beginning of 2023. While these headwinds continued into the fourth quarter, Olin’s overall performance in 2022 resulted in Adjusted EBITDA of $2.43 billion. In the January 26, 2023 press release announcing earnings results for 2022, Olin provided forward-looking Adjusted EBITDA guidance to investors of $1.5 billion to $2.0 billion for 2023. This guidance reflected the difficult economic conditions Olin’s businesses faced in the second half of 2022 that were projected to continue in 2023 in a potentially recessionary environment coupled with demand weaknesses. In accordance with its philosophy and acknowledging the challenging performance environment ahead, the Committee established target Adjusted EBITDA for 2023 of $1.75 billion, the midpoint of guidance provided to investors for the year. As described in the table below, the results for 2023 for all three segments reflect these headwinds worsening during the year, as no division achieved the financial target for Adjusted EBITDA or Cash Flow. Dollar amounts in the table below are shown in millions.
Short-Term Incentive Program (Non-equity Incentive Program Compensation)
| Performance Measure | Weighting | Performance Target | Performance Threshold | Performance Maximum | Actual Performance | Actual Payout Percentage | | Adjusted EBITDA—Corporate | 50% | $1,750.0 | $1,260.0 | $2,100.0 | $1,306.0 | 27.3% | | Levered Free Cash Flow—Corporate | 30% | $886.0 | $637.9 | $1,063.0 | $758.5 | 22.3% | | Adjusted EBITDA—Chemicals Division | 60% | $1,561.0 | $1,123.9 | $1,873.2 | $1,131.3 | 30.5% | | Adjusted Cash Flow—Chemicals | 20% | $1,321.0 | $951.1 | $1,585.2 | $1,073.1 | 13.3% |
Short-Term Incentive Program (Non-equity Incentive Program Compensation)
For 2023, in calculating Adjusted EBITDA, we used 2023 EBITDA excluding the effect of the following special charges, gains and losses (which were reflected in our 2023 EBITDA): (i) restructuring charges of $89.6 million, (ii) $27.0 million of pretax gains on the sale of Olin's domestic private trucking fleet and operations, (iii) $15.6 million insurance recovery associated with a second quarter 2022 business interruption at our Plaquemine, Louisiana, Chlor Alkali Products and Vinyls facility, (iv) $4.1 million related to results from the White Flyer Targets acquisition, and (v) environmental insurance recoveries for costs incurred and expensed in prior years of $6.4 million. Adjusted Cash Flow represents our after-tax operating cash flows of the business, including interest paid and changes in working capital, reduced by capital expenditures and payments under long-term supply contracts. Levered Free Cash Flow represents our cash flow after interest paid, income taxes paid, changes in working capital, capital expenditures and payments under long-term supply contracts. As described above, for our NEOs, the 80% portion of the STIP target award related to financial targets would be paid at the target award level (set forth in the Grants of Plan-Based Awards table) if our Adjusted EBITDA and Adjusted Cash Flow equal the financial performance targets. If any of the three metrics fall above or below the target level, our committee adjusts the STIP cash payment as described above. In the event that actual Adjusted EBITDA is below the threshold level of the target Adjusted EBITDA, all STIP payments for the financial portion of the STIP award (80%) are discretionary. Our NEOs with corporate-wide responsibility (Messrs. Sutton and Slater and Ms. O’Brien) received a payout of 27.3% for Adjusted EBITDA–Corporate and 22.3% for Levered Free Cash Flow–Corporate. Our NEO with Chemicals division responsibility (Mr. Schumacher) received a payout of 30.5% for Adjusted EBITDA–Chemicals Division and 13.3% for Adjusted Cash Flow–Chemicals Division. Our NEO with both corporate-wide and Chemicals division responsibility (Mr. Gumpel) received a payout of 27.3% for Adjusted EBITDA–Corporate, 30.5% for Adjusted EBITDA–Chemicals Division, 22.3% for Levered Free Cash Flow–Corporate and 13.3% for Adjusted Cash Flow–Chemicals Division. Non-Financial Objectives. In 2023, safety, health and environmental, and strategic goals comprised 20% of the STIP award opportunity for our NEOs.
Short-Term Incentive Program (Non-equity Incentive Program Compensation)
| Performance Goal | Possible | Achieved | | Strategic Goals | 15% | 13.5% | | Safety, Health & Environmental Goals | 5% | 3.5% | | Total | 20% | 17.0% |
Short-Term Incentive Program (Non-equity Incentive Program Compensation)
For 2023, all NEOs earned 17.0% of their target STIP award, out of a possible 20%, related to achievement of non-financial objectives.
Long-Term Incentive (Equity-Based) Compensation (LTIP)
Long-Term Incentive (Equity-Based) Compensation (LTIP) In 2023, we allocated the value of LTIP awards equally between performance shares and stock options.
Long-Term Incentive (Equity-Based) Compensation (LTIP)
| Why Stock Options? | Why Performance Shares? | | • Performance-based because their value is solely tied to Olin’s stock price, which directly correlates to our shareholders’ interests. • Fosters an environment focused on long-term growth and shareholder value creation. • Declines in stock price following the grant of stock options detrimentally impact executive pay (i.e., when a stock option is “underwater” it has no value). • Highly valued by employees; an important retention tool. | • Performance-based both because the number of shares earned depends on performance against pre-defined financial goals and the value of the shares fluctuates based on the stock price. • Motivates decision making that maximizes performance over a multi-year timeframe. • Tied to key financial metrics—relative total shareholder return and net income. • Coordinates the activities of all award recipients (including our NEOs) in support of long-term organizational value enhancement. |
Long-Term Incentive (Equity-Based) Compensation (LTIP)
All LTIP participants, including NEOs, are assigned target award levels which for 2023 were:
Long-Term Incentive (Equity-Based) Compensation (LTIP)
| NEO | Target Award | | Scott M. Sutton | $9,000,000 | | Todd A. Slater | $1,650,000 | | Dana C. O'Brien | $1,000,000 | | Damian Gumpel | $1,100,000 | | Patrick M. Schumacher | $1,100,000 |
Long-Term Incentive (Equity-Based) Compensation (LTIP)
Performance Shares. Half the value of each participant’s 2023 LTIP target award value was delivered in performance shares. The target number of performance shares awarded to each NEO was formulated by dividing half the participant’s target award value by the fair market value of our common stock (the average of the high and low per share sales price of our common stock on the NYSE on the grant date). The total number of performance shares that vest and will be paid to each NEO from awards made in 2023 will vary between 0% and 200% of this target number. Half of the target number of performance shares will be earned based on our relative total shareholder return (TSR) over the three-year period ending December 31, 2025 compared to the community of companies in the S&P 1500 Material Index, plus one selected direct competitor—Huntsman Corporation. We refer to this group of companies as the Performance Share Comparison Group. The remaining half of the target number of performance shares will be earned based on our actual net income compared to the net income goal set by our committee for the same three-year period. The following charts identify the relationship between the target number of performance shares earned and performance generated:
Long-Term Incentive (Equity-Based) Compensation (LTIP)
| If Olin’s TSR for a Performance Cycle is: | The number of TSR Performance Shares paid as a percentage of the target TSR Performance Share Award will be: | | At or above the 80th Percentile of the Performance Share Comparison Group | 200% | | Above the 50th Percentile, but below the 80th Percentile of the TSR for the Performance Share Comparison Group | 100% of the target number of TSR Performance Shares plus 3.33% of the target number of TSR Performance Shares for each incremental percentile position above the 50th Percentile | | At the 50th Percentile of the TSR for the Performance Share Comparison Group | 100% of the target number of TSR Performance Shares | | Above the 20th Percentile, but below the 50th Percentile of the TSR for the Performance Share Comparison Group | 25% of the target number of TSR Performance Shares plus 2.5% of the target number of TSR Performance Shares for each incremental percentile position above the 20th Percentile | | At the 20th Percentile of the TSR for the Performance Share Comparison Group | 25% of the target number of TSR Performance Shares | | Below the 20th Percentile of the TSR for the Performance Share Comparison Group | 0% |
Long-Term Incentive (Equity-Based) Compensation (LTIP)
| If Olin’s Net Income (LTIP) for the relevant portion of the Performance Cycle is: | The number of Net Income Performance Shares paid as a percentage of the target Net Income Performance Shares allocated to that Net Income Goal will be: | | At least 140% of the relevant Net Income (LTIP) Goal | 200% of the target number of Net Income Performance Shares allocated to that Net Income Goal | | More than 100% but less than 140% of the relevant Net Income (LTIP) Goal | 100% of the target number of Net Income Performance Shares allocated to that Net Income Goal plus a proportionate number of target Net Income Performance Shares determined using linear interpolation | | 100% of the relevant Net Income (LTIP) Goal | 100% of the target number of Net Income Performance Shares allocated to that Net Income Goal | | More than 60% but less than 100% of the relevant Net Income (LTIP) Goal | 50% of the target number of Net Income Performance Shares allocated to that Net Income Goal plus a proportionate number of target Net Income Performance Shares determined using linear interpolation | | 60% of the relevant Net Income (LTIP) Goal | 50% of the target number of Net Income Performance Shares allocated to that Net Income Goal | | Less than 60% of the relevant Net Income (LTIP) Goal | 0% |
Long-Term Incentive (Equity-Based) Compensation (LTIP)
Stock Options. The remaining half of each participant’s 2023 LTIP target award value is delivered in stock options. The number of shares subject to the option award is determined by dividing half the value of the overall LTIP target by the Black-Scholes value of options for our common stock (not to be lower than 20% of the then-current market price of our common stock). Our committee typically approves option awards at its first committee meeting each year. In 2023, the first committee meeting was February 22, 2023. At that meeting, our committee approved the granting of option awards effective on February 22, 2023. The exercise price on February 22, 2023 was $60.55 per share, the average of the high and low per share sales price of our common stock on the NYSE on that date. These option awards were made consistent with past practice in which the option awards have: •a grant effective date at least 10 business days after the release of year-end earnings; and •an exercise price equal to fair market value on the grant effective date. This practice ensures that the exercise price for stock options reflects full disclosure of prior year earnings information. We have not engaged in “back dating” of options, as our policies do not allow back dating. In addition, our equity plans do not permit option grants with an exercise price below the fair market value of our stock on the effective date of the option grant. 2021 LTIP Award. In February 2021, as part of our annual LTIP award cycle, our committee granted performance share awards to Messrs. Sutton, Slater and Gumpel, who were each executive officers at that time. The performance share awards were granted according to the award structure and vesting conditions described above with a performance period covering 2021 through 2023. Our TSR for the 2021 – 2023 performance period was over the 76th percentile as compared to our Performance Share Comparison Group resulting in a vesting at 189.34% for TSR Performance Shares. TSR for Olin and the Performance Share Comparison Group companies is calculated using a 20-trading day average stock price. We achieved a cumulative percentage of 151.7% of our applicable adjusted net income goals for an aggregate payout percentage of 170.51% of our 2021 LTIP Performance Share award. Restricted Stock. Our committee does not award restricted stock or restricted stock units to NEOs on a regular basis. In 2023, no grants of restricted stock units were made to any NEOs.
Other Compensation
| Executive | Retention Bonus | | Todd A. Slater | $1,000,000 | | Dana C. O’Brien | $1,000,000 | | Damian Gumpel | $600,000 |
Other Compensation
| Vesting Date | Vesting % of the Retention Bonus | | July 1, 2024 | 10% | | January 1, 2025 | 20% | | July 1, 2025 | 30% | | January 1, 2026 | 40% |
Other Compensation
In general, if an Executive terminates his or her employment for any reason prior to a vesting date, all unvested amounts will be immediately forfeited; provided that, in the event of termination without cause or due to death or disability, or due to a change in control of the Corporation, the Retention Bonus will become 100% vested. Once vested, the Retention Bonus (or portion thereof) is paid in a cash lump sum within 30 days, or, in the event of termination due to death or disability, no later than March 15 of the following year. The Retention Agreements include restrictive covenants, including non-competition, non-solicitation, and confidentiality protections in favor of the Corporation.
Clawback Policy
Clawback Policy Each of our NEOs is subject to a clawback policy applicable to all of Olin’s executive officers, as defined by Section 16 of the Exchange Act. In response to, and in compliance with, the SEC’s release of final rules regarding clawback policies and the NYSE’s publication of corresponding listing standards, Olin most recently amended and restated its clawback policy applicable to executive officers. Olin’s clawback policy allows recovery of all or a portion of certain incentive-based compensation. More specifically, Olin may recover compensation as follows: (i)Due to Accounting Restatement: If Olin is required to prepare an accounting restatement of its financial statements due to material noncompliance with any financial reporting requirement under securities laws, our board or our committee must clawback any “excess compensation” received by an executive officer (current or former) during the applicable look-back period regardless of whether the executive officer engaged in misconduct or was otherwise directly or indirectly responsible for the accounting restatement. “Excess compensation” is defined as any amount of incentive-based compensation (defined per SEC and NYSE clawback rules) received by an executive officer that exceeds the amount of incentive-based compensation that would otherwise have been received had it been determined based on the restated financial information or properly calculated financial measure. The “lookback period” is the 3 completed fiscal years immediately preceding the earlier of the date on which (1) the board or appropriate committee concludes or reasonably should have concluded that an accounting restatement is required, or (2) a regulator directs a restatement. (ii)Due to Misconduct: In the event our board or our committee reasonably determines that an executive officer has engaged in grossly negligent or intentional misconduct that was a “significant contributing factor” to an accounting restatement of our financial statements, or a significant increase in the value of that executive’s incentive awards, the board or committee may (1) recover all income received by an executive officer from any incentive award during the fiscal year in which such determination occurs (or the 3 completed fiscal years immediately preceding such determination), and/or (2) cancel any incentive award granted to the executive officer during the fiscal year of such determination (or the 3 completed fiscal years immediately preceding such determination). An “incentive award” generally includes an award that vests or is paid out upon achievement of quantitative performance targets (e.g., payments under the STIP and awards granted under the LTIP), but does not include any stock options, restricted shares or restricted stock units that are subject to time-based vesting criteria only. Amounts that we recover under this policy are not included in calculating that executive’s benefits under our Supplemental CEOP, and our recovery of amounts under the policy does not trigger any benefits under our severance plans. In addition to the clawback policy, our equity plans provide that if a participant renders service to one of our competitors, discloses confidential information without our consent, or violates other terms of the plan, our committee may terminate any unvested, unpaid or deferred awards held by the participant, or may require the participant to forfeit benefits received under the plan within the six month period preceding the participant’s action triggering the clawback. Olin does not indemnify any executive officer against the loss of any covered compensation as a result of the application of the clawback policy.
Risk Assessment
All elements of compensation, including salaries, generate charges to earnings under generally accepted accounting principles (GAAP). We generally do not adjust compensation based on accounting factors. Our committee considers the deductibility of long-term and annual incentive awards in structuring our executive compensation program, to the extent practical. To hire and retain highly skilled executives and remain competitive, our committee also looks at other factors and retains the discretion to make awards and pay amounts that do not qualify as tax deductible. Our equity and severance plans do not provide any “gross-up” for the amount of excise tax, if any, due on “excess parachute payments” as defined under Code Section 280G. These benefits are described in more detail under “Potential Payments Upon Termination or Change in Control.”
EXECUTIVE COMPENSATION
| Summary Compensation Table |
EXECUTIVE COMPENSATION
| Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus (1) ($) (d) | Stock Awards (2) ($) (e) | Option Awards (2) ($) (f) | Non-equity Incentive Plan Compensation (3) ($) (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (4) ($) (h) | All Other Compensation (5) ($) (i) | Total ($) (j) | | Scott M. Sutton Chairman, President and CEO | 2023 | $1,250,000 | $— | $4,754,436 | $4,545,892 | $1,165,500 | $— | $266,703 | $11,982,531 | | | 2022 | $1,065,000 | $— | $3,975,484 | $3,657,786 | $1,806,040 | $— | $241,256 | $10,745,566 | | | 2021 | $750,000 | $— | $4,479,480 | $3,055,253 | $1,725,750 | $— | $94,810 | $10,105,293 | | Todd A. Slater Senior Vice President and CFO | 2023 | $680,000 | $— | $871,670 | $833,431 | $386,280 | $15,924 | $127,740 | $2,915,045 | | | 2022 | $650,000 | $— | $829,141 | $762,480 | $717,200 | $— | $131,306 | $3,090,127 | | | 2021 | $615,000 | $— | $934,848 | $636,222 | $840,750 | $— | $76,563 | $3,103,383 | | Dana C. O’Brien Senior Vice President, General Counsel and Secretary | 2023 | $630,000 | $— | $528,265 | $505,106 | $313,020 | $— | $110,160 | $2,086,551 | | | 2022 | $600,000 | $150,000 | $499,681 | $457,488 | $586,800 | $— | $63,000 | $2,356,969 | | Damian Gumpel Vice President, Corporate Strategy | 2023 | $600,000 | $— | $581,126 | $555,630 | $280,280 | $6,875 | $99,376 | $2,123,287 | | | 2022 | $550,000 | $— | $554,591 | $508,320 | $459,500 | $— | $115,204 | $2,187,615 | | | 2021 | $493,501 | $— | $1,140,824 | $305,228 | $637,200 | $— | $59,271 | $2,636,024 | | Patrick M. Schumacher Vice President and President, Chlor Alkali Products and Vinyls | 2023 | $600,000 | $— | $581,126 | $555,630 | $273,900 | $— | $89,363 | $2,100,019 | | | 2022 | $550,000 | $— | $554,591 | $508,320 | $459,500 | $— | $50,400 | $2,122,811 |
EXECUTIVE COMPENSATION
_______________________ (1)For Ms. O’Brien, the value in this column represents the payment of the second half of a retention award made in conjunction with her hire. (2)Represents the aggregate grant date fair value of equity awards granted in that year (performance shares and restricted stock units in column (e) and options in column (f)), in each case calculated in accordance with ASC Topic 718. Please refer to Footnote 4 to the Grants of Plan-Based Awards table for a discussion of the assumptions used in these calculations. The performance share amounts in column (e) are calculated based on a payout equal to 100% of the target level for awards made in 2023, 2022 and 2021. Set forth below are the amounts that would have been included for performance share awards and total equity awards, if the grant date fair value had been based on the highest level of performance shares (for a payout equal to 200% of the target level).
EXECUTIVE COMPENSATION
| NEO | 2023 Performance Share | 2022 Performance Share | 2021 Performance Share / Total | | | | Scott M. Sutton | $9,508,872 | $7,950,968 | $8,958,960 | / | $8,958,960 | | Todd A. Slater | $1,743,379 | $1,658,282 | $1,869,696 | / | $1,869,696 | | Dana C. O'Brien | $1,056,570 | $999,362 | N/A | | | | Damian Gumpel | $1,162,252 | $1,109,182 | $891,568 | / | $1,586,608 | | Patrick M. Schumacher | $1,162,252 | $1,109,182 | N/A | | |
EXECUTIVE COMPENSATION
At the End Date as specified in the Transition Agreement, equity awards granted to Mr. Sutton in 2023 that have not vested in accordance with their original terms will be forfeited. (3)Amounts listed in this column were determined by our committee under our STIP. (4)Amounts reported in this column represent the total change in the present value of the pension benefits during the applicable year under all of our defined benefit pension plans. Pension values as of December 31, 2023 for Mr. Slater include amounts under the Qualified Plan, Supplemental Plan, and Senior Plan. Additionally, Mr. Gumpel participates solely in a cash balance arrangement under the Qualified Plan, and Messrs. Sutton and Schumacher and Ms. O’Brien are not eligible to participate in any of the defined benefit plans. Other than Mr. Slater, none of the NEO’s participate in the Supplemental or Senior Plans. Changes in the present value of pension benefits are determined using the assumptions we use for financial reporting purposes and represent changes in assumptions and the fact that each NEO is one year older, rather than any change in our NEO’s accrued pension benefit. Please see the note entitled “Pension Plans” in the notes to our audited financial statements included in our 2023 annual report on Form 10‑K for a discussion of these assumptions. The values shown in the table are due to the change of assumptions and the fact that each executive is one year older, as well as the Required NQ Plan Payments (as described on page 50 below). It is not driven by any change in the retirement benefit itself, except for Mr. Gumpel. The retirement benefits for Mr. Gumpel reflects an account balance based on a “personal pension account” (PPA) Cash Balance formula acquired from the Dow Employees Pension Plan (DEPP), which is then credited with interest until his assumed retirement date. The credited interest rate is 150 basis points plus the discount rate on 6-month Treasury Bills for the month of September of the prior plan year. To determine the change in the present value of the pension benefits under these plans, for Mr. Slater, we used age 62, the first age at which unreduced pension benefits are payable under the applicable Plans. For Mr. Gumpel, an interest crediting rate of 4% was assumed for the accumulation of his PPA account balance arrangement to age 65 and the conversion of his account balance to a life annuity benefit. In accordance with the SEC regulations, the pension benefits in the Summary Compensation Table reflect benefits payable in the form of a single life annuity payable only during the life of the executive, and do not reflect any joint and survivorship benefit. For more information on these defined benefit plans, including the pension equity and cash balance arrangements, see the descriptions beginning on page 49. (5)Amounts reported in this column for 2023 are comprised of the following items:
EXECUTIVE COMPENSATION
| Executive Officer | CEOP/Supplemental CEOP–Retirement Account (a) | Other Payments (b) | Total | | Scott M. Sutton | $266,703 | $— | $266,703 | | Todd A. Slater | $125,190 | $2,550 | $127,740 | | Dana C. O'Brien | $110,160 | $— | $110,160 | | Damian Gumpel | $97,463 | $1,913 | $99,376 | | Patrick M. Schumacher | $89,363 | $— | $89,363 |
EXECUTIVE COMPENSATION
____________________ (a)The amounts shown represent Olin’s contributions of a total of 7.5% of eligible compensation to the Retirement Account portion of the CEOP and the Supplemental CEOP in addition to the company’s match of a portion of eligible compensation that the participant contributes to each plan. (b)The values for Messrs. Slater and Gumpel represent the phantom dividends and interest accrued and paid in cash for the restricted stock unit award granted January 2, 2020 which vested on January 2, 2023.
EXECUTIVE COMPENSATION
| Grants of Plan-Based Awards |
EXECUTIVE COMPENSATION
| Outstanding Equity Awards at Fiscal Year-End |
EXECUTIVE COMPENSATION
| Option Exercises and Stock Vested |
EXECUTIVE COMPENSATION
| Pension Benefits |
EXECUTIVE COMPENSATION
| Nonqualified Deferred Compensation |
EXECUTIVE COMPENSATION
| Potential Payments Upon Termination or Change in Control |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION In 2023, our compensation package for non-employee directors consisted of: •an annual retainer of $140,000, of which at least $40,000 must be taken in shares of common stock or, at the director’s election, credited as phantom stock units in the director’s deferred stock account; •phantom stock units with an aggregate fair market value equal to $115,000 on the valuation date, rounded to the nearest 100 shares which are credited to the director’s deferred stock account; •a $30,000 annual cash fee for the Lead Director; •a $15,000 annual cash fee for the chairs of the Directors and Corporate Governance Committee, a $20,000 annual fee for the chair of the Compensation Committee, and a $25,000 annual fee for the chair of the Audit Committee; and •participation in a charitable gift program, where we make a 50% matching contribution (up to a total of $5,000 per year) for the director’s gifts to charities that meet the requirements of Code Section 501(c)(3). Fair market value for determining the number of shares included in all phantom stock unit and common stock awards described above is equal to the average of the high and low sales price of our common stock on May 1 of the applicable year or the first day in May on which the NYSE is open for trading. Each of Olin’s non-employee directors participates in the Directors Plan, under which the common stock and phantom stock unit amounts are paid. In addition to the phantom stock units which must be deferred, a director may elect to defer other portions of his or her compensation (cash and/or shares of common stock) as phantom stock units. The following table shows all cash, stock retainers and compensation earned or received at the director’s election in the form of common stock or phantom stock units, and other compensation earned or paid to each of our non-employee directors during 2023. Each of the directors listed below served for the entire year except for Ms. Piggott who was elected to our Board by our Board on June 5, 2023.
DIRECTOR COMPENSATION
| Name (a) | Fees Earned or Paid in Cash (1) ($) (b) | Stock Awards (2) ($) (c) | All Other Compensation (3) ($) (d) | Total ($) (e) | | Beverley A. Babcock | $125,000 | $155,077 | $— | $280,077 | | C. Robert Bunch | $120,053 | $155,077 | $5,000 | $280,130 | | Matthew S. Darnall | $100,007 | $155,077 | $5,000 | $260,084 | | Julie A. Piggott | $83,339 | $129,231 | $— | $212,570 | | Earl L. Shipp | $100,000 | $155,077 | $— | $255,077 | | William H. Weideman | $130,000 | $155,077 | $— | $285,077 | | W. Anthony Will | $100,007 | $155,077 | $— | $255,084 | | Carol A. Williams | $115,000 | $155,077 | $5,000 | $275,077 |
DIRECTOR COMPENSATION
(1)In 2023, Messrs. Bunch, Darnall, and Will, and Ms. Piggott elected to receive all or a portion of their compensation in deferred cash or phantom stock units credited to their respective deferred cash and stock accounts under the Directors Plan. The fair value of their compensation received in the form of phantom stock units is included in this column calculated in accordance with ASC Topic 718. Ms. Piggott elected to defer the receipt of her $100,000 annual cash retainer in her deferred cash account; and Messrs. Bunch, Darnall and Will, elected to defer all of their compensation as phantom stock units in their respective deferred stock accounts. (2)This column represents the grant date fair value of 2023 stock awards to directors calculated in accordance with ASC Topic 718. (3)Consists of amounts we contributed in 2023 to charities on behalf of directors under our matching charitable gifts program available to all employees and directors, as follows:
DIRECTOR COMPENSATION
| Name | Charitable Gift Matching Contributions | | C. Robert Bunch | $5,000 | | Matthew S. Darnall | $5,000 | | Carol A. Williams | $5,000 |
DIRECTOR COMPENSATION
The Compensation Committee of our Board is responsible for reviewing and establishing the compensation of our non-employee directors that is externally competitive and designed to align the interests of the directors with our shareholders. In discharging this responsibility, the Compensation Committee considers recommendations from Exequity. All stock-based compensation for our directors is governed by the Directors Plan. The annual stock grant, retainer stock grant and cash retainer are paid for the 12-month period running from May 1 to April 30, with payments made on or about May 1 or the first day in May on which the NYSE is open for trading. Under the Directors Plan, directors may choose to defer the cash portion of their compensation to their cash or stock accounts. We credit their deferred accounts with quarterly interest (on the cash portion) and with dividend equivalents (on the phantom stock portion). Phantom stock units are paid out in shares of our common stock or, at the director’s election, in cash upon the director leaving our Board, or at one or more later dates selected by the director. We also pay the balance of any deferred account to the director if there is a change in control—generally if: •a person or group acquires 40% or more of our assets, 30% or more of our stock, or a majority of the market value or voting power of our stock, or •a majority of our board members are not endorsed by the directors in office at the time of election. We have stock ownership guidelines for our non-employee directors where each such director is expected to own shares of our common stock with a market value of at least five times the amount of the annual retainer, within five years after the director joins our board. With the exception of Mr. Darnall and Ms. Piggott, who joined our Board on September 30, 2021 and June 5, 2023, respectively, all of our other current non-employee directors met these guidelines and are in compliance with these guidelines as of the date of this Proxy Statement.
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE As required by applicable law and SEC regulation, we calculated a reasonable estimate of the ratio of the combined annual total compensation of Scott M. Sutton, our Chairman, President and CEO, compared to that of our median employee in 2023.
PAY RATIO DISCLOSURE
| Based on the information described below, for 2023, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 135 to 1. |
PAY RATIO DISCLOSURE
We used the same median employee for the pay ratio calculation in 2023 as in 2022. There was no significant change in our employee population or in the median employee’s compensation arrangement or other material change during those years that would significantly affect our pay ratio calculation. As of December 31, 2023, our global employee population consisted of 7,400 individuals working at Olin and its consolidated subsidiaries. This includes 6,248 United States (U.S.) employees. We identified our median employee for the 2022 pay ratio analysis using the methodology and the material assumptions, adjustments, and estimates described below.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table shows the total compensation for our NEOs for the past four fiscal years as set forth in the Summary Compensation Table (SCT), the compensation actually paid (CAP) to our CEO, and on an average basis, our other NEOs, Olin’s total shareholder return (TSR), the TSR of our peer group, our Net Income (Loss), and our financial performance measure for compensatory purposes, Adjusted EBITDA. The CAP is calculated in accordance with Item 402(v) of Regulation S-K and is subject the adjustments contained therein which may differ materially from our NEOs cash compensation as paid by Olin.
PAY VERSUS PERFORMANCE
| Year | SCT Total for First CEO (1) ($) | SCT Total for Second CEO (1) ($) | Average SCT Total for Other NEOs (2) ($) | CAP to First CEO (3) ($) | CAP to Second CEO (3) ($) | Average CAP to Other NEOs (3) (4) ($) | TSR (5) ($) | Peer Group TSR (5) ($) | Net Income (Loss) ($ in millions) | Adjusted EBITDA ($ in millions) | | 2023 | $11,982,531 | N/A | $2,306,226 | $13,528,609 | N/A | $2,417,626 | $347 | $138 | $460.2 | $1,310.1 | | 2022 | $10,745,566 | N/A | $2,386,281 | $8,902,735 | N/A | $572,337 | $336 | $119 | $1,326.9 | $2,427.8 | | 2021 | $10,105,293 | N/A | $3,217,587 | $41,203,583 | N/A | $11,724,673 | $359 | $126 | $1,296.7 | $2,493.3 | | 2020 | $1,646,019 | $8,030,259 | $2,501,366 | $8,191,019 | $17,507,746 | $4,232,125 | $151 | $108 | $(969.9) | $636.0 |
PAY VERSUS PERFORMANCE
___________________ (1)Our First CEO for the years presented represents Mr. Sutton. Mr. Sutton became President and CEO of Olin on September 1, 2020. Mr. Sutton became Chairman, President, and CEO on April 22, 2021. Our Second CEO represents John E. Fischer who was Chairman, President, and CEO prior to Mr. Sutton. (2)The Other NEOs for each applicable year are as follows: 2023: Todd A. Slater, Dana C. O’Brien, Patrick M. Schumacher, and Damian Gumpel 2022: Todd A. Slater, Dana C. O’Brien, Patrick M. Schumacher, Damian Gumpel, and Pat D. Dawson 2021: Todd A. Slater, Pat D. Dawson, James A. Varilek, and Damian Gumpel 2020: Todd A. Slater, Pat D. Dawson, James A. Varilek, and Brett A. Flaugher (3)The following adjustments were made to the SCT total in order to calculate CAP. Amounts presented for Other NEOs reflect an average for the Other NEOs for that applicable year:
PAY VERSUS PERFORMANCE
| | | | Pension Adjustments | Equity Award Adjustments (i) | | | | | | | | Year | Executives | SCT Total ($) | Deduct Change in Pension Value and Nonqualified Deferred Compensation Earnings from SCT ($) | Deduct Stock Awards from SCT ($) | Deduct Option Awards from SCT ($) | Add Year End Value of Awards Granted in Current Year ($) | Add Change in Value of Awards Granted in Prior Years ($) | Add Change in Value of Awards Granted in Prior Years which Vested in Current Year ($) | Deduct Awards Which Failed to Meet Vesting Conditions (4) ($) | Add Accrued Dividends and Interest ($) | | 2023 | First CEO | $11,982,531 | $— | $(4,754,436) | $(4,545,892) | $7,962,995 | $(339,246) | $3,222,657 | $— | $— | | | Other NEOs | $2,306,226 | $(5,700) | $(640,547) | $(612,449) | $1,072,832 | $(51,377) | $347,167 | $— | $1,474 | | 2022 | First CEO | $10,745,566 | $— | $(3,975,484) | $(3,657,786) | $8,406,229 | $(2,209,860) | $(405,930) | $— | $— | | | Other NEOs | $2,386,281 | $— | $(653,429) | $(599,818) | $1,212,539 | $(166,284) | $(146,115) | $(1,461,529) | $692 | | 2021 | First CEO | $10,105,293 | $— | $(4,479,480) | $(3,055,253) | $18,553,023 | $20,080,000 | $— | $— | $— | | | Other NEOs | $3,217,587 | $— | $(1,055,590) | $(601,537) | $3,825,319 | $5,271,902 | $1,064,359 | $— | $2,633 | | 2020 | First CEO | $1,646,019 | $— | $(1,012,500) | $— | $7,557,500 | $— | $— | $— | $— | | | Second CEO | $8,030,259 | $(22,921) | $(3,532,102) | $(2,730,000) | $12,626,812 | $3,247,818 | $(113,722) | $— | $1,602 | | | Other NEOs | $2,501,366 | $(172,064) | $(924,710) | $(507,325) | $2,731,147 | $618,107 | $(25,078) | $— | $10,682 |
PAY VERSUS PERFORMANCE
(i)Our valuation assumptions used to calculate the fair value of equity awards reflect changes in our stock price and related volatility, changes to the length of the awards solely due to the passage of time, and updates to market driven assumptions such as the risk-free interest rate. (4)CAP for 2022 reflects the retirement of Mr. Dawson effective April 30, 2022 which resulted in the cancellation of his outstanding and unvested stock option awards and pro-ration of his outstanding and unvested performance share awards. Excluding the impact of Mr. Dawson’s retirement, the Average CAP in 2022 would have been $2,033,866. (5)TSR is determined based on the value of an initial fixed investment of $100. Our peer group reflects the performance of the S&P 1500 Commodity Chemicals Index.
Relationship Between Compensation Actually Paid and Performance Measures
Relationship Between Compensation Actually Paid and Performance Measures The table above displays a high correlation between compensation actually paid to our NEOs (as adjusted for continuing NEOs) and Olin’s performance, which is consistent with our compensation philosophy described in our Compensation Discussion and Analysis on page 30. As shown above, Olin’s cumulative TSR has exceeded the cumulative peer group TSR during the past three years. Compensation actually paid to our NEOs (as adjusted for continuing NEOs) tracks closely with TSR and moves directionally with our performance indicating the strong relationship between the two metrics. Compensation actually paid also directionally reflects changes in our net income and Adjusted EBITDA; during the years when Olin’s performance increased, so did our compensation actually paid and vice versa. Our equity incentives are sensitive to changes in stock price as shown in the table in 2021 during which our stock price significantly increased relative to 2020 resulting in an increase in compensation actually paid. The charts below show, for the past four years, the relationship of Olin’s TSR relative to its peers as well as the relationship between the CEO and non-CEO compensation actually paid and (1) Olin’s TSR, (2) Olin’s net income (loss), and (3) Olin’s Adjusted EBITDA.
Required Tabular Disclosure of Most Important Measures to Determine Compensation Actually Paid
Required Tabular Disclosure of Most Important Measures to Determine Compensation Actually Paid
Required Tabular Disclosure of Most Important Measures to Determine Compensation Actually Paid
| Most Important Performance Measures | | Adjusted Cash Flow | | Levered Free Cash Flow | | Adjusted EBITDA | | Net Income (LTIP) | | Relative Total Shareholder Return |
Required Tabular Disclosure of Most Important Measures to Determine Compensation Actually Paid
The measures listed above represent the most important performance measures we use to determine compensation actually paid. Adjusted Cash Flow, Levered Free Cash Flow and Adjusted EBITDA are measures used to assess performance against targets included in the short-term incentive program. Within our long-term incentive program, Net Income (LTIP) and Relative Total Shareholder Return are measures used specifically in the Performance Share Program.