DEF 14A of Avient Corp
Filed Mar 27, 2024 · FY20230001122976-24-000025
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
| Board and Committees | 32 | | Board Refreshment and Diversity | 37 | | 2023 Non-Employee Director Compensation | 38 | | Non-Employee Director Compensation Highlights | 38 | | Non-Employee Director Retainer and Meeting Fees | 38 | | 2023 Non-Employee Director Compensation Table | 39 | | Option Awards Outstanding and Fully Vested Deferred Shares | 40 | | Ownership of Avient Shares | 41 | | Beneficial Ownership of Our Common Shares | 41 | | Stock Ownership Guidelines for Non-Employee Directors | 42 | | Compensation Discussion and Analysis | 43 | | Executive Summary | 43 | | Executive Compensation Philosophy and Objectives | 46 | | What We Pay and Why: Elements of Compensation | 48 | | Other Aspects of our Compensation Programs | 54 | | Executive Compensation | 59 | | 2023 Summary Compensation Table | 59 | | 2023 Grants of Plan-Based Awards | 62 | | Outstanding Equity Awards at 2023 Fiscal Year-End | 64 | | 2023 Option Exercises and Stock Vested | 65 | | 2023 Non Qualified Deferred Compensation | 65 | | Potential Payments Upon Termination or Change of Control | 66 | | CEO Pay Ratio Disclosure | 71 | | Pay Versus Performance Disclosure | 72 | | Compensation Committee Interlocks and Insider Participation | 75 | | Risk Assessment of the Compensation Programs | 75 | | Compensation Committee Report | 76 | | Miscellaneous Provisions | 77 | | Internet Availability of Proxy Materials | 77 | | Voting at the Meeting | 77 | | Revoking a Proxy | 78 | | Shareholder Proposals | 78 | | Proxy Solicitation | 79 | | Householding of Proxy Materials | 79 | | Appendix A | A-1 |
2023 Annual Incentive Program
2023 Annual Incentive Program We set appropriate goals for each of our performance measures in our 2023 annual cash incentive program (the “2023 Annual Incentive Program”). Our performance in 2023 resulted in the participating executive officers named in the 2023 Summary Compensation Table of this proxy statement (the “Named Executive Officers”), earning a below target payout under the 2023 Annual Incentive Program. Dr. Khandpur did not participate in the 2023 Annual Incentive Program due to his commencement of service on December 1, 2023. Messrs. Patterson and Rathbun and Mses. Beggs and Kunkle's 2023 Annual Incentive Program opportunities were based on consolidated Company results. Mr. Garratt's 2023 Annual Incentive Program opportunities were based on both business-unit specific results and on consolidated Avient adjusted operating income results. Results were calculated with adjustments for special items pursuant to the terms of the 2023 Annual Incentive Program as approved by the Compensation Committee. Total attainment for consolidated Avient and Color, Additives and Inks ("CAI") (applicable for Mr. Garratt) under the 2023 Annual Incentive Program was 52.5% and 52.5%, respectively, with the components consisting of (dollars in millions):
2023 Annual Incentive Program
| 2023 Corporate Plan Annual Incentive Program* (Patterson, Beggs, Kunkle, Rathbun) | | | | | | | | Measure | Weighting | Threshold | Target | Maximum | Results | Payout % | | Adjusted Operating Income (consolidated) | 70% | $314.5 | $338.6 | $399.6 | $312.8 | 0.0% | | Working Capital as a % of Sales | 20% | 12.4% | 11.7% | 10.7% | 10.3% | 200.0% | | Sustainability Objectives | 10% | See the Compensation Discussion and Analysis section for more information about goals and achievements | | | | 125.0% | | Total Attainment | | | | | | 52.5% |
2023 Annual Incentive Program
*Adjusted operating income (performance measures and results) reported in the table above was calculated with adjustments for special items (as noted on Appendix A) pursuant to the terms of the awards and as approved by the Compensation Committee.
2023 Annual Incentive Program
| 2023 CAI Plan Annual Incentive Program* (Garratt) | | | | | | | | Measure | Weighting | Threshold | Target | Maximum | Results | Payout % | | Adjusted Operating Income (CAI) | 59.5% | $253.0 | $272.2 | $312.6 | $251.9 | 0.0% | | Adjusted Operating Income (consolidated) | 10.5% | 314.5 | 338.6 | 399.6 | $312.8 | 0.0% | | Working Capital as a % of Sales (CAI) | 20% | 14.1% | 13.4% | 12.2% | 11.6% | 200.0% | | Sustainability Objectives | 10% | See the Compensation Discussion and Analysis section for more information about goals and achievements | | | | 125.0% | | Total Attainment | | | | | | 52.5% |
2023 Annual Incentive Program
*Adjusted operating income (performance measures and results) reported in the table above was calculated with adjustments for special items (as noted on Appendix A) pursuant to the terms of the awards and as approved by the Compensation Committee. The following table shows, for each participating Named Executive Officer, the target 2023 Annual Incentive Program payout opportunity, the percentage of such payout opportunity earned based on 2023 performance, and the dollar value of the actual payout.
2023 Annual Incentive Program
| 2023 Annual Incentive Program Payouts | | | | | Named Executive Officer | 2023 Target Opportunity ($) | Payout (%) | Payout ($) | | Robert M. Patterson | 1,521,000 | 52.5% | 798,525 | | Jamie A. Beggs | 431,250 | 52.5% | 226,406 | | Joel R. Rathbun | 393,750 | 52.5% | 206,719 | | Lisa K. Kunkle | 321,750 | 52.5% | 168,919 | | Michael A. Garratt | 315,250 | 52.5% | 165,506 |
2021-2023 Long-Term Incentive Awards
2021-2023 Long-Term Incentive Awards In 2023, the participating Named Executive Officers earned a 170% payout for their 2021-2023 cash-settled performance units granted under our Amended and Restated 2020 Equity and Incentive Compensation Plan (the “2020 Plan”). The payout was earned based on the Company’s adjusted EPS performance over four equally-weighted performance periods as noted below. Dr. Khandpur did not participate in the 2021 performance unit awards.
2021-2023 Long-Term Incentive Awards
| 2021–2023 Cash-Settled Performance Units Performance Measure: Adjusted EPS | | | | | | Performance Periods | Weighting | Target | Result | Payout % | | January 1, 2021 – December 31, 2021 | 25% | $2.24 | $3.05 | 200% | | January 1, 2022 – December 31, 2022 | 25% | $2.16 | $2.93 | 200% | | January 1, 2023 – December 31, 2023 | 25% | $1.86 | $1.69 | 81% | | January 1, 2021 – December 31, 2023 | 25% | $6.26 | $7.67 | 200% | | Total Attainment | | | | 170% |
2021-2023 Long-Term Incentive Awards
Adjusted EPS (threshold, target and maximum levels, and results) with respect to the incentives described above includes intangible amortization expense, and was calculated with adjustments for acquisitions, divestitures and special items pursuant to the terms of the 2021-2023 long-term incentive program (the “2021-2023 Long-Term Incentive Program”) and as approved by the Compensation Committee. For information on the terms and conditions of these incentive programs, see the “What We Pay and Why: Elements of Compensation” section of this proxy statement.
2021-2023 Long-Term Incentive Awards
| OUR DIRECTOR NOMINEES AND COMMITTEE MEMBERSHIP |
2021-2023 Long-Term Incentive Awards
You are being asked to vote on the election of twelve Director nominees. Detailed information about each Director nominee’s background, qualifications, attributes, skills and experience can be found beginning on page 17. Our Board maintains Audit ("AC"), Compensation ("CC"), Governance and Corporate Responsibility ("G&CRC"), and Environmental, Health and Safety ("EH&SC") committees. The following table provides membership and meeting information for each committee as of March 19, 2024. In addition, the table identifies the independent directors.
2021-2023 Long-Term Incentive Awards
| Name | Age | Director Since | Independent | Committee Membership (M=Member, C=Chair) | | | | | | | | | AC | CC | G&CRC | EH&SC | | Robert E. Abernathy | 69 | 2018 | Yes | M | M | | | | Richard H. Fearon | 68 | 2004 | Yes | | M | C | | | Gregory J. Goff | 67 | 2011 | Yes | | | M | C | | Neil Green | 54 | 2021 | Yes | M | | M | | | William R. Jellison | 66 | 2015 | Yes | C | | | M | | Ashish K. Khandpur, Ph.D. | 56 | 2023 | No | | | | | | Sandra Beach Lin | 66 | 2013 | Yes | M | | M | | | Kim Ann Mink, Ph.D. | 64 | 2017 | Yes | M | | | M | | Ernest Nicolas | 46 | 2021 | Yes | | M | | M | | Kerry J. Preete | 63 | 2013 | Yes | | C | M | | | Patricia Verduin, Ph.D. | 64 | 2019 | Yes | | | M | M | | William A. Wulfsohn | 62 | 2011 | Yes | M | M | | | | Number of Meetings Held in 2023 | | | | 7 | 4 | 2 | 2 |
2021-2023 Long-Term Incentive Awards
| SUMMARY OF DIRECTOR NOMINEE SKILLS, EXPERIENCE AND BACKGROUND |
2021-2023 Long-Term Incentive Awards
Each of our director nominees possess a balance of strategic skills, professional experiences and diverse perspectives. The table below summarizes the key skills, experiences and backgrounds of each of our director nominees that are most relevant to their board service.
2021-2023 Long-Term Incentive Awards
| Skills/Experience | Abernathy | Fearon | Goff | Green | Jellison | Khandpur | Lin | Mink | Nicolas | Preete | Verduin | Wulfsohn | | Financial Knowledge of finance or financial reporting; experience with debt/capital market transactions and/or mergers and acquisitions | ● | ● | ● | | ● | | ● | ● | | ● | | ● | | International Experience doing business internationally or focused on international issues and operations and exposure to markets, economies, and cultures outside the U.S. | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | | Industry Expertise Significant experience in the Company’s businesses and industries | ● | ● | ● | | | ● | ● | ● | | ● | ● | ● | | Regulatory Experience in government and regulatory affairs, and regulated industries, including as part of a business and/or through positions with government organizations and regulatory bodies | ● | ● | ● | | | ● | ● | ● | | ● | ● | | | Technology Technical or scientific knowledge and experience implementing technology strategies | ● | | | | | ● | | ● | | | ● | ● | | Human Capital Experience in management of labor relations, in human resources, and talent management | ● | ● | ● | | | ● | ● | ● | ● | ● | ● | ● | | Operations Experience overseeing complex operations and developing and implementing operational plans and business operations strategy | ● | | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | | Corporate Governance Experience and understanding of governance matters and principles, including management accountability, transparency and protection of shareholder interests | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | | IT and Cybersecurity Experience and understanding of information security, data privacy and cybersecurity | | ● | | ● | ● | | | | | ● | | | | Sustainability Experience in environmental matters, community affairs, and/or corporate responsibility initiatives including sustainability | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | | Other Public Company Boards | 1 | 3 | 1 | — | — | 1 | 2 | 2 | — | 1 | 2 | 1 |
2021-2023 Long-Term Incentive Awards
| Board Diversity Matrix (as of March 19, 2024) |
2021-2023 Long-Term Incentive Awards
| Total Number of Directors 12 | | | | | Female | Male | | Gender Identity | | | | Directors | 3 | 9 | | Demographic Background | | | | African American or Black | — | 2 | | Alaskan Native or Native American | — | — | | Asian | — | 1 | | Hispanic or Latinx | — | — | | Native Hawaiian or Pacific Islander | — | — | | White | 3 | 6 | | Two or More Races or Ethnicities | — | — | | Supplemental Characteristics | | | | Person with Disability/Disabilities | 1 | — | | Military Veteran | — | — | | Person of International / Non-U.S. Origin | — | 1 | | LGBTQ+ | — | — |
2021-2023 Long-Term Incentive Awards
| GOVERNANCE HIGHLIGHTS |
2021-2023 Long-Term Incentive Awards
As part of our commitment to overall excellence, our Company’s governance practices include the following:
Board Practices
Board Practices •Our Board annually conducts an evaluation of its performance, which includes a peer evaluation of each Director. •The Governance and Corporate Responsibility Committee reviews criteria for Board membership and considers changes as needed so that the Board continues to reflect the appropriate mix of skills and experience. •Non-employee Directors may not stand for re-election following the date of the Director’s 72nd birthday, although the Board may waive this limitation if it determines such waiver to be in the best interests of the Company. •All Directors stand for election annually. •We maintain a majority voting policy for uncontested Director elections. •We maintain a fully independent Audit Committee, Compensation Committee, and Governance and Corporate Responsibility Committee.
Board Practices
| PROPOSAL 1 — ELECTION OF TWELVE DIRECTOR NOMINEES TO OUR BOARD OF DIRECTORS |
Board Practices
Our Board currently consists of 12 Directors. Each Director serves for a one-year term until a successor is duly elected and qualified, subject to the Director’s earlier death, retirement or resignation. A shareholder who wishes to nominate a person for election as a Director must provide written notice to our Secretary in accordance with the procedures specified in Regulation 12 of our Code of Regulations (“Regulations”). Generally, the Secretary must receive the notice at our principal executive offices not less than 90 nor more than 120 calendar days prior to the first anniversary of the date on which we first mailed our proxy materials for the preceding year’s annual meeting. The notice must set forth, as to each nominee, among other things, the name, age, and other identifying information, principal occupation and employment during the past five years, name and principal business of any corporation or other organization in which such occupation and employment were carried on, certain information regarding Company securities ownership, and a brief description of any arrangement or understanding between such person and any others pursuant to which such person was selected as a nominee. The notice must include the nominee’s signed consent to serve as a Director if elected. The notice must set forth the name and address of, and the number of our common shares owned by, the shareholder giving the notice and the beneficial owner on whose behalf the nomination is made and any other shareholders believed to be supporting such nominee. Following are the nominees for election as Directors for one-year terms expiring in 2025, a description of the business experience of each nominee and the names of other publicly-held companies for which he or she currently serves as a director or has served as a director during the past five years. Each nominee for election as a Director, except for Dr. Khandpur, was elected by our shareholders at our 2023 Annual Meeting. The board appointed Dr. Khandpur to fill the vacancy created by the retirement of former Chairman, President and Chief Executive Officer Robert M. Patterson. The composition of the Board is intended to reflect an appropriate mix of skill sets, experience and qualifications that are relevant to Avient’s business and governance over time. In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that the nominee should serve as a Director, the Board also believes that all of our Director nominees are individuals of substantial accomplishment with demonstrated leadership capabilities. Each of our Director nominees also has the following personal characteristics, which are required attributes for all Board nominees: high ethical standards, integrity, sound judgment and an ability to devote sufficient time to the affairs of our Company. The information below is current as of March 19, 2024.
Board Practices
| Our Board recommends a vote FOR the election of each of the twelve Director nominees to our Board. |
Board Practices
| Robert E. Abernathy Retired Chairman and Chief Executive Officer of Halyard Health, Inc., a medical technology company that focuses on eliminating pain, speeding recovery, and preventing infection for healthcare providers and patients worldwide. Mr. Abernathy served as Chairman and Chief Executive Officer of Halyard Health, Inc. from the time of its spinoff from Kimberly-Clark Corporation (“Kimberly-Clark”) in 2014 until his retirement from those positions in 2017. Prior to that, he worked for Kimberly-Clark, a global personal care products company. He joined Kimberly-Clark in 1982 and served in numerous roles of increasing responsibility, including President, Global Healthcare in 2014 and Executive Vice President, from 2013 to 2014. Qualifications, Attributes, Skills and Experience: We believe that our Company can capitalize on Mr. Abernathy’s significant global experience, particularly in developing markets. Further, Mr. Abernathy’s prior role as a Chief Executive Officer of a publicly traded company and service on several other external boards will enable him to provide relevant and topical advice on issues affecting public companies. Mr. Abernathy’s unique perspective gained while working in the healthcare and consumer products industries can add value when evaluating our commercial relationships in those industries. | Director since: 2018 Age: 69 Current Public Company Directorships: •Haemonetics Corporation Former Directorships: •Halyard Health, Inc. •RadioShack Corp. •Lubrizol Corp. •Kimberly-Clark de Mexico | | Richard H. Fearon Non-Executive Chairman of our Board since 2023. Prior to serving as Board Chair, Mr. Fearon served as Lead Director of our Board from 2015-2023. Retired Chief Financial and Planning Officer of Eaton plc (“Eaton”), a global manufacturing company. Mr. Fearon served as Chief Financial and Planning Officer of Eaton from 2002, and as Vice Chairman from 2009 until his retirement in 2021. In his position at Eaton, Mr. Fearon was responsible for the accounting, control, corporate development, information systems, internal audit, investor relations, strategic planning, tax and treasury functions of Eaton. Prior to Eaton, Mr. Fearon worked at several large diversified companies, including Transamerica Corporation, NatSteel Limited and The Walt Disney Company. Qualifications, Attributes, Skills and Experience: We believe that Mr. Fearon’s years of experience as Eaton’s Chief Financial Officer, together with his years of service at other large global companies, enable him to provide the Board with important insight and leadership. He has comprehensive knowledge of financial accounting standards and extensive experience in financial statement preparation, corporate finance, corporate development, risk management, and investor relations. As an individual with extensive experience as an executive and leader at a multi-national corporation, Mr. Fearon is particularly equipped to advise our Board on current issues facing our Company. He also has significant governance expertise developed through his years as Lead Director of the Company from 2015 through 2023, as well as his service on numerous other boards. He has served as Non-Executive Chairman of our Board since 2023. | Director since: 2004 Age: 68 Current Public Company Directorships: •Waters Corporation •Crown Holdings, Inc. •CRH plc Former Directorships: •Eaton plc •Southern Steel Bhd •Centurion Industries, Ltd. •Hennessy Capital Investment Corp. VI |
Board Practices
| Gregory J. Goff Retired Executive Vice Chairman of Marathon Petroleum Corporation (“Marathon”), a leading, integrated, downstream energy company. Mr. Goff served in this capacity from 2018 until his retirement in 2019. Prior to Marathon’s acquisition of Andeavor (formerly Tesoro Corporation), Mr. Goff served as President and Chief Executive Officer from 2010 to 2018, and as Chairman from 2014 to 2018, of Andeavor, a leading company in the independent refining and marketing business. He also served as Chairman and Chief Executive Officer of Andeavor Logistics LP (formerly Tesoro Logistics LP), a NYSE-listed master limited partnership that owned, operated and developed crude oil and refined products and logistics assets, from 2011 to 2018. Prior to joining Tesoro in 2010, Mr. Goff worked for ConocoPhillips Corporation, an integrated energy company, where he held a number of senior leadership positions, most recently Senior Vice President Commercial from 2008 to 2010. Qualifications, Attributes, Skills and Experience: We believe that, as a Board member with proven leadership capabilities and as an executive who has extensive international business experience across Europe, Asia and Latin America, Mr. Goff provides a unique perspective on our strategy and operations. Mr. Goff’s deep understanding of the energy industry and specialty chemical businesses provides valuable insight into Avient’s strategic planning. His experience as the Chief Executive Officer of a large, independent refining and petroleum products marketing company and his participation as a member of national trade associations provide him with valuable experience that can enhance our Board. | Director since: 2011 Age: 67 Current Public Company Directorships: •Exxon Mobil Corporation Current Non-Public Company Directorships: •X-Energy Reactor Company, LLC Former Directorships: •Enbridge Inc. •Marathon •MPLX GP, TLGP •Andeavor •DCP Midstream GP, LLC •QEP Midstream Partners, LP •Western Logistics GP LLC | | Neil Green Executive Vice President and Chief Digital Officer at Otis Worldwide Corporation (“Otis”), a leading elevator and escalator manufacturing, installation and service company, since 2020. From 2018 to 2020, Mr. Green served as Otis’ Vice President, Transformation and Chief Digital Officer. Prior to joining Otis, Mr. Green served as Vice President, Data Center Group at Intel Corporation, a semiconductor company, and as President, Intel Federal LLC, a subsidiary of Intel Corporation, from 2015 to 2018, and previously in various other roles of increasing responsibility at Intel Corporation. Qualifications, Attributes, Skills and Experience: We believe that Mr. Green’s role as Chief Digital Officer at a global manufacturing company uniquely positions him to provide insights into Avient’s digital strategy and execution, cloud adoption, mobility, data science, and cybersecurity. We further believe that Mr. Green can provide the Board with topical advice regarding innovative new technology developments to improve product development, service and manufacturing. | Director since: 2021 Age: 54 Current Public Company Directorships: •None Former Directorships: •None |
Board Practices
| William R. Jellison Retired Vice President, Chief Financial Officer of Stryker Corporation (“Stryker”), one of the world’s leading medical technology (“Medtech”) companies. Since 2017, Mr. Jellison has served as Senior Advisor for Astor Place Holdings, the Private Equity arm of Select Equities, and consults with other private equity and investment management firms in the Medtech industry. Previously, Mr. Jellison served as Vice President, Chief Financial Officer of Stryker from 2013 to 2016. Prior to joining Stryker, Mr. Jellison served as the Senior Vice President and Chief Financial Officer of Dentsply International (“Dentsply”), the world’s largest manufacturer of professional dental products, from 1998 to 2013, except for a roughly two-year period of time between 2002 and 2005 when he was a Senior Vice President with full P&L responsibilities for some of Dentsply’s operating divisions located in the U.S., Europe and Asia. Mr. Jellison began his career with the Donnelly Corporation, a publicly traded international automotive parts supplier, where he served in several senior leadership roles, advancing to Vice President of Finance. Qualifications, Attributes, Skills and Experience: We believe that Mr. Jellison brings a unique perspective to the Board, especially with respect to opportunities to further specialize in the healthcare industry. In addition, Mr. Jellison brings substantial financial experience from a large, publicly-traded company to the Board. His experience abroad also provides him with diverse operating experiences in international markets, which provides the Board with a meaningful global business perspective. Mr. Jellison is able to use his experience in serving as an executive at a respected Medtech company to guide our Board in driving further specialization. | Director since: 2015 Age: 66 Current Public Company Directorships: •None Current Non-Public Company Directorships: •Young Innovations, Inc. Former Directorships: •None | | Ashish K. Khandpur, Ph.D. President and Chief Executive Officer of Avient. Dr. Khandpur has served as President and Chief Executive Officer of Avient since 2023. Prior to serving in these current roles, Dr. Khandpur served as Group President of the Transportation & Electronics business group for 3M Company (“3M”), a global manufacturing and technology company, from April 2021 to November 2023. During his 28-year career with 3M, Dr. Khandpur held a series of roles with increasing responsibility, including Executive Vice President, Transportation & Electronics business group, from April 2019 to April 2021; Executive Vice President, Electronics & Energy business group, from July 2017 to March 2019; and Senior Vice President, Research & Development and Chief Technology Officer, from July 2014 to June 2017, among other roles. Qualifications, Attributes, Skills and Experience We believe that as our President and Chief Executive Officer and in light of his prior executive experience, Dr. Khandpur is particularly well qualified to serve on our Board. His breadth of experiences in multiple market segments, running complex businesses with broad global footprints, and his deep technical expertise and demonstrated commercial success in building and growing businesses make him particularly well-suited as a Board member to elevate Avient’s performance. His responsibility for developing and executing the Company’s annual operating plans and strategic plans provides him with the knowledge and experience needed to offer unique and valuable input to our Board. | Director since: 2023 Age: 56 Current Public Company Directorships: •Constellation Energy Corporation Former Directorships: •3M India |
Board Practices
| Sandra Beach Lin Retired President, Chief Executive Officer and Director of Calisolar, Inc. (now Silicor Materials Inc.), a solar silicon company. Ms. Lin served in this capacity from 2010 until her retirement in 2011. Previously, she served as Executive Vice President, then Corporate Executive Vice President, at Celanese Corporation (“Celanese”), a global hybrid chemical company, from 2007 to 2010. Prior to Celanese, Ms. Lin held global senior executive positions at Avery Dennison Corporation, Alcoa Inc. and Honeywell International Inc. Qualifications, Attributes, Skills and Experience We believe that Ms. Lin’s extensive senior executive experience, including as a Chief Executive Officer, leading global businesses in multiple industries provides her with valuable skills to serve on our Board. She has a deep understanding of the specialty chemicals industry, a strong operational foundation and wide-ranging international experience. Ms. Lin also currently serves as a director for two other public companies, and one privately-held precision engineered drug delivery company, which provides her with additional experience she utilizes while serving as a valued member of our Board. | Director since: 2013 Age: 66 Current Public Company Directorships: •American Electric Power Company, Inc. •Trinseo PLC Current Non-Public Company Directorships: •Ripple Therapeutics Former Directorships: •WESCO International, Inc. | | Kim Ann Mink, Ph.D. Former Chairman, President and Chief Executive Officer of Innophos Holdings, Inc. (“Innophos”), a leading international producer of performance-critical and nutritional functional ingredients, with applications in food, health and industrial specialties markets. Dr. Mink served in this capacity from 2015 until her retirement in 2020. Prior to joining Innophos, Dr. Mink served as Business President of Elastomers, Electrical and Telecommunications at the Dow Chemical Company (“Dow”), a specialty chemicals provider, from 2012 to 2015. She joined Dow in 2009 as Global General Manager, Performance Materials and President and Chief Executive Officer of ANGUS Chemical Co. (then a fully-owned subsidiary of Dow). Prior to joining Dow, she was Corporate Vice President and Global General Manager, Ion Exchange Resins at the Rohm and Haas Company (now a fully-owned subsidiary of Dow), where she spent more than 20 years serving in numerous senior roles with increasing responsibilities. Qualifications, Attributes, Skills and Experience: We believe Dr. Mink provides us with valuable counsel related to her chemical and advanced materials background. Further, her experience as a Chief Executive Officer of a public company provides Avient with a diverse perspective when forming strategies to guide the direction of our Company. Avient also benefits from her experience and expertise in technology and varied end markets. | Director since: 2017 Age: 64 Current Public Company Directorships: •Eastman Chemical Company •Air Liquide S.A. Current Non-Public Company Directorships: •Group14 Technologies Former Directorships: •Innophos Holdings, Inc. |
Board Practices
| Ernest Nicolas Chief Supply Chain Officer at HP Inc., a technology company with a product and services portfolio of personal systems, printers, and 3D printing solutions, since 2022. From 2020 to 2022, Mr. Nicolas served as Senior Vice President and Chief Supply Chain Officer at Rockwell Automation, Inc. (“Rockwell Automation”), a global leader in industrial automation and digital transformation. From 2019 to 2020, Mr. Nicolas served as Rockwell Automation’s Senior Vice President, Operations and Engineering Services; from 2018 to 2019, he served as Vice President, Global Supply Chain; and from 2015 to 2018, he served as Vice President, Strategic Sourcing and Supply Management. He joined Rockwell Automation in 2006 and has held numerous positions of increasing responsibility since that time. Prior to joining Rockwell Automation, Mr. Nicolas began his career at General Motors Company. Qualifications, Attributes, Skills and Experience: We believe that Mr. Nicolas’ experience as Chief Supply Chain Officer at a large industrial company provides valuable insights into issues impacting our integrated supply chain. Mr. Nicolas has a deep understanding of supply chain planning, strategic sourcing, manufacturing operations, logistics, customer care, and enterprise quality, and we believe that this can assist Avient’s supply chain leadership. In addition, we believe that Mr. Nicolas’ experience in managing manufacturing in the Asia Pacific region can assist Avient with our manufacturing plans in that region. | Director since: 2021 Age: 46 Current Public Company Directorships: •None Former Directorships: •None | | Kerry J. Preete Retired Executive Vice President, Chief Strategy Officer for Monsanto Company (“Monsanto”), a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. Mr. Preete served in this capacity from 2010 until his retirement in 2018. Mr. Preete also previously served as Monsanto’s President, Global Crop Protection Division from 2009 to 2010 and Vice President, International Commercial Business from 2008 to 2009. From 1985 to 2008, Mr. Preete served in various roles of increasing responsibility at Monsanto. Qualifications, Attributes, Skills and Experience: Because of his broad experience at a leading, well-known company, we believe Mr. Preete brings an insightful perspective on running a successful, innovative company. Mr. Preete is specifically adept in not only thinking strategically but also tactically, and these traits will be valuable to Avient as it continues into the future. Further, his global experience and understanding will assist Avient in its plans to operate in different regions and cultures, and we believe his global business acumen is relevant and transferable across industries. Mr. Preete’s operational foundation, strategic expertise, and global experience are assets to Avient’s Board. | Director since: 2013 Age: 63 Current Public Company Directorships: •Corteva, Inc. Former Directorships: •Univar Solutions Inc. |
Board Practices
| Patricia Verduin, Ph.D. Retired Chief Technology Officer for Colgate-Palmolive Company (“Colgate-Palmolive”), a leading consumer products manufacturer. Dr. Verduin served in this capacity from 2011 until her retirement in 2022. Dr. Verduin was Colgate-Palmolive’s Vice President, Research and Development from 2007 to 2011. Prior to joining Colgate-Palmolive, Dr. Verduin served as Senior Vice President and Chief Science Officer, Grocery Manufacturers Association from 2006 to 2007, as Senior Vice President of Product Quality and Development from 2002 to 2006, and as Senior Vice President of Research and Development, Grocery Products Development from 2000 to 2002 at ConAgra Foods, Inc. (now Conagra Brands, Inc.). Qualifications, Attributes, Skills and Experience: We believe that Dr. Verduin’s experience leading large global science, technology, regulatory, and innovation teams in the corporate setting will provide a unique perspective to our Board. Her role as a Chief Technology Officer and roles in science, innovation and product development will provide valuable insight into leading an innovative company and will allow her to provide expert guidance to our management and Board on our technology and innovation strategies. Dr. Verduin was also heavily involved in M&A activity in her various positions and can assist Avient in its future acquisition strategies. | Director since: 2019 Age: 64 Current Public Company Directorships: •FMC Corporation •Ingredion Incorporated Former Directorships: •Monsanto | | William A. Wulfsohn Former Chairman and Chief Executive Officer of Ashland Global Holdings Inc. (“Ashland”), a global leader in providing specialty chemical solutions to customers in a wide range of customer and industrial markets. Mr. Wulfsohn served in this capacity from 2015 until 2019. He was also a Director and Non-Executive Chairman of Valvoline Inc. (“Valvoline”), a leading worldwide producer and distributer of premium-branded automotive, commercial and industrial lubricants and automotive chemicals, from 2016 until 2018. From 2010 until 2014, Mr. Wulfsohn was President and Chief Executive Officer of Carpenter Technology Corporation (“Carpenter”), a manufacturer of stainless steel, titanium and other specialty metals and engineered products, and was a director of Carpenter from 2009 until 2014. Qualifications, Attributes, Skills and Experience We believe that Mr. Wulfsohn is a valuable member of our Board. He is a proven leader, with deep and varied experience in technology and successful business operations. His background in managing operations in Europe and Asia/Pacific provides him with international expertise that is of value to Avient. Further, we believe his experience as a Chief Executive Officer of publicly-traded specialty companies has given him unique skills to assist in providing guidance on Avient’s continuing transformation. | Director since: 2011 Age: 62 Current Public Company Directorships: •Modine Manufacturing Company Former Directorships: •Anzu Special Acquisition Corp I •Ashland Global Holdings Inc. •Carpenter Technology •Valvoline Inc. |
Board Practices
ADVISORY VOTE
Board Practices
| PROPOSAL 2 — APPROVAL, ON AN ADVISORY BASIS, OF NAMED EXECUTIVE OFFICER COMPENSATION |
Board Practices
As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”), our Board is submitting a “Say on Pay” proposal for shareholder consideration. While the vote to approve Named Executive Officer compensation is non-binding and solely advisory in nature, our Board and the Compensation Committee will review the voting results. If there are a significant number of negative votes, we will seek to understand the concerns that influenced the vote and expect to address them in making future decisions about our executive compensation programs. At our 2023 Annual Meeting, shareholders voted to hold an advisory “Say on Pay” vote on an annual basis. Accordingly, we have determined to submit an advisory vote to approve our Named Executive Officer compensation to our shareholders at each annual meeting (with the next vote expected to occur in 2025) until the Company seeks another advisory vote on the frequency of the advisory vote on our Named Executive Officer compensation program (which next frequency vote is anticipated to occur at the 2029 Annual Meeting). As described more fully in the “Compensation Discussion and Analysis” section of this proxy statement, the Compensation Committee of our Board has structured our executive compensation program to achieve the following key objectives:
Board Practices
| Objective | How Our Executive Compensation Program Achieves this Objective | | Pay-For-Performance | Setting a significant portion of each Named Executive Officer’s total compensation in the form of variable compensation that is earned when pre-established financial performance goals are achieved | | Align Executive Compensation with Shareholders’ Interests | Focusing incentive programs on the critical performance measures that determine Avient’s overall success and reward executives for the attainment of short-term results, balanced with the need for sustainable long-term success | | Attract, Motivate and Retain Management | Competing effectively to attract, motivate and retain a management team that leads in setting and achieving the overall goals and objectives of Avient |
Board Practices
We urge shareholders to read the “Compensation Discussion and Analysis” section of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives. We also encourage you to review the 2023 Summary Compensation Table and other related compensation tables and narratives in the “Executive Compensation” section of this proxy statement, which provide detailed information regarding the compensation of our Named Executive Officers. The Board and the Compensation Committee believe that the policies and procedures described and explained in the “Compensation Discussion and Analysis” section of this proxy statement are effective in achieving our business goals and the compensation of our Named Executive Officers reported in the “Executive Compensation” section of this proxy statement has supported and contributed to the Company’s recent and long-term success.
Board Practices
| Our Board recommends a vote FOR the approval, on an advisory basis, of Named Executive Officer compensation. |
Board Practices
We believe you should vote “FOR” our Named Executive Officer compensation program and approve the following resolution because the compensation actually earned by our Named Executive Officers for our ADVISORY VOTE 2023 performance was aligned with our pay-for-performance objectives, our Company’s performance and shareholder interests: “RESOLVED, that the compensation paid to Avient’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion, is hereby APPROVED.”
Board Practices
| PROPOSAL 3 — RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP ("EY") AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024 |
Board Practices
The Audit Committee has appointed EY as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2024. The Board recommends ratification of the Audit Committee’s appointment of EY. The selection of EY as our independent registered public accounting firm is not required to be submitted to a vote of our shareholders for ratification. The Sarbanes-Oxley Act of 2002 requires that the Audit Committee be directly responsible for the appointment, compensation and oversight of our independent auditor. The Board is submitting the appointment to our shareholders for ratification as a matter of good corporate practice. If our shareholders fail to vote on an advisory basis in favor of the selection, the Audit Committee will reconsider whether to retain EY and may retain that firm or another firm without re-submitting the matter to our shareholders. Even if our shareholders ratify the appointment, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our best interests and the best interests of our shareholders. A representative of EY is expected to be present at the Annual Meeting. The representative will be given an opportunity to make a statement if desired and to respond to appropriate questions regarding EY’s examination of our consolidated financial statements and records for the year ended December 31, 2023.
Board Practices
| Our Board recommends a vote FOR the ratification of the appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2024. |
Board Practices
| INDEPENDENT REGISTERED PUBLIC ACCOUNTANT SERVICES AND RELATED FEE ARRANGEMENTS |
Board Practices
Services provided by EY, our independent registered public accounting firm, and related fees in each of the last two fiscal years were as follows: Audit Fees. Audit services include the annual audit of the consolidated financial statements, the audit of internal controls over financial reporting, the reviews of our quarterly reports on Form 10-Q, the issuance of comfort letters and consents, the review of registration statements filed with the SEC, accounting and financial reporting consultations and international statutory audits. Fees for audit services totaled $5.3 million in 2023 and $5.9 million in 2022. The full Audit Committee or the Chair of the Audit Committee pre-approved all audit services and related fee arrangements for 2023 in accordance with the Audit Committee Pre-Approval Policy for all Audit and Non-Audit Services and Related Fee Arrangements. Audit-Related Fees. Audit-related services principally include employee benefit plan audits, accounting consultations and attest services that are not required by statute or regulation and other international attest services not classified as audit fees. There were no fees for audit-related services billed in 2023 or 2022. Tax Fees. Tax services include tax compliance, tax advice and tax planning. Fees for tax services totaled $0.9 million in 2023 and $1.5 million in 2022. The Audit Committee pre-approved all tax fee arrangements billed in 2023. All Other Fees. No fees for other services were billed in 2023 or 2022. Our Audit Committee Pre-Approval Policy for all Audit and Non-Audit Services and Related Fee Arrangements (the “Pre-Approval Policy”) requires our Audit Committee to pre-approve all audit and non-audit services performed by EY in order to assure that the provision of such services and related fee arrangements do not impair EY’s independence. Under the Pre-Approval Policy, the Audit Committee may delegate pre-approval authority to one or more of its members, and the member or members to whom the Audit Committee delegates such authority must report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee has formally delegated this pre-approval authority to its Chair. Management has no authority to approve services performed by EY that have not been pre-approved by the Audit Committee. The term of any pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. EY will provide us a description of work scope and supporting back-up documentation regarding the specific services they will provide. At each meeting of the Audit Committee, the current year’s previously pre-approved independent auditor fees along with any proposed revisions will be presented for approval. Any interim requests between Audit Committee meetings to provide services that require separate pre-approval will be submitted to the Audit Committee or the Audit Committee Chair by EY and our Chief Financial Officer, or Controller, and must include a statement as to whether, in each of their respective views, the request is consistent with the Securities and Exchange Commission’s ("SEC") rules on auditor independence.
Board Practices
| REPORT OF THE AUDIT COMMITTEE |
Board Practices
The Audit Committee assists the Board in fulfilling its oversight responsibilities to shareholders relating to the integrity of the Company’s consolidated financial statements, the Company’s compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, and the performance of the Company’s internal and independent auditors. The Audit Committee’s specific responsibilities are described in its charter, which is available on the Company’s website at: www.avient.com under the heading “Investors” and the subheading “Governance.” The Audit Committee currently consists of six Directors, each of whom our Board has determined to meet the requirements of the New York Stock Exchange (the “NYSE”) for independence and financial literacy. Five members of the Audit Committee also meet the requirements of an “audit committee financial expert” as defined by the SEC. The Audit Committee approves, subject to shareholder ratification, the appointment of the Company’s independent registered public accounting firm and pre-approves all audit and non-audit services to be performed by the firm. The Audit Committee has retained Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024. The Audit Committee through its Chair is also directly involved in the selection of EY’s lead engagement partner, which occurs every five years. The most recent lead engagement partner rotation occurred at the start of 2022. Avient’s Audit Committee believes that the continued retention of EY to serve as Avient’s independent registered public accounting firm is in the best interests of Avient and its shareholders. In making such determination, the Audit Committee considers, among other things, an evaluation of EY’s performance, qualifications, independence, tenure, and appropriateness of fees, as well as the potential impact of changing auditors. EY has been retained as the independent registered public accounting firm for Avient and its predecessor companies, PolyOne Corporation and The Geon Company, continuously since 1993. Management has the primary responsibility for the completeness and accuracy of the Company’s consolidated financial statements and disclosures, the financial reporting process and the effectiveness of the Company’s internal control over financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 with management and the independent registered public accounting firm, including any significant changes in the Company’s selection or application of accounting principles. The Audit Committee also reviewed and discussed with management and the independent registered public accounting firm management’s report on internal control over financial reporting, including the significance and status of control deficiencies identified and the results of remediation efforts undertaken, to determine the effectiveness of internal control over financial reporting at December 31, 2023. The Audit Committee reviewed with the independent registered public accounting firm, which has the responsibility for expressing an opinion on the conformity of the consolidated financial statements with generally accepted accounting principles and applicable rules and regulations, their judgments as to the quality, not just the acceptability, of Avient’s critical accounting principles and estimates and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards. The Audit Committee also reviewed with the independent registered public accounting firm its report on the Company’s internal control over financial reporting as of December 31, 2023, including the basis for its conclusions. The Audit Committee reviewed and discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. In addition, EY has provided the Audit Committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with EY their firm’s independence from management and Avient. The Audit Committee has approved all audit, audit-related and non-audit services and fees provided to the Company by the independent registered public accounting firm in accordance with its approval process. Based upon the Audit Committee’s considerations, the Audit Committee has concluded that EY is independent. The Audit Committee discussed with Avient’s internal and independent auditors the overall scope and audit plans and evaluated their performance. The Audit Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of Avient’s internal control over financial reporting, and the overall quality of Avient’s financial reporting. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board (and the Board has approved) that the audited consolidated financial statements and management’s assessment of the effectiveness of the Company’s internal control over financial reporting be included in the Annual Report on Form 10-K for the year ended December 31, 2023, to be filed with the SEC. All members of the Audit Committee concur with this report.
6 of 12 Director Nominees
6 of 12 Director Nominees (1) Diversity characteristics are based on information self-identified by each director to the Company.
6 of 12 Director Nominees
| 2023 NON-EMPLOYEE DIRECTOR COMPENSATION |
6 of 12 Director Nominees
We compensate non-employee Directors for their service on the Board with a combination of cash and equity awards, the amounts of which are commensurate with their role and involvement, and consistent with peer company practices. In setting Director compensation, we consider the significant amount of time our Directors spend fulfilling their duties as well as the skill level required of members of our Board. We compensate our non-employee Directors in a way that is competitive, attracts and retains a high caliber of Directors, and aligns their interests with those of our shareholders.
6 of 12 Director Nominees
| NON-EMPLOYEE DIRECTOR COMPENSATION HIGHLIGHTS |
6 of 12 Director Nominees
•Annual review and assessment of non-employee Director compensation by the Compensation Committee; •Comparative assessment of non-employee Director compensation by the Consultant against market data; •Emphasis on equity in the overall compensation mix to support shareholder alignment; •Shareholder-approved limit on cash and equity compensation to non-employee Directors under the 2020 Plan; and •Robust stock ownership guideline set at 12,500 shares for each non-employee Director (which amount is equivalent to more than four times the annual cash retainer, based on the Company's closing stock price on December 29, 2023 of $41.57).
6 of 12 Director Nominees
| NON-EMPLOYEE DIRECTOR RETAINER AND MEETING FEES |
6 of 12 Director Nominees
In 2023, we paid our non-employee Directors a retainer at an annual rate of $250,000 (payable in quarterly installments in arrears) consisting of $110,000 in cash and $140,000 in targeted value of fully vested common shares (subject to rounding). In 2023, the Compensation Committee analyzed competitive market data provided by the Consultant relating to both the cash retainer (including the additional cash retainers for the Lead Director and committee chairs, and unscheduled meeting fees) and the equity award value. These compensation elements were compared against Avient’s peer group (as described in the "Compensation Discussion and Analysis"), as well as a general industry group consisting of 123 comparably-sized general industry (excluding financial services and utilities) companies based on median revenues. In the Compensation Committee’s view, this analysis demonstrated that the non-employee Directors’ compensation was reasonably positioned relative to market. No changes were made in 2023 to the Directors' base cash retainer and equity award value. No fees are paid for attendance at regularly scheduled board meetings. We pay individual meeting fees only as follows: $2,000 in cash for each unscheduled Board and committee meeting attended; and $1,000 in cash for participation in each unscheduled significant telephonic Board and committee meeting. In addition, the Non-Executive Chairman or Lead Director (as applicable) and chairs of the following committees receive the additional fixed annual cash retainers (payable in quarterly installments in arrears) listed below. The additional retainer for the Non-Executive Chairman was implemented in December 2023. None of the other additional retainers were increased over 2022 levels. We also reimburse Directors for expenses associated with each meeting attended.
6 of 12 Director Nominees
| Role | Annual Cash Retainers | | Non-Executive Chairman | $130,000 | | Lead Director | $30,000 | | Chair, Audit Committee | $20,000 | | Chair, Compensation Committee | $15,000 | | Chair, Environmental, Health and Safety Committee | $15,000 | | Chair, Governance and Corporate Responsibility Committee | $15,000 |
6 of 12 Director Nominees
Non-employee Directors may defer payment of all or a portion of their annual cash retainer under our Deferred Compensation Plan for Non-Employee Directors (“Deferred Compensation Plan”). Directors may also elect to have their cash retainer converted into our common shares. These shares, as well as the annual retainer consisting of fully vested common shares, may also be deferred under the Deferred Compensation Plan. In 2023, we awarded shares to Directors under the 2020 Plan. Deferred compensation for the participating Directors, whether in the form of cash or common shares, is recorded in a recordkeeping account that reflects the amounts deferred and any applicable notional earnings. Dividends, if any, on the deferred common shares are accrued for the benefit of the participating Directors.
6 of 12 Director Nominees
| 2023 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE |
6 of 12 Director Nominees
| Name | Fees Earned or Paid in Cash (a) ($) | Stock Awards (b) ($) | Total (c) ($) | | R.E. Abernathy | 111,000 | 140,030 | 251,030 | | R.H. Fearon (1) | 164,425 | 140,030 | 304,455 | | G.J. Goff | 126,000 | 140,030 | 266,030 | | N. Green | 111,000 | 140,030 | 251,030 | | W.R. Jellison (2) | 131,000 | 140,030 | 271,030 | | S.B. Lin | 111,000 | 140,030 | 251,030 | | K.A. Mink | 111,000 | 140,030 | 251,030 | | E. Nicolas (3) | 111,000 | 140,030 | 251,030 | | K.J. Preete | 126,000 | 140,030 | 266,030 | | P. Verduin | 111,000 | 140,030 | 251,030 | | W.A. Wulfsohn | 111,000 | 140,030 | 251,030 |
6 of 12 Director Nominees
(1) In 2023, Mr. Fearon's cash fees included amounts earned for his service as Lead Director (January 1, 2023 - November 30, 2023) and Non-Executive Chairman (as of December 1, 2023). (2) In 2023, Mr. Jellison deferred payment of all of his annual cash retainer, as well as meeting fees, into the Deferred Compensation Plan, which amounts were invested according to his elections. (3) In 2023, Mr. Nicolas deferred payment of all of his annual cash retainer, as well as meeting fees, into the Deferred Compensation Plan, which amounts were invested in Company common shares, rounded up to the nearest whole share. As a result, he was credited with 2,803 common shares under the Deferred Compensation Plan.
Stock Awards (column (b))
The purpose of our stock ownership guidelines (referred to as the “Guidelines”) is to better align our Directors’ financial interests with those of our shareholders by requiring our Directors to own a minimum amount of our shares. In order to reflect the Board’s commitment to share ownership, the required share ownership level for non-employee Directors is a minimum of 12,500 shares (which amount, for 2023, is equivalent to more than four times the annual cash retainer, based on the Company's closing stock price on December 29, 2023 of $41.57). The Directors are expected to make continuing progress towards compliance with the Guidelines and to comply fully within five years of becoming subject to the Guidelines. For purposes of our Guidelines, the following types of share ownership and equity awards are included as shares owned: shares directly and indirectly held; shares and phantom shares held in our deferral plans; and restricted stock units. As of the date of this proxy statement, all Directors either meet, or are viewed by us as on track to meet, the Guidelines. All Directors are required to retain 100% of all shares obtained through us, as compensation for services provided to us, with such percentage to be calculated after any reduction in the number of shares to be delivered as a result of any taxes and exercise costs relating to the shares (if applicable). This requirement to retain 100% of all shares obtained from us ceases once the Director has met the Guidelines, as long as the Guidelines continue to be met. Similar policies, as they relate to our Named Executive Officers, are set forth in the “Other Aspects of Our Compensation Programs” section of this proxy statement.
Stock Awards (column (b))
Leadership Transitions. On December 1, 2023, Mr. Patterson retired as Chairman, President and Chief Executive Officer, but continued to serve as an employee of the Company in the role of Special Advisor, and is expected to remain in such role until May 31, 2024. Dr. Khandpur became our President and Chief Executive Officer as of Mr. Patterson's retirement, and Mr. Fearon became our Non-Executive Chairman. In connection with the leadership transition and Dr. Khandpur's service, the Compensation Committee determined an appropriate compensation package for Dr. Khandpur, as described in the "Other Aspects of our Compensation Programs" section of this proxy statement. In addition, Ms. Kunkle retired from her roles and as an employee of the Company on January 31, 2024. How Pay is Tied to Company Performance. Our compensation programs are designed to: (1) reward employees for generating consistent improvement in Company performance; (2) align compensation with the interests of our shareholders with the ultimate goal of improving long-term shareholder value; and (3) attract, motivate and retain talented executives. We believe that executive compensation, including both pay opportunities and pay actually earned, should be tied to Company performance, which we view in two primary ways: •The Company’s operating performance, including results against both our long-term and short-term growth targets; and •Return to shareholders over time. How our compensation programs contribute to our Company’s success is described below. Key 2023 Company Performance Results and Return to Shareholders. While 2023 was a challenging year due to weak global demand conditions and significant customer inventory destocking, we were able to partially offset these dynamics by pricing effectively, capturing deflation and managing costs. We also made great strides in integrating APM. We are well positioned to continue to build upon our transformed portfolio, leveraging our culture of strong customer focus and platform of differentiated technologies. Through continuous innovation, Avient consistently introduces new products and technologies, sustaining our competitive edge in the market. 2023 Company highlights include: •Full-year GAAP earnings per share ("EPS") of $0.83 in 2023, compared to $0.90 from continuing operations in 2022; •Adjusted EPS of $2.36 in 2023, compared to pro forma adjusted EPS of $3.04 in 2022(1); •2023 cash flow from operations was $202 million; excluding $104 million of taxes paid on the sale of our Distribution business (which was completed in 2022), cash flow from operations was $306 million(1); •Increased our dividend on an annualized basis by 4% to $1.03; the 13th consecutive year of annual increase; •Our injury incident rate was 0.58 (per 100 full-time workers per year) compared to the industry average of 3.40 in 2022; •Certified again as an ACC Responsible Care® organization for outstanding environmental, health, safety and security performance; and •Received our 5th certification as a Great Place to Work® by the Great Place to Work Institute. (1) Adjusted EPS, pro forma Adjusted EPS, and cash flow excluding taxes paid on the sale of our Distribution business are financial measures that are not presented in accordance with generally accepted accounting principles ("GAAP"). See Appendix A for an explanation of management’s use of non-GAAP financial measures and a reconciliation of these measures to their most directly comparable financial measures calculated in accordance with GAAP. Pay-for-Performance: 2023 Compensation Outcomes. Our 2023 compensation results continued to reflect our pay-for-performance philosophy of aligning executive compensation directly with our operational and financial performance: •2023 Annual Incentive Program: The 2023 Annual Incentive Program used adjusted operating income, working capital as a percentage of sales and sustainability metrics. Our 2023 financial performance resulted in the Named Executive Officers participating in the 2023 Annual Incentive Program receiving payouts based on the attainment rates below. The description set forth in the “What We Pay and Why: Elements of Compensation” section of this proxy statement highlights the key financial results that were used in determining payouts to our Named Executive Officers under our 2023 Annual Incentive Program.
Stock Awards (column (b))
| 2023 Corporate Plan Annual Incentive Program (Patterson, Beggs, Kunkle and Rathbun) | 52.5% | | 2023 CAI Annual Incentive Program (Garratt) | 52.5% |
Stock Awards (column (b))
•2021-2023 Long-Term Incentive Program: We used adjusted EPS as the performance measure for our 2021-2023 Long-Term Incentive Program cash-settled performance units, as we believe an improvement in EPS drives improvement in shareholder value. The participating Named Executive Officers received a payout under this award based on 170% attainment. The description set forth in the “What We Pay and Why: Elements of Compensation” section of this proxy statement highlights the key financial results that were used in determining payouts to our Named Executive Officers for the 2021-2023 performance period. In addition, our SARs have performance conditions, tied to our stock price appreciation. Our executive compensation programs reflect the belief that the amount earned by our executives must to a significant extent depend on achieving rigorous company and business segment objectives designed to enhance shareholder value. Looking back, and taking into account the performance achieved compared to the objectives set, we believe that our Named Executive Officers’ incentive compensation results are aligned with the operational performance that we achieved for 2023. Results of Say-on-Pay Vote. At the 2023 Annual Meeting, we held our annual advisory vote on named executive officer compensation. Over 94% of the votes cast were in favor of this advisory proposal. The Compensation Committee considered the voting results as well as other input from conversations held with investors and viewed them as continued support of our executive compensation programs. As a result, the Compensation Committee made no material changes in the structure of our compensation programs or pay-for-performance philosophy based on the voting results for the proposal. At the 2024 Annual Meeting, we will again hold an advisory vote to approve Named Executive Officer compensation. The Compensation Committee expects to consider the results from this year’s and future advisory votes on named executive officer compensation. Executive Compensation Practices and Programs. The executive compensation practices and programs described below and in the accompanying tables played a vital role in driving our financial results, aligning pay with performance for 2023, and are intended to attract and retain a highly experienced, successful team to manage Avient. Our practices and programs are directly linked to our key business objectives and are designed to create value for our shareholders, including when we achieve positive operational performance.
Stock Awards (column (b))
| We align executive compensation with shareholder interests We avoid excessive risk while fostering sustainable company growth | ✓ | Ensure that the majority of executive pay is based on objective, challenging financial goals and Company performance | | | ✓ | Utilize maximums on potential payments, include retention vehicles in our compensation programs, provide multiple performance targets and maintain robust Board and management processes to identify risk, including a risk assessment of compensation programs that is performed each year | | | ✓ | Maintain stock ownership guidelines for all Named Executive Officers | | | ✓ | Evaluate annual and aggregate dilution from stock awards prior to our annual equity award grants | | We adhere to executive compensation best practices | ✓ | Do not provide gross-ups for excise taxes on “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (“Code”) in any new management continuity agreements or for financial planning benefits | | | ✓ | Maintain a NYSE-compliant clawback policy applicable to all executive officers | | | ✓ | Prohibit Named Executive Officers from hedging or pledging our securities | | | ✓ | Utilize an independent consultant to help the Compensation Committee understand compensation practices that impact Named Executive Officer compensation | | | ✓ | Provide for minimum required vesting periods for our equity awards |
Stock Awards (column (b))
Our executive compensation programs reward our officers’ performance, are specifically linked to our achievement of strategic operating and financial goals, and are designed to be competitive in the marketplace. We reward our executives for performance that meets or exceeds our strategic goals, without encouraging excessive risk-taking that could have a detrimental impact on our long-term results and the interests of our shareholders. We believe the design of our compensation plans and the relative mix of compensation elements successfully motivate our executives to improve our overall corporate performance and the profitability of the specific business segments for which they are responsible, thus maximizing shareholder value. The main objectives of our executive compensation programs are to: •Foster a pay-for-performance culture by rewarding the achievement of specified strategic operating and financial objectives that maximize shareholder value; •Help ensure our goals and objectives are aligned with the interests of our shareholders by recognizing and rewarding business results and the growth of our stock price through incentive programs; and •Attract, motivate, and retain a highly qualified and successful management team to lead Avient in setting and effectively executing upon our strategic goals and objectives. Compensation Consultant. Our executive compensation programs are approved and overseen by the Compensation Committee, which is composed entirely of independent Directors. The Compensation Committee retained the Consultant in 2023 to assist as a general matter with assessing the competitiveness and overall appropriateness of our executive compensation programs. Typically, the Compensation Committee will work with the Consultant and consider input from members of senior management to help ensure that our executives, including our Named Executive Officers, receive market competitive compensation programs that reward business results. As described below, the Consultant assisted the Compensation Committee by (1) providing comparative compensation information for management's review of base salaries, annual incentive targets and long-term incentive targets in the context of a general understanding of current compensation practices in the market, (2) providing guidance on incentive plan design, (3) monitoring and communicating trends in executive compensation to the Compensation Committee, (4) assisting with our proxy statement disclosures and (5) assessing our Board’s compensation. Competitive Market Pay Information. We designed our compensation programs to be competitive with companies of comparable size and industry with whom we compete for executive talent. In a typical year, we review competitive market compensation data relating to salary, annual incentives and long-term incentives. In its normal process, while the Compensation Committee does consider comparative compensation information to gain a general understanding of current compensation practices in the market, it does not benchmark or ultimately target a specific percentile or data point in assessing competitiveness for base pay or our incentive programs. Individual opportunities vary based on length of time with Avient, individual performance and level of leadership responsibility within the Company. The Compensation Committee also obtains advice and recommendations from the Consultant regarding other areas of total compensation. In preparing competitive market data for 2023, we drew from two independent sources. We first reviewed proxy statement disclosures of a peer group of similarly-sized United States based companies as a market check with respect to the compensation for our senior executives. This approach provided insight into current compensation practices at business competitors or companies facing similar operating challenges. We annually evaluate the composition of our compensation peer group, giving specific consideration to company size, global presence, and specialty chemical focus. We also look at the frequency with which these companies were used as peers by other companies in our industry and which companies had identified Avient as a peer. Each of the companies constituting our peer group for 2023 meet a majority of the primary criteria established above. The peer group consisted of the following 15 companies after the Compensation Committee made adjustments to remove W.R. Grace & Co., International Flavors & Fragrances Inc., Univar Solutions Inc., and Albemarle Corporation, and add Stepan Company, Quaker Chemical Corporation, and Sensient Technologies Corporation.
Stock Awards (column (b))
| Avient's 2023 Peer Group for Compensation Decisions | | | | Ashland Global Holdings Inc. | Eastman Chemical Company | RPM International Inc. | | Avery Dennison Corporation | FMC Corporation | The Scotts Miracle-Gro Company | | Cabot Corporation | H.B. Fuller Company | Sensient Technologies Corporation | | Celanese Corporation | Hexcel Corporation | Stepan Company | | The Chemours Company | Quaker Chemical Corporation | Trinseo S.A. |
Stock Awards (column (b))
The second independent source of data that we used to augment the peer proxy analysis was the Consultant’s analysis of competitive market data relating to other applicable general industries. The Consultant specifically used the Willis Towers Watson’s executive compensation database. To obtain comparability based on company size, the Consultant’s analysis either referenced a specific sample of comparably-sized companies or calibrated the pay of a broad sample of companies against company size. Avient did not select the companies that comprise any of these survey groups, and the component companies’ identities were not a material factor in this analysis. Review of 2023 Named Executive Officer Compensation. Management and the Compensation Committee typically review the specific pay disclosures of our peer group and the broad-based survey data provided by the Consultant. Management uses this data to develop recommendations for the Compensation Committee’s review regarding eligibility and award opportunities as well as performance measures and goals for our long-term and short-term incentive plans commencing in the following year. The Compensation Committee typically also considers this information when making compensation decisions and aligning each of the pay elements with our compensation objectives. For 2023, the general decision was made by the Compensation Committee (with the support of management) not to make any base salary or annual or long-term incentive target opportunity adjustments for the Named Executive Officers. This decision was made based primarily on the Compensation Committee's overall assessment of the general economic climate and challenges facing Avient (and not based on the comparative compensation information). The Compensation Committee used comparative compensation information from the peer group in a general manner when negotiating and determining the initial compensation arrangements for Dr. Khandpur for 2023 and into 2024.
Stock Awards (column (b))
| Base Salary | Annual Incentive | Long-Term Incentive | | To attract and retain talent | Drives the achievement of key business results on an annual basis | Directly ties the interests of NEOs to our shareholders | | Fixed base of cash compensation | Performance-based and not guaranteed | Helps retain key talent and a majority is performance-based and not guaranteed | | Weighting 14%—CEO 29%—CFO 32%—Other NEOs | Weighting 18%—CEO 22%—CFO 22%—Other NEOs | Weighting 68%—CEO 49%—CFO 46%—Other NEOs |
Stock Awards (column (b))
While the Compensation Committee typically considers comparative compensation information to gain a general understanding of current compensation practices in the market, it does not benchmark or ultimately target a specific percentile or data point in assessing competitiveness for base pay or our incentive programs. Individual opportunities vary based on length of time with Avient, individual performance and level of leadership responsibility within the Company. This strategy is consistent with our competitive market pay philosophy discussed in the “Executive Compensation Philosophy and Objectives” section of this proxy statement. 2023 Base Salary. Base salaries for our Named Executive Officers are typically determined on an individual basis by the Compensation Committee after consideration of: (1) the CEO’s recommendations (for all Named Executive Officers other than the CEO); (2) breadth, scope and complexity of the executive’s role; (3) internal equity; (4) current compensation; (5) tenure in position; (6) market pay levels and trends around merit increases; and (7) individual performance. As discussed above, however, for 2023, the Compensation Committee determined base salaries for Messrs. Patterson, Garratt and Rathbun, and Mses. Beggs and Kunkle would remain unchanged from 2022 as follows: Mr. Patterson – $1,170,000; Ms. Beggs – $575,000; Mr. Garratt – $485,000; Mr. Rathbun – $525,000; and Ms. Kunkle – $495,000. In connection with his appointment as President and Chief Executive Officer, Dr. Khandpur's initial base salary was established at $1,050,000 through negotiation and guided by comparative compensation information as discussed above. 2023 Annual Incentive. We provided an annual incentive opportunity for 2023 under the 2020 Plan to (1) reward our Named Executive Officers for achieving specific performance goals that would advance our profitability, (2) drive key business results, and (3) recognize individuals based on their contributions to those results. The Named Executive Officers’ 2023 individual annual incentive opportunities (expressed as a percentage of base pay) that were approved by the Compensation Committee and effective for the 2023 Annual Incentive Program were unchanged from 2022 and were as follows: Mr. Patterson – 130%; Ms. Beggs – 75%; Mr. Rathbun –75%; and Mr. Garratt and Ms. Kunkle – 65%. Dr. Khandpur did not participate in the 2023 Annual Incentive Program. The Compensation Committee determined, after a thorough evaluation of possible plan designs and performance measures, that we would maintain generally the same fundamental annual incentive design in 2023 that we used in 2022. The Compensation Committee's evaluation demonstrated that the following metrics would be the most critical elements of Avientʼs performance: •Adjusted Operating Income. Adjusted operating income was defined as operating income excluding special items (as noted on Appendix A). •Working Capital as a Percentage of Sales. Working capital as a percentage of sales was calculated by taking the average 13 months of total Company working capital divided by the sum of 12 months of 2023 total Company sales, where working capital equals (1) trade accounts receivable (2) plus inventory (3) minus trade accounts payable. •Sustainability Metrics. The specific sustainability metrics were determined by the Committee and were generally designed to: (1) improve employee safety and employee engagement; and (2) reduce energy and waste intensity. The payouts under the 2023 Annual Incentive Program were based on attainment with respect to target goals set for each financial performance measure and, with respect to the sustainability metrics, included specific metrics for two of our “Ps of Sustainability”: People and Planet. Rewardable attainment for each measure ranged from 50% (threshold) to 200% (maximum) of goal. If achievement with respect to any objective performance measure fell between the threshold and target, or between the target and maximum, earned award amounts for that particular performance measure were interpolated on a straight-line mathematical basis. If achievement with respect to any performance measure did not reach threshold, then that measure would have been deemed to have 0% attainment. The Compensation Committee made a final determination of the amount to be paid. The performance measures for the 2023 Annual Incentive Program were weighted as outlined below. The 2023 Corporate and Business Segment Annual Plan weightings reflect adjustments from 2022 as follows:
Stock Awards (column (b))
| Corporate Annual Incentive Program Measure | 2022 Weighting | 2023 Weighting | | Adjusted Operating Income (Consolidated) | 60% | 70% | | Working Capital as a % of Sales | 20% | 20% | | Sustainability Objectives | 20% | 10% |
Stock Awards (column (b))
| Business Segment Annual Incentive Program Measure | 2022 Weighting | 2023 Weighting | | Adjusted Operating Income (Consolidated) | 20% | 10.5% | | Adjusted Operating Income (Business Segment results) | 40% | 59.5% | | Working Capital as a % of Sales (Business Segment results) | 20% | 20% | | Sustainability Objectives | 20% | 10% |
Stock Awards (column (b))
We set appropriate performance goals in 2023 under the 2023 Annual Incentive Program that focused our efforts on those factors that we believed were critical to our ongoing success, including earnings improvement, cash generation from working capital, efficiencies in our operations, and the advancement of sustainability initiatives. The 2023 performance goals were set in accordance with our strategic plan framework and annual operating plan, developed at the end of 2022. At that time, we viewed the targeted level of performance for each measure as challenging to achieve. The threshold, target and maximum goals, attainment levels, and final payouts for each objective metric for the Named Executive Officers are set forth in the table below. The 2023 adjusted operating income target was considered and set by the Compensation Committee below 2022 actual results due to the anticipated magnitude of lower global demand and customer inventory destocking effects on our business (partially offset by planned cost reductions and margin improvement initiatives). The Compensation Committee in particular recognized that these lower demand and destocking effects would be outside of the control of the Company and its senior management team. Progress against the working capital as a percentage of sales metric is reflected by lower levels of working capital, so actual results that are lower than target are viewed as exceeding target performance. As mentioned above, the sustainability metrics were based on our 2 Ps of People and Planet. The “People” metric considered both (1) the results of our 2023 Great Places to Work® employee engagement survey (and whether the results resulted in certification by Great Places to Work and an improvement over the prior year’s scores), and (2) the percentage of employees who participated in a safety activity during the year. The “Planet” metric considered both (1) waste to landfill intensity (Kg / MT Sales); and (2) weather adjusted energy intensity. The Compensation Committee determined: (1) that the "People" objectives had been met as we were certified as a Great Place to Work and more than 99% of employees participated in at least one safety improvement activity in 2023; and (2) that the "Planet" objective regarding waste to landfill intensity had been exceeded as a result of the reduction achieved, but that the objective regarding energy intensity had not been met. Messrs. Patterson and Rathbun and Mses. Beggs and Kunkle's 2023 Annual Incentive Program opportunities were based on consolidated results. Total attainment for these participants under the 2023 Annual Incentive Program was 52.5%, with the components consisting of (dollars in millions):
Stock Awards (column (b))
| 2023 Corporate Plan Annual Incentive Program* (Patterson, Beggs, Kunkle, Rathbun) | | | | | | | | Measure | Weighting | Threshold | Target | Maximum | Results | Payout % | | Adjusted Operating Income (consolidated) | 70% | $314.5 | $338.6 | $399.6 | $312.8 | 0.0% | | Working Capital as a % of Sales | 20% | 12.4% | 11.7% | 10.7% | 10.3% | 200.0% | | Sustainability Objectives | 10% | See above disclosure for more information about goals and achievements | | | | 125.0% | | Total Attainment | | | | | | 52.5% |
Stock Awards (column (b))
*Adjusted operating income (performance measures and results) reported in the table above was calculated with adjustments for special items (as noted on Appendix A) pursuant to the terms of the awards and as approved by the Compensation Committee. Mr. Garratt's 2023 Annual Incentive Program opportunities were based on a combination of business segment specific results and total company results. The opportunities related to adjusted operating income were based 85% (59.5% of total opportunity) on business segment specific results and 15% (10.5% of total opportunity) on consolidated Avient adjusted operating income results. Total attainment for CAI under the 2023 Annual Incentive Program was 52.5%, with the components consisting of (dollars in millions):
Stock Awards (column (b))
| 2023 CAI Plan Annual Incentive Program* (Garratt) | | | | | | | | Measure | Weighting | Threshold | Target | Maximum | Results | Payout % | | Adjusted Operating Income (CAI) | 59.5% | $253.0 | $272.2 | $312.6 | $251.9 | 0.0% | | Adjusted Operating Income (consolidated) | 10.5% | $314.5 | $338.6 | $399.6 | $312.8 | 0.0% | | Working Capital as a % of Sales (CAI) | 20% | 14.1% | 13.4% | 12.2% | 11.6% | 200.0% | | Sustainability Objectives | 10% | See above disclosure for more information about goals and achievements | | | | 125.0% | | Total Attainment | | | | | | 52.5% |
Stock Awards (column (b))
*Adjusted operating income (performance measures and results) reported in the table above was calculated with adjustments for special items (as noted on Appendix A) pursuant to the terms of the awards and as approved by the Compensation Committee. All 2023 Annual Incentive Program payouts aligned with the actual performance achieved. The awards were made in accordance with the 2020 Plan. For information regarding the ultimate payouts under the 2023 Annual Incentive Program, see the 2023 Summary Compensation Table. Long-Term Incentive. We provide long-term incentive compensation to our Named Executive Officers to directly tie the interests of these individuals to the interests of our shareholders. We also believe that long-term incentive compensation is an important retention tool. The 2023 long-term incentive awards were granted under the 2020 Plan. The individual long-term incentive target opportunities provided to our Named Executive Officers, which are reflected as a percentage of base salary, are typically established with consideration of our competitive market pay philosophy discussed in the “Executive Compensation Philosophy and Objectives” section of this proxy statement and intended to reward the Named Executive Officers for achieving specific performance objectives. The awards granted for 2023 under the 2020 Plan were based upon our closing stock price on February 17, 2023. The accounting value of each award was determined using the grant date of the award, February 17, 2023. The Compensation Committee approved the following decisions with respect to the individual long-term incentive opportunities (expressed as a percentage of base salary) of the Named Executive Officers for 2023, which were in effect as of February 17, 2023 (the grant date of our annual long-term incentive awards), and remain unchanged from 2022: Mr. Patterson – 490%; Ms. Beggs – 165%; Ms. Kunkle – 155%; Mr. Garratt – 140%; and Mr. Rathbun – 140%. Due to the timing of his appointment, Dr. Khandpur did not participate in these 2023 long-term incentive compensation program awards. In addition, as further described below, Ms. Kunkle's outstanding long-term incentive awards were modified in connection with her 2024 retirement from the Company. Awards Granted in 2023. The Compensation Committee elected to retain the same three compensation vehicles and weightings that we used in 2022 for the 2023 long-term incentive awards, which are listed below. We maintained this program design to continue to provide a balance between the relative values of the three compensation vehicles while efficiently using the shares available under the 2020 Plan. Of these three vehicles, the cash-settled performance units and the stock appreciation rights (“SARs”) have performance conditions, as described in detail below. Both the cash-settled performance units and the SARs are additionally subject to time-based vesting as described in detail below. The restricted stock units (“RSUs”) are time-based awards that generally vest in their entirety on the third anniversary of the grant date. On February 17, 2023, we granted awards under the 2020 Plan to all of our Named Executive Officers, with the exception of Dr. Khandpur. Details regarding these awards are described below. Cash-Settled Performance Units. Cash-settled performance units provide an opportunity for employees to receive a cash bonus if specified performance measures are met for pre-defined performance periods. The Compensation Committee maintained adjusted EPS as the performance measure for the 2023-2025 cash-settled performance unit awards in order to drive improvements in shareholder value. We use the four performance periods and relative weightings listed below to drive annual performance as well as cumulative performance. Requiring annual, as well as cumulative, performance goals helps ensure that adjusted EPS growth is a constant and visible incentive goal for our Named Executive Officers to achieve each year.
Stock Awards (column (b))
The attainment level for the cash-settled performance units will be certified at the end of the total three-year performance period. We established threshold, target and maximum adjusted EPS goals for each of the above listed performance periods. Participants earn, for the applicable performance period: (1) 100% of the target award of cash-settled performance units upon attainment of the target performance level; (2) 50% of the target award upon attainment of the threshold performance level; or (3) 200% of the target award upon attainment of the maximum (or greater) performance level. If final performance falls between the threshold and target or between target and maximum, earned award amounts will be interpolated. If threshold performance is not achieved for a particular performance period, then no award will be paid to the participants for such performance period. The cash-settled performance units do not pay out until the payment date in order to serve as a retention vehicle, and participants must generally be employed on the payment date to receive payment. The payment date will be a date in 2026 determined by the Compensation Committee (or its authorized delegate), which will occur no later than March 15, 2026. We do not disclose the specific, forward-looking adjusted EPS goals that we established for the cash-settled performance units granted in 2023 in this proxy statement because (1) these goals relate to executive compensation to be earned and/or paid in future years and do not affect a fair understanding of the Named Executive Officers’ compensation for 2023 and (2) we believe that disclosure of such goals while the applicable performance period is ongoing would cause us competitive harm. However, we expect to disclose such goals in future proxy statements once the applicable performance periods have ended as part of our discussion and analysis about the amounts earned by the Named Executive Officers under these awards. In setting the applicable target levels, the Compensation Committee considered how achievement of the performance goals could be impacted by events expected to occur in the coming years. When establishing the specific goals for the adjusted EPS performance measure, we specifically considered how likely it will be for us to achieve the goals. We believe that the threshold goals have been established at levels that should be appropriately difficult to attain, and that the target goals will require considerable and increasing collective effort on the part of our employees, including our Named Executive Officers, to achieve. Achievement of the maximum goal is considered to be a stretch goal given current market conditions. The performance unit grants made in 2023 for the Named Executive Officers are set forth in the 2023 Grants of Plan-Based Awards table of this proxy statement. Stock-Settled Stock Appreciation Rights. The SARs, when exercised by the Named Executive Officers, are settled in our common shares and have an exercise price equal to the closing market price of our common shares on the grant date. However, the SARs are subject to an appreciation cap of 200% of the initial grant date closing stock price. To continually reinforce our ongoing commitment to enhancing shareholder value, the general design for the 2023 awards was to vest one-third upon the later of: (1) achieving each of the following stock price hurdles and maintaining them for twenty consecutive trading days: 10%, 15% and 20% increase, respectively, over the initial grant date closing stock price of $42.93; and (2) the satisfaction of time-based vesting requirements that lapse one-third on each of the first three anniversaries of the grant date, generally subject to the Named Executive Officer’s continued employment. None of the performance hurdles were met in 2023. The SARs have an exercise term of ten years. The SARs granted in 2023 to the Named Executive Officers are set forth in the 2023 Grants of Plan-Based Awards table of this proxy statement. Restricted Stock Units. RSUs are designed to promote share ownership and promote the retention of our executives. The RSUs generally vest on the third anniversary of the grant date and are set forth in the 2023 Grants of Plan-Based Awards table of this proxy statement. Award of Restricted Stock Units. On December 1, 2023, as part of his onboarding compensation package, we granted an award of 141,000 RSUs to Dr. Khandpur. The award, in lieu of Dr. Khandpur’s participation in our standard 2023 long-term incentive program award, was intended to recognize his appointment as President and Chief Executive Officer. This award was determined by the Compensation Committee based on negotiation and its review of comparative compensation information, as described above. The RSUs vest ratably over four years from the grant date and are set forth in the 2023 Grants of Plan-Based Awards table of this proxy statement. Dr. Khandpur did not receive any other long-term incentive awards in 2023. Actions Taken on Awards Granted in Prior Years. In February 2023, the Compensation Committee reviewed, certified and approved the attainment level of cash-settled performance units granted in 2021 for the three-year performance period of January 1, 2021 through December 31, 2023. The four, equally weighted performance periods listed below were used in order to drive annual as well as cumulative performance. The cash-settled performance units were earned by achieving performance goals related to our adjusted EPS over each performance period. For retention purposes, the performance units generally could not be paid until the payment date approximately three years following the date of grant as approved by Compensation Committee (or its authorized delegate). The participating Named Executive Officers received a cash payout based on achieving 170% of the target level performance for the award, reflected below. Dr. Khandpur joined the Company on December 1, 2023, after the grant date for these awards, and therefore did not participate in the 2021-2023 Long-Term Incentive Program.
Stock Awards (column (b))
| 2021–2023 Cash-Settled Performance Units Performance Measure: Adjusted EPS | | | | | | Performance Periods | Weighting | Target | Result | Payout % | | January 1, 2021 – December 31, 2021 | 25% | $2.24 | $3.05 | 200% | | January 1, 2022 – December 31, 2022 | 25% | $2.16 | $2.93 | 200% | | January 1, 2023 – December 31, 2023 | 25% | $1.86 | $1.69 | 81% | | January 1, 2021 – December 31, 2023 | 25% | $6.26 | $7.67 | 200% | | Total Attainment | | | | 170% |
Stock Awards (column (b))
The Compensation Committee, with support from management, also considers, adopts, reviews and revises executive officer benefit programs, promotions, and any individual agreements impacting the compensation and benefits of our Named Executive Officers. Please see the "Potential Payments Upon Termination or Change of Control" section of this proxy statement for more information. In addition, the Compensation Committee also oversees the governance of our compensation practices. The following section describes significant activities relating to the above that occurred in 2023. Retirement Benefits. We offer the following retirement benefits to eligible employees and eligible Named Executive Officers as specified below. Additional details about these plans, as they apply to the Named Executive Officers, are included in the “2023 Nonqualified Deferred Compensation” section of this proxy statement. •A defined contribution retirement benefit available to eligible United States employees (as defined in the plan document) through an Internal Revenue Code tax-qualified profit sharing/401(k) plan (referred to as the “Qualified Savings Plan”); and •An unfunded, nonqualified plan that provides benefits similar to the Qualified Savings Plan (referred to as the “Avient Supplemental Retirement Benefit Plan”), but without the Internal Revenue Code contribution and earnings limitations Other Benefits. We provide other benefits to the Named Executive Officers that we believe are necessary to compete for executive talent. The additional benefits for the Named Executive Officers generally consist of a benefit allowance (for Mr. Patterson only, in the amount of $7,500 annually), limited reimbursement of expenses for financial planning and tax preparation, global travel health benefits and an annual physical examination. The specific amounts attributable to the 2023 other benefits provided to the Named Executive Officers are set forth in the “All Other Compensation” column of the 2023 Summary Compensation Table of this proxy statement. The benefit allowance and reimbursement of expenses for financial planning/tax preparation are treated as taxable income to the Named Executive Officers and are not grossed up by Avient. Tax gross-ups are provided for imputed income for spouse/guest travel. We also provide other benefits such as medical, dental, life insurance and disability coverage to each United States-based Named Executive Officer, which are identical to the benefits provided to all other eligible United States-based employees (as defined in the plan document). We provide vacation and paid holidays to all employees, including the Named Executive Officers. The Named Executive Officers were each eligible for four weeks of vacation in 2023, except Dr. Khandpur whose eligibility was pro-rated to reflect his partial year of service. We also provide additional benefits to our Named Executive Officers in special circumstances, such as the payment of relocation expenses, housing, and tax preparation fees and tax equalization costs in the event of an expatriate assignment. These expatriate benefits are provided to all employees who take an international assignment. In 2023, Mr. Garratt was the only Named Executive Officer on an expatriate assignment and, as a result, received expatriate benefits under our Expatriate Policy consistent with benefits provided to other Company expatriates. Appointment of Dr. Khandpur. On November 13, 2023, Avient announced that Dr. Khandpur was appointed as Mr. Patterson's successor as President and Chief Executive Officer and a member of the Board, effective December 1, 2023. In connection with his appointment, the Compensation Committee determined to provide Mr. Khandpur with an initial base salary rate of $1,050,000 per year, a sign-on cash payment of $1,500,000 and the time-based grant of 141,000 RSUs described above. These RSUs, which were negotiated with Dr. Khandpur, were provided to offset the value Dr. Khandpur forfeited upon departure from his previous employer. Further, Dr. Khandpur will begin participation in 2024 in Avient’s annual cash incentive program (with a target award of 120% of earned base salary and payment from 0% to 200% of target) and long-term equity incentive program (with a target award of 440% of annual base salary), and will participate in Avient’s other standard benefits and perquisites for executive officers, including relocation services. Dr. Khandpur is a party to a Management Continuity Agreement and participates in Avient’s Executive Severance Plan, and he is entitled generally to severance benefits under such arrangements pursuant to their terms, as further described below. Special Advisor Service of Mr. Patterson. During Mr. Patterson’s service as Special Advisor, he will continue to receive his base salary at the annual rate of $1,170,000, but he will not participate in Avient’s annual cash incentive program or long-term incentive program for new grants in 2024. Mr. Patterson’s outstanding long-term incentive awards will continue to vest in accordance with their terms in connection with his continued employment as Special Advisor. Retirement of Ms. Kunkle. On November 1, 2023, Ms. Kunkle announced her intention to retire from the Company, effective as of January 31, 2024, and thereafter retired on that date. Ms. Kunkle had considered earlier retirement from the Company, but as a result of discussions with the Company and further contemplation, she delayed her decision to retire until November 2023, and her last day of employment until January 31, 2024, to help facilitate the CEO transition process. In consideration of Ms. Kunkle's extension and years of service to the Company, Ms. Kunkle’s unvested long-term incentive awards were modified to waive the continued employment requirements for such awards; such awards will otherwise be governed by the standard terms of each award, including any performance criteria. For details regarding the modified awards, refer to the 2023 Grants of Plan-Based Awards table of this proxy statement. Ms. Kunkle will retain her vested equity awards, which will be governed by the standard terms of each award. The incremental value of the modified awards is $236,634 for the stock awards and $127,488 for the option awards. Ms. Kunkle's additional retirement benefits will consist of those benefits accrued and vested under the standard terms and conditions of the plans in which she participated. See the “2023 Nonqualified Deferred Compensation” section of this proxy statement for more information. Tax Considerations. Cash compensation, such as base salary and annual incentive compensation, is taxable to the recipient as ordinary income when earned, unless deferred under a company-sponsored deferral plan. Deferrals under Internal Revenue Code tax-qualified plans, such as a 401(k) plan, do not affect our current tax deduction. Deferrals under supplemental executive deferral plans delay our tax deduction until the deferred amount (and any accumulation thereon) is paid. Stock-settled SARs are generally taxable as ordinary income when exercised, RSUs are generally taxable as ordinary income when they vest, and cash-settled performance units are generally taxable as ordinary income when paid. We generally realize a tax deduction at those specified times, except where limited by Code Section 162(m), which generally disallows a federal income tax deduction to publicly traded companies like Avient for compensation in excess of $1 million per year paid to certain current and former executive officers. The Compensation Committee reviews potential tax implications before making decisions regarding compensation.
Stock Awards (column (b))
Timing with Respect to Equity Award Grants. We have adopted a policy with respect to the timing of the grant of equity awards, which policy provides that equity awards (including common stock, SARs and restricted stock units) are granted pursuant to approval by the Board or the Compensation Committee, or pursuant to authority delegated by the Board or the Compensation Committee to the Chief Executive Officer. Such grants generally are made at times when Avient is not in possession of material non-public information, and not during a “blackout period,” which is the period of time that is in close proximity to the release of financial or material non-public information. The policy further provides that, to the extent practicable, annual grants to existing employees should be approved at regularly scheduled meetings and that the grant price for any stock option or SAR shall not be less than the fair market value of Avient’s common shares on the grant date (which is generally defined as the closing price of our common shares on the grant date). Clawback Policy. Effective October 2, 2023, the Company adopted a new Compensation Clawback Policy, which provides for the reasonably prompt recovery (or clawback) of certain excess incentive-based compensation received during an applicable three-year recovery period by current or former executive officers in the event Avient is required to prepare an accounting restatement due to the material noncompliance with any financial reporting requirement under the securities laws. Triggering events include accounting restatements to correct an error in previously issued financial statements that is material to such 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. Excess incentive-based compensation for these purposes generally means the amount of incentive-based compensation received (on or after October 2, 2023) by such executive officer that exceeds the amount of incentive-based compensation that would have been received by such executive officer had it been determined based on the restated amounts, without regard to any taxes paid. Incentive-based compensation potentially subject to recovery under the mandatory accounting restatement provisions of the Compensation Clawback Policy is generally limited to any compensation granted, earned or vested based wholly or in part on the attainment of one or more financial reporting measures. In general, Avient may utilize a broad range of recoupment methods under the Compensation Clawback Policy for mandatory accounting restatement clawbacks. The Compensation Clawback Policy does not condition such clawback on the fault of the executive officer, but Avient is not required to clawback amounts in limited circumstances where the Compensation Committee has made a determination that recovery would be impracticable and (1) Avient has already attempted to recover such amounts but the direct expense paid to a third party in an effort to enforce the Compensation Clawback Policy would exceed the amount to be recovered, (2) the recovery of amounts would violate applicable home country law, or (3) the recovery would likely cause the non-compliance of a tax-qualified retirement plan under the Internal Revenue Code of 1986, as amended, and applicable regulations. Operation of the mandatory accounting restatement provisions of the Compensation Clawback Policy is subject to a brief phase-in process during the first few years after its effectiveness. Avient may not indemnify any such executive officer against the loss of such recovered compensation in the event of a mandatory accounting restatement. Further, Avient continues to maintain a predecessor compensation clawback policy (the “Prior Clawback Policy”). The Prior Clawback Policy remains operational and applies to individuals and/or compensation not covered by or subject to the new NYSE-compliant Compensation Clawback Policy. The Prior Clawback Policy will apply on a permissive basis in the event of an applicable accounting restatement plus qualifying misconduct that contributed to the accounting restatement (in which case Avient may require an executive officer to repay all incentive-based compensation that he or she received in excess of what would have been paid if the restated financial statements had originally been prepared without such material accounting restatement). Prohibition on Hedging Our Securities. Avient’s Insider Trading Policy prohibits Directors, officers and certain other employees of Avient from engaging in hedging or other speculative transactions with respect to our securities, including buying or selling puts or calls, short sales, or margin purchases of our securities.
Stock Awards (column (b))
| 2023 SUMMARY COMPENSATION TABLE |
Stock Awards (column (b))
| Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus ($) (d) | Stock Awards ($) (e) | Option Awards ($) (f) | Non-Equity Incentive Plan Compensation ($) (g) | All Other Compensation ($) (h) | Total ($) (i) | | Ashish K. Khandpur, President and Chief Executive Officer (1) | 2023 | 44,423 | 1,500,000 | 5,006,910 | — | — | 179 | 6,551,512 | | Jamie A. Beggs, Senior Vice President, Chief Financial Officer | 2023 | 575,000 | — | 332,708 | 332,439 | 644,606 | 51,433 | 1,936,186 | | | 2022 | 565,769 | — | 334,264 | 332,206 | 245,699 | 72,352 | 1,550,290 | | | 2021 | 538,846 | — | 287,436 | 286,286 | 735,525 | 48,235 | 1,896,328 | | Michael A. Garratt, Senior Vice President, President, Color, Additives and Inks, EMEA | 2023 | 485,000 | — | 238,262 | 238,090 | 474,906 | 725,726 | 2,161,984 | | | 2022 | 478,846 | — | 239,512 | 238,354 | 468,709 | 509,526 | 1,934,947 | | | 2021 | 460,385 | — | 213,464 | 212,083 | 734,900 | 364,558 | 1,985,390 | | Joel R. Rathbun, Senior Vice President, Mergers and Acquisitions | 2023 | 525,000 | — | 294,071 | 294,446 | 516,119 | 36,807 | 1,666,443 | | | 2022 | 494,231 | — | 239,512 | 238,354 | 511,026 | 25,692 | 1,508,815 | | | 2021 | 457,308 | — | 213,464 | 212,083 | 720,050 | 43,256 | 1,646,161 | | Lisa K. Kunkle, Former Senior Vice President, General Counsel and Secretary (2) | 2023 | 495,000 | — | 507,093 | 396,605 | 502,119 | 47,371 | 1,948,188 | | | 2022 | 485,769 | — | 271,096 | 268,893 | 528,754 | 47,022 | 1,601,534 | | | 2021 | 460,385 | — | 228,258 | 227,871 | 746,150 | 33,450 | 1,696,114 | | Robert M. Patterson, Former Chairman, President and Chief Executive Officer | 2023 | 1,170,000 | — | 2,006,978 | 2,006,666 | 3,525,325 | 118,752 | 8,827,721 | | | 2022 | 1,156,154 | — | 2,008,216 | 2,006,642 | 3,676,524 | 199,316 | 9,046,852 | | | 2021 | 1,117,308 | | 1,870,448 | 1,870,333 | 4,377,187 | 147,255 | 9,382,531 |
All Other Compensation (column (h))
| 2023 GRANTS OF PLAN-BASED AWARDS |
Narrative Disclosure Relating to the 2023 Summary Compensation Table and the 2023 Grants of Plan-Based Awards Table
Narrative Disclosure Relating to the 2023 Summary Compensation Table and the 2023 Grants of Plan-Based Awards Table For information regarding the amount of salary and bonus compensation in proportion to total compensation, see the “What We Pay and Why: Elements of Compensation” section of this proxy statement. For information regarding the management Continuity Agreements, see the “Potential Payments Upon Termination or Change of Control” section of this proxy statement. For more information about the 2023 modification of Ms. Kunkle's outstanding 2021, 2022 and 2023 incentive awards, please see Compensation Discussion and Analysis section of this proxy statement, the footnotes and narrative to the 2023 Summary Compensation Table, and the "Potential Payments Upon Termination or Change of Control" disclosure below.
Narrative Disclosure Relating to the 2023 Summary Compensation Table and the 2023 Grants of Plan-Based Awards Table
| OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END |
Narrative Disclosure Relating to the 2023 Summary Compensation Table and the 2023 Grants of Plan-Based Awards Table
| Name | | Option Awards | | | | | Stock Awards | | | | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercise-able (1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (2) (#) | Market Value of Shares or Units of Stock that have not Vested ($) | | A.K. Khandpur | 12/1/2023 | — | — | — | — | — | 141,952 | 5,900,945 | | J.A. Beggs | 2/08/2021 | — | — | — | — | — | 7,291 | 303,087 | | | 2/14/2022 | — | — | — | — | — | 6,689 | 278,062 | | | 2/17/2023 | — | — | — | — | — | 7,959 | 330,856 | | | 2/08/2021 | 18,133 | 9,067 | — | 42.27 | 2/08/2031 | — | — | | | 2/14/2022 | — | — | 22,300 | 52.64 | 2/14/2032 | — | — | | | 2/17/2023 | — | — | 26,250 | 42.93 | 2/17/2033 | — | — | | M.A. Garratt | 2/08/2021 | — | — | — | — | — | 5,417 | 225,185 | | | 2/14/2022 | — | — | — | — | — | 4,794 | 199,287 | | | 2/17/2023 | — | — | — | — | — | 5,701 | 236,991 | | | 2/04/2015 | 9,200 | — | — | 38.27 | 2/04/2025 | — | — | | | 2/15/2017 | 13,250 | — | — | 34.10 | 2/15/2027 | — | — | | | 2/14/2018 | 11,050 | — | — | 41.89 | 2/14/2028 | — | — | | | 2/11/2019 | 18,200 | — | — | 31.54 | 2/11/2029 | — | — | | | 2/10/2020 | 19,650 | — | — | 31.48 | 2/10/2030 | — | — | | | 2/08/2021 | 13,433 | 6,717 | — | 42.27 | 2/08/2031 | — | — | | | 2/14/2022 | — | — | 16,000 | 52.64 | 2/14/2032 | — | — | | | 2/17/2023 | — | — | 18,800 | 42.93 | 2/17/2033 | — | — | | J.R. Rathbun | 2/08/2021 | — | — | — | — | — | 5,417 | 225,185 | | | 2/14/2022 | — | — | — | — | — | 4,794 | 199,287 | | | 2/17/2023 | — | — | — | — | — | 7,036 | 292,487 | | | 2/4/2015 | 2,500 | — | — | 38.27 | 2/4/2025 | — | — | | | 2/10/2016 | 10,400 | — | — | 24.98 | 2/10/2026 | — | — | | | 2/15/2017 | 10,100 | — | — | 34.10 | 2/15/2027 | — | — | | | 2/14/2018 | 10,400 | — | — | 41.89 | 2/14/2028 | — | — | | | 2/11/2019 | 17,150 | — | — | 31.54 | 2/11/2029 | — | — | | | 2/10/2020 | 19,200 | — | — | 31.48 | 2/10/2030 | — | — | | | 2/08/2021 | 13,433 | 6,717 | — | 42.27 | 2/08/2031 | — | — | | | 2/14/2022 | — | — | 16,000 | 52.64 | 2/14/2032 | — | — | | | 2/17/2023 | — | — | 23,250 | 42.93 | 2/17/2033 | — | — | | L.K. Kunkle (3) | 2/08/2021 | — | — | — | — | — | 5,792 | 240,773 | | | 2/14/2022 | — | — | — | — | — | 5,425 | 225,517 | | | 2/17/2023 | — | — | — | — | — | 6,470 | 268,958 | | | 2/15/2017 | 12,100 | — | — | 34.10 | 2/15/2027 | — | — | | | 2/14/2018 | 11,500 | — | — | 41.89 | 2/14/2028 | — | — | | | 2/11/2019 | 19,250 | — | — | 31.54 | 2/11/2029 | — | — | | | 2/10/2020 | 21,200 | — | — | 31.48 | 2/10/2030 | — | — | | | 2/08/2021 | 14,433 | 7,217 | — | 42.27 | 2/08/2031 | — | — | | | 2/14/2022 | — | — | 18,050 | 52.64 | 2/14/2032 | — | — | | | 2/17/2023 | — | — | 21,250 | 42.93 | 2/17/2033 | — | — | | R.M. Patterson | 2/08/2021 | — | — | — | — | — | 47,414 | 1,971,000 | | | 2/14/2022 | — | — | — | — | — | 40,165 | 1,669,659 | | | 2/17/2023 | — | — | — | — | — | 48,002 | 1,995,443 | | | 5/15/2014 | — | — | — | — | — | 60,421 | 2,511,701 | | | 2/14/2018 | 31,516 | — | — | 41.89 | 2/14/2028 | — | — | | | 2/11/2019 | 51,150 | — | — | 31.54 | 2/11/2029 | — | — | | | 2/10/2020 | 115,033 | — | — | 31.48 | 2/10/2030 | — | — | | | 2/08/2021 | 118,466 | 59,234 | — | 42.27 | 2/08/2031 | — | — | | | 2/14/2022 | — | — | 134,700 | 52.64 | 2/14/2032 | — | — | | | 2/17/2023 | — | — | 158,450 | 42.93 | 2/17/2033 | — | — |
Narrative Disclosure Relating to the 2023 Summary Compensation Table and the 2023 Grants of Plan-Based Awards Table
(1)Amounts in these columns represent stock-settled SARs that vest in one-third increments, with each one-third increment vesting on the later of (a) the first, second and third anniversary of the grant date, respectively and (b) the achievement of a stock price hurdle (based on Avient’s closing stock price and sustained for thirty consecutive trading days for all grants except the February 17, 2023 grant for which the stock price hurdle must be sustained for twenty consecutive trading days) applicable to that increment. As of December 31, 2023, all stock price hurdles have been met for all SAR grants made prior to 2022, and none of the stock price hurdles have been met for the 2022 or 2023 SAR grants. SAR grants for which stock price hurdles have been met vest in one-third increments on the first, second and third anniversary of the grant date. (2)Amounts in this column represent stock-settled RSU awards that generally vest in full on the third anniversary of the grant date, with the exception of the December 1, 2023 grant to Dr. Khandpur which vests ratably over four years and the May 15, 2014 grant to Mr. Patterson which represents an earned performance share award that shall become non-forfeitable and fully vested on May 15, 2024. The awards include shares deemed purchased with reinvested dividend equivalents that are subject to the same forfeiture conditions as the shares to which the dividends relate. The amounts in this column include all dividend equivalents declared from 2021 through 2023 attributable to the awards (including the fourth quarter dividend declared on October 12, 2023 to shareholders of record on December 15, 2023, which was paid on January 5, 2024). (3)On November 1, 2023, Ms. Kunkle announced her intention to retire from the Company, effective as of January 31, 2024. In consideration of Ms. Kunkle's years of service to the Company, Ms. Kunkle’s unvested long-term incentive awards were modified to waive the continued employment requirements for such awards; such awards will otherwise be governed by the standard terms of each award, including any performance criteria. For details regarding the modified awards, refer to the 2023 Grants of Plan-Based Awards table of this proxy statement. Ms. Kunkle will retain her vested equity awards, which will be governed by the standard terms of each award. The incremental value of the modified awards is $236,634 for the stock awards and $127,488 for the option awards.
Narrative Disclosure Relating to the 2023 Summary Compensation Table and the 2023 Grants of Plan-Based Awards Table
| 2023 OPTION EXERCISES AND STOCK VESTED |
Narrative Disclosure Relating to the 2023 Summary Compensation Table and the 2023 Grants of Plan-Based Awards Table
| Name (a) | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c) | Number of Shares Acquired on Vesting (#) (d) | Value Realized On Vesting ($) (e) | | A.K. Khandpur | — | — | — | — | | J.A. Beggs | — | — | 23,777 | 1,579,190 | | M.A. Garratt | — | — | 3,698 | 256,220 | | L.K. Kunkle | — | — | 4,438 | 276,600 | | J.R. Rathbun | 2,400 | 8,340 | 3,544 | 250,197 | | R.M. Patterson | — | — | 36,806 | 2,237,609 |
Stock Awards (columns (d) and (e))
| 2023 NON QUALIFIED DEFERRED COMPENSATION |
Stock Awards (columns (d) and (e))
| POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL |
Summary of Potential Payments
Summary of Potential Payments Our plans, agreements, arrangements or typical practices would provide severance benefits to our Named Executive Officers in varying amounts to the executive under certain scenarios. We do not have employment agreements with our Named Executive Officers. We do have management continuity agreements (“Continuity Agreements”) with each of our Named Executive Officers that provide for specified benefits upon a termination of employment following a change of control, and each of our Named Executive Officers participates in our Executive Severance Plan. Further, other Company plans, agreements and arrangements may provide for specified benefits upon a change of control (or for acceleration of such benefits). Severance and other benefits that are payable upon a termination of employment or upon a change of control are described below. The table following this narrative discussion summarizes the amounts payable upon termination or a change of control under certain circumstances to our Named Executive Officers, assuming that the executive’s employment terminated on December 29, 2023.
Payments and Benefits Upon Termination - as of the End of Fiscal Year 2023
| CEO PAY RATIO DISCLOSURE |
How the Median Employee was Determined
| PAY VERSUS PERFORMANCE DISCLOSURE |
How the Median Employee was Determined
| PAY VERSUS PERFORMANCE(1) | | | | | | | | | | | | Year (a) | Summary Compensation Table (“SCT”) Total for First PEO (b) | SCT Total for Second PEO (b) | Compensation Actually Paid (“CAP”) to First PEO (c)(2) | CAP to Second PEO (c)(2) | Average SCT Total for Non-PEO Named Executive Officers (d) | Average CAP to Non-PEO Named Executive Officers (e)(2) | Value of Initial Fixed $100 Investment | | Net Income ($mm) (h) | Adjusted Earnings per Share (“EPS”) (i)(5) | | | | | | | | | Total Share-holder Return (f)(3) | Peer Group Total Share-holder Return (g)(4) | | | | 2023 | 8,827,721 | 6,551,512 | 11,369,504 | 7,405,972 | 1,928,200 | 2,212,634 | 124.60 | 149.93 | 76.2 | 2.36 | | 2022 | 9,046,852 | — | 621,952 | — | 1,648,896 | 585,793 | 98.60 | 130.45 | 703.4 | 2.69 | | 2021 | 9,382,531 | — | 17,199,415 | — | 1,805,998 | 2,658,967 | 159.61 | 151.70 | 230.6 | 2.68 | | 2020 | 7,009,374 | — | 8,892,140 | — | 1,685,044 | 1,864,956 | 112.93 | 119.86 | 133.4 | 1.43 |
Net Income versus Compensation Actually Paid
Net Income versus Compensation Actually Paid
Net Income versus Compensation Actually Paid
| First PEO | Second PEO | Average Non-PEO Named Executive Officer | Net Income |
Net Income versus Compensation Actually Paid
Net Income versus Compensation Actually Paid. Net income includes the income from discontinued operations, and for 2022 includes a one time $550 million gain on the sale of our Distribution business. Therefore, in 2022, net income is not heavily correlated with named executive officer compensation because this gain is not reflective of the underlying performance of the Company.
Total Shareholder Return versus Compensation Actually Paid
Total Shareholder Return versus Compensation Actually Paid
Total Shareholder Return versus Compensation Actually Paid
| First PEO | Second PEO | Average Non-PEO Named Executive Officer | Company TSR | Peer Group TSR |
Total Shareholder Return versus Compensation Actually Paid
Total Shareholder Return versus Compensation Actually Paid. Named executive officer compensation moved generally in tandem with both improving and declining TSR results over the Covered Years.
Adjusted EPS versus Compensation Actually Paid
Adjusted EPS versus Compensation Actually Paid
Adjusted EPS versus Compensation Actually Paid
| First PEO | Second PEO | Average Non-PEO Named Executive Officer | Adjusted EPS |
Adjusted EPS versus Compensation Actually Paid
Adjusted EPS versus Compensation Actually Paid. Named executive officer compensation has either tracked or, in the case of 2022, significantly lagged our performance as compared to adjusted EPS over the Covered Years.
Adjusted EPS versus Compensation Actually Paid
| COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION |
Adjusted EPS versus Compensation Actually Paid
During 2023, Robert E. Abernathy, Richard H. Fearon, Ernest Nicolas, Kerry J. Preete, and William A. Wulfsohn served on the Compensation Committee. None of our executive officers was a member of the Board of Directors or compensation committee of any other company where the relationship would be construed to constitute a committee interlock within the meaning of the rules of the SEC during 2023.
Adjusted EPS versus Compensation Actually Paid
| RISK ASSESSMENT OF THE COMPENSATION PROGRAMS |
Adjusted EPS versus Compensation Actually Paid
As part of the Compensation Committee’s annual governance process, in October 2023 we conducted a formal assessment of our compensation programs to help confirm that they do not create risks that are reasonably likely to have a material adverse effect on Avient. With guidance from the Consultant, our Internal Audit and Human Resources groups completed the initial risk assessment of our compensation programs, including those that extend beyond the executive officers. The assessment was reviewed by our legal department and the Consultant, with these groups providing additional analysis and validation of the results. The results of the compensation risk assessment were presented to the Compensation Committee at its October 2023 meeting. The areas we considered in determining that our compensation programs do not pose a material risk to Avient included our:
Adjusted EPS versus Compensation Actually Paid
| Compensation Philosophy | Payout Curves | Clawback Policy | | Compensation Plan Design | Weightings of Incentive Plan Measures | Anti-Hedging/Anti-Pledging Policies | | Balanced Pay Mix | Compensation Plan Governance and Oversight | Stock Ownership Requirements | | Timing on Incentive Payouts | Selection of Performance Measures | Pay-for-Performance Validation |
Adjusted EPS versus Compensation Actually Paid
As a result of the assessment, the Compensation Committee concluded that our compensation structures are appropriate and no material risks were identified.
Adjusted EPS versus Compensation Actually Paid
| COMPENSATION COMMITTEE REPORT |
Adjusted EPS versus Compensation Actually Paid
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth in this proxy statement with management. Based on this review and discussion, the Compensation Committee has recommended to the Board the inclusion of the Compensation Discussion and Analysis in this proxy statement, which is incorporated by reference in Avient’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.