DEF 14A of Tredegar Corp
Filed Mar 26, 2024 · FY20230001140361-24-015264
Vote Required and Board Recommendation
| George C. Freeman, III Age: 60 Director since 2011 | Chief Executive Officer of Universal Corporation, an international leaf tobacco merchant (Universal), since April 1, 2008, Chairman of Universal since August 5, 2008, and President of Universal since December 12, 2006. Other directorship: Universal Corporation since 2008. The Board has concluded that Mr. Freeman should serve as a director based on his strong executive management and leadership skills, his financial expertise and his extensive knowledge of international business, risk oversight and corporate governance. |
Vote Required and Board Recommendation
| Kenneth R. Newsome Age: 64 Director since 2014 | Executive Chairman of Markel Food Group, a food processing and manufacturing company, since February 2014, having served previously as President and Chief Executive Officer of AMF Bakery Systems, Inc., a leading manufacturer of high-speed industrial baking equipment, since 1996. The Board has concluded that Mr. Newsome should serve as a director based on his manufacturing expertise and significant leadership and management skills acquired as the chief executive of a global manufacturing company. |
Vote Required and Board Recommendation
| Gregory A. Pratt Age: 75 Director since 2014 | Chairman of the Board of Tredegar since January 2023, having served previously as Lead Director since 2016. Mr. Pratt retired in 2020 from his position as Chairman of the Board of Carpenter Technology Corporation, a manufacturer and distributor of cast/wrought and powder metal stainless steels and specialty alloys (Carpenter), having served previously as Executive Chairman of Carpenter from July 2015 until November 2015 and as Executive Chairman, Chief Executive Officer, and President of Carpenter from November 2014 until July 2015. Mr. Pratt served as Capital Area Chapter Chairman of the National Association of Corporate Directors, a non-profit organization focused on improving boardroom governance, from 2007 until 2019. Other directorships: Anterix Inc., a wireless communications company focused on commercializing spectrum assets since June 2020; and Carpenter (from November 2009 until his retirement in 2020). Our Nominating and Governance Committee and the Board have separately determined that Mr. Pratt’s continued service on the Board past age 72 is in the best interests of Tredegar. The Board has concluded that Mr. Pratt should serve as a director based on his financial and manufacturing expertise and leadership and management skills acquired as the chief executive of a large public company. In addition, he brings public company board experience gained from his service on other public company boards. |
Vote Required and Board Recommendation
| Thomas G. Snead, Jr. Age: 70 Director since 2013 | Retired, having served previously as President of Anthem, Inc., Southeast Region, a managed care, and health insurance company, from December 2002 until his retirement in January 2006. Other directorships: Atlantic Union Bankshares Corporation (formerly Union Bankshares Corporation), a Virginia financial and bank holding company since January 2018; and Xenith Bankshares, Inc. (from May 2013 until its merger with Union Bankshares Corporation in January 2018). The Board has concluded that Mr. Snead should serve as a director based on his significant executive, financial and operations experience at a complex and highly regulated public company. His extensive background in corporate strategy, finance, accounting, and operations allows Mr. Snead to provide valuable insight. In addition, he brings public company board experience gained from his service on other public company boards. |
Vote Required and Board Recommendation
| John M. Steitz Age: 65 Director since 2017 | President and Chief Executive Officer of Tredegar since March 2019, having served previously as President and Chief Executive Officer of Addivant Corporation, a leading global supplier of antioxidants, intermediates, inhibitors, modifiers, UV stabilizers and other additives to the plastic and rubber industries, from March 2015 until January 2019, and as President and Chief Operating Officer of PQ Corporation, a leading worldwide producer of specialty inorganic performance chemicals and catalysts, from October 2013 until March 2015. Other directorship: Innophos Holdings, Inc., a producer of specialty grade phosphate products for the food, pharmaceutical and industrial market segments (from 2008 until its acquisition by One Rock Capital Partners in February 2020). The Board has concluded that Mr. Steitz should serve as a director based on his knowledge of Tredegar and our businesses, his extensive operational background in the chemical industry and his broad global commercial experience. In addition, Mr. Steitz brings public company experience from both a senior management and board member perspective. |
Vote Required and Board Recommendation
| Carl E. Tack, III Age: 68 Director since 2014 | Adjunct Professor, Finance, Mason School of Business, College of William and Mary (W&M), since February 2022, having served previously as Visiting Lecturer and Co-Director of the Boehly Center for Excellence in Finance, W&M, from August 2015 until May 2021, Adjunct Professor, W&M, from July 2013 until August 2015, as Managing Partner, Delta Partners Group, from December 2010 until May 2012, Lecturer at Imperial College London from January 2010 until May 2010, Executive in Residence and Lecturer, London Business School, from January 2010 until June 2011, and Managing Director, Deutsche Bank, from June 1996 until April 2009. The Board has concluded that Mr. Tack should serve as a director based on his significant corporate finance and corporate strategy expertise acquired through his 24 years of experience as an investment banker working with companies engaged in a variety of industries and global markets. |
Remediation of Previously Disclosed Material Weaknesses
| COMPENSATION OF DIRECTORS |
Components of Director Compensation
Components of Director Compensation Our Nominating and Governance Committee determines and approves non-employee director compensation. Our CEO, whose compensation is determined solely by our Executive Compensation Committee, receives no additional compensation for service as a director. For 2023, non-employee directors received the following annual retainers, payable in equal quarterly installments in arrears, for their service on the Board and its committees:
Components of Director Compensation
| Non-Employee Director – Cash | $60,000 | | Non-Employee Director – Stock | $90,000 | | Chairman of the Board – Cash | $32,500 | | Chairman of the Board – Stock | $32,500 | | Audit Committee Chair | $20,000 | | Non-Chair Member of the Audit Committee | $9,500 | | Executive Compensation Committee Chair | $11,000 | | Non-Chair Member of the Executive Compensation Committee | $7,000 | | Nominating and Governance Committee Chair | $7,500 | | Non-Chair Member of the Nominating and Governance Committee | $4,500 |
Components of Director Compensation
The stock retainers for non-employee directors and the Chairman of the Board were paid in the form of stock awards under the Tredegar Corporation Amended and Restated 2018 Equity Incentive Plan (the 2018 Plan). The stock awards were determined based on the closing price of Tredegar common stock as reported on the NYSE on the date of grant. The stock awards became fully vested and transferable immediately upon the date of the grant. Retainers for our Chairman of the Board and committee Chairs and members commenced after the Board elected members to those positions. The following table presents information relating to the total compensation paid to our non-employee directors in the fiscal year ended December 31, 2023.
Non-Employee Director Compensation
Non-Employee Director Compensation
Non-Employee Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Total ($) | | George C. Freeman, III | $74,881 | $89,989 | $164,870 | | John D. Gottwald(2) | $27,079 | $32,654 | $59,734 | | Kenneth R. Newsome | $71,511 | $89,989 | $161,500 | | Gregory A. Pratt | $100,759 | $113,727 | $214,486 | | Thomas G. Snead, Jr. | $80,011 | $89,989 | $170,000 | | Carl E. Tack, III | $81,642 | $89,989 | $171,630 | | Anne G. Waleski(3) | $64,035 | $75,318 | $139,353 |
Non-Employee Director Compensation
| (1) Beginning in 2021, we began paying retainers on the first day of the following quarter in order to ease the administrative burden caused by a December 31 payment. The following table indicates the respective dates of grant, the number of shares received and the closing price of Tredegar common stock for each such award granted during 2023: |
Non-Employee Director Compensation
| Date of Grant | Non-Employee Director Shares | Chairman of the Board Additional Shares | Closing Price | | January 4, 2023 | 2180 | 787 | 10.26 | | April 3, 2023 | 2,432 | 810 | $9.25 | | July 3, 2023 | 3,275 | 1,182 | $6.87 | | October 2, 2023 | 4,197 | 1,516 | $5.36 |
Non-Employee Director Compensation
The amounts set forth in the “Stock Awards” column of the Non-Employee Director Compensation Table represent the grant date fair value computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification™ (ASC) Topic 718, Compensation – Stock Compensation, for the shares of Tredegar common stock awarded to each non-employee director identified above under the terms of the 2018 Plan during the fiscal year ended December 31, 2023, based on the closing price of Tredegar common stock as reported on the NYSE on the respective dates of grant.
Non-Employee Director Compensation
| (2) John D. Gottwald retired on January 6, 2023, from our Board and received a pro-rated amount of shares. |
Non-Employee Director Compensation
| (3) Anne G. Waleski retired on August 1, 2023, from our Board and received a pro-rated amount of shares. |
General
| ● | links a significant portion of total pay to the execution of strategies intended to create long-term shareholder value; |
Discretionary Bonus
Discretionary Bonus The Committee reserves the right to exercise judgement when determining potential payouts to ensure the related predetermined performance objectives were in fact sufficiently robust. While the Committee approves predetermined performance objectives at the beginning of the year, the Committee also evaluates performance at the end of the year to determine whether the predetermined objectives were reasonable. The Committee’s goal is to ensure that any payout is ultimately a function of performance. Objectives established at the beginning of a year may reflect expectations that do not occur (i.e., the objectives were not as difficult to achieve as originally forecasted). Therefore, at the conclusion of the year, the Committee evaluates performance against the actual environment in which we operated, not just the one they forecasted, and adjusts payouts accordingly. For 2023, no discretionary bonuses were paid to or earned by our NEOs.
Annual Incentives
Annual Incentives General. Annual cash incentive opportunities serve to link executive rewards to our financial performance and the achievement of individual objectives. Each year, we establish business plans for the forthcoming year that include financial, strategic, and other goals for each of our operating businesses. These business plans are reviewed by the Board. Annual incentive payouts for our NEOs are determined based on the achievement of approved business plans. 2023 Cash Incentive Plan. For our NEOs, determination of their respective 2023 Cash Incentive Plan payout was dependent on the following variables: (i) the achievement of Consolidated Adjusted EBITDA financial results, as defined, and (ii) the achievement of the specific performance objectives noted below. The NEO performance objectives and the 2023 actual results are listed in the table below:
Annual Incentives
| 2023 NEO Performance Objectives | 2023 Actual Results | Weighting | Weighted Result | | Achieve Consolidated Adjusted EBIDTA of $77.4 million | Consolidated Adjusted EBITDA $33.5 million | 70% | 0% | | Achieve full SOX compliance goal with no material weaknesses in Tredegar’s internal control over financial reporting for the year ended 12/31/2023. | Achieved full SOX compliance goal with no material weaknesses in Tredegar’s internal control over financial reporting for the year ended 12/31/2023. | 20% | 20% | | Execute strategic objectives | Announced the sale of our Flexible Packaging Films business (referred to as Terphane) on 09/01/2023 and completed the termination and settlemen of the Pension Plan (as defined on page 40 below). | 10% | 10% | | | | 100% | 30% |
Annual Incentives
To ensure that the annual incentive awards establish a direct link between the interests of our NEOs and our shareholders, the Committee assesses performance against certain financial measures to establish the size of the incentive pool used for payment of annual incentive awards for the current year. For 2023, the key financial measure of operating performance used to determine the amount, if any, of the annual incentive pool was consolidated adjusted EBITDA (Consolidated Adjusted EBITDA). Achievement of the Consolidated Adjusted EBITDA threshold was directly linked to seventy percent of the 2023 Cash Incentive Plan for our NEOs. The Committee believes that this financial performance measure is effective and appropriate because it reflects income statement performance, which is consistent with the interests of our shareholders. When setting the financial performance goals for the 2023 Cash Incentive Plan, the Committee reviewed and approved the following performance targets for the 2023 Cash Incentive Plan as they apply to our NEOs:
Annual Incentives
| | 2023 Targets ($ in Thousands) | | | | | Threshold | Target | Maximum | | Consolidated Adjusted | | | | | EBITDA | $66,942 | $77,390 | $109,088 |
Annual Incentives
For purposes of the 2023 Cash Incentive Plan, Consolidated Adjusted EBITDA excludes unusual items and losses associated with plant shutdowns, asset impairments, restructurings, gains and losses from the sale of assets, investment write-downs and write-ups, gains and losses from non-manufacturing operations, stock option charges under ASC Topic 718, pension income or expense for the Pension Plan, discontinued operations and other items that may be recognized or accrued under generally accepted accounting principles (GAAP). The accounting principles used to determine Consolidated Adjusted EBITDA are applied on a consistent basis with exceptions approved by the Committee. For the purposes of the incentive award calculations for 2023, Consolidated Adjusted EBITDA, as defined above, is further adjusted to exclude the following: (i) discretionary bonuses, since amounts are unpredictable, uncontrollable at the management level, and possibly significant; (ii) income or expense relating to stock options, SARs, restricted stock, performance-based stock or stock unit awards since amounts are dependent on future periods and are therefore subject to significant volatility; (iii) foreign exchange transaction gains and losses, (iv) income or loss associated with adjustments relating to the last-in, first-out method of accounting, (v) certain one-time unusual expenses unrelated to the operating businesses or entities (items (i), (ii), (iii), (iv) and (v), the 2023 Excluded Items), and (vi) EBITDA, as defined above, from any company or entity acquired in 2023 (there were no acquisitions or divestitures in 2023). For 2023, Consolidated Adjusted EBITDA was $33.5 million. For 2023, each NEO had the following award opportunity as a percentage of 2023 base salary under the 2023 Cash Incentive Plan:
Annual Incentives
| Named Executive Officer | Threshold Bonus % | Target Bonus % | Maximum Bonus % | | John M. Steitz | 50.00% | 100.00% | 100.00% | | D. Andrew Edwards | 35.00% | 70.00% | 140.00% | | Kevin C. Donnelly | 30.00% | 60.00% | 120.00% |
Annual Incentives
The NEOs requested that no payment be made to the NEOs in connection with the achievement of 2023 NEO performance objectives until the sale of Terphane is completed. Based on the Committee’s review of the achievement of the above 2023 NEO performance objectives and the results of the Consolidated Adjusted EBITDA financial result, the Committee awarded the following payments contingent on the completion of the sale of Terphane:
Annual Incentives
| Named Executive Officer | Actual Payout under 2023 Cash Incentive Plan | % of 2023 Base Salary | | John M. Steitz | 281,268 | 30.00% | | D. Andrew Edwards | 105,421 | 21.00% | | Kevin C. Donnelly | 81,625 | 18.00% |
Annual Incentives
The Committee received and confirmed Tredegar’s financial performance results before approving the payouts under the 2023 Cash Incentive Plan.
Long-Term Incentives
Long-Term Incentives Long-term incentives are an important element of our compensation program. The 2018 Plan allows for the granting of stock options, restricted stock, stock appreciation rights (SARs) and other equity awards based on Tredegar common stock, as well as performance-based long-term incentive cash awards. We believe long-term incentives, such as those permitted by the 2018 Plan, promote our success by helping to retain executives and by focusing employee efforts on achieving performance goals that lead to long-term growth of shareholder value. Long-term equity-based awards are generally approved each year during the first quarter of the year and typically become effective on the third business day following the release of our fourth quarter earnings for the preceding fiscal year. During 2023, the Committee elected to delay the approval of the long-term equity-based awards until May 2023 due to the Company’s then-ongoing evaluation of its potential sale of Terphane. The Committee believes this delay allowed it to more appropriately set the long-term incentives for the executive officers based on the Company’s plans and strategic objectives. In consultation with Pearl Meyer, the Committee reviewed and considered various forms and methods of providing long-term incentive compensation opportunities to our executive officers. After considering factors such as pay and performance alignment, shareholder alignment, retention goals, accounting cost, share usage, shareholder dilution, the ratio of short-term and long-term compensation, tax implications, peer group practices and market trends, the Committee approved for 2023 the use of (1) service-based restricted stock and (2) performance units. These service-based restricted stock and performance unit awards were intended to further balance the performance and retention objectives of our long-term incentive program and to create additional stock ownership opportunities for executives and to further align their interests with shareholders. The Committee determined that the equity grant mix for 2023 for our NEOs would be as follows: 50% of the equity grant value in the form of performance units and 50% of the equity grant value in the form of service-based restricted stock. The specific number of restricted stock and performance units is generally based on converting the equity grant value into an appropriate number of shares for each form of equity being awarded. For conversion purposes, shares of restricted stock and performance units granted in 2023 were valued based on the closing price of Tredegar common stock as reported on the NYSE on the date of grant (May 11, 2023). Grant levels may then be adjusted up or down, at the Committee’s discretion, based on a variety of factors, including, but not limited to, our performance, the executive’s performance, internal pay equity and share availability under the 2018 Plan. Restricted Stock. During 2023, the Committee approved the following service-based restricted stock grants to each NEO identified below:
Long-Term Incentives
| Named Executive Officer | Grant Date | Award (#) | Fair Value as of Grant Date | | John M. Steitz | 5/11/2023 | 75,000(1) | $576,750 | | D. Andrew Edwards | 5/11/2023 | 37,662 | $289,621 | | Kevin C. Donnelly | 5/11/2023 | 28,350 | $218,012 |
Long-Term Incentives
| (1) In 2022 and 2023, the Committee granted Mr. Steitz 83,652 and 134,229 shares of restricted stock, respectively, as part of the Company’s long-term incentive plan. In the third quarter of 2023, the Company determined that a portion of each of the restricted stock grants made in 2022 and 2023 inadvertently exceeded the 2018 Plan’s limits on the number of stock awards that may be granted to any individual (75,000 during a calendar year). Accordingly, in early 2024, 8,652 shares of the 2022 grant and 59,229 shares of the 2023 grant were rescinded. |
Long-Term Incentives
The shares of restricted stock vest three years from the date of grant. The shares of restricted stock (net of any shares surrendered to satisfy tax withholding obligations) must be retained by the NEO until the earlier of (i) the date that the NEO is in compliance with the ownership requirements of Tredegar’s Executive Stock Ownership Policy (the Policy), (ii) the date that the NEO is not subject to the Policy, (iii) a change in control of Tredegar, (iv) the NEO’s death or (v) the NEO’s retirement. Performance Units. The cash settled performance units have a 2-year performance period, with a payout calculation based on the achievement of specific consolidated adjusted cumulative EBITDA performance goals at threshold, target, or maximum levels for the period from January 1, 2023, through December 31, 2024. The payout calculation for our NEOs is preliminary and subject to adjustment based on the relative total shareholder return (rTSR) of the Company compared to the Industrial and Materials companies in the S&P 600 Index for the period from May 11, 2023, through December 31, 2025. If the Company’s rTSR is less than 25th percentile of the comparator group, there is no payout. If the Company’s rTSR is between 25th and 75th percentile of the comparator group, the preliminary payout will not be adjusted. If the Company’s rTSR is greater than 75th percentile of the comparator group, the preliminary payout calculation will be increased by 50%.
Long-Term Incentives
| Preliminary Award Opportunity based on Consolidated Corporate Adjusted Cumulative EBITDA | | | | | Named Executive Officer(1) | Threshold Award % | Target Award % | Maximum Award % | | % of Performance Unit value granted | | | | | John M. Steitz | 50.00% | 100.00% | 150.00% | | D. Andrew Edwards | 50.00% | 100.00% | 150.00% | | Kevin C. Donnelly | 50.00% | 100.00% | 150.00% |
Long-Term Incentives
(1) Cash settled performance units for Messrs. Steitz, Edwards and Donnelly have an additional 3-year rTSR adjustment on top of a 2-year cumulative EBITDA achievement, payable in 2026 with a potential $0 payout if the Company’s rTSR is less than the 25th percentile of the comparator group. For the cash settled performance units, achievement of the highest level of performance conditions would result in NEOs receiving 225% of the target amounts. As of May 11, 2023, the 2-year consolidated adjusted cumulative EBITDA was below the financial performance threshold, thus in accordance with ASC Topic 718, the Grant Date Fair Value of these awards was $0. During 2023, the Committee approved the following performance unit grants to each NEO identified below:
Long-Term Incentives
| Named Executive Officer | Grant Date | Award (#)(1) | Grant Date Fair Value of Award | | John M. Steitz | 5/11/2023 | 134,229 | 0 | | D. Andrew Edwards | 5/11/2023 | 37,662 | 0 | | Kevin C. Donnelly | 5/11/2023 | 28,350 | 0 |
Long-Term Incentives
| (1) The number of awarded performance units was determined by dividing the value of the award approved by the Committee by our closing stock price on the date of grant at $7.69. As of May 11, 2023, the 2-year cumulative EBITDA was below the financial performance threshold, thus in accordance with ASC Topic 718, the Grant Date Fair Value of these awards was $0. |
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position | Year | Salary($) | Bonus($) | Stock Awards ($)(1) | Option/SAR Awards ($)(2) | Non-Equity Incentive Plan Compensation($)(3) | Change in Pension Value and Non-qualified Deferred Compensation Earnings($)(4) | All Other Compensation ($)(5) | Total($) | | John M. Steitz(6) | 2023 | 928,545 | -0- | 576,750 | -0- | 281,268 | -0- | 116,376 | 1,902,939 | | President and | 2022 | 894,936 | -0- | 2,080,501 | -0- | 283,495 | -0- | 103,199 | 3,673,092 | | Chief Executive Officer | 2021 | 868,869 | 743,957 | 502,582 | 1,469,572 | -0- | -0- | 88,112 | 3,362,131 | | D. Andrew Edwards | 2023 | 497,177 | -0- | 289,621 | -0- | 105,421 | -0- | 46,412 | 938,631 | | Executive Vice President | 2022 | 479,181 | -0- | 612,802 | -0- | 106,256 | -0- | 42,427 | 1,240,666 | | and Chief Financial Officer | 2021 | 465,224 | 250,000 | 141,020 | 412,333 | 367,083 | -0- | 55,225 | 1,690,885 | | Kevin C. Donnelly(7) | 2023 | 449,111 | -0- | 218,012 | -0- | 81,625 | -0- | 52,568 | 801,316 | | Vice President, | 2022 | 436,030 | -0- | 436,038 | -0- | 177,639 | -0- | 53,906 | 1,103,613 | | General Counsel and Secretary | 2021 | 375,000 | 50,000 | 748,551 | 283,202 | 209,813 | -0- | 40,053 | 1,706,619 |
Summary Compensation Table
| ___________ |
Summary Compensation Table
| (1) Represents the grant date fair value of restricted stock awards computed in accordance with ASC Topic 718. For purposes of calculating these amounts, we have used the same assumptions used for financial reporting purposes under GAAP. For a description of the assumptions we used, see Note 11 to our financial statements, which is included in our 2023 Form 10-K. 50% of the value shown under Stock Awards ($) in 2023 are cash settled performance units tied to a 2-year consolidated adjusted cumulative EBITDA achievement. Cash settled performance units for our NEOs have an additional 3-year rTSR adjustment in addition to the 2-year consolidated adjusted cumulative EBITDA achievement, payable in 2026 with a potential $0 payout if the Company’s rTSR is less than the 25th percentile of the comparator group. For the cash settled performance units, achievement of the highest level of performance conditions would result in the NEOs receiving 225% of the target amounts. As of May 11, 2023, the 2-year consolidated adjusted cumulative EBITDA below the financial performance threshold, thus in accordance with ASC Topic 718, the Grant Date Fair Value of these awards was $0. |
Summary Compensation Table
| (2) Represents the grant date fair value of stock option awards computed in accordance with ASC Topic 718. For purposes of calculating these amounts, we have used the same assumptions used for financial reporting purposes under GAAP. For a description of the assumptions we used, see Note 11 to our financial statements, which is included in our 2023 Form 10-K. The actual value an NEO may receive depends on market prices, and there can be no assurance that the amounts reflected in the “Option/SAR Awards” column will actually be realized. No gain to an NEO is possible without an appreciation in stock value. |
Summary Compensation Table
| (3) Represents cash awards to the NEOs under Tredegar’s annual cash incentive plans for the years indicated. 2023 actual payments are contingent on the completion of the sale of Terphane. |
Summary Compensation Table
| (4) This amount represents the change in actuarial present value in the Pension Plan from December 31, 2022, to December 31, 2023, from December 31, 2021, to December 31, 2022, and from December 31, 2020, to December 31, 2021, respectively. Messrs. Steitz and Donnelly are not eligible to participate in the Pension Plan. |
Summary Compensation Table
| (5) These amounts include the following: |
Summary Compensation Table
| Name | | Matching Contributions under the Retirement Savings Plan($) | Matching Contributions under the Savings Plan Benefit Restoration Plan($) | Dividends on Shares in the Savings Plan Benefit Restoration Plan($) | Dividends on Shares of Restricted Stock($) | Total($) | | John M. Steitz | 2023 | 16,500 | 29,927 | 2,801 | 67,148 | 116,376 | | D. Andrew Edwards | 2023 | 11,263 | 13,596 | 2,768 | 18,785 | 46,412 | | Kevin C. Donnelly | 2023 | 16,500 | 5,956 | 1,154 | 28,958 | 52,568 |
Summary Compensation Table
| (6) In 2022 and 2023, the Committee granted Mr. Steitz 83,652 and 134,229 shares of restricted stock, respectively, as part of the Company’s long-term incentive plan. In the third quarter of 2023, the Company determined that a portion of each of the restricted stock grants made in 2022 and 2023 inadvertently exceeded the 2018 Plan’s limits on the number of stock awards that may be granted to any individual (75,000 during a calendar year). Accordingly, in early 2024, 8,652 shares of the 2022, grant and 59,229 shares of the 2023, grant were rescinded. The value of shares in the Stock Award column represents 75,000 shares for 2023. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table presents information regarding grants of plan-based awards to our NEOs during the fiscal year ended December 31, 2023.
Grants of Plan-Based Awards
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2)(3) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | Grant Date Fair Value of Stock and Option Awards ($) | | | | Threshold ($) | Target ($) | Maxi-mum ($) | Threshold (#) | Target (#) | Maxi-mum (#) | | | | John M. Steitz | | 468,780 | 937,560 | 937,560 | | | | | $0(6) | | | 5/11/2023 | | | | 67,115 | 134,229 | 302,015 | | | | | 5/11/2023 | | | | | | | 75,000 | 576,750 | | D. Andrew Edwards | | 175,702 | 351,403 | 702,806 | | | | | $0(6) | | | 5/11/2023 | | | | 18,831 | 37,662 | 84,740 | | | | | 5/11/2023 | | | | | | | 37,662 | 289,621 | | Kevin C. Donnelly | | 136,042 | 272,083 | 544,166 | | | | | $0(6) | | | 5/11/2023 | | | | 14,175 | 28,350 | 63,788 | | | | | 5/11/2023 | | | | | | | 28,350 | 218,012 | | 1 | Represents the annual incentive opportunities under the 2023 Cash Incentive Plan. The actual amount paid to each NEO under the 2023 Cash Incentive Plan is included under “Summary Compensation Table – Non-Equity Incentive Plan Compensation” beginning on page 36 of this proxy statement. | | | | | | | | | | 2 | Represents Cash settled Performance Units granted in 2023. See “Compensation Discussion and Analysis – Long-Term Incentives – 2023 Performance Units” on page 31 of this proxy statement for additional information, including the achievement criteria associated with the Performance Units. As of December 31, 2023, achievement of 2-year EBITDA has not been met. | | | | | | | | | | 3 | The cash settled Performance Units for Messrs. Steitz, Edwards and Donnelly have an additional 3-year rTSR adjustment on top of a 2-year cumulative EBITDA achievement. | | | | | | | | | | 4 | Represents restricted stock awards granted in 2023. | | | | | | | | | | 5 | In 2022 and 2023, the Committee granted Mr. Steitz 83,652 and 134,229 shares of restricted stock, respectively, as part of the Company’s long-term incentive plan. In the third quarter of 2023, the Company determined that a portion of each of the restricted stock grants made in 2022 and 2023 inadvertently exceeded the 2018 Plan’s limits on the number of stock awards that may be granted to any individual (75,000) during a calendar year. Accordingly, in early 2024, 8,652 shares of the 2022 grant and 59,229 shares of the 2023 grant were rescinded. The value of shares in the Stock Award column represents 75,000 shares for 2023. | | | | | | | | | | 6 | As of the date of grant (May 11, 2023), the 2-year consolidated adjusted cumulative EBITDA performance metric for the cash settled performance units was below the financial performance threshold, thus in accordance with ASC Topic 718, the Grant Date Fair Value of these awards was $0. | | | | | | | | |
Outstanding Equity Awards At Fiscal Year-End
Outstanding Equity Awards At Fiscal Year-End
Outstanding Equity Awards At Fiscal Year-End
| | Option Awards | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options/SARs | Option Exercise Price(1) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | | (#) Exercisable(8) | ($) | | (#) | ($) | (#) | ($) | | John M. Steitz(7) | 366,165 | 14.62 | 3/21/2024 | 32,870(2) | 177,827 | | | | | 21,679 | 15.25 | 3/21/2024 | 75,000(4) | 405,750 | 83,652(6) | 0 | | | 427,275 | 10.75 | 3/18/2027 | 75,000(5) | 405,750 | 134,229(6) | 0 | | | 35,909 | 15.25 | 3/18/2027 | | | | | | | 263,914 | 16.37 | 3/20/2028 | | | | | | D. Andrew Edwards | 75,175 | 11.67 | 5/22/2024 | 9,223(2) | 49,896 | | | | | 2,927 | 15.25 | 5/22/2024 | 23,470(4) | 126,973 | 23,470(6) | 0 | | | 46,074 | 14.43 | 5/7/2025 | 37,662(5) | 203,751 | 37,662(6) | 0 | | | 2,261 | 15.25 | 5/7/2025 | | | | | | | 50,744 | 13.78 | 3/21/2026 | | | | | | | 3,113 | 15.25 | 3/21/2026 | | | | | | | 114,355 | 10.75 | 3/18/2027 | | | | | | | 9,611 | 15.25 | 3/18/2027 | | | | | | | 74,049 | 16.37 | 3/20/2028 | | | | | | Kevin C. Donnelly | 2,900 | 19.64 | 2/21/2023 | 45,727(2) | 247,383 | | | | | 1,043 | 15.25 | 2/21/2023 | 17,812(3) | 96,363 | | | | | 1,760 | 17.29 | 3/28/2024 | 28,350(5) | 153,374 | 28,350(6) | 0 | | | 662 | 15.25 | 3/28/2024 | | | | | | | 5,489 | 10.75 | 3/18/2027 | | | | | | | 461 | 15.25 | 3/18/2027 | | | | | | | 50,859 | 16.37 | 3/20/2028 | | | | |
Outstanding Equity Awards At Fiscal Year-End
| (1) In accordance with the Amended and Restated 2004 Equity Incentive Plan (the 2004 Plan) and the 2018 Plan, the per share exercise price for the stock options and the exercise price for the SARs was not less than the fair market value of the shares of Tredegar common stock on the date of the applicable grant of the option or SAR, as determined by the closing price as reported on the NYSE on that date. |
Outstanding Equity Awards At Fiscal Year-End
| (2) The shares of restricted common stock will vest on March 19, 2024. |
Outstanding Equity Awards At Fiscal Year-End
| (3) The shares of restricted common stock will vest on March 15, 2025. |
Outstanding Equity Awards At Fiscal Year-End
| (4) The shares of restricted common stock will vest on May 4, 2025. |
Outstanding Equity Awards At Fiscal Year-End
| (5) The shares of restricted common stock will vest on May 11, 2026 |
Outstanding Equity Awards At Fiscal Year-End
| (6) Cash settled performance units have an additional 3-year rTSR adjustment in addition to a 2-year consolidated adjusted cumulative EBITDA achievement, payable in 2026 with a potential of $0 payout at Threshold if the Company’s rTSR is less than the 25th percentile of the comparator group. |
Outstanding Equity Awards At Fiscal Year-End
| (7) In 2022 and 2023, the Committee granted Mr. Steitz 83,652 and 134,229 shares of restricted stock, respectively, as part of the Company’s long-term incentive plan. In the third quarter of 2023, the Company determined that a portion of each of the restricted stock grants made in 2022 and 2023 inadvertently exceeded the 2018 Plan’s limits on the number of stock awards that may be granted to any individual (75,000) during a calendar year. Accordingly, in early 2024, 8,652 shares of the 2022 grant and 59,229 shares of the 2023 grant were rescinded. The number of outstanding shares in this table includes 75,000 shares for each of the 2 years, 2022 and 2023. |
Outstanding Equity Awards At Fiscal Year-End
| (8) All outstanding option awards are fully vested and exercisable as of December 31, 2023. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table presents information concerning the exercise of stock options and vesting of stock (including restricted stock and performance units) for our NEOs during the fiscal year ended December 31, 2023.
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Name | | | | | | | (#) | ($) | (#) | ($) | | John M. Steitz | -0- | -0- | 32,725 | 293,871 | | D. Andrew Edwards | -0- | -0- | 8,759 | 78,656 | | Kevin C. Donnelly | -0- | -0- | 3,783 | 33,971 |
Pension Benefits
Pension Benefits The following table presents information as of December 31, 2023, concerning each of our defined benefit plans that provide for payments or other benefits to our NEOs at, following or in connection with retirement. Messrs. Steitz and Donnelly are not eligible to participate in the Pension Plan.
Pension Benefits
| | | Number of Years | Present Value of | Payments During | | Name | Plan Name | Credited Service | Accumulated Benefit (1) | Last Fiscal Year | | | | (#) | ($) | ($) | | D. Andrew Edwards | Pension Plan | 17 | 0 | -0- | | (1) For purposes of computing the actuarial present value of the accrued benefit payable to the NEOs, we have used the following assumptions: | | | | | | | 12/31/2021 | 12/31/2022 | 12/31/2023 | | | Discount Rate | 2.90% (Pension Plan) | 3.79% (Pension Plan) | 3.79% (Pension Plan) | | | | 2.64% (Restoration Plan) | 5.09% (Restoration Plan) | 5.09% (Restoration Plan) | | | Mortality Table | Pri-2012 Fully Generational Retiree Mortality Table, projected using Scale MP-2020 | Pri-2012 Fully Generational Retiree Mortality Table, projected using Scale MP-2020 | Pri-2012 Fully Generational Retiree Mortality Table, projected using Scale MP-2021 | | | Retirement Age | Age 60, or current age, if older | | | | | Preretirement Decrements | None | | | | | Payment Option | Single life annuity with five years of benefits guaranteed | | | |
Pension Benefits
| (2) On February 8, 2022, the Board adopted a resolution to terminate and settle the Pension Plan. Effective May 31, 2022, the Pension Plan was terminated. On October 31, 2023, the Company contributed $27.7 million to fully fund the Pension Plan with the amount necessary to purchase from Massachusetts Mutual Life Insurance Company a nonparticipating single premium group annuity contract for $157.5 million. On November 3, 2023, the Pension Plan termination and settlement process were completed, and the Company’s relevant Pension Plan obligation was transferred to Massachusetts Mutual Life Insurance Company. This completed the Pension Plan termination process that began in February 2022. Mr. Edwards was the only NEO who participated in the Pension Plan. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The following table presents information concerning the Savings Plan Benefit Restoration Plan for Employees of Tredegar Corporation (SPBR Plan), which is a defined contribution plan that provides for the deferral of compensation of our NEOs on a basis that is not tax qualified.
Nonqualified Deferred Compensation
| | Executive | Registrant | Aggregate | Aggregate | Aggregate | | Name | Contributions | Contributions in | Earnings in Last | Withdrawals/ | Balance at Last | | | in Last FY | Last FY(1) | FY | Distributions | FYE(2) | | | ($) | ($) | ($) | ($) | ($) | | John M. Steitz | -0- | 32,728 | (-33,242) | -0- | 70,080 | | D.Andrew Edwards | -0- | 16,364 | (-32,007) | -0- | 53,866 | | Kevin C. Donnelly | -0- | 7,110 | (-12,921) | -0- | 23,486 |
Nonqualified Deferred Compensation
| (1) These amounts represent the sum of the amounts included in Note (5) to the Summary Compensation Table beginning on page 35 of this proxy statement under the columns “Matching Contributions under the Savings Plan Benefit Restoration Plan” and “Dividends on Shares in the Savings Plan Benefit Restoration Plan.” | | (2) These amounts include the following amounts that were previously reported as compensation in the Summary Compensation Table: |
Nonqualified Deferred Compensation
| Name | Matching Contributions under the Savings Plan Benefit Restoration Plan ($) | Dividends on Shares in the Savings Plan Benefit Restoration Plan ($) | Total($) | | John M. Steitz | 29,927 | 2,801 | 32,728 | | D. Andrew Edwards | 13,596 | 2,768 | 16,364 | | Kevin C. Donnelly | 5,956 | 1,154 | 7,110 |
SPBR Plan
| Name | Payment on Retirement($)(1) | Payment on Termination($)(1) | Payment on Death or Disability($)(1) | | John M. Steitz | 70,080 | 70,080 | 70,080 | | D. Andrew Edwards | 53,866 | 53,866 | 53,866 | | Kevin C. Donnelly | 23,486 | 23,486 | 23,486 |
Other Potential Payments Upon Termination or a Change in Control
Other Potential Payments Upon Termination or a Change in Control
Agreements with Executive Officers
| CEO PAY RATIO DISCLOSURE |
Agreements with Executive Officers
| PAY VERSUS PERFORMANCE DISCLOSURE |
Agreements with Executive Officers
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for CEO(1) | Compensation Actually Paid to CEO(1)(2)(3) | Average Summary Compensation Table Total for Non-CEO NEOs(3) | Average Compensation Actually Paid to Non-CEO NEOs(2)(3)(4) | Tredegar Corporation | S&P SmallCap 600 Index | Net Income (in millions) | Consolidated Adjusted EBITDA (in millions)(5) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $1,902,939 | $105,227 | $869,974 | $385,321 | $39.45 | $129.09 | ($105.9) | $33.5 | | 2022 | $3,362,131 | $3,066,262 | $1,172,140 | $834,135 | $71.95 | $113.35 | $29.0 | $90.6 | | 2021 | $3,673,092 | $839,896 | $1,698,752 | $1,170,165 | $79.58 | $137.26 | $57.8 | $98.4 | | 2020 | $5,031,163 | $5,183,267 | $2,098,857 | $1,563,219 | $108.64 | $109.57 | ($75.4) | $116.1 |
Agreements with Executive Officers
| Compensation actually Paid (as calculated) | $105,227 | $385,321 |
Pay Versus Performance: Graphical Description
Pay Versus Performance: Graphical Description The illustrations below provide a graphical description of CAP and the following measures:
Pay Versus Performance: Graphical Description
| ● | the Company’s cumulative TSR and the Peer Group’s cumulative TSR; |
Pay Versus Performance: Graphical Description
| ● | the Company’s Net Income; and |
Pay Versus Performance: Graphical Description
| ● | the Company Selected Measure, which for Tredegar is Consolidated Adjusted EBITDA. |
Pay Versus Performance: Graphical Description
CAP and Cumulative TSR / Cumulative TSR of the Peer Group CAP and Company Net Income CAP and Consolidated Adjusted EBITDA