DEF 14A of American Vanguard Corp, Apr 25, 2024

DEF 14A of American Vanguard Corp

Filed Apr 25, 2024 · FY20230000950170-24-048460

Open on EDGAR

  1. How many votes must the director nominees receive to be elected?

    How many votes must the director nominees receive to be elected? A nominee for director shall be elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. In other words, those nominees for whom the number of shares voted “FOR” exceeds the number of shares voted “AGAINST” will be elected. There is no cumulative voting for the Company’s directors. Further, abstentions and broker non-votes will not be taken into account in determining the outcome of the election of directors. The Nominating and Corporate Governance Committee (“N&CG Committee”) has established procedures under which any director who is not so elected shall offer to tender his or her resignation to the Board. The N&CG Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the results.

  2. NOMINEES FOR ELECTION AS DIRECTORS—QUALIFICATIONS, EXPERIENCE AND COMPETENCIES

    NOMINEES FOR ELECTION AS DIRECTORS—QUALIFICATIONS, EXPERIENCE AND COMPETENCIES The following sets forth the names and certain information with respect to the persons nominated for election as directors. All such nominees have consented to serve and are currently directors. Eight of the nine nominees were elected by the stockholders at the 2023 Annual Meeting of Stockholders. Following summary information on the experience of each nominee we have included a matrix that outlines the key skills and competencies of all nominees. Marisol Angelini, age 62, was elected to the Board in December 2021. Experience: Ms. Angelini is a senior leader with over 30 years of experience in global consumer product companies, focusing on growing and transforming businesses. During her career at The Coca-Cola Company, she served as CMO (Central and Eastern Europe, Mexico and Brazil), VP of Global Tea/Water categories, and General Manager of Glaceau Smartwater. Prior to that, Ms. Angelini led personal care, household cleaners, oral care, and paper businesses, which she ran while working for Procter & Gamble in Latin America. She has been involved in multiple acquisitions within P&G and Coca-Cola and has been instrumental in sourcing, integrating and making these businesses profitable. She has board experience in public, private and non-profit companies and is a certified board director. She served on the board of Bush’s Brothers (a $1 billion family company) and is also a member of NACD (National Association of Corporate Directors), which is dedicated toward director education and best practices for public company boards. Ms. Angelini holds an MBA from Mercer University in Atlanta and a BA from Georgia State University. Ms. Angelini’s experience in the food sector (which is our ultimate customer), LATAM, marketing, new product launching, and governance are all valuable traits for our board of directors. Dr. Mark R. Bassett, age 63, was elected to the Board in June 2022. Experience: Dr. Bassett brings strong operational expertise and a continuous improvement mindset. He has a long and accomplished history over the last 30 years of building and growing chemical businesses. Until December 31, 2021, Dr. Bassett was the Chairman and CEO of Hemlock Semiconductor (HSC). The leadership of The Dow Chemical Company (NYSE: DOW) selected him to manage the transition of HSC to becoming a standalone company of approximately $1 billion in revenue and roughly 1,200 of employees. HSC is a leading provider of ultra-pure polycrystalline silicon and other silicon-based products used in the manufacture of semiconductor devices, solar cells and modules. Prior to leading HSC, from 2012-2016 he was a global VP, Polyurethanes at The Dow Chemical Company responsible for a multi-billion dollar global P&L with over 2000 associates at over 35 sites globally. From 2009-2012, he led the formation of Dow Oxygenated Solvents which consolidated three separate businesses into a multi-billion dollar portfolio with 10 sites and approximately 500 employees. He graduated magna cum laude from Notre Dame with a B.S. in Chemical Engineering and holds an M.S. and Ph.D in Chemical Engineering from the University of Virginia. He was selected as a National Science Foundation post-doctoral fellow. Scott D. Baskin, age 70, was elected to the Board in January 2014. • Experience: Mr. Baskin has extensive experience as a litigator arising from his 35-year career with the law firm of Irell & Manella, from which he retired at the end of 2013. During his tenure at Irell & Manella, Mr. Baskin concentrated his practice on intellectual property, technology, real estate, business torts and securities actions for a multitude of corporate clients. A frequent lecturer and writer, he has published many articles on intellectual property rights, patent infringement, trial preparation and discovery. He was an assistant instructor at Yale Law School and clerked for Hon. Y. C. Choy, United States Court of Appeals for the Ninth Circuit. Mr. Baskin holds a B.A. in Political Science and History from Stanford University and a J.D. from Yale Law School. Mr. Baskin brings legal acumen and extensive experience in intellectual property matters, which complement the Company’s commitment to technology innovation. Dr. Debra F. Edwards, age 70, was elected to the Board in 2011. • Experience: Dr. Edwards has over 40 years of experience specializing in pesticide residue chemistry, human health risk assessment, human health and ecological risk management, registration, reregistration and regulatory policy development. The majority of her career has been spent in leading large scientific and regulatory organizations within the United States Environmental Protection Agency (“USEPA”), culminating in her serving as Director of the Office of Pesticide Programs. Except for a two-year stint in Guatemala as an agricultural extension volunteer in the United States Peace Corps (1997-1999), Dr. Edwards worked for the USEPA from 1985 until 2010. For the following 11 years after her retirement from the USEPA, Dr. Edwards worked as an independent consultant specializing in global regulatory strategy for pesticides and biocides. Her clients included the USDA’s Foreign Agricultural Service, the FDA’s Center for Food Safety and Applied Nutrition, pesticide industry task forces and trade associations, food crop trade associations, and individual pesticide and biocide companies. Dr. Edwards graduated Phi Beta Kappa with a B.Sc. in Botany from Miami University (Ohio), received M.Sc. and Ph.D. degrees in Plant Pathology from the Ohio State University, and completed a Postdoctoral research appointment at the USDA’s Pesticide Degradation Laboratory in Beltsville, MD. She has been the recipient of numerous academic and professional honors, including the Presidential Rank Award for Meritorious Service as a Senior Executive of the USEPA, and has published and made presentations in national and international fora on pesticide regulation, food safety and integrated pest management. Patrick E. Gottschalk, age 61, was elected to the Board in June 2022. Experience: Mr. Gottschalk is a leader with significant operational experience who helps executives develop and implement strategic goals. He served as Chairman and CEO of Union Carbide from 2007 until 2012. Most recently Mr. Gottschalk served as President of Coatings, Monomers and Additives, a multi-billion dollar business within The Dow Chemical Company (NYSE: DOW), which is a chemicals manufacturer, and served in this capacity from 2012 until 2016. Mr. Gottschalk currently serves as a director of the Superior Plus Corporation, which is a publicly listed corporation on the Toronto stock exchange (TSX: SPB). He received a BS in Chemical Engineering from the University of Texas and an MBA from Pepperdine University. Emer Gunter, age 63, was elected to the Board in 2019.

  3. NOMINEES FOR ELECTION AS DIRECTORS—QUALIFICATIONS, EXPERIENCE AND COMPETENCIES

    Experience: Ms. Gunter joined the Board after a 34 year career at Monsanto, during which she served as Director of Manufacturing for Latin America (overseeing 20 plants), Asia Pacific (overseeing 15 plants) and, ultimately, as Vice President of Environmental, Safety and Health. During that time, she led multiple initiatives in various countries relating to process optimization, de-bottlenecking, quality, cost reliability, ESH (environmental, safety and health), six sigma, factory automation, succession planning and new facility construction. She also served as a member of the Manufacturing Leadership Team and Monsanto Advisory Council, where she operationalized human rights initiatives, influenced ESH throughout the culture and led a step-change in contractor and employee safety performance, reducing the number of recordables by half, while the company doubled in size. Ms. Gunter’s extensive expertise in manufacturing, international business operations and ESH make her a valuable resource to the Company, which has a long history in manufacturing, and is committed to the principles of sustainability. Steven D. Macicek, age 66, was elected to the Board in March 2024. • Experience: Mr. Macicek joined the Board in March 2024 and was appointed to the position of Chair of the Audit Committee following the retirement of Morton D. Erlich. Mr. Macicek formerly served in positions of increasing responsibility at Ernst & Young from 2002-2019, as Global Service Partner, as as as serving as Energy Services Market Leader, Member of the Southwest Region Advisory Forum, Leader of the Center for Board Matters (Southwest Region). Prior to that time, he held positions of increasing responsibility at Arthur Andersen, LLP from 1980-2002. Throughout his career, Mr. Macicek has provided audit, tax and advisory services to numerous corporate clients, including high-growth mid-caps and large multinationals across multiple industries, including, distribution, manufacturing, construction, engineering, oil and gas, energy services and software. He is an audit committee financial expert, a Certified Public Accountant and has advised numerous boards and C-suite executives on complex accounting and business issues. Keith M. Rosenbloom, age 55, was elected to the Board in June 2022. • Experience: Mr. Rosenbloom has over 30 years of public and private investing experience. He is committed to helping AVD create long-term shareholder value by improving its asset allocation paradigm, corporate finance analysis, capital markets credibility and focus on improving long-term stakeholder returns. Mr. Rosenbloom is the co-founder of Cruiser Capital Advisors, LLC, which acts as the investment advisor to pooled investment vehicles on a discretionary basis. Over the past eight years, Mr. Rosenbloom has helped the boards of public companies such as A. Schulman (formerly NASDAQ: SHLM), Ashland Global (NYSE: ASH) and Dow Chemical (NYSE: DOW), add highly qualified members to their boardrooms, seeking to improve stockholder value at those companies. Mr. Rosenbloom also serves on a number of charitable boards including, Hillel International (Board of Governors), and Hatzalah (Israel's private EMT service). Mr. Rosenbloom graduated cum laude from Yale University. Eric G. Wintemute, age 68, was elected to the Board in June 1994. Experience: Mr. Wintemute served as President and Chief Executive Officer (“CEO”) from July 1994 until June 2011, and Chairman and CEO since June 2011. With 27 years’ experience on this Board, 42 years’ experience at the Company (27 years as CEO) and membership in leading crop protection trade groups (current member of the board of directors, executive committee and past chairman of CropLife America), Mr. Wintemute brings a broad industry perspective to the Board. From 2013 until 2018, Mr. Wintemute served as a member of the board of directors of TyraTech, Inc., during which time it was a publicly traded company on the London Stock Exchange. TyraTech, Inc. was acquired by the Company in November 2018 and delisted at that time. His interaction with the heads of the Company’s peers, suppliers and customers; legislators; and enforcement authorities has enabled him to identify economic, technological and political trends affecting the Company. As indicated in the table below, our director nominees collectively possess a wide-range of key skills and competencies that provide a strong foundation for strategic oversight, risk management, corporate governance and practical business decision making. We believe that such individuals are qualified to serve on our Board in light of these skills and competencies, among others.

  4. NOMINEES FOR ELECTION AS DIRECTORS—QUALIFICATIONS, EXPERIENCE AND COMPETENCIES

    | Key Skills/Competencies | Angelini | Baskin | Bassett | Edwards | Gottschalk | Gunter | Macicek | Rosenbloom | Wintemute | | Agribusiness | ● | | | ● | | ● | | | ● | | C-Suite / Senior Mgt. | ● | ● | ● | ● | ● | ● | | | ● | | Cybersecurity/IT | | | | | ● | | | | | | Diversity | ● | | | ● | | ● | | | | | ESG/Sustainability | ● | | | ● | | ● | | | | | Financial Expert/Literate | ● | ● | | | ● | | ● | ● | | | Global | ● | | ● | ● | ● | ● | | | ● | | Gov't/Regulatory | | ● | | ● | | | | | ● | | Human Capital | ● | | ● | ● | ● | ● | ● | | ● | | Merger and Acquisition | ● | ● | ● | | ● | | | ● | ● | | Operational Excellence | | | ● | ● | ● | ● | | | ● | | Supply Chain | | | ● | | ● | ● | | | ● | | Strategy | ● | ● | ● | ● | ● | ● | ● | ● | ● | | Transformation | ● | | ● | | ● | | | | |

  5. NOMINEES FOR ELECTION AS DIRECTORS—QUALIFICATIONS, EXPERIENCE AND COMPETENCIES

    Key to skills matrix: Agribusiness – 10+ years in Agriculture, Food or Agrochemical business; C-Suite/Senior Management – 10+ years; Cybersecurity/IT – oversaw digital tools for business efficiency, security, privacy; Diversity – representative of diverse gender or other attribute; ESG/Sustainability – experience in overseeing sustainability initiatives including sustainability reports; Finance Expert/Literate – qualifies as Audit Committee expert or as financially literate under SEC rules; Global Experience – managed multinational company or lived and/or worked abroad; Government/regulatory – served or interacted extensively with a regulatory agency; Human Capital – oversaw human capital, talent management, rewards and/or HR systems; Mergers & Acquisitions – self-evident; Operational Excellence – led initiatives to improve operational and/or financial efficiency; Supply Chain – managed procurement, vendor relations and/or pricing policies related thereto; Strategy – oversaw corporate strategy for near- and mid-term growth and profitability; Transformation – oversaw initiatives to achieve operating greater operating leverage through business, operational and product changes.

  6. Executive Summary

    Executive Summary The Company’s performance in 2023 declined as compared to the prior year due primarily to three factors: first customers in many regions implemented destocking directives in order to limit their carrying costs of inventory, second, weakening economic conditions in China manifested themselves in a glut of low-priced generic products in many regions, and third, supply chain constraints carried over from pandemic years. In light of these factors, the Company finished the year with pre-tax earnings at less than 50% of the budgeted target. Accordingly, the incentive compensation pool was unfunded, and neither the CEO nor any of the other NEOs received any cash bonus for 2023 performance. Thus, the cash bonus and total direct compensation for the CEO were below the 25thpercentile of the CEOs of the Company’s Proxy Peers. The CEO’s equity award which was set at the beginning of 2023 on the heels of a more successful year, was at about the median of the Proxy Peers and was made with an eye toward incentivizing future value creation. With respect to the cash bonus, total direct compensation and equity award, the other NEOs were below the 25thpercentile of the Company’s proxy peers. The Company’s one-year, three-year and five-year total shareholder return (“TSR”) was below the 25thpercentile of its Proxy Peers. The Company believes that, overall, executive compensation for 2023 was consistent with the rubric of pay-for-performance.

  7. Compensation Objectives

    Compensation Objectives Our executive compensation program has three primary objectives to: • Align management’s interests with the long-term interests of stockholders; • Provide compensation on the basis of performance that supports key financial and strategic business outcomes; and • Attract, motivate and retain top talent to lead our business. Our first objective is accomplished by ensuring that our executives are stockholders. We do this through the regular awards of equity, whether in the form of restricted stock, options or performance-based shares/options, and the adoption of executive stock ownership guidelines. We make these equity awards through our stock incentive plan, which was most recently approved in its current form by our stockholders at the 2022 Annual Meeting. Our second objective means that we want our executives to seek optimal results in both the short and long term. One of the primary means of rewarding performance is through cash incentive compensation. Another means is through performance-based equity, which requires that the Company attain certain measures of financial success (i.e., earnings before interest and taxes “EBIT”, net sales, and TSR), as compared to its industry peers and to broader industry in general. Our third objective is accomplished through ensuring that our compensation is competitive (for example, through benchmarking the compensation practices of similarly-situated companies) and to promote the retention of key talent through awards of stock (either restricted stock units or stock options) that vest over three years.

  8. Compensation Program Best Practices

    | Included Features (“Sound Practices”) | Excluded Features (“Poor Practices”) | | ➣ Performance-based Equity – Half of the equity awards made to executives vest based upon metrics as compared to a peer group, specifically, net sales, EBIT and TSR which over a performance period, typically three years’ in length. ➣ Caps on Individual Bonuses – Our executives’ incentive compensation is capped at 1.6 times salary for the CEO and 1 times salary for other officers. ➣ Clawback Policy – Our executives are subject to having incentive compensation recouped by the Company in the event of material fraud or misconduct resulting in a restatement of financial statements. ➣ Stock Ownership Guidelines— We have adopted share ownership requirements for both our executive officers (4X base wage for CEO and 2X base wage for CEO reports) and our directors (four years’ worth of stock awards). ➣ Consultant Independence – The Compensation Committee retains an independent compensation consultant. Our consultant is evaluated annually for independence to ensure objectivity. ➣ Market Benchmarking – Compensation decisions are made in the context of relevant market comparators. ➣ Risk Management – Our executive officers’ compensation program has been designed and is reviewed to ensure that it does not encourage inappropriate risk-taking. ➣ “Double Trigger” severance – Our change in control agreements require both a change in control and termination during a two year period before equity is accelerated and monetary benefits become due. (Please see page 33 of this Proxy). | ➣ No income or excise tax gross-ups. ➣ No “single trigger” severance payments in case of change of control. ➣ No guaranteed base salary increases, minimum bonuses or equity awards. ➣ No resetting of strike price on underwater options. ➣ No replacement or “make whole” awards of equity. ➣ No Hedging–Our executive officers and directors are prohibited from all hedging activities (as, for example, with zero-cost collars and forward sales contracts) and holding Company securities in margin accounts. |

  9. High Percentage of Performance Shares

    High Percentage of Performance Shares In making equity awards to executive officers, the Company splits those awards between time-based restricted stock (having a three-year, cliff-vesting period) and performance shares (which also have a three-year cliff-vesting period), as per the terms and conditions of the Company’s standard, form Performance Share Agreement Performance shares vest upon the occurrence of two things: first, the recipient’s continuous employment with the Company through the third anniversary of the award date, and second, the achievement of certain financial metrics as follows. Over the course of a three year performance period, the Company measures the relative growth of EBIT (weighted at 50%) and net sales (weighted at 30%), as compared to the median growth of EBIT and net sales, respectively, of a peer group of companies, which, as of December 31, 2023, consisted of AgroFresh Solutions, Inc. (AGFS), Balchem Corporation (BCPC), Chase Corporation (CCF), CVR Partners LP (UAN), Hawkins, Inc. (HWKN), Innospec Inc. (IOSP), Intrepid Potash, Inc. (IPI), Landec Corporation (LNDC), Livent Corporation (LTHM), LSB Industries, Inc. (LXU), Quaker Chemical Corporation (KWR) and Tredegar Corporation (TG) (the “ Proxy Peer Group”). In the Company’s opinion, these companies represent similarly-situated public companies based upon GICS codes, size and cross-referencing within their respective proxy disclosures. Thus, we believe it is appropriate to use these companies as a benchmark against which to compare the Company’s financial performance. In addition to the EBIT and net sales metrics, the Company also measures TSR, for the same performance period as compared to that of the Russell 2000 (weighted at 10%) and the Company’s Proxy Peers for the fiscal year immediately preceding the date of the award (weighted at 10%). In order to calculate the number of performance shares earned, the Company takes the product of the (number of shares granted) x (weighting factor) x (the applicable performance factor). When applied, the performance factors, which are listed below for EBIT, net sales and TSR, can yield a result as low as zero shares (when the Company has underperformed) and as high as 200% of the target shares granted (when the Company has outperformed its comparator group).

  10. High Percentage of Performance Shares

    | Table 1 - PERFORMANCE FACTORS – EBIT & Net Sales | | | % Proxy Peers Median | % Target Payout1 | | ≥125% | 200% | | 117.5%-124.9% | 150% | | 110%-117.4% | 125% | | 100% | 100% | | 80% | 50% | | <80% | 0% |

  11. Table 2 - PERFORMANCE FACTORS – TSR Goal

    | % Proxy Peers Median | % Target Payout2 | | ≥80thpercentile | 200% | | 60th percentile | 150% | | 50th percentile | 100% | | 40th percentile | 75% | | 30th percentile | 50% | | <30th percentile | 0% |

  12. Caps on Individual Bonuses

    Caps on Individual Bonuses The Company continues to follow a policy of placing individual limits on each executive’s annual incentive cash compensation. Specifically, the CEO is limited to 1.6 times his annual salary, while the other NEOs are limited to one times his or her annual salary. The Compensation Committee has put these caps in place both to eliminate the possibility that any one individual will receive an excessive share of the bonus pool and to prevent windfall payments in the event that unforeseen circumstances result in goals being drastically exceeded. Further, as was the case in 2023, to the extent that a threshold level of profitability is not met, no incentive compensation is conferred. C.

  13. Compensation Consultant Independence

    Compensation Consultant Independence As per New York Stock Exchange ("NYSE") Listing Standard 303A.05(c)(iv), the charter of the Compensation Committee requires that committee to evaluate the independence of its compensation consultants. Accordingly, that committee evaluated its compensation consultant, Exequity LLP, in 2023 and determined that there is no conflict of interest with that firm and that with respect to the six factors set forth in the listing rules, Exequity was independent, as indicated by the following:

  14. Compensation Consultant Independence

    | Independence Factor | Consultant Compliance | | ➣ Provision of other services to the Company by the consultant. ➣ Amount of fees received from the Company as a percentage of consultant’s total revenues. ➣ Policies and procedures of committee with regard to its consultant are designed to prevent conflicts of interest such as: ➣ Providing unrelated services. ➣ Trading in the stock of its clients. ➣ Any business or personal relationship with a member of the Compensation Committee. ➣ Any stock of the Company owned by consultant. ➣ Any business or personal relationship with an executive officer of the Company. | ➣ Consultant does not provide other services to the Company. ➣ Fees received by consultant during FY 2023 are less than 1% of the consulting firm’s revenues for that year. ➣ Consultant has implemented principles to ensure independence: ➣ Does not provide unrelated services. ➣ Does not trade in the stock of its clients. ➣ There is no relationship with a member of the Compensation Committee. ➣ Consultant owns no shares of the Company. ➣ There is no relationship with an executive officer. |

  15. Compensation Consultant Independence

    We believe that, by ensuring the independence and objectivity of our compensation consultant, we provide an additional assurance that the consultant will not be influenced by improper motives, such as personal gain, that could compromise its ability to recommend a fair and transparent plan of compensation for Company executives.

  16. Elements of 2023 and 2024 Compensation

    Elements of 2023 and 2024 Compensation Salaries— As per the Company’s standard practice, the 2023 salaries were set in December of the prior year in the context of benchmarking from the Compensation Committee’s independent compensation consultant. With continued inflation on the order of 4% in 2022 and annual increases for 2023 among public companies of 3.5%-3%, salaries for the Company’s NEOs were increased by 3% effective at the start of 2023. It should be noted that the Company does not always give annual salary increases to its employees; in fact, in certain years, salaries were frozen. For example, in light of poor financial performance in 2023, the NEOs received no salary increase in 2024 with the proviso that, to the extent the Company achieves its adjusted EBITDA target, the forfeited increase would be paid at year end. It should also be noted that the Company has historically raised salaries in excess of a modest adjustment when an officer takes on additional, meaningful responsibilities. For the CEO, base salary was approximately 30% of total cash compensation in 2023. This compares to 25% in 2022 and 28% in 2021. This increase in salary as a percent of total compensation in 2023 was due to the absence of cash incentive compensation for that year. Base salary as a percent of total cash compensation among NEOs as a group was 68 % in 2023, 69% in 2022 and 73% in 2021. Incentive Compensation— In 2023, as in prior years, executives were eligible to receive annual incentive compensation in the form of a cash bonus. Unlike salary, the cash bonus is “at risk” and varies from year to year depending upon many factors. The main reason for this element of compensation (which is typically paid in the month of March or April immediately following the measurement year) is to reward the executive for Company performance and the executives’ individual contributions. Incentive Pool Funding— With respect to 2023, the Company did not attain one-half of budgeted pre-tax earnings, which is the trigger for setting aside a reserve for incentive compensation. Accordingly, the Company did not establish an incentive pool, and none of the NEOs received any incentive compensation for 2023 performance. This is consistent with the Company’s commitment to paying for performance, as, in this case, performance was substandard. Looking into 2024, the Company has established a more formulaic approach toward Short-Term Incentive compensation ("STI") for its NEOs. We have depicted the elements of the formula in the table below. Before walking through the calculation, we will start with our reasoning behind the factors and formula. While continuing our practice of reserving 15% of pre-tax earnings for potential use as an incentive pool (again, only to the extent that pre-tax earnings equal or exceed the amount budgeted for the year), we have identified the following specific parameters. First, in light of the fact that operating leverage degraded over the course of 2023, we have given particular emphasis to adjusted EBITDA. For purposes of measuring STI, then, we will give adjusted EBITDA a 60% weighting. Second, we chose net sales to be weighted at 20%. This metric gives the executive team motivation to continue growing the business, even while improving profitability. Third, we chose a not-to-exceed target for operating expenses to be weighted at 20%. This metric gives further impetus toward limiting expenses while growing the top line.

  17. Elements of 2023 and 2024 Compensation

    | As is commonly the case with executive compensation, we have set up payout parameters to encourage over-performance and discourage under-performance. Specifically, to the extent that the Company hits 75% of the targeted metric (say, net sales) the payout factor will be 50%. If the Company is at target, then the payout is at target. And, to the extent that the Company exceeds the target (reaches 125%), the payout factor will be 150%. The financial factor is then subject to a SMARTgoal modifier of between 80% and 120% which reflect other, personal goals (other than the companywide financial goals). | |

  18. Benchmarking and the Compensation Consultant

    Benchmarking and the Compensation Consultant During 2023 the Compensation Committee’s independent compensation consultant, Exequity, revisited the group of comparator companies for purposes of benchmarking executive compensation, which analysis it completed in November 2023. In connection with those efforts, Exequity defined a group of comparators, focusing on product lines, GICS numbers, and a proxy review to determine whether and to what extent peer companies identified the Company (or others in the Company’s peer group) as comparators. The comparator group (“Proxy Peers”) identified by Exequity consisted of 14 publicly traded specialty chemical companies, namely: Aspen Aerogels, Inc. (ASPN),Balchem Corporation (BCPC), Chase Corporation (CCF), Core Molding Technologies, Inc. (CMT), CVR Partners LP (UAN), Ecovyst Inc. (ECVT), Hawkins, Inc. (HWKN), Haynes International, Inc. (HAYN), Innospec Inc. (IOSP), Intrepid Potash, Inc. (IPI), Livent Corporation (LTHM), LSB Industries, Inc. (LXU), Quaker Chemical Corporation (KWR) and Tredegar Corporation (TG). Proxy Peers had median revenues of $713 million per annum, median market capitalization $942 million and median enterprise value of $1,278 million. To our knowledge American Vanguard is the only publicly traded crop protection Company of its size, and no Proxy Peers operate at all in the crop protection sector. According to Exequity’s analysis, 2023 compensation for the Company’s CEO yielded the following comparative results, which are also depicted in the table below: • The CEO base salary was slightly above the median (about the 65th percentile) of the Proxy Peers. • The bonus amount (of $0) for the CEO was below the 25th percentile for target bonus of the Proxy Peers. • Total cash for the CEO was below the 25th percentile for target total cash of the Proxy Peers. • Equity granted in 2023 to the CEO was at the median of the Proxy Peers. • Total direct compensation for the Company’s CEO was below the 25th percentile of the Proxy Peers. On average, according to the Exequity study, compensation for other NEOs was as follows: salary was at the median on average for salaries of Proxy Peers, while incentive cash, total cash, equity and total direct compensation were below the 25th percentile for the Proxy Peers.

  19. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE

  20. SUMMARY COMPENSATION TABLE

    | Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus(1) ($) (d) | Stock Awards ($) (e) (2) | Option Awards ($) (f) | Non-Equity Incentive Plan Compensation ($) (g) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings ($) (h) | All Other Compen- sation ($) (i) | Total ($) (j) | | Eric G. Wintemute | 2023 | 755,655 | — | 1,688,426 | — | — | — | 65,692 | 2,509,773 | | | 2022 | 723,465 | 656,250 | 1,407,292 | — | — | — | 65,867 | 2,852,874 | | | 2021 | 701,612 | 349,476 | 1,306,087 | — | — | — | 106,514 | 2,463,689 | | Ulrich G. Trogele | 2023 | 449,702 | — | 189,679 | — | — | — | 36,030 | 675,411 | | | 2022 | 430,529 | 195,000 | 209,582 | — | — | — | 34,780 | 869,891 | | | 2021 | 417,482 | 156,040 | 209,353 | — | — | — | 34,030 | 816,905 | | David T. Johnson | 2023 | 428,278 | — | 180,680 | — | — | — | 79,793 | 688,751 | | | 2022 | 410,033 | 186,250 | 199,634 | — | — | — | 53,767 | 849,684 | | | 2021 | 397,649 | 148,627 | 195,641 | — | — | — | 34,030 | 775,947 | | Timothy J. Donnelly | 2023 | 362,214 | — | 152,820 | — | — | — | 36,030 | 551,064 | | | 2022 | 346,785 | 167,500 | 168,841 | — | — | — | 34,780 | 717,906 | | | 2021 | 336,310 | 125,701 | 185,316 | — | — | — | 33,520 | 680,847 | | Anthony S. Hendrix | 2023 | 348,001 | — | 99,899 | — | — | — | 44,401 | 492,301 | | | 2022 | 333,163 | 150,000 | 108,108 | — | — | — | 44,173 | 635,444 | | | 2021 | 323,067 | 120,751 | 179,348 | — | — | — | 37,655 | 660,821 | | Peter E. Eilers(1) | 2023 | 290,868 | — | 87,067 | — | — | — | 52,861 | 430,797 | | | 2022 | 292,867 | 142,500 | 102,043 | — | — | — | 39,188 | 576,598 | | | 2021 | 318,477 | 113,966 | 126,919 | — | — | — | 49,093 | 608,455 |

  21. SUMMARY COMPENSATION TABLE

    (1) Salary for 2023, 2022 and 2021 reflects the effect of euro to dollar currency exchange. The amounts shown represent the aggregate grant date fair value of $21.51 with respect to restricted stock units, and $23.63 with respect to performance-based shares. Grant date values were all calculated in accordance with FASB ASC Topic 718, and all amounts shown in this column exclude the effect of estimated forfeitures related to service-based vesting conditions. Additional detail regarding the awards reflected within this column is included in Note 13 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.

  22. GRANTS OF PLAN-BASED AWARDS

    GRANTS OF PLAN-BASED AWARDS The following table sets forth the grant of plan-based awards for the year ended December 31, 2023 to the NEOs.

  23. GRANTS OF PLAN-BASED AWARDS

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of | Full Grant Date Fair | | Name (a) | Grant Date (b) | Threshold (#) (c) | Target (#) (d) | Maximum (#) (e) | Threshold (#) (f) | Target (#) (g) | Maximum (#) (h) | Units (#) (i) | Options (#) (j) | Option Awards ($/Share) (k) | Value of Stock ($) (1) (l) | | Eric G. Wintemute | 4/10/2023 | — | — | — | 39,211 | 39,211(2) | 39,211 | — | — | — | 844,997 | | Eric G. Wintemute | 4/10/2023 | — | — | — | — | 31,369(3) | 62,738 | — | — | — | 676,002 | | Eric G. Wintemute | 4/10/2023 | — | — | — | — | 7,842(4) | 15,684 | — | — | — | 167,427 | | Ulrich G. Trogele | 4/10/2023 | — | — | — | 4,405 | 4,405(2) | 4,405 | — | — | — | 94,928 | | Ulrich G. Trogele | 4/10/2023 | — | — | — | — | 3,524(3) | 7,048 | — | — | — | 75,942 | | Ulrich G. Trogele | 4/10/2023 | — | — | — | — | 881(4) | 1,762 | — | — | — | 18,809 | | David T. Johnson | 4/10/2023 | — | — | — | 4,196 | 4,196(2) | 4,196 | — | — | — | 90,424 | | David T. Johnson | 4/10/2023 | — | — | — | — | 3,357(3) | 6,714 | — | — | — | 72,339 | | David T. Johnson | 4/10/2023 | — | — | — | — | 839(4) | 1,678 | — | — | — | 17,913 | | Timothy J. Donnelly | 4/10/2023 | — | — | — | 3,549 | 3,549(2) | 3,549 | — | — | — | 76,481 | | Timothy J. Donnelly | 4/10/2023 | — | — | — | — | 2,839(3) | 5,678 | — | — | — | 61,185 | | Timothy J. Donnelly | 4/10/2023 | — | — | — | — | 710(4) | 1,420 | — | — | — | 15,159 | | Anthony S. Hendrix | 4/10/2023 | — | — | — | 2,320 | 2,320(2) | 2,320 | — | — | — | 49,996 | | Anthony S. Hendrix | 4/10/2023 | — | — | — | — | 1,856(3) | 3,712 | — | — | — | 39,997 | | Anthony S. Hendrix | 4/10/2023 | — | — | — | — | 464(4) | 928 | — | — | — | 9,906 | | Peter E. Eilers | 4/10/2023 | — | — | — | 2,022 | 2,022(2) | 2,022 | — | — | — | 43,574 | | Peter E. Eilers | 4/10/2023 | — | — | — | — | 1,618(3) | 3,235 | — | — | — | 34,859 | | Peter E. Eilers | 4/10/2023 | — | — | — | — | 404(4) | 809 | — | — | — | 8,625 |

  24. GRANTS OF PLAN-BASED AWARDS

    (1) This column shows the full grant date fair value of restricted stock grants made based on the closing price of the Company’s stock as of the date of award, with the exception of the TSR grant, which was determined by using the Monte Carlo valuation method. The full grant date fair value of each award is the number of shares multiplied by the grant date fair value per share. These amounts were not paid to any named executive officer. The recognized compensation expenses for 2021 awards are shown in the “Stock Awards” column in the “Summary Compensation Table”. These grants constitute restricted stock that vests in its entirety upon three years of the award date and is subject to forfeiture in the event that the recipient is not continuously employed by the Company through the vesting date. The grant date fair value of these awards is $21.55 per share, which was determined based on the closing price of the Company’s stock as of the Plan extension approval date. These grants constitute performance shares that vest upon both (i) the passage of three years of full-time, continuous employment and (ii) the achievement of certain financial goals of the Company compared to an identified peer group. With respect to clause (ii), the number of shares to vest depends upon the level of net sales and income before interest and tax achieved during the period commencing January 1, 2021 and ending December 31, 2025 as compared to internal targets and can vary from zero (for performance at less than 80% of the target) to 200% (for performance at or above 125% of the target). The grant date fair value of these awards is $21.55 per share, which was determined based on the closing price of the Company’s stock as of the Plan extension approval date. These shares constitute an award of performance shares that vest based upon both (i) continuous, full-time service through the third anniversary of the award, and (ii) the achievement of TSR metrics as follows. As measured during the period commencing January 1, 2022 and ending December 31, 2025, assuming an initial share price of $21.55 per share, the number of shares earned depends upon the achievement of a certain target share price as compared to that of the Russell 2000 Index and comparator companies, identified in the Company’s 2020 Proxy Statement at the end of the measurement period and can vary from zero shares (for a share price that is less than 30th percentile of the comparator group) to 200% (for a share price that is at or greater than 80th percentile of the comparator group). The grant date fair value of these awards is $21.35 per share, which was determined using the Monte Carlo valuation method.

  25. NARRATIVE DISCUSSION TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE

    NARRATIVE DISCUSSION TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE The Company and Eric G. Wintemute entered into an employment agreement, dated as of April 1, 2022, pursuant to which Mr. Wintemute serves as the Company’s Chairman and CEO. Mr. Wintemute’s annual base compensation for the year ended December 31, 2023 was $757,000, with increases to be made by the Board in their sole discretion. Mr. Wintemute may receive a bonus, in an amount as determined by the Board, based on his performance against reasonable qualitative and quantitative benchmarks. The agreement also provides Mr. Wintemute with certain additional benefits which are prevalent among executives at this level in the industry, including a car allowance of $1,800 per month and reimbursement for reasonable and customary business expenses. Mr. Wintemute’s agreement is of indefinite duration, unless terminated by the Company. If the Company terminates Mr. Wintemute’s employment without cause and not due to disability or death, the Company shall pay to Mr. Wintemute an amount equal to two times the average annual cash compensation received by him over the course of the two immediately preceding calendar years (including his average annual bonus as measured over the three, previous full years) and his unvested shares will be deemed to be vested as of the termination date. If Mr. Wintemute dies or is disabled during the term of the agreement, the Company will pay him or his designated beneficiary, as applicable, any amounts (including salary) and continue any benefits due to Mr. Wintemute under the agreement for 12 months after his death or disability. Provisions relating to change of control are set forth on page 35 above.

  26. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table shows, with respect to the NEOs, the number of shares covered by both exercisable and non-exercisable stock options and, in addition, grants of restricted stock units that had not yet vested as of December 31, 2023, with respect to options to purchase common stock of the Company. The closing price of the common stock on December 31, 2023, the last trading day of the Company’s fiscal year, was $10.97 per share.

  27. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | | Option Awards | | | | | | Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | | Eric G. Wintemute | 78,127 | — | — | $11.49 | 12/30/2024 | | David T. Johnson | 13,000 | — | — | $11.49 | 12/30/2024 |

  28. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | | Stock Awards | | | | | Name (a) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j) | | Eric G. Wintemute | 202,604 | 2,222,566 | — | — | | Ulrich G. Trogele | 28,040 | 307,599 | — | — | | David T. Johnson | 26,522 | 290,946 | — | — | | Timothy J. Donnelly | 23,416 | 256,874 | — | — | | Anthony S. Hendrix | 18,098 | 198,535 | — | — | | Peter E. Eilers | 14,646 | 160,667 | — | — |

  29. OPTION EXERCISES AND STOCK VESTED

    OPTION EXERCISES AND STOCK VESTED The following table shows, with respect to the NEOs, the number of shares acquired on the exercise of stock options and on vesting of stock awards and their respective value realized (market price less exercise price) for the year ended December 31, 2023.

  30. OPTION EXERCISES AND STOCK VESTED

    | | Option Awards | | Stock Awards | | | Name (a) | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c) | Number of Shares Acquired on Vesting (#) (d) | Value Realized on Vesting ($) (e) (1) | | Eric G. Wintemute | — | — | 50,283 | 835,703 | | Ulrich G. Trogele | — | — | 9,892 | 164,405 | | David T. Johnson | — | — | 5,482 | 91,111 | | Timothy J. Donnelly | — | — | 5,806 | 96,496 | | Anthony S. Hendrix | — | — | 6,358 | 105,670 | | Peter E. Eilers | — | — | 8,271 | 137,464 |

  31. OPTION EXERCISES AND STOCK VESTED

    (1) Value realized on vesting is value of shares, excluding shares forfeited for U.S. payroll tax purposes, if applicable, at time of vesting.

  32. Pension Benefits and Non-qualified Deferred Compensation

    Pension Benefits and Non-qualified Deferred Compensation The Company provided no pension benefits and no non-qualified deferred compensation to the NEOs during the year ended December 31, 2023.

  33. Potential Payments upon Termination or Change of Control

    Potential Payments upon Termination or Change of Control The CEO is party to an employment agreement dated as of April 1, 2022, under the terms of which in the case of termination without cause (or resignation for good reason) occurring any time during the period commencing three months before and ending 24 months after a change of control, he is entitled to receive the sum of the following (in exchange for a release of claims against the Company): cash incentive compensation for the then-current year (pro-rated through the date of termination), two-times his annual salary, two-times his average bonus (measured over the three, prior full-years), $10,000 worth of executive placement services, immediate acceleration and vesting of all unvested options or restricted stock and 24 consecutive months’ worth of COBRA coverage. Each of the other NEOs is party to a change of control severance agreement, under the terms of which the employee is entitled to receive certain payments in the event that there is both a change of control during the term of agreement and such employee is either terminated (for reasons other than cause) or resigns for good reason within 24 months of such change of control. As with the CEO, there is a double trigger before benefits are earned under this arrangement. Provided both conditions for payment are met and the Company receives a release of all claims from the employee, the employee is entitled to receive a lump sum amount equal to two years’ base salary, two-times the employee’s average cash incentive compensation (measured over the past three full-years), 24 months’ worth of COBRA coverage for medical insurance, executive level outplacement costs, and immediate acceleration and vesting of unvested options (or other securities to which employee may have a right). For purposes of the CEO, “change in control” is defined to be identical with that set forth in the Company’s 2022 Equity Incentive Plan. For NEOs other than the CEO, “change in control” is defined to mean, in effect, either (i) a merger or consolidation of the Company in which those who were stockholders immediately before the effective time of the merger or consolidation have less than 50% of the voting power of the new corporation or entity; (ii) a sale or disposition of all or substantially all of the Company’s assets; (iii) when any person (as defined in Sections 13(d) and 14(d) of the Exchange Act) directly or indirectly owns more than 50% of the Common Stock of the Company or (iv) in the event over a 24 month period a majority of the board of directors is replaced by new members. Further, as a condition to payment (whether to the CEO or any of the other NEOs), the employee must execute and deliver a written release of claims against the Company. The following table summarizes the estimated amounts that NEOs would be entitled to receive whether in the form of cash or securities in the event of a termination without cause or voluntary resignation for good reason after a change in control assuming, for illustration purposes, that such change in control had occurred on December 31, 2023.

  34. Potential Payments upon Termination or Change of Control

    | | Salary ($) | Average Bonus ($) | COBRA Insurance Premiums ($) | Outplacement Services ($) | Accelerated Options and Grants Vesting ($)(1) | Total Change in Control Payments ($)(2) | | Eric G. Wintemute | 1,514,026 | 335,242 | 31,025 | 10,000 | 2,222,566 | 4,112,859 | | Ulrich G. Trogele | 900,896 | 117,013 | 42,393 | 10,000 | 307,599 | 1,377,901 | | David T. Johnson | 858,096 | 111,626 | 64,103 | 10,000 | 290,946 | 1,334,771 | | Timothy J. Donnelly | 725,732 | 97,734 | 86,731 | 10,000 | 256,874 | 1,177,071 | | Anthony S. Hendrix | 697,156 | 90,250 | 86,731 | 10,000 | 198,535 | 1,082,672 | | Peter E. Eilers | 628,276 | 85,489 | — | 10,000 | 160,667 | 884,432 |

  35. Potential Payments upon Termination or Change of Control

    Upon change in control, the agreement allows for the accelerated vesting of options and grants. Assuming the change in control had happened as of December 31, 2023, there would be unvested awards of 313,326 shares of restricted stocks and no shares of incentive stock options. If the change in control occurred on December 31, 2023, these awards would have vested and the Company would have recognized additional compensation expense based on grant date fair value in the amount of $2,933,665 for restricted stocks, and the officers would have recognized the value of vested grants as income based on fair market value in the amount of $3,437,187 (which is the sum of this column). (2) There are no tax excise gross-ups relating to change-in-control payments for NEOs.

  36. CEO Pay Ratio Disclosure

    CEO Pay Ratio Disclosure As per Item 402(u) of Regulation S-K, we are providing the following information about the annual total compensation of our CEO, Eric G. Wintemute, as compared with the median of annual total compensation of all employees of the Company (excluding the CEO). For fiscal year 2023, we report as follows: • The annual total compensation of the CEO, as per the Summary Compensation table on page 28 hereof was $2,509,773; and • The median of the annual total compensation of all employees of the Company (excluding the CEO) was $58,240. Based upon this information, we reasonably estimate that the ratio for the CEO’s annual total compensation to the annual total compensation of our median employee was approximately 43:1. Our pay ratio was calculated as per Item 402(u) as follows. In order to identify the median employee, using the criteria set forth in Item 402(c) of Regulation S-K for populating data within the Summary Compensation Table, we gathered information from payroll, stock award and incentive compensation on all employees as of December 31, 2023, which was within three months of the closing of the Company’s last fiscal year. In measuring the wages of non-exempt employees, we took the actual wages, including regular time and overtime, paid to such employees. Where employees were paid in foreign currencies, we converted that currency into U.S. dollars as of the date of measurement. In establishing total compensation, we considered not only wages and bonuses, but also the fair value of equity awards, if any. After arriving at total compensation for the employee population (not including the CEO), we listed them in descending order of compensation and identified the median employee.

  37. Pay Versus Performance

    Pay Versus Performance As per item 402(v) of Regulation S-K, we are providing the following information about the relationship between Compensation Actually Paid (CAP) as defined in Item 402(v) and performance. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with its performance, refer to the “Compensation Discussion and Analysis.”.

  38. Pay Versus Performance

    | Year | Summary compensation table total for PEO | Compensation actually paid to PEO | Average summary compensation table total for non-PEO named executive officers | Average compensation actually paid to non-PEO named executive officers | Value of initial fixed $100 investment based on Total shareholder return | Value of initial fixed $100 investment based on Global Agribusiness TSR | Net income $000s | Net sales $000s | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $2,509,773 | $(471,651) | $567,665 | $201,287 | $72 | $105 | $7,519 | $579,371 | | 2022 | $2,852,874 | $3,432,747 | $729,905 | $817,252 | $141 | $115 | $27,404 | $609,615 | | 2021 | $2,463,689 | $3,089,570 | $708,595 | $802,105 | $106 | $125 | $18,587 | $557,676 | | 2020 | $2,181,538 | $1,925,191 | $645,118 | $610,063 | $100 | $100 | $15,242 | $458,704 |

  39. Pay Versus Performance

    Footnotes to Table 1: 1. Our principal executive officer (“PEO”) for each of the fiscal years 2023, 2022 and 2021 is Eric G. Wintemute. The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Wintemute for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation – Executive Compensation Tables – Summary Compensation Table.” 2. The dollar amounts reported in column (e) represent the amount of “compensation actually paid” or “CAP” to the PEO, as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the PEO during the applicable year. The following adjustments were made to the PEO’s total compensation for each applicable year to determine the compensation actually paid in accordance with SEC rules:

  40. Pay Versus Performance

    | Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards | Equity Award Adjustments | Reported Change in the Actuarial Value of Pension Benefits | Pension Benefit Adjustments | Compensation Actually Paid to PEO | | | | (a) | (b) | (c) | (d) | | | 2023 | $2,509,773 | $(1,688,426) | $(1,292,998) | $— | $— | $(471,651) | | 2022 | $2,852,874 | $(1,407,292) | $1,987,165 | $— | $— | $3,432,747 | | 2021 | $2,463,689 | $(1,306,087) | $1,931,968 | $— | $— | $3,089,570 | | 2020 | $2,181,538 | $(1,392,708) | $1,136,361 | $— | $— | $1,925,191 |

  41. Pay Versus Performance

    a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards”, column (e) and “Option Awards” in column (f) of the Summary Compensation Table for the applicable year. The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: 3. (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments for the PEO are as follows:

  42. Pay Versus Performance

    | Year | Year End Fair Value of Equity Awards | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends etc not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2023 | $860,289 | $(1,333,715) | $(361,161) | $104,508 | $(562,919) | $— | $(1,292,998) | | 2022 | $1,289,835 | $859,999 | $161,607 | $— | $(324,276) | $— | $1,987,165 | | 2021 | $1,061,580 | $144,499 | $290,744 | $487,478 | $(52,333) | $— | $1,931,968 | | 2020 | $1,503,640 | $(505,018) | $(183,806) | $390,800 | $(69,255) | $— | $1,136,361 |

  43. Pay Versus Performance

    3. The dollar amounts reported in column (d) of Table 1 represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding the PEO) in the “Total” column of the Summary Compensation Table in each applicable year. The NEOs for the years 2023, 2022 and 2021 were Ulrich G. Trogele, David T. Johnson, Timothy J. Donnelly, Anthony S. Hendrix and Peter E. Eilers. 4. The dollar amounts reported in column (e) of Table 1 represent the average amount of “compensation actually paid” (also, "CAP") to the NEOs as a group (excluding the PEO) as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group for each year to determine the compensation actually paid, using the same methodology described above in Note 2:

  44. Pay Versus Performance

    | Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Value of Equity Awards | Average Equity Award Adjustments | Reported Change in the Actuarial Value of Pension Benefits | Pension Benefit Adjustments | Average Compensation Actually Paid to Non-PEO NEOs | | | | | (a) | | (b) | | | 2023 | $567,665 | $(142,029) | $(224,349) | $— | $— | $201,287 | | 2022 | $729,905 | $(157,642) | $244,989 | $— | $— | $817,252 | | 2021 | $708,595 | $(179,315) | $272,825 | $— | $— | $802,105 | | 2020 | $645,118 | $(211,566) | $176,511 | $— | $— | $610,063 |

  45. Pay Versus Performance

    The amounts deducted or added in calculating the total average equity award adjustments for NEOs other than the PEO are as follows:

  46. Pay Versus Performance

    | Year | Year End Fair Value of Equity Awards | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends etc. not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2023 | $72,367 | $(166,981) | $(54,861) | $10,650 | $(85,524) | $— | $(224,349) | | 2022 | $144,484 | $125,605 | $24,945 | $— | $(50,045) | $— | $244,989 | | 2021 | $145,746 | $22,097 | $42,051 | $70,498 | $(7,567) | $— | $272,825 | | 2020 | $228,417 | $(75,693) | $(30,040) | $63,445 | $(9,618) | $— | $176,511 |

  47. Pay Versus Performance

    There are no amounts deducted or added in calculating total pension benefit adjustments, as the Company does not sponsor any privately-sponsored pension plan or defined benefit plan. On behalf of Mr. Eilers, the Company contributes toward a pension plan sponsored by a third party with respect to which the Company is not privy to funding or other metrics that would be used in establishing actuarial values. 5. Cumulative TSR in column (f) of Table 1 is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. 6. Column (g) of Table 1 represents the TSR of the Global Agribusiness Index. 7. The dollar amounts reported in column (h) of Table 1 represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. 8. The dollar amounts reported in column (i) of Table 1 represent the amount of net sales reflected in the Company’s audited consolidated financial statements for the applicable year. As described in greater detail in “Executive Compensation – Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our incentive awards are selected based on an objective of incentivizing our named executive officers to increase the value of our enterprise for our shareholders. The most important metrics used by the Company to link executive compensation actually paid to the Company’s named executive officers, for the most recently completed fiscal year, to the Company’s performance are as follows: • Net Sales • Adjusted EBITDA* • Earnings Per Share * Adjusted EBITDA is calculated by taking the sum of net income plus stock compensation expense, depreciation and amortization, proxy costs, interest expenses (net) and the provision for income taxes. Below are graphical depictions of various metrics disclosed above, specifically: cumulative TSR of the Company versus the TSR of the Global Agribusiness Index and three graphs showing the compensation actually paid for the PEO and Non-PEO NEOs versus cumulative TSR of the Company, net income and net sales, respectively, for the years 2021, 2022 and 2023. Alphabetical references in the data legends on these charts refer to columns in Table 1 above. Cumulative TSR of the Company and Cumulative TSR of the Global Agribusiness Index Compensation Actually Paid and Company TSR Compensation Actually Paid and Net Income Compensation Actually Paid and Net Sales

  48. Director Compensation

    Director Compensation The following table summarizes compensation paid to the non-management members of the Board for the year ended December 31, 2023.

  49. Director Compensation

    | Name (a) | Fees Earned or Paid in Cash ($) (b) | Stock Awards ($) (c) (1) | Option Awards ($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) (f) | All Other Compen- sation ($) (g) | Total ($) (h) | | Marisol Angelini | 95,500 | 80,000 | — | — | — | — | 175,500 | | Scott D. Baskin | 150,000 | 40,000 | — | — | — | — | 190,000 | | Mark R. Bassett | 79,458 | 80,000 | — | — | — | 95,200(2) | 254,658 | | Debra F. Edwards | 129,500 | 40,000 | — | — | — | — | 169,500 | | Morton D. Erlich | 132,500 | 40,000 | — | — | — | — | 172,500 | | Patrick E. Gottschalk | 79,965 | 80,000 | — | — | — | — | 159,965 | | Émer Gunter | 85,000 | 80,000 | — | — | — | — | 165,000 | | Keith M. Rosenbloom | 81,958 | 80,000 | — | — | — | — | 161,958 |

  50. Director Compensation

    (1) Represents a grant of 4,398 shares of common stock to each of the directors who received $80,000 worth of shares, and a grant of 2,199 shares of common stock to those who received $40,000 worth of shares. Grant date values were all calculated in accordance with FASB ASC Topic 718, and all amounts shown in this column exclude the effect of estimated forfeitures related to service-based vesting conditions. The grant date fair value was calculated based on the closing price of the Common Stock on the date of issuance. This amount was for consulting services provided by Mr. Bassett as more fully described on page 42. During 2023, compensation for non-management board members has been made as per the table set forth below:

  51. Election of Directors

    Election of Directors The Board is elected annually. The Certificate of Incorporation and Bylaws, as each has been previously amended and restated, of the Company, currently provide that the number of directors of the Board shall not be more than nine nor less than three. As per the Bylaws, the Board has fixed the maximum number of directors at nine. At this election, nine directors have been nominated to be elected at the Annual Meeting and, if elected, will hold office from the time of the election until the next Annual Meeting and until their respective successors are duly elected and qualified, or until their earlier resignation or removal. The Board has nominated to be elected to serve as directors until the next annual meeting or until their successors are duly elected and qualified. • Marisol Angelini, • Scott Baskin, • Mark Bassett, • Debra Edwards, • Patrick Gottschalk, • Emer Gunter, • Steven Macicek • Keith Rosenbloom, and • Eric Wintemute