DEF 14A of Andersons, Inc., Mar 13, 2024

DEF 14A of Andersons, Inc.

Filed Mar 13, 2024 · FY20230000821026-24-000108

Open on EDGAR

  1. Election of Directors

    Election of Directors The Board has adopted a policy that directors generally may not stand for re-election after attaining age 72. After decades of dedicated and valuable service to the Company and its Board, Michael J. Anderson, Sr., the current Chairman of the Board, will be retiring from the Board effective as of the 2024 Annual Meeting, having reached the age of 72. In consideration of recent transitions in Board composition and the value of retaining directors with specific areas of expertise needed by the Board, the Board determined that it would be in the best interests of the Company and its shareholders to ask Ross W. Manire to stand for re-election at the 2024 Annual Meeting, although he has also reached the age of 72. Given Mr. Manire’s background as a former Chief Executive Officer, with experience as a founder, CEO and director of Information Technology companies, he brings a unique perspective and skills to the Board. Proxies cannot be voted for a greater number of individuals than the number of nominees listed below. The Governance / Nominating Committee and the Board have nominated and recommend the election of each of the nine nominees listed below. Each director elected will serve until the next Annual Meeting or until their earlier removal or resignation. Each of the nominees listed is currently a Director of the Company. The Board expects all nominees named below to be available for election. In case any nominee is not available, the proxy holders may vote for a substitute, unless the Board reduces the number of directors as provided for in the Company’s Code of Regulations. Directors will be elected at the Annual Meeting by a plurality of the votes cast at the Annual Meeting. The following biographical disclosures only include information regarding nominees for election or re-election at the Annual Meeting. After decades of dedicated and valuable service, Michael J. Anderson, Sr. will not stand for re-election at the Annual Meeting and is therefore not represented in the below biographical information. Following is a brief biography of each nominee as well as the specific qualifications of the nominee as identified by the Board’s Governance / Nominating Committee. Information as to their ownership of the Common Shares can be found under the caption “Share Ownership” in this proxy statement. All information provided is current as of February 29, 2024.

  2. Election of Directors

    | Name | Age | Principal Occupation, Business Experience and Other Directorships | Director Since | | Patrick E. Bowe | 65 | President and Chief Executive Officer ("CEO") since November 2, 2015. Prior to that, Corporate Vice President of Cargill, Inc. and a leader of Cargill's Food Ingredients and Systems business since 2007. Prior to joining Cargill's Corn Milling Division, managed the copper trading desk for Cargill Metals Division and worked as a trader and analyst for Cargill Investor Services at the Chicago Board of Trade. Worked as a cash grain merchant for Louis Dreyfus Corp. in Springfield, Ill., and Phil O'Connell Grain Co., in Stockton, California. Former director of United Malt Group and Primient from 2022-2023. | 2015 | | Gerard M. Anderson | 65 | Executive Chairman of DTE Energy from 2019 through 2022; Chairman and Chief Executive Officer of DTE Energy from 2014 through 2019; President and Chief Operating Officer of DTE Energy from 2005 through 2010. Joined Detroit Edison, a subsidiary of DTE Energy in 1993 and held various executive positions. Prior to this, a consultant with McKinsey & Co., Inc. Director of DTE Energy from 2010 - 2022. Director of The AES Corporation since 2023. Senior Adviser to ArcLight Capital, an energy-focused private equity company. | 2008 | | Steven K. Campbell | 60 | Retired head of North America Grain and Group Executive Vice President at Louis Dreyfus from 2012 through 2017; Past President and CEO of Louis Dreyfus Commodities Grain Merchandising LLC from 2008 through 2017; Former Vice President with Archer Daniels Midland from 1995 through 1997; Past industry involvement includes serving as Chairman, Kansas City Board of Trade, First Vice Chairman on the North American Export Grain Association's Board of Directors and holding a position on the Commodity Markets Council Board of Directors. Guest lecturer at Auburn University, speaking on commodity trading. | 2022 | | Gary A. Douglas | 63 | President of Nationwide National Partners from March 2013 through September 2022 (Retired); President and Chief Operating Officer of Nationwide Agribusiness from 2007 through 2013; Regional Vice President of Nationwide Mutual Insurance Company from 2005 through 2007. On the Development Committee of the National Urban League, on the Governance Committee of the National Association of Mutual Insurance Companies, and on the Sustainability Committee of the African American Leadership Academy. | 2021 | | Pamela S. Hershberger | 58 | Retired Managing Partner of Ernst & Young LLP in Toledo, Ohio. Thirty-one years of service at Ernst & Young LLP, beginning her career in the firm's Toledo, Ohio office as a staff auditor. In 2008, named Toledo's Office Managing Partner, a position she held until her retirement in 2018. | 2019 |

  3. Election of Directors

    | Name | Age | Principal Occupation, Business Experience and Other Directorships | Director Since | | Catherine M. Kilbane | 60 | Retired Senior Vice President, General Counsel and Secretary of The Sherwin-Williams Company, 2013 to July 2017. Prior to that, Senior Vice President, General Counsel and Secretary of American Greetings Corporation from 2003-2012. Prior to that a partner with the Cleveland law firm of Baker & Hostetler LLP. Director of The Davey Tree Expert Company since 2018. Director of Interface, Inc. since 2018. Trustee of The Cleveland Clinic Foundation since 2015. | 2007 | | Robert J. King, Jr. | 68 | Advisory Director for FNB Corp from 2013 through October 2020. Prior to that, President and Chief Executive Officer, PVF Capital Corp from 2009 to 2013; Senior Managing Director, Private Equity, FSI Group, LLC from 2006 through 2009; Managing Director, Western Reserve Partners LLC from 2005-2006; Executive Vice President of Fifth Third Bank from 2002 through 2004 and Chairman, President and Chief Executive Officer of Fifth Third Bank (Northeastern Ohio) from 1997 through 2002. Director of Oak Tree Holdings LLC since 2021, Shiloh Industries, Inc. from 2005 to 2020, MTD Corp. from 2005 to 2021, and Medical Mutual of Ohio since 2012. | 2005 | | Ross W. Manire | 72 | Retired President and Chief Executive Officer of ExteNet Systems, Inc., from 2002 to 2018. Served as President, Enclosure Systems Division of Flextronics International from 2000 to 2002. Prior to that was Chief Executive Officer at Chatham Technologies, Inc., and served in several executive roles at 3Com Corporation and US Robotics (acquired by 3Com in 1997). Former Partner at Ridge Capital Corporation and Ernst & Young LLP. Director of Zebra Technologies Corporation since 2003 and Eagle Test Systems, Inc. from 2004 through 2008. | 2009 | | John T. Stout, Jr. | 70 | Chairman and Chief Executive Officer of Plaza Belmont Management Group LLC since 2014. Prior to that, Chief Executive Officer of Plaza Belmont Management Group LLC since 1998. Director of Mennel Milling Company, Inc. since 1992. Director and Chairman of the Board of Renwood Mills, LLC from 2016 to 2022. Director and Managing Member of Renwood Appreciation & Income Fund, LLC from 2016 through 2022. Director and Managing Member of Homegrown Family Foods from 2019 through 2022. Chairman of the Board of Homegrown Family Foods since 2022. Previously President of Manildra Milling Corp and Manildra Energy Corp from 1991 through 1998 and Executive Vice President and Director of Dixie Portland Flour Mills Inc. from 1984 to 1989. Director of The Federal Reserve Bank of Kansas City from 2010 to 2015. | 2009 |

  4. Board Meetings and Committees

    Board Meetings and Committees

  5. Board Meetings and Committees

    | | | Committees of the Board Effective December 31, 2023 | | | | | Name | Board | Audit | Compensation | Governance / Nominating | Finance | | Michael J. Anderson, Sr. | C | | | | | | Patrick E. Bowe | X | | | | | | Gerard M. Anderson | X | | | X | X | | Steven K. Campbell | X | | | | X | | Gary A. Douglas | X | X | X | | | | Pamela S. Hershberger | X | C | | X | | | Catherine M. Kilbane | X | X | | C | | | Robert J. King, Jr. | X | | X | | C | | Ross W. Manire | X | X | C | | | | John T. Stout, Jr. | X | | X | | X |

  6. Board Meetings and Committees

    C - Chair, X - Member The Board held six regular board meetings in 2023. Each director attended 75% or more of the 2023 meetings of the Board, and committees on which each such director served during each director's period of service. We encourage Board members to attend the annual meeting, and all of the Board members standing for reelection at that time attended the 2023 Annual Shareholders Meeting. The Audit Committee, Compensation Committee, Finance Committee and Governance / Nominating Committee each have written charters. Copies of such charters are available at www.andersonsinc.com under the Governance tab within the Investors section of the website. Director Independence: The Board is made up of a majority of independent directors. Each of the Audit, Compensation, Finance and Governance / Nominating Committees is made up entirely of independent members. An “independent” director is a director who meets the criteria for independence as required by the applicable law and the NASDAQ Corporate Governance Standards for Listed Companies and is affirmatively determined to be “independent” by the Board. The Board has determined that each of the current directors standing for re-election is independent under the corporate governance standards of the NASDAQ, with the exception of Patrick E. Bowe, President and CEO. Audit Committee: The Board established the Audit Committee as defined by Section 3(a)(58)A of the Securities Exchange Act of 1934. The Audit Committee is currently comprised of four independent directors (as defined in the NASDAQ Corporate Governance Standards for Listed Companies generally and as applicable to audit committee members) and, among other duties, oversees the accounting and financial reporting process of the Company, appoints the independent registered public accounting firm, reviews the internal audit and external financial reporting of the Company, reviews the scope of the independent audit and considers comments by the independent registered public accounting firm regarding internal controls and accounting procedures and management’s response to those comments, and is also tasked with oversight of the Company's cybersecurity program. The Audit Committee held eight meetings in 2023. The Board has determined that Pamela S. Hershberger, Committee Chair, and Ross W. Manire, Committee member, are each “audit committee financial experts” as defined in the federal securities laws and regulations. Compensation and Leadership Development Committee ("Compensation Committee"): The Compensation Committee, is comprised solely of four independent directors (as defined in the NASDAQ Corporate Governance Standards for Listed Companies generally and as applicable to Compensation Committee members). The Compensation Committee reviews the recommendations of the Company’s CEO and Human Resources as to the appropriate compensation, which includes base salaries, short-term and long-term compensation and benefits, of the Company’s officers and determines the compensation of such officers for the ensuing year which it then recommends to the full Board for approval. The CEO compensation is also determined by the Committee and then recommended to the full Board for approval. In addition, under the Company’s Amended and Restated 2019 Long-Term Incentive Compensation Plan (the "2019 Plan"), the Committee reviews, approves and recommends to the Board the value of grants of equity-based compensation aggregated for non-officers and individual grants for officers and reviews and approves the “Compensation Discussion and Analysis” appearing in this proxy statement. The Compensation Committee met four times during 2023. The Compensation Committee, by charter, is authorized to retain its own independent compensation consultants and legal counsel. The role of those independent compensation consultants is more fully described in the Compensation Committee Consultants section below. Finance Committee: The Finance Committee is comprised of four independent directors (as defined in the NASDAQ Corporate Governance Standards for Listed Companies) and is charged with monitoring and overseeing the Company’s financial resources, strategies and risks, especially those that are long-term in nature. The Finance Committee met three times in 2023. Governance / Nominating Committee: The Governance / Nominating Committee is comprised of three independent directors (as defined in the NASDAQ Corporate Governance Standards for Listed Companies). The Governance / Nominating Committee met two times in 2023. The Committee recommends to the Board actions to be taken regarding the Board's structure, organization and functioning, selects and reviews candidates to be nominated to the Board, reports to the Board regarding the qualifications of such candidates, recommends a slate of directors to be submitted to the shareholders for approval, and proposes agenda items and recommendations to meetings of the independent directors (led by the independent Lead Director) without management being present. The Governance / Nominating Committee and other members of the Board identify candidates for consideration by the Committee, and may, if it elects to, engage the services of third-party search firms to identify candidates. The Governance / Nominating Committee recommended the election to the Board of each nominee named in this proxy statement. It is the policy of the Governance / Nominating Committee to consider for nomination as a director any person whose name is submitted by a shareholder, provided that the submission is made prior to December 31 of the year that precedes the next annual meeting of shareholders and provided that the person is willing to be considered as a candidate. Submission of names by shareholders is to be made to the Secretary of the Company in writing delivered to the Company’s principal executive offices in Maumee, Ohio. The Secretary, in turn, submits the names to the Chair of the Governance / Nominating Committee for consideration. The shareholder’s submission should set forth all information relating to any nominee that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Act of 1934, as amended (including, if so required, such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected). The foregoing procedures relate to submission of recommended nominees for consideration by the Governance / Nominating Committee. Shareholders who propose to actually nominate a director candidate should refer to Shareholder Proposals for 2024 Annual Meeting for additional information. Each candidate for director (no matter how nominated) is evaluated on the basis of their ability to contribute expertise to the businesses and services in which the Company engages, to conduct himself or herself in accordance with the Company’s Statement of Principles, and to contribute to the mission and greater good of the Company. The candidate’s particular expertise, as well as existing Board expertise, as that expertise aligns with the Company's business and strategy, is taken into consideration. A candidate’s “independence,” as defined by applicable stock exchange regulations and any other applicable laws, and the Board’s ratio of independent to non-independent directors are also taken into consideration. Preferences, qualifications and specific qualities or skills considered necessary for one or more of the directors to possess include, but are not limited to, the following: •Able to serve for a reasonable period of time •Multi-business background preferred •Successful career in business preferred •Active preferred over retired •Audit Committee membership potential •Strategic thinker •Leader / manager •Agribusiness background, domestic and international •Transportation background

  7. Board Meetings and Committees

    •Brand marketing exposure The Committee seeks nominees who provide a diverse set of backgrounds, skills, experiences and viewpoints who will contribute expertise to the Board, conduct themselves in accordance with the Company’s Statement of Principles and strong ethical behavior, and share their diverse skills and experiences for the greater good of the Company. Because the Company consists of diverse businesses, we highly value differing viewpoints shared in the pursuit of Board actions that best balance the objectives of our customers, employees, shareholders and communities. The Board has adopted a policy not to nominate for re-election to the Board any member reaching the age of 72 prior to the annual meeting. The Board did not make any exceptions or waivers of this policy in 2023, however, as discussed above, the Board has waived this policy to allow for re-election of Mr. Manire in 2024. Board Leadership Structure: In 2023 and in previous years, the positions of CEO and Chairman were separated. Michael J. Anderson, Sr. has served as Chairman of the Board of Directors since 2009. The Board considered Mr. Anderson's experience on other public company boards, as well as his extensive prior experience with the Company, to provide a resource that served the Company well. Since Mr. Anderson is not an independent Board member, the Board established the position of an independent Lead Director. In 2023, Catherine M. Kilbane, an independent Board member, served as Lead Director. The Chairman chairs meetings of the Board, sets Board meeting agendas, has authority to call meetings of the Board and serves as liaison with management of the Company. The Lead Director is chosen by the independent directors of the Board. The Lead Director chairs meetings of the independent directors, approves Board meeting agendas and the information available to the Board, has the authority to call meetings of the independent directors, and serves as liaison with the Chairman. In performing these functions, the Lead Director has the responsibility and authority to set the agenda and manage the meetings of the independent directors, to communicate their interests to the Chairman and to the CEO, and to assert any other concerns for the benefit of the stockholders, and in so doing serve as an institutional counterweight to the Chairman and CEO. As noted above, Mr. Anderson will be retiring from the Board effective as of the 2024 Annual Meeting. The Board expects to consider its leadership structure at its May 2024 meeting and designate a Chairman and, if the Chairman is not independent, a Lead Director. The Board also expects to consider at that time whether to continue to separate the positions of CEO and Chairman. Board Oversight of Risk: The Board is responsible for overseeing risk management for the Company. It has delegated to each of the Audit Committee, the Finance Committee, the Compensation Committee and the Governance / Nominating Committee, certain of its responsibilities in this area. •Audit Committee: The Audit Committee has the oversight responsibility for the integrity of the Company’s financial statements and its financial reporting process, as well as its systems of internal accounting and financial controls, and the performance of the Company’s internal audit function and independent auditor. The Audit Committee is tasked with oversight of the Company's cybersecurity program and receives periodic reporting on the topic throughout the year, including with regard to the Company's progress against the National Institute of Standards and Technology Cybersecurity Framework. Cybersecurity additionally is defined as a risk in the Company's Enterprise Risk Management (“ERM”) program. •Finance Committee: The Finance Committee has responsibility for risks relating to capital markets including interest rate volatility and access to capital, counterparties, product liability, price volatility and general industry market risks. •Compensation Committee: The Compensation Committee has responsibility for reviewing the Company’s compensation policies to ensure that these policies are not reasonably likely to create undue risk to the Company. •Governance / Nominating Committee: The Governance / Nominating Committee has responsibility for oversight of the Company’s ethics policies, including the Company’s Standards of Business Conduct and Response Program, board succession and regulatory / legislative issues. The Governance / Nominating Committee also has oversight responsibility for the Company's environmental, social, and governance ("ESG") activities and practices. Although the Board has delegated certain responsibilities for risk management to its Committees, the Board retains overall responsibility for this duty. Each Committee Chair reports to the Board matters discussed or reviewed at Committee meetings. Although the Board oversees the Company’s risk management, management is responsible for day-to-day risk management processes and provides regular updates to the Board and its Committees. Executive Sessions of the Board: Our independent directors meet in executive session at each Board meeting. Our independent Lead Director chairs these executive sessions. Shareholder Communications to Board: Shareholders may send communications to the Board by writing any of the Company's officers, or Christine M. Castellano, Executive Vice President, General Counsel & Corporate Secretary, at the Company’s principal executive offices at its Maumee, Ohio address or by calling any officer at 419-893-5050 or 800-537-3370. All appropriate shareholder communications addressed to the Board will be forwarded directly to the Board members. Corporate Governance Guidelines: A copy of the Company’s Corporate Governance Guidelines may be found in the Company’s website under the under the Governance tab within the Investors section of the website.

  8. Mix of Target Compensation

    Mix of Target Compensation 2023 Financial Performance Highlights The Company's financial results for the year ended December 31, 2023, are as follows: •The Company reported net income attributable to The Andersons, Inc. common shareholders from continuing operations of $101.2 million, or $2.94 per diluted share. •The Trade segment reported income before income taxes of $96.2 million as the segment continued to capitalize on strong agriculture fundamentals. The asset-based business benefited from strong elevation margins and good space income on a large and wet harvest combined with better wheat income opportunities during the year. Merchandising fundamentals were also solid during 2023, especially with a market inverse through the first part of the year, but were negatively impacted from fewer merchandising opportunities in the Middle East and North Africa including losses related to the currency liquidity issues in Egypt. The premium ingredients business also delivered positive results from acquisitions and other recently deployed capital. •The Renewables segment reported income before income taxes of $91.2 million, led by outstanding earnings from strong operations at the Company's ethanol plants. The plants continue to run efficiently with high ethanol yields and favorable ethanol crush margins. The renewable diesel feedstock business continued to grow as it continued to add more products to its portfolio. The results also include an $87.2 million impairment charge and $6.5 million gain on deconsolidation, both related to the ELEMENT ethanol plant. •The Nutrient & Industrial segment reported income before income taxes of $25.0 million. The Ag Supply Chain product line experienced compressed margins in 2023 that were partially offset with increased volumes as nutrient prices moved lower throughout the year providing fewer margin opportunities when compared to 2022. The Specialty Liquids and Engineered Granules product lines fell slightly behind the prior year mainly due to decreased volumes. Summary Incentive Awards Earned Based on these results as well as other measures of our financial performance as discussed in more detail below, NEOs were eligible for 2023 AIP performance payouts that varied from 105% - 172% of their individual Targets, depending on business unit. NEOs were eligible for 200% payouts for both the EPS and TSR performance-based portion of our long-term incentive plans that vested in 2023. More specifically: •All of our NEOs received a payout as part of his or her annual cash bonus based on Company, business unit, and individual performance. •Half of the PSUs granted in 2021 and vesting in early 2024, based on the performance period ended December 31, 2023, were tied to our 3-year cumulative EPS performance. Executives received a 200% payout on these awards as our actual 3-year cumulative EPS was 258% of the Target set for these awards, as discussed in more detail below. •Half of the PSUs granted in 2021 and vesting in early 2024, based on the performance period ended as of December 31, 2023, were tied to our 3-year TSR performance. Executives received a 200% payout on these awards as our actual TSR outperformed the Russell 3000 Index by 26.62%. The graphs below display trends in pretax income, FCF, and ROIC, in each case as calculated and adjusted for purposes of performance targets under the AIP, compared to total AIP payout for the Company’s CEO for each year presented. Each of these targets is a non-GAAP financial measure. Refer to the Executive Compensation Components discussion below for more information as to how each of these performance targets is calculated for purposes of the AIP, as well as Appendix A for a reconciliation to the nearest GAAP financial measure. The following long-term performance and compensation graphs illustrate EPS and relative TSR, in each case as calculated and, in the case of EPS, adjusted for the purposes of performance targets for Performance Share Units (PSU's), and the resulting CEO equity-based compensation from PSUs for the three-year performance periods ending on December 31 for the years presented below. EPS for these purposes is a non-GAAP financial measure. Refer to the Executive Compensation Components discussion below for more information as to how these performance targets are calculated, as well as Appendix A for a reconciliation of EPS for these purposes to the nearest GAAP financial measure. We establish both Threshold and Target levels for our incentives, and cap an individual's formulaic incentive, no matter how extraordinary the performance, at twice the Target incentive. We believe our standards for Threshold and Target levels provide fair and challenging goals based on historical results. For the three-year period ended December 31, 2023, we achieved earnings of $10.37 per diluted share, adjusted for certain items, as noted above, and reconciled to the Consolidated Statements of Operations in Appendix A. The relationship between performance-based pay and pay at risk is strong as evidenced by the graphs of annual and long-term NEO compensation. See the Equity Grants section below for greater detail on the composition of bonus performance targets and thresholds.

  9. Compensation Governance Framework

    Compensation Governance Framework In order to meet the key objectives of our executive compensation program and to mitigate risk from our compensation practices, the Company has adopted a strong corporate governance framework that includes the components described below. •Stock Ownership Guidelines - We have established stock ownership guidelines for our executive officers with target shareholding levels expressed as multiples of base salary to further align the interests of our executives with those of our shareholders. Directors are also subject to ownership guidelines expressed as a multiple of their annual retainer. Refer to our Stock Ownership and Retention Policy for additional information. •Share Retention Requirement - Company officers are required to retain at least 75% of the net shares acquired through incentive awards until their target shareholding level is achieved. Refer to the Stock Ownership and Retention Policy for additional information. •Recoupment Policy - With final rules adopted by the SEC and Nasdaq implementing the requirement of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we have adopted a policy requiring the repayment or “clawback” of the amount erroneously awarded incentive-based compensation in the event that the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. •No Automatic Single-Trigger Vesting - The 2019 Plan does not provide for automatic single-trigger vesting following a change in control. •No Stock Option Re-Pricing - The 2019 Plan does not permit us to reprice stock options without shareholder approval or to grant stock options with an exercise price below fair market value. •Minimum Vesting Period - The 2019 Plan requires a minimum one-year vesting requirement on long-term incentive grants, subjected to limited exceptions. •No Excise Tax Gross-Ups - The Company does not provide tax gross-ups for excise taxes that may be imposed under IRC Section 4999 following a change-in-control or on executive benefits and perquisites during normal employment. •Annual Say on Pay Vote - We value the input of our shareholders and conduct a non-binding vote on our executive compensation policies and practices annually. •No Hedging or Pledging - The Company prohibits the hedging or pledging by an Officer or Director of his/her interest in The Andersons, Inc. stock. “Hedging” is defined by the purchase or sale of derivatives or other financial instruments, most commonly (but not exclusively) futures, put options, and call options on the Company's Common Shares, in order to monetize the stock, or mitigate the risk of stock ownership. “Pledging” is defined as granting the Company's Common Shares as collateral to a creditor as security for a loan or other obligation.

  10. General Principles and Procedures

    General Principles and Procedures Compensation Committee’s Role and Responsibilities The Compensation Committee, which is composed solely of independent directors, reviews all aspects of cash and long-term incentive compensation for executive officers and makes recommendations to the Board pursuant to the Compensation Committee charter, which is reviewed and approved by the Governance / Nominating Committee, and ratified by the Board, annually. The CEO and members of our Human Resources team make initial recommendations to the Compensation Committee and participate in Compensation Committee discussions. In the case of the CEO, compensation is determined by the Compensation Committee, without management present. The Compensation Committee then makes recommendations related to the compensation provided to all executive officers (including the CEO) to the Board for their approval. Compensation Committee Consultants The Compensation Committee is empowered by its charter to retain its own independent legal and compensation consultants, at the Company's expense. In 2023, the Compensation Committee engaged Semler Brossy Consulting Group, LLC ("Semler Brossy") as its own independent advisor to objectively review and make recommendations regarding 1) aspects of our Long-Term Incentive Compensation Plan and equity grants, and 2) Total Direct Compensation for executive officers and non-employee independent directors. Semler Brossy also supports the Compensation Committee in identifying an appropriate peer group for benchmarking executive pay levels and practices, annually providing the Compensation Committee with data on competitive pay levels for the senior executives and the design and calibration of our annual incentive plan, providing the Compensation Committee with regular updates on regulatory and governance considerations, and providing input into the Company's disclosures on executive compensation and other activities. Annually, the Compensation Committee reviews the independence of Semler Brossy based on the NASDAQ listing standards and has determined that Semler Brossy is independent of management. The consultant continued to act as an independent adviser to the Compensation Committee in 2023 regarding Committee matters as well as the 2024 executive compensation program for executive officers and non-employee independent directors. Benchmarking For NEOs, we compare our compensation to that of other companies on an annual basis. For 2023, compensation was benchmarked against public market data from peer company proxies as well as based on data published in annual compensation surveys. Peer group companies are reviewed annually by the Compensation Committee based on the recommendations of Semler Brossy. Peers are selected to best reflect our mix of businesses and economics, such as operating income, market value and operating margin. We do not reference revenue as a factor in assessing our peer group. Our approach to benchmarking combines peer group data from commodities-based businesses with general industry surveys that reflect a smaller revenue scope than our actual revenue. This approach addresses the issue that our commodities-based business may overstate our true peer size and seeks to avoid the upward compensation pressure a peer-group only approach might create. The peer group used for NEO pay decisions in 2023 is comprised of these 16 companies:

  11. General Principles and Procedures

    For 2023 pay decisions, due to the Company's increase in size and market valuations, as well as the sale of the Rail business, the peer group was changed to remove Sanderson Farms, Darling Ingredients, Beacon Roofing Supply, Flowers Foods, SiteOne Landscape Supply and Greenbrier. Our pay strategy is to have Target Total Direct Compensation (sum of base salary, short-term incentive and long-term incentive) aligned with the median of our competitive benchmark if annually established Target levels for Company and business unit pretax income, ROIC and FCF are achieved. While the Compensation Committee referenced the median of market data for each element, as well as the sum of all elements of total compensation when making pay decisions for NEOs, actual and Target pay for each executive may vary from market median based on the Compensation Committee’s assessment of each individual’s skill, experience, performance and other contributions, as well as the overall business context of the Company and year-over-year changes in market pay levels, each assessed by the Compensation Committee in its judgment without any specific weightings or formulas.

  12. Elements of Total Direct Compensation

    | Total Cash Compensation | | | | | Element | Description | Objective | Delivery | | Base Salary | Generally targeted at the median of market benchmarks. | Payment for day-to-day performance of job accountabilities. A market-based range allows for variation based on skills, experience, and performance. | Cash | | Short-term Incentive Compensation – Annual Incentive Plan | Annual incentive opportunity calculated as percentage of base salary. Short-term incentive is based primarily upon the formula as described in Annual Incentive Plan below. A discretionary award may also be awarded by the CEO (or the Compensation Committee in the case of the CEO). At Target performance in 2023, the discretionary amount is 25% of the total incentive bonus Target. Maximum incentive payout for the objective financial measures is two times the individual’s Target, regardless of performance. The discretionary portion is based on a pool that will never exceed two times the collective NEO’s Target amounts. This pool is allocated to each NEO at the discretion of the CEO (or the Compensation Committee for the CEO). | Incentive for annual pretax income, ROIC, FCF performance plus other non-financial objectives. Allocation of discretionary pool based on assessment of overall individual performance and achievement of individual objectives. | Cash |

  13. Elements of Total Direct Compensation

    | Long-term Incentive ("LTI") Compensation | | | | | Element | Description | Objective | Delivery | | Performance Share Units | Grant amount represents half of the NEO’s total LTI Target opportunity; 60% for Mr. Bowe and Mr. Krueger. Vesting of PSUs granted in 2023 was based upon achievement of: 1) targeted cumulative diluted Earnings Per Share (EPS) over the 3-year performance period, and 2) relative TSR over the 3-year performance period. 50% of PSUs are earned based on cumulative EPS and the remaining 50% based on TSR. | Taken together the two equally weighted performance measures used for the PSUs reward an effective balance between consistent year-over-year earnings and shareholder return expectations. The use of TSR strengthens the link between share price growth and long-term compensation. | Conversion of units to Common Shares (if earned) at the end of the three-year performance period and are then subject to the Stock Ownership & Retention Policy. | | Restricted Stock Units | The 2023 grant amount represents half of the NEO's total LTI Target; 40% for Mr. Bowe and Mr. Krueger. | Promotes retention due to the multi-year vesting period. Also creates focus on share price and alignment with shareholders. | Delivery of restricted units at grant date. Units have graded vesting over three years and are then subject to the Stock Ownership & Retention Policy. |

  14. 2023 Executive Compensation Components

    2023 Executive Compensation Components Base Pay Generally, annual increases to base salary for each NEO are determined based upon the NEO’s current salary relative to competitive benchmark information, individual performance and the Company’s plan for overall wage increases. Larger salary increases may occur when promotions or new accountabilities create additional value for a position, benchmark data indicates that an adjustment is necessary to maintain market competitiveness or based upon considerations of internal equity with other similarly situated NEOs. For 2023, the Compensation Committee referenced the median of competitive benchmark information when considering each NEOs competitive salary positioning. The Compensation Committee considers a range of plus or minus 15% from the median of the benchmark information as a competitive target range. The following is a table setting forth NEO annualized base salary and the percentage change from the prior year:

  15. 2023 Executive Compensation Components

    Annual Incentive Plan We believe that our annual incentive plan encourages sound investment decisions, prudent asset management, and profitable business unit and Company performance. Our AIP includes three quantitative metrics, pretax income, return on invested capital and free cash flow, in each case subject to certain adjustments as described below. These metrics were selected to align the efforts of executives with our strategies, our shareholders and to maximize value. The Compensation Committee approves the financial Threshold, Target and Maximum for each of the selected metrics. Thresholds are levels of pretax income, ROIC and FCF that must be achieved before any AIP payment is earned. At Threshold performance, only minimum levels of AIP payments are earned. Targets are the levels of pretax income, ROIC and FCF at which the resulting AIP payment will equal the targeted competitive level of compensation discussed under “Benchmarking” above. Maximums are levels of pretax income, ROIC and FCF at which the Maximum bonus amounts are earned. We establish performance goals at both the individual business unit and total Company level for pretax income and ROIC (depending on the NEO), while FCF is measured only at the overall Company level for all participants. For 2023, pretax income Targets were set at the approved 2023 budget. Thresholds were set at 50% of the Targets. Maximums were set at approximately 172% of Target. ROIC Targets were set at or above business unit and Company planned ROIC (113% for total Company) with Thresholds set at varying percentages of the Target in light of specific business outlook (66% - 75% for business groups, 75% for total Company). The Maximums were set at 129% - 178% of the Targets for the business groups, and 133% for total Company. Lastly, the Company FCF Target represented an amount that was above the consolidated budget. Threshold for FCF was set at 50% of Target. The Maximum was set at 250% of Target. The performance goal ranges between Threshold and Target as well as Target and Maximum are intentionally set with a wide range to recognize the potential volatility of a commodity based business. With the exception of FCF, 2023 Targets were significantly increased from 2022 Targets for all business unit and the total Company; FCF remained the same for 2023. The Compensation Committee believes the 2023 business plan was challenging at the time it was approved and created additional alignment with our short and long-term business plans and strategies. The Compensation Committee retains discretion to consider adjustments to performance results to exclude the impact of unusual or extraordinary transactions that do not reflect the on-going business operations and to avoid unintended incentives for management to make decisions solely on the basis of achieving financial results. The Compensation Committee uses a decision framework for consistency to consider the materiality and facts and circumstances of potential adjustments and has discretion as to which business unit and/or individuals are impacted. The financial goals and results impacting 2023 NEO compensation were as follows:

  16. 2023 Executive Compensation Components

    | (in thousands) | FCF (1) | | | | ROIC (2) | | | | Pretax Income (3) | | | | | Business Unit | Threshold | Target | Maximum | Actual | Threshold | Target | Maximum | Actual | Threshold | Target | Maximum | Actual | | Company | $30,000 | $60,000 | $150,000 | $116,374 | 4.5% | 6.0% | 8.0% | 8.2% | $53,650 | $107,200 | $184,100 | $147,976 | | Nutrient & Industrial | — | — | — | — | 6.5% | 8.7% | 14.0% | 7.7% | 14,500 | 29,000 | 50,000 | 25,735 |

  17. 2023 Executive Compensation Components

    (1)FCF is a non-GAAP measure derived from the Consolidated Statements of Cash Flows and is calculated as Cash provided by (used in) operating activities before changes in operating assets & liabilities, plus proceeds of asset/facility sales; less the following items: purchases of property, plant, equipment and investments, cash dividends, and any impacts from amounts attributable to the noncontrolling interest. See reconciliation tables to the nearest GAAP measure in Appendix A for further information. (2)ROIC is calculated as adjusted pretax income before interest expense and charges for factoring receivables, assuming a statutory blended tax rate of 25%, divided by net invested capital. Adjusted pretax income and ROIC are non-GAAP measures. See reconciliation tables to the nearest GAAP measure in Appendix A for further information. Total adjusted invested capital includes total equity and total debt, less Cash and cash equivalents (as reported on the Consolidated Balance Sheets) and uses a five-quarter rolling average. (3)Reflects "Income (loss) before income taxes attributable to the Company from continuing operations" from the Company's Consolidated Statements of Operations filed in Form 10-K, adjusted for certain expenses. See reconciliation tables in Appendix A for further information. For any individual eligible for AIP incentive awards, including the NEOs, the AIP award is divided into components: three non-discretionary components based upon Company or business unit pretax income, Company or business unit ROIC and Company FCF; and a discretionary component based upon the CEO’s assessment of individual performance (in the case of the CEO, the Compensation Committee’s assessment of CEO's performance). If the Company, as a whole, or an individual business unit, as applicable, exceeds Threshold, the amount available for Company or business unit incentives will be increased proportionately. If Thresholds are not met, no Company or business unit incentives are earned for the non-discretionary portions of AIP which are based on Company or business unit performance, as applicable. While our expectation is that each business unit will achieve at least Threshold performance resulting in at least a minimum Company or business unit incentive, this is not always possible due to the volatility of the Company's industries. The criteria by which each NEO is measured is shown below:

  18. 2023 Executive Compensation Components

    The Compensation Committee considers and approves all NEO AIP incentives, including the discretionary portion attributed to individual performance. For 2023, the pool of dollars available to the CEO for this discretionary portion was based on a combination of business unit and Company pretax income performance, business unit and Company ROIC performance and the Company's FCF performance. The Compensation Committee may elect to fund a minimum amount for the discretionary performance portion of AIP even when the Company or business unit has not achieved Threshold performance. While no amount of funding is assured in this circumstance, if the Compensation Committee determines that some level of award for individual performance is appropriate, it may elect to authorize discretionary funding. As business unit and Company financial metric Thresholds are exceeded, the funding of the discretionary pool increases proportionately. At Target performance, the aggregate pool for discretionary awards is 25% of the total AIP cash bonus pool. The CEO bases his determination for discretionary awards on his assessment of the NEO's business unit and individual performance, unique challenges faced by such NEO's industry, as well as the size of the NEO's Company and business unit-based AIP incentive in light of the challenges and opportunities which may have impacted their ability to achieve Target income levels. The CEO has latitude in awarding discretionary awards to the executive team based on each executive's individual performance and contributions, but each discretionary award recommended by the CEO must be approved by the Compensation Committee. For 2023, the CEO recommended and the Compensation Committee approved discretionary awards for the NEO group, excluding the CEO, which averaged 155% of the Target value for the individual performance component of AIP incentives. In addition to the individual performance efforts of the NEOs, discretionary factors also included safety performance, successful talent management and succession efforts, strategic leadership, strong operational and financial management, execution of merger & acquisition and growth strategy, and employee engagement efforts. The Compensation Committee makes the determination of the individual performance award for the CEO. For 2023, the Compensation Committee considered safety performance, progress and challenges in several areas: financial performance of the business, strategic planning efforts, execution of strategic components through mergers & acquisitions, leadership development and succession planning, proper control and risk management, employee engagement efforts, and other performance items as determined by the Board, in awarding 172% of the discretionary Target value to the CEO. The following table includes AIP payouts (including both formula and discretionary components) and the percentage of the total Target incentive for each of the NEOs:

  19. 2023 Executive Compensation Components

    | | 2023 | | | 2022 | | | Target as a % of Base Salary (1) | | | Payout | Target | % of Target | Payout | Target | % of Target | | | Patrick E. Bowe | $1,720,000 | $1,000,000 | 172% | $1,993,000 | $1,000,000 | 199% | 100% | | Brian A. Valentine | 855,000 | 497,250 | 172% | 990,000 | 497,250 | 199% | 85% | | William E. Krueger (2) | 1,634,000 | 950,000 | 172% | 2,379,110 | 562,500 | 423% | 100% | | Christine M. Castellano | 580,500 | 337,500 | 172% | 672,000 | 337,500 | 199% | 75% | | Joseph E. McNeely | 354,000 | 337,500 | 105% | 593,000 | 337,500 | 176% | 75% |

  20. 2023 Executive Compensation Components

    (1)Amounts are reflective of competitive practices based on peer group benchmarking provided by the Compensation Committee's independent compensation advisor. (2)Mr. Krueger's 2022 Target represents 75% of his original 2022 base salary of $750,000. His base salary was increased in December of 2022 upon his appointment to Chief Operating Officer. Amounts for Mr. Krueger in 2022 also include an additional incentive payment tied to the trading performance of the Trade & Processing business unit. 2023 Equity Grants Equity was issued to our executives in 2023 under the Company’s 2019 Plan in the form of 50% RSUs and 50% PSUs, except for Mr. Bowe and Mr. Krueger who received an LTI grant comprised of 40% RSUs and 60% PSUs. For all executives we target long-term compensation to be an amount on the date of grant which, when combined with base salary and Target bonus, aligns the aggregate Total Direct Compensation to a level that is competitive and reflects each executive's level of experience, skills, and contributions. For the 2023 grants, the NEOs Target LTI value on the date of grant equaled 270% of salary for Mr. Bowe, 200% for Mr. Krueger, 120% of salary for Mr. Valentine and averaged 75% of salary for the remaining NEOs. The methodology for determining the number of units to be granted uses the LTI dollar value for each executive officer approved by the Compensation Committee as of February 16, 2023. The actual number of units granted is based on the average closing price for the month of February with a grant effective date of March 1. This methodology is objective and avoids any recalculation of granted shares due to price volatility between an estimated price and the actual grant date price. We generally approve annual equity awards with consistent timing aligned with the Compensation Committee's first regular meeting each year. We may also issue grants of equity-based compensation to executives who join the Company during the year, but do not generally issue equity compensation to non-executive employees outside of the annual grant. The following are the Target compensation values for the equity grants made to NEOs:

  21. 2023 Executive Compensation Components

    (1) Mr. Krueger's 2022 Target compensation value for equity grants represents 75% of his original 2022 base salary of $750,000. His base salary was increased in December of 2022 upon his appointment to Chief Operating Officer, and his 2023 Target compensation for equity grants was increased to 200% of his base salary for 2023. Restricted Share Units RSUs promote retention and alignment with shareholder interests by tying executive compensation to the price of the Company's Common Shares. The 2023 RSUs vest in three installments, in the amount of one-third per year starting on March 1 following the year of grant and annually thereafter until fully vested. Dividends on awarded RSUs are delivered in the form of additional shares as restrictions lapse equivalent to the dollar value of dividends attributable to the number of shares vested. Performance Share Units PSUs deliver Company stock based on the achievement of specific earnings-based goals and stock price appreciation goals. PSUs granted in 2023 have a three-year performance period and are earned based on: 1) cumulative EPS and 2) relative TSR. The number of PSUs available for issuance at Target performance is based on 50% of the NEO's Targeted LTI value, except for Mr. Bowe and Mr. Krueger whose PSUs available for issuance at Target performance is 60% of the Targeted LTI value. The cumulative EPS and TSR results for the performance period determine how many underlying shares are actually issued. The PSUs granted are based 50% on cumulative EPS and 50% on TSR. Unlike restricted stock, which requires only continued service to be earned by the executive, the PSUs are only earned when the Company achieves targets that emphasize the Company’s pay-for-performance philosophy. Dividends on awarded PSUs are delivered in the form of additional shares at the end of the performance period but only equivalent to the value of dividends on the number of shares ultimately earned and delivered. In determining cumulative EPS Threshold, Target, and Maximum performance levels, the Compensation Committee considers short and long-term business goals at the time of grant. The Compensation Committee also considers related factors, including recent EPS performance, and economic and industry conditions that may impact cumulative EPS performance. These levels of achievement are based on the cumulative EPS plan for the year the grant is made plus a target growth component for the next two years. For the 2023 grant, we based year two performance on a 34% growth in EPS and a 7% growth was applied to year two EPS to set year three’s Target. The Compensation Committee reviews and approves these criteria in advance of the grant. Threshold goals are a floor, so that performance below “Threshold” results in no cumulative EPS-based PSU award delivery. Threshold goals are set at a level equal to minimally acceptable performance. Target goals are then set at a level which would be challenging but reasonably achievable under normal market conditions. In order to achieve the Maximum PSU award, exceptional cumulative EPS results must be achieved over the performance period. As noted previously, a downturn in agriculture significantly impacted our ability to achieve short and long-term objectives used to deliver incentive compensation from 2016-2020; this began to change in 2021 with higher product demand and global supply constraints. Cumulative EPS for LTI grants may be adjusted for unusual or non-recurring items. The cumulative EPS used for executive compensation is a non-GAAP measure, see Appendix A for a reconciliation to Diluted earnings per share from continuing operations attributable to The Andersons, Inc. shareholders within the Statement of Operations on form 10-K. The following table displays Threshold, Target and Maximum achievement levels for the EPS-based PSUs with performance periods ending over the most recent three years:

  22. 2023 Executive Compensation Components

    | Cumulative Diluted Earnings Per Share | Threshold | Target (1) | Maximum (2) | Actual (3) | Percent of Target PSU Value Earned | | 3 years ended 2023 | $2.87 | $4.02 | $4.92 | $10.37 | 200% | | 3 years ended 2022 | 2.99 | 4.66 | 6.78 | 7.46 | 200% | | 3 years ended 2021 | 4.47 | 6.97 | 10.14 | 5.55 | 56% |

  23. 2023 Executive Compensation Components

    | | | Vested PSU Payout Percent | | | Goal Achievement | Company's 3-Year Annualized TSR Relative to Comparator Group | % of Target PSUs if Company TSR is Positive | % of Target PSUs if Company TSR is Negative | | Maximum | +18 percentage points or more above Target | 200% | 100% | | Above Target | For every +1 percentage points Company TSR is above Target | 100% plus 5.56% of Target | 100% | | Target | Comparator Group's Annualized TSR | 100% | 100% | | Below Target | For every -1 percentage points Company TSR is below Comparator Group | 100% less 5% of Target | 100% less 5% of Target | | Threshold | -12 percentage points below Comparator Group | 40% | 40% | | Below Threshold | More than -12 percentage points below Comparator Group | 0% | 0% |

  24. 2023 Executive Compensation Components

    An average of December closing prices preceding the performance period is used to establish the starting price of the Company's Common Shares and the Russell 3000 Index price for the 3-year performance period. The average closing prices in the final December of the three year performance period is used to determine actual performance. Pre-established averaging periods are used to alleviate market timing and volatility concerns. We believe the use of the equity awards described above creates long-term incentives that balance the goals of growing stock price and strong Company earnings. The TSR award for the 2021-2023 performance period used the same performance targets as outlined above for the awards made in 2023. Below are TSR-based PSU performance results for the three-year period ending in 2023:

  25. 2023 Executive Compensation Components

    | Relative TSR | Company Actual TSR 2021 - 2023 | Russell 3000 Index | Difference | Percent of Target PSU Value Earned | | 3 years ended 2023 | 35.06% | 8.44% | 26.62% | 200.00% |

  26. 2023 Executive Compensation Components

    Beginning in 2024, we will change our PSU structure to a single EPS metric with TSR as a modifier to the overall PSU award. Similar to the current EPS design, the PSUs will be based on cumulative EPS, performance is measured against pre-established 3-year Threshold, Target, and Maximum levels of achievement for 3-year cumulative EPS. These levels of achievement are based on the cumulative EPS plan for the year the grant is made plus a target growth component for the next two years. The TSR modifier will use a percentile-rank design and a custom agribusiness peer group that will be approved annually by the Compensation Committee. The agribusiness peer group will ensure we are measured against the performance of others directly within our primary industry. Other Considerations As a publicly traded company, we are subject to Section 162(m). Section 162(m) of the Internal Revenue Code precludes the Company from taking a federal income tax deduction for compensation paid in excess of $1 million to our “covered employees”, including our NEOs, as defined under Section 162(m). The Compensation Committee considers tax deductibility to be an important, but not the sole, or primary, consideration in setting executive compensation. Because the Compensation Committee also recognizes the need to maintain flexibility to make compensation decisions when necessary to enable the Company to continue to attract, retain, and motivate talented executive officers, it reserves the authority to approve non-deductible compensation. Stock Ownership and Retention Policy Our Board has adopted a Stock Ownership and Retention Policy ("Ownership Policy") that applies to NEOs, other officers and directors who receive equity compensation. The Ownership Policy is intended to align the interests of directors and officers with the interests of the Company’s shareholders by ensuring significant levels of the Company's Common Shares are maintained throughout their careers. Our Ownership Policy specifies a target ownership level expressed as a multiple of base salary. The salary multiple varies by position for the Company's officers. Company officers and directors are required to retain at least 75% of the net shares acquired through equity awards until their guideline ownership level is achieved. The target ownership levels for the NEOs are as follows:

  27. 2023 Executive Compensation Components

    The Company prohibits hedging activities on Company stock by its officers and directors, as well as the pledging of shares as described in Compensation Governance Framework. In 2022, the Compensation Committee eliminated the ability of participants to reduce their ownership requirements when approaching retirement. This reduction began at two years from retirement and dropped the target ownership level by one-third and by another one-third at one year from normal retirement age. “Retirement” is defined as a termination of employment on or after the date that the participant has attained the age of sixty (60) and has had at least five (5) years of continuous employment with the Company, or any subsidiary. Beginning in 2022, this reduction no longer applies to participants with the exception of Mr. Bowe who was the only participant to have reached the definition of "retirement" at the time this policy revision was approved. Compensation Recoupment Policy In 2023, we adopted a compensation recoupment policy consistent with the final rules adopted by the SEC and Nasdaq implementing the requirement of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the policy, our executive officers are subject to recoupment of the amount of erroneously awarded incentive-based compensation in the event that the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Post-Termination Compensation/Retirement Programs Our overall retirement philosophy is to provide plans that are competitive, cost effective and work together with Social Security and employee savings to provide meaningful retirement benefits. We offer two separate retirement programs: •Retirement Savings Investment Plan ("401(k) Plan")—promotes employee savings for retirement, with the Company matching a portion of the savings and non-elective contributions for participants. For 2023, all NEOs are eligible for a performance-based contribution of up to 5%. The actual performance-based contribution for 2023 was 5%. •Deferred Compensation Plan ("DCP")—works in conjunction with the 401(k) Plan to provide additional elective deferral opportunities to key employees that would otherwise be limited due to statutory rules. Employment Agreements and Severance Patrick E. Bowe In connection with position as CEO, Mr. Bowe's executive employment agreement is for an indefinite term, subject to termination at any time by the Company or Mr. Bowe. For a period of twenty-four months (thirty-six months in the event of a change-in-control) following his termination of employment, Mr. Bowe is prohibited from competing against the Company, soliciting its customers or employees, and working for a competitor. Mr. Bowe has also agreed that he will not disclose the Company’s confidential information. Other Executives We have entered into agreements with our NEOs that require us to provide compensation to them in the event of certain qualifying non-elective terminations of employment. For qualifying terminations, other than in connection with a change in control of the Company, the agreements provide that the NEOs will receive cash severance equal to their annual base salary and their annual cash bonus at Target. For qualifying terminations in connection with a change in control of the Company, the agreements provide that the NEOs will receive cash severance equal to two times their annual base salary and their annual cash bonus at Target. Certain vesting periods under the 2019 Plan may accelerate under certain termination and change in control situations, as more fully described below in Termination / Change in Control Payments. The agreements also provide for a lump sum premium subsidy for the continuation of health care benefits for the duration of the severance period. The agreements are intended to help assure continuation of management during potential change of control situations, and to assist in recruiting and retention of key executives. In addition, the 2019 Plan does not provide for automatic single-trigger vesting upon a Change in Control. Perquisites Other than executive officer physicals, there are no other significant perquisites, unusual reimbursements or non-cash rewards (other than equity). Summary Compensation Table The table below summarizes the total compensation paid or earned by each of the NEOs for the fiscal years ended December 31, 2023, 2022 and 2021.

  28. 2023 Executive Compensation Components

    | Name and Position (1) | Year | Salary (2) | Bonus (3) | Stock Awards (4) | Option Awards (5) | Non-Equity Incentive Plan Compensation (6) | Change in Pension Value & Nonqualified Deferred Compensation Earnings | All Other Compensation (7) | Total | | (a) | (b) | (c)($) | (d)($) | (e)($) | (f)($) | (g)($) | (h)($) | (i)($) | (j)($) | | Patrick E. Bowe President and Chief Executive Officer | 2023 | 1,000,000 | — | 3,468,141 | 5,151 | 1,720,000 | — | 633,200 | 6,826,492 | | | 2022 | 992,308 | — | 3,512,116 | 3,528 | 1,993,000 | — | 208,541 | 6,709,493 | | | 2021 | 960,000 | — | 2,849,435 | 6,338 | 1,846,000 | — | 105,126 | 5,766,899 | | Brian A. Valentine Executive Vice President, Chief Financial Officer | 2023 | 585,000 | — | 882,307 | — | 855,000 | — | 230,236 | 2,552,543 | | | 2022 | 583,077 | — | 893,339 | — | 990,000 | — | 96,941 | 2,563,357 | | | 2021 | 481,154 | — | 622,691 | — | 825,000 | — | 52,091 | 1,980,936 | | William E. Krueger Chief Operating Officer | 2023 | 950,000 | — | 2,440,548 | — | 1,634,000 | — | 322,040 | 5,346,588 | | | 2022 | 760,192 | — | 715,825 | — | 2,379,110 | — | 253,155 | 4,108,282 | | | 2021 | 600,000 | — | 469,166 | — | 1,750,000 | — | 120,388 | 2,939,554 | | Christine M. Castellano Executive Vice President, General Counsel & Corporate Secretary | 2023 | 450,000 | — | 424,186 | — | 580,500 | — | 160,948 | 1,615,634 | | | 2022 | 449,039 | — | 429,442 | — | 672,000 | — | 72,382 | 1,622,863 | | | 2021 | 400,000 | — | 312,796 | — | 600,000 | — | 31,408 | 1,344,204 | | Joseph E. McNeely President, Nutrient and Industrial | 2023 | 450,000 | — | 424,186 | 5,151 | 354,000 | — | 156,657 | 1,389,994 | | | 2022 | 450,000 | 50,000 | 429,442 | 3,528 | 593,000 | — | 99,575 | 1,625,545 | | | 2021 | 417,308 | 200,000 | 398,214 | 6,338 | 627,000 | — | 52,729 | 1,701,589 |

  29. Director Compensation

    Director Compensation The following description of director compensation reflects the program in place for 2023. Director compensation is reviewed regularly and compared to the proxy information from the same peer companies used for executive compensation. Directors who are not employees of the Company receive an annual retainer of $80,000. Committee Chairpersons each receive an additional retainer as follows: Audit Committee, $15,000 annually; Compensation Committee, $12,750 annually; and all other Committees, $10,000 annually. The Lead Director also receives a $15,000 annual retainer. The Board Chair receives a $70,000 annual retainer. Directors may elect to receive their retainers in cash or Common Shares. Committee members receive an additional retainer as follows: Audit Committee, $10,000 annually; Compensation Committee, $7,500 annually; and all other Committees $5,000 annually. Additional compensation may be paid to individual directors for work requiring time and effort beyond what is normally expected to prepare for and attend Board and Committee meetings including orientation for new directors and special projects. Directors are paid their retainers on a quarterly basis and are not compensated for individual Board or Committee meetings. Directors receive an annual equity grant of RSUs, other than Michael J. Anderson, Sr., who received an equivalent amount of cash. The value of annual grants for 2023 was $130,000. Director grants of RSUs will fully vest after one year from date of grant. Directors appointed between annual meeting dates receive a prorated equity grant. Patrick E. Bowe was the only employee director during 2023. He received no additional compensation for his directorship.

  30. Director Compensation

    | | Fees earned or paid in cash | Stock awards (1)(2)(3) | Total | | (a) | (b)($) | (c)($) | (d)($) | | Gerard M. Anderson (2) | 90,000 | 116,993 | 206,993 | | Michael J. Anderson, Sr. | 280,000 | — | 280,000 | | Steven K. Campbell (2) | 85,000 | 115,751 | 200,751 | | Gary A. Douglas (2)(3) | 75,000 | 139,503 | 214,503 | | Stephen F. Dowdle (2)(4) | 22,500 | 1,780 | 24,280 | | Pamela S. Hershberger (2) | 110,625 | 116,993 | 227,618 | | Catherine M. Kilbane (2) | 120,000 | 116,993 | 236,993 | | Robert J. King, Jr. (2) | 102,500 | 116,993 | 219,493 | | Ross W. Manire (2) | 110,250 | 116,993 | 227,243 | | John T. Stout, Jr. (2) | 92,500 | 116,993 | 209,493 |

  31. Director Compensation

    (1)RSUs were granted to all directors, except Michael J. Anderson, Sr. and Stephen F. Dowdle, on May 5, 2023 and are valued at $37.48 per share, the closing price on the date of issuance. (2)RSU dividend equivalent shares were granted on May 5, 2023 and are valued at $36.77 per share, the closing price on the date prior to issuance. (3)Mr. Douglas made the election to receive Common Shares in lieu of his retainer fees for a portion of 2023. All of these shares are fully vested. For purposes of determining the number of shares to be issued in lieu of such fees, the shares are valued at the closing price on the date prior to issuance. (4)Mr. Dowdle did not stand for re-election in May 2023, as he had reached the Board's mandatory retirement age of 72. Outstanding equity awards for non-employee directors and former directors at December 31, 2023, are as follows:

  32. Director Compensation

    | Name | Outstanding Restricted Stock Units (#) | | Gerard M. Anderson | 3,074 | | Steven K. Campbell | 3,074 | | Gary A. Douglas | 3,074 | | Pamela S. Hershberger | 3,074 | | Catherine M. Kilbane | 3,074 | | Robert J. King, Jr. | 3,074 | | Ross W. Manire | 3,074 | | John T. Stout, Jr. | 3,074 |

  33. CEO Pay Ratio

    CEO Pay Ratio We identified the median employee by examining 2021/2022 eligible compensation under the Company’s qualified and non-qualified retirement benefit plans (“Retirement Benefit Eligible Compensation”) for all individuals, excluding our CEO, who were employed by the Company on November 15, 2022. We believe the use of Retirement Benefit Eligible Compensation for all employees is a consistently applied compensation measure because it takes into account base pay for all employees, hours worked and overtime for hourly employees, plus bonuses, and because this measurement excludes equity awards which the Company does not widely distribute to employees. Approximately 3.7% of our employees receive annual equity awards. It is important to note that Retirement Benefit Eligible Compensation was calculated and used for all employees, including those who were not actively contributing or not eligible to contribute to a retirement benefit account for the pay periods completed during the twelve month period from November 16, 2021 to November 15, 2022. Except for one (1) Singapore, twelve (12) United Kingdom, four (4) Mexico, and twenty-two (22) Switzerland employees out of a total population of 2,283 employees, which was considered a de minimis number of non-US employees, we included all employees, whether employed on a full-time, part time, seasonal, or temporary basis. We did not make any assumptions, adjustments or estimates with respect to Retirement Benefit Eligible Compensation, but we did annualize such compensation for any full-time and part time employees that were not employed by the Company for the full twelve month period from November 16, 2021 to November 15, 2022. We have calculated the annual total compensation for the median employee using the same methodology we use for our CEO as set forth in the Summary Compensation Table. We also included amounts for Company paid non-discriminatory benefits for both the median employee and CEO in the total compensation calculations. Benefit values were based on the elections of the CEO and the median employee in effect on November 15, 2023, in addition to the value of other non-elective benefit coverages. The 2023 annual total compensation of our CEO was $6,840,619, the 2023 annual total compensation of our median compensated employee was $88,604; and the ratio of these amounts is 77 to 1. We believe this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Exchange Act of 1934.

  34. Pay vs. Performance Disclosures

    Pay vs. Performance Disclosures

  35. Pay vs. Performance Disclosures

    | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs | Total Shareholder Return | Peer Group Total Shareholder Return | Net Income (Loss) (in thousands) | Adjusted Pretax Income (in thousands) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $6,826,492 | $14,853,950 | $2,726,190 | $4,017,469 | $251 | $158 | $132,529 | $147,976 | | 2022 | 6,709,493 | 6,928,966 | 2,480,012 | 2,465,395 | 150 | 184 | 166,979 | 175,491 | | 2021 | 5,766,899 | 11,692,450 | 1,991,571 | 2,971,502 | 163 | 160 | 135,866 | 132,371 | | 2020 | 3,752,735 | 3,007,429 | 1,190,140 | 1,091,568 | 101 | 108 | (14,215) | 10,635 |

  36. Pay vs. Performance Disclosures

    Column (b). Reflects compensation amounts reported in the Summary Compensation Table for our Principal Executive Officer ("PEO") - CEO, Patrick E. Bowe, for the respective years shown. Column (c). Compensation actually paid ("CAP") to our CEO in 2023, 2022, 2021 and 2020 reflects the respective amounts set forth in column (b) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules. For information regarding the decisions made by our Compensation Committee in regards to the CEO’s compensation for each fiscal year, please see the Compensation Discussion & Analysis section of the proxy statements reporting pay for the fiscal years covered in the table above.

  37. Pay vs. Performance Disclosures

    | PEO | 2023 | 2022 | 2021 | 2020 | | Summary Compensation Table ("SCT") Total Compensation | $6,826,492 | $6,709,493 | $5,766,899 | $3,752,735 | | Grant Date Fair Value of Stock Awards from SCT | (3,468,141) | (3,512,116) | (2,849,435) | (2,214,057) | | Fair Value of Equity Awards Granted in the Year and Unvested as of Year End | 4,383,523 | 3,403,594 | 5,496,886 | 2,333,253 | | Change in Fair Value of Outstanding and Unvested Equity Awards, Year Over Year | 5,742,156 | 331,078 | 3,278,100 | (864,502) | | Change in Fair Value of Equity Awards Vested, Granted in a Previous Year | 1,369,920 | (3,083) | — | — | | Compensation Actually Paid | $14,853,950 | $6,928,966 | $11,692,450 | $3,007,429 |

  38. Pay vs. Performance Disclosures

    Column (d). The following non-CEO named executive officers are included in the average figures shown: ◦2023, 2022 and 2021: Brian A. Valentine, William E. Krueger, Christine M. Castellano and Joseph E. McNeely ◦2020: Brian A. Valentine, William E. Krueger, Christine M. Castellano, Joseph E. McNeely, Valerie M. Blanchett and Jeffrey C. Blair Column (e). Average “compensation actually paid” for our non-CEO NEOs in 2023, 2022, 2021 and 2020 reflects the respective amounts set forth in column (d) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules. For information regarding the decisions made by our Compensation Committee in regards to the non-CEO NEOs’ compensation for each fiscal year, see the Compensation Discussion & Analysis section of the proxy statements reporting pay for the fiscal years covered in the table above.

  39. Pay vs. Performance Disclosures

    | Non-PEO NEOs | 2023 | 2022 | 2021 | 2020 | | SCT Total Compensation | $2,726,190 | $2,480,012 | $1,991,571 | $1,190,140 | | Grant Date Fair Value of Stock Awards from SCT | (1,042,807) | (617,012) | (450,717) | (321,067) | | Fair Value of Equity Awards Granted in the Year and Unvested as of Year End | 1,317,137 | 581,148 | 825,760 | 314,288 | | Change in Fair Value of Outstanding and Unvested Equity Awards, Year Over Year | 839,044 | 21,550 | 602,952 | (57,654) | | Change in Fair Value of Equity Awards Vested, Granted in a Previous Year | 177,905 | (303) | 1,936 | (34,139) | | Compensation Actually Paid | $4,017,469 | $2,465,395 | $2,971,502 | $1,091,568 |

  40. Pay vs. Performance Disclosures

    Column (f). For the relevant fiscal year, represents the cumulative total shareholder return of The Andersons, Inc. for the measurement periods ending December 31, 2023, 2022, 2021, and 2020, respectively. Column (g). For the relevant fiscal year, represents the cumulative TSR of the Peer Group Index disclosed in Item 5 of the Company's Annual Report on Form 10-K for the measurement periods ending December 31, 2023, 2022, 2021, and 2020, respectively. The Peer Group Index, weighted for market capitalization, consists of the following companies: Archer-Daniels-Midland Co., Alto Ingredients, Inc., Bunge Global SA, Green Plains, Inc., Ingredion Incorporated, and Nutrien Ltd. Column (h). "Net Income (Loss)" is reported in the Consolidated Statements of Operations in the Company's Annual Report on Form 10-K for each of the years ended December 31, 2023, 2022, 2021 and 2020. Column (i). "Adjusted Pretax Income" is a non-GAAP measure that reflects "Income (loss) before income taxes from continuing operations" from the Company's Consolidated Statements of Operations filed in Form 10-K, adjusted for certain items. For a reconciliation of this number to the nearest GAAP measure, see Appendix A.

  41. Relationship Between Compensation Actually Paid and Performance Measures

    Relationship Between Compensation Actually Paid and Performance Measures a.Total Shareholder Return (TSR): The relationship between CAP and TSR for the years ended December 31, 2023, 2022, 2021 and 2020 is displayed in the graph below: b.Net Income (Loss): The relationship between CAP and Net Income (Loss) for the years ended December 31, 2023, 2022, 2021 and 2020 is displayed in the graph below: c.Adjusted Pretax Income: The relationship between CAP and Adjusted Pretax Income for the years ended December 31, 2023, 2022, 2021, and 2020 is displayed in the graph below: The following chart assumes a $100 investment in both The Andersons, Inc. Common Shares and the Peer Group Index on December 31, 2019. The chart depicts the relationship between the Company’s TSR and the TSR of the Peer Group Index for the periods presented: