DEF 14A of Orion S.A.
Filed Apr 29, 2024 · FY20230001140361-24-023058
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| • | Commitment to representing the long-term interests of our shareholders |
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Selection and Evaluation of Director Candidates The Board is free to select its Chairman and the Company’s CEO in the manner it considers in the best interest of the Company at any given point in time. These positions may be filled by one individual or by two different individuals. Currently, the two positions are separated. At any time when the positions of Chairman and CEO are filled by one individual, the independent directors shall designate from among themselves a lead director, who shall have the following powers and duties:
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| • | Presiding at all meetings of the Board at which the Chairman and CEO is not present |
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| • | Presiding at executive sessions of the independent directors |
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| • | Reviewing and approving meeting agendas, meeting schedules and information sent to the Board |
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| • | Serving as a liaison between the Chairman and CEO and the independent directors |
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| • | Having the authority to call meetings of the independent directors |
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| • | Being available for consultation and direct communication with shareholders, as appropriate |
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The Nominating, Sustainability and Governance Committee is responsible for searching, selecting or recommending for the Board’s selection, the slate of qualified director nominees for election to the Company’s Board and, if deemed feasible by the Board, for filling vacancies occurring between Annual General Meetings of shareholders. The Nominating, Sustainability and Governance Committee may also consult with outside advisors or retain independent search firms to assist in the search for qualified candidates. The Nominating, Sustainability and Governance Committee endeavors to identify a diverse list of potential candidates, including diversity in experience, skills, culture and gender, among other factors. Once potential candidates are identified, the Nominating, Sustainability and Governance Committee reviews
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the backgrounds of those candidates, evaluates candidates’ independence from the Company and potential conflicts of interest and determines if candidates meet the NYSE Rules. The committee assesses also whether candidates meet the qualifications desired by the Nominating, Sustainability and Governance Committee for election as director as well as future committee member, as applicable. The Nominating, Sustainability and Governance Committee is responsible for reviewing with our Board, on an annual basis, the appropriate characteristics, skills and experience required for the Board as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members) and in recommending candidates for election, the Nominating, Sustainability and Governance Committee will consider the individual’s, cultural background, experience and characteristics. In addition, the Nominating, Sustainability and Governance Committee reviews the overall composition of the Board to ensure there is an appropriate mix of specific culture, experience, qualifications and skills to promote a diversity of points of view for the effective performance of the Board’s oversight functions and representation of shareholders’ interests. One or more shareholders of record holding at least 10% of the outstanding Common Shares (excluding, for the avoidance of doubt, any Common Shares repurchased by the Company) may add items to the agenda of the Annual General Meeting, including a resolution to appoint a director of the Company, provided that each such item is accompanied by a justification or a draft resolution to be adopted in the Annual General Meeting. The Board through its Nominating, Sustainability and Governance Committee will give appropriate consideration to candidates for Board membership proposed by shareholders and will evaluate such candidates in the same manner as other candidates identified by or submitted to the Board. Director Tenure and Retirement Policy Under Luxembourg law, a given director can be appointed to the Board an unlimited number of times for a maximum period of six years for each such appointment. Because of the value the Board places on having directors who are knowledgeable about the Company and its operations, the Company follows the policy to nominate each director for the election by shareholders for a one-year period at a time only, with the ability to be re-elected to the Board on a yearly basis. In connection with each director nomination recommendation, the Nominating, Sustainability and Governance Committee considers continuing director tenure and retirement aspects. To ensure that directors may appropriately discharge their responsibilities, the Board has adopted a policy that any director (including a management director) who has a significant change in business affiliation or position of principal employment which the Board may deem to be contrary to the best interests of the Company or adversely affecting her or his ability to perform the essential functions and responsibilities of a director, will be expected to tender her or his proposed resignation from the Board to the Nominating, Sustainability and Governance Committee (or, in the event of the chair of the Nominating, Sustainability and Governance Committee’s occupation or association changing, to the Chairman of the Board). The Nominating, Sustainability and Governance Committee shall review the director’s continuation on the Board, and recommend to the Board whether, in light of all the circumstances, the Board should accept such proposed resignation or request that the director continues to serve as one of the Company’s directors. Board Refreshment The Board seeks to bring together a diverse mix of directors that the Board and senior management can leverage to make well-considered strategic decisions in the best interests of the Company and its stockholders. To gather new ideas and perspectives, and to respond to the ever-changing needs of our clients and other stakeholders, the Board actively seeks candidates representing a range of tenures, areas of expertise, industry experience, and backgrounds. Consequently, the Board has refreshed its composition by adding four new directors in the last five years, including Ms. Mary Lindsey in 2020, who brings finance, accounting, tax and cybersecurity expertise, Mr. Yi Hyon Paik in 2020, who brings technology, strategy and research and development experience and Mr. Michel Wurth in 2020, who adds finance, strategy and sustainability expertise. Mr. Anthony L. Davis joined the Board in 2022, and brought knowledge and experience in the ESG field while adding an investor perspective to the Board. He served on the Board until his resignation on December 27, 2023, to focus on other commitments and not as a result of any disagreement with the Company. Election of Directors In accordance with our articles of association, the election of directors requires the approval of a majority of the votes validly cast at the Annual General Meeting. Director Independence Our nominated Board is composed of a supermajority of independent directors in accordance with the NYSE listing requirements. In making a respective determination, the Board has affirmed that each of the independent directors meets the objective requirements for independence set forth by the NYSE listing requirements. The independent directors are Ms. Kerry A. Galvin, Mr. Paul Huck, Ms. Mary Lindsey, Mr. Didier Miraton, Mr. Yi Hyon Paik, Mr. Dan F. Smith, Mr. Hans-Dietrich Winkhaus, and Mr. Michel Wurth. Only one director, Mr. Corning Painter, is not independent because he is our CEO. The independence standards included in the NYSE listing requirements specify the criteria by which the independence of our directors is determined, including strict guidelines for directors and their immediate family members with respect to past employment or affiliation with the Company, its management or its independent registered public accounting firm.
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Code of Conduct, Governance Guidelines and Code of Ethics for Senior Financial Officers accompanied by Whistleblower Policy and Hotline We operate under a written Code of Conduct that applies to all our employees and directors, including those officers responsible for financial reporting. Upon employment with us, all officers and employees are required to affirm in writing their receipt and review of the Code of Conduct and their compliance with its provisions. Our Code of Conduct is accompanied by our whistleblower policy and hotline. The Company’s General Counsel addresses all material whistleblower complaints with the Board’s Audit Committee on a quarterly basis. We maintain an Insider Trading Policy that safeguards compliance with insider trading laws and prohibits officer, employee and director hedging of Company securities, including our Common Shares. A yearly training reflecting the principles laid out in our Code of Conduct and other material policies is mandatory for all employees, globally. In 2023, 100% of Company employees successfully completed our compliance training. Also, as previously mentioned, the Board has, upon the recommendation of the Nominating, Sustainability and Governance Committee, adopted a set of Corporate Governance Guidelines to promote the functioning of the Board and its committees and to set forth a common set of expectations as to how the Board should perform its functions. Such guidelines address, in particular Board composition, Board leadership, the selection of directors, the organization of Board meetings, executive Board sessions, Board committee purpose and responsibilities, management succession, Board compensation, expectations on directors, Board evaluation processes and the reliance on management and outside advice. Additionally, the Board has adopted a Code of Ethics for Senior Financial Officers, applicable to the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, in order to:
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| • | Promote honest and ethical conduct including the ethical handling of conflicts of interest |
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| • | Promote full, fair, accurate, timely and transparent disclosure |
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| • | Promote compliance with applicable laws and governmental rules and regulations, NYSE Rules, accounting standards and Company policies |
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| • | Deter wrongdoing |
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The Code of Ethics for Senior Financial Officers is accompanied by the Company’s Clawback Policy, which applies in the event of material misstatements in our financial reporting. Our Code of Conduct, Corporate Governance Guidelines, Code of Ethics for Senior Financial Officers and the Company‘s Clawback Policy can be accessed under the Investors and Corporate Governance links on our website at https://investor.orioncarbons.com/governance/governance-documents/default.aspx and https://orioncarbons.com/legal/compliance-guidelines/#compliance_policies. We intend to satisfy any disclosure requirements pursuant to Item 5.05 of Form 8-K and NYSE rules regarding any amendment to, or waiver from, certain provisions of our Code of Conduct by posting such information on our website.
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Board Evaluation The chair of the Nominating, Sustainability and Governance Committee coordinates the annual self-evaluation process on behalf of the Board. The charter of each committee of the Board also requires an annual performance evaluation, which is performed for each committee as part of the annual Board evaluation. The Board self-evaluation process involves completion of an electronic questionnaire by each Board and committee member, followed by a one-on-one interview of each director conducted by the chair of the Nominating, Sustainability and Governance Committee. On this basis, the chair of the Nominating, Sustainability and Governance Committee leads a discussion with each committee and the full Board to review the results of the self-evaluation and identify follow up items. The objective is to allow the directors to share their perspectives and consider adjustments or enhancements to the Board processes in response to the feedback. Shareholder Engagement Our executive management team actively engages in communications throughout the year with shareholders of all ownership levels. Generally, these communications involve presentations to investors and question and answer sessions, meetings with investors and shareholders one-on-one and in small groups, as well as responding to investor and shareholder e-mails and telephone calls. Management’s discussions with shareholders and the investment community address numerous aspects of our business and matters of importance or concern to our shareholders. Observations, questions or comments from our shareholders are routinely shared with the Board and its committees, so that the Board can then consider these matters as part of its oversight responsibilities. On occasion, an independent board member may participate in these discussions. Important shareholder engagement topics discussed in 2023 were:
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Sustainability Highlights Our Board oversees and regularly discusses corporate strategy of which two pillars are driven by sustainability: developing the market for conductive carbons and the development of a circular economy for used tires. The Board is updated periodically on the Life Cycle Analysis of our products and various manufacturing processes we operate or are developing. Our Board of Directors’ Nominating, Sustainability and Governance Committee regularly reviews the Company’s strategy, activities and policies regarding sustainability and makes recommendations to the full Board, which has the oversight function with regard to the Company’s Environmental, Social and Governance (ESG) goals and activities. Our CEO is accountable to ensure accurate reporting on sustainability to the Board. In 2023, Orion refreshed its ESG materiality assessment, engaged with customers and EU authorities on environmental topics, with employees via an employee engagement survey, with its plant managers on community engagement and with investors on various financial and ESG achievements. The Company launched its newly introduced Supplier Code of Conduct with its suppliers and reported to the Nominating, Sustainability and Governance Committee on progress and status with regard to its specific ESG goals. The Board’s Audit Committee actively monitored the Company’s achievement of the sustainability-linked loan targets. For the second consecutive year, we achieved the maximum score of “Most Effective” employees, in an employee engagement survey rolled out by Korn Ferry. The survey identifies four distinct groups of employees in organizations, characterized by differing levels of Engagement and Enablement. In 2023, we saw a 1,100 basis point improvement in the Most Effective employee group from 2022.
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Complaint Procedures for Accounting, Internal Control, Auditing and Financial Matters In accordance with SEC Rules, the Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal control, auditing or financial matters (collectively, “Accounting Matters”) and (ii) the confidential, anonymous submission by employees or outside third parties of concerns regarding questionable Accounting Matters. The Audit Committee oversees treatment of complaints and concerns in this area. The Audit Committee can involve an external counsel in any reviews and investigations. The General Counsel reports to the Audit Committee at each quarterly meeting on current compliance matters (if any). Additional information regarding our procedures for anonymous reporting can be found in our Policy on Whistleblower Protection and under the Legal link on our website at https://orioncarbons.com/legal/compliance-guidelines/#reporting_violations.
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Board Leadership Structure, Board’s Role in Strategy and Risk Oversight, and Board and Committee Meetings Board Leadership Structure With respect to the roles of the Chairman of our Board and CEO, our Board exercises its discretion in combining or separating these positions as it deems appropriate in light of prevailing circumstances. The Board believes that the combination or separation of these positions should continue to be considered as part of our succession planning process. Currently, the roles are not combined, with Mr. Painter serving as our CEO and Mr. Smith serving as the non-executive Chairman of the Board. Mr. Painter and Mr. Smith’s extensive business knowledge, along with their demonstrated leadership capability, makes them highly qualified to continue to serve as our CEO and Chairman of the Board, respectively. Having both roles separated allows for an intensive dialogue between the CEO and the Chairman of the Board in addition to the regular discussions amongst the CEO, the Chairman of the Board and the other committee chairpersons and directors. Our Board of Directors regards this as meaningful, not only as this leads to different perspectives for Board meeting agenda proposals to the full Board, but for adding value through larger, diverse experience backing up these two most senior company positions. The independent Chairman of the Board also heads the Board’s regular independent director executive sessions with the CEO not being present and provides an independent perspective to the CEO on strategic topics. The Board of Directors plans to continue the separation of the two roles because the separation of executive management and Board leadership supports the effective oversight function of the Board. We regard this to be good corporate governance that also reflects supervisory board elements typically found in European two-tier corporate setups. The Board would consider combining the roles of Chairman of the Board and CEO in one person, if e.g. an emergency event would suggest such combination, or the above described advantages could be achieved more efficiently by other corporate governance structures, or would be outweighed by the need for a concentrated leadership in order to better serve the interests of shareholders. Combining the roles of Chairman of the Board and CEO would be addressed beforehand with shareholders at an annual general meeting of shareholders if allowable under the circumstances. Strategy Oversight The Board of Directors provides guidance and exercises oversight on the Company’s global strategy and its translation into immediate, mid-term and long-term projects, measures, and initiatives. The Board reviews the Company’s strategies as part of the budget and capital expense plan process at least annually and provides guidance on business development projects. The Board approves the Company’s business plan, performance objectives, capital spending as well as the research and development and innovation budget for the following year. The Board focuses amongst other factors on the adequate return on capital spent and on improving project execution. In addition, various strategy elements are discussed with management at each Board meeting and form a part of the Board’s regular committee work. The Nominating, Sustainability and Governance Committee provides oversight and guidance on environmental and sustainability matters, while the Audit Committee focuses on financial reporting and capital allocation. Both committees report to the full Board on these matters. Management provides regular updates on progress and execution on the business plan and overall strategy to the Board, and the Board involves third-party experts when it deems appropriate. Risk Oversight The Board is responsible for overseeing our risk management process (including cybersecurity risk and environmental, health, safety as well as social risks), but does not provide day-to-day risk management of the Company, which is the responsibility of our executive management team. The Board oversees the implementation of risk mitigation strategies by management to ensure such strategies focus on both general risk management and management of the Company’s most significant risks. In evaluating the risks, the Board typically starts from a risk heat map compiled by senior management which ranks risks in particular based on probability, amounts at stake and reputational consequences considering a ten-year time span. The Board also considers the periodic reports from the Company’s risk committee which meets at least once per quarter and periodic intra-year updates to the development of the risk heat map. Outside perspectives are provided in specific areas such as by third party cybersecurity evaluation firms and by relayed comments from members of our insurance group. On this basis, the Board determines the adequacy of the mitigation measures and strategies taken, thereby applying short-, mid- and long-term effects and respective oversight requirements. The Board is aware that specific risks require individual mitigation strategies and oversight standards. The Board is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters and significant transactions. In addition, each of the Board committees is responsible for risk management or recommendations on risk-related matters concerning its area of responsibility, consistent with its charter, and such other responsibilities as may be delegated to it by the Board from time to time. The risk management process established and overseen by the Company’s executive management team includes the centralized corporate review of the global market, financial, regulatory, legal, cybersecurity and other risks associated with transactions, and approval of funds disbursed. The Company’s General Counsel holds the responsibility of the group’s Chief Compliance Officer. He ensures the group’s functioning compliance management system, investigates compliance matters, ensures the respective mitigation of compliance risks, and reports in this function to the Company’s Audit Committee.
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Cybersecurity The Board’s approach to managing cybersecurity is designed to ensure oversight and strategic leadership. Leading the Company’s cybersecurity risk management is our Chief Information Security Officer (“CISO”) who has more than 10 years’ experience in the field of cybersecurity. In the case of cybersecurity incidents, our CISO leads our Cyber Emergency Response Team and coordinates the respective disclosure process, which is a collaborative process by which our CISO is advised of cyber incidents and communicates and collaborates with relevant departments across the organization to develop and execute an appropriate response. While the Board of Directors has delegated the continuous cybersecurity monitoring responsibility to the Board’s Audit Committee, it remains apprised of relevant cybersecurity updates, risks and incidents. The regular updates on cybersecurity status, material cyber incidents, and cyber risk management from either the Chief Information Officer (“CIO”) or CISO are provided to both the Board and Audit Committee. In addition, the Company’s executive management, through its CIO, briefs the Audit Committee at each quarterly Audit Committee meeting on the Company’s IT and cybersecurity status, including its Operational Technology systems. The Audit Committee reviews also cover current IT cybersecurity scorecards, which reflect amongst others the status of awareness training programs, phishing incidents, penetration tests, endpoint security findings and an overall cybersecurity vulnerability assessment score. The Audit Committee regularly discusses identified security risks with senior management and reviews management proposed mitigation measures, as well as key cybersecurity initiatives and programs. The Board has discussed emerging technologies such as artificial intelligence (AI) and the associated upsides of using AI in its operations as well as the risk factors from cyber and data security perspectives. The Board also considers cybersecurity topics including risk mitigation on a regular basis. In line with the guidance provided by the Board, the Company performs IT external network penetration testing and table-top exercises and regularly benchmarks its measures to top marketplace security standards such as the U.S. National Institute of Standards and Technology’s (“NIST”) cybersecurity standards. The Board believes this expanded attention to cybersecurity is appropriate. In line therewith, the Company’s CEO as well as Ms. Galvin (Chair of the Nominating, Sustainability and Governance Committee as well as member of the Audit Committee) each have completed a two-day master class in cybersecurity organized by the National Association of Corporate Directors (NACD) in early 2023. Also, our Director, Ms. Lindsey, has earned a CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University. Ms. Lindsey is a member of the Company’s Audit Committee. Financing and Liquidity Our capital structure and liquidity position evolves due to the impact of fluctuations in the global economic environment on underlying carbon black demand and our results of operations. Changes in growth, continuity and safety capital investment levels over time also play a role. The Board oversees financing and liquidity risks by regularly monitoring our financial and liquidity position to ensure we maintain the financial resources needed to fund our operations, projected growth, and other financing and operating expenses. At each Board meeting, management reviews together with the Board, current information related to the Company’s financial results and position. We believe these procedures provide adequate risk oversight of financing and liquidity matters affecting the Company. In 2023, the Company renewed its senior secured revolving credit facility, which was intentionally reduced from EUR 350 million to EUR 300 million, as a result of the Company’s stronger cash flow. In line with the Board’s position, the Company added a new feature that includes the linkage of revolving facility funding costs to two sustainability goals. They include continuous greenhouse gas intensity reduction and improvement of its annual EcoVadis ESG rating. Under these terms, the interest rate could be reduced by five basis points – or by 0.05 percent - if the company achieves both of its targets. Financial Reporting, Internal Control and Regulatory Compliance The Audit Committee of the Board provides risk oversight with respect to financial reporting, internal control over financial reporting, general risk management, cybersecurity and related regulatory as well as general compliance matters. Each quarter, our Audit Committee meets and discusses with our independent registered public accounting firm its review of the current interim financial information. After our financial year-end, the Audit Committee discusses with the independent registered public accounting firm its audit of our annual consolidated financial statements, including our procedures on internal control over financial reporting. On this basis, the Audit Committee makes a recommendation for the Board’s approval of the inclusion of the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission. Also, during the financial year, our Audit Committee meets in private sessions (without the presence of management) with our independent registered public accounting firm to discuss any matters related to the audit of our annual consolidated financial statements and our internal control over financial reporting. Compensation Risk Oversight The Compensation Committee of the Board provides risk oversight with respect to compensation of the Company’s employees, including the NEOs. We believe we have established a short- and long-term compensation program that appropriately incentivizes desired performance and mitigates inappropriate risk-taking. The Compensation Committee solicits input from our CEO with respect to the performance of our executive officers and their compensation levels not less frequently than annually. The members of our Compensation Committee have extensive and varied experience with various
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public and private corporations - as investors and shareholders, as senior executives, and as directors charged with the oversight of management and the setting of executive compensation levels. Further, the Compensation Committee engaged Korn Ferry, an independent executive compensation advisory firm, to provide survey data and advice on market trends on director and executive compensation. Environmental and Social Risk Oversight The Board has identified the Company’s strategies, activities and policies regarding sustainability and any other Environmental, Social and Governance (ESG) opportunities and challenges as a key focus of risk oversight. Consequently, the Nominating, Sustainability and Governance Committee of the Board regularly reviews the Company’s strategies, activities and policies regarding sustainability and other ESG-related matters and makes recommendations to the Board. The committee also reviews the Company’s annual sustainability report as well as other material ESG disclosures (if any) prior to their publication. The Board and its committees thereby complement the Company’s internal risk management organization which comprises, amongst other things, an electronic company-wide risk reporting tool and register, regional as well as global risk owners and a standing risk committee headed by the Company’s Chief Risk Officer and assisted by the Company’s Environmental, Health and Safety, commercial and functional leaders. The Board oversees the Company’s broader social responsibilities. It consequently approves the Company’s donations and social contributions strategy, contributions above certain thresholds and the annual budget for contributions. The Board also focuses on community service and investment efforts that help strengthen the communities around the world in which we operate, as well as giving to organizations that advance education and respond to natural disasters. Some examples of our community engagement in recent years, include:
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| • | Day of Caring by Orion employees to support the Houston Food Bank |
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| • | Day of Caring by Orion employees to support the Hutchison County, Texas United Way |
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| • | Tree planting in Paulinia Brazil during Sustainable Week |
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| • | Donations of computer accessories and software in Jaslo, Poland to support a non-profit agency focusing children’s learning & development |
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| • | Orion “Light the Night”: walk and fundraising campaign to support blood cancer research |
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| • | Fundraising for people impacted by the floods in Ravenna, Italy |
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Human Capital The Board also addresses its social responsibilities through focusing on the Company’s human capital and talent management. The Board receives periodic updates from management on topics such as culture, development, engagement, and diversity and inclusion. The Board has opportunities to engage with employees in informal situations like dinners and plant visits. The Board endorses the attracting, recruiting, motivating and developing of a diverse, talented global workforce as a primary goal. The Company is committed to providing its employees with equal opportunities for learning and personal growth in an environment where creativity and innovation are encouraged. To this end, the Board supports the Company’s aspiration to be the employer of choice in our industry. The Board has reviewed the results of the latest employee survey and has aligned with management on measures and initiatives to be undertaken to further improve employee satisfaction. With this in mind, management continues to augment and improve the existing programs to provide an effective platform for all our employees to be trained and developed and to provide them with an opportunity to grow and achieve their individual aspirations. In 2023, senior management in conjunction with the Board has renewed the Company’s purpose and value definitions and has summarized these in a new company slogan for Orion which reads “Orion - Delivering sustainable solutions”. Management believes this statement best describes Orion’s purpose and values in a short statement that nurtures a culture and environment in which all employees feel inspired to advance their personal growth and the planet. Since 2023, Orion also sponsors a women’s professional group, which functions as an organized effort to support and advocate for the professional growth of women at Orion. The group creates a space that fosters professional development for women in all departments and provides more tools for success in the workplace. Employee engagement and enablement makes Orion a better place to work and is integral to our continued success. To ensure our employees are both motivated to do their work and equipped with the tools and training to be successful, we start with listening. We continue to use employee surveys and communication meetings to help ensure the voices of all our employees are heard. To further demonstrate our commitment in advancing our employees, our long-term incentive plan measures include our annual employee engagement score. In 2023, we further aligned our actions and investments in several priority areas including the:
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| • | Establishment of both a new Emerging Leaders and Leaders of Leaders programs to supplement the Orion Leadership Academy and Site Leader Development programs |
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| • | Implementation of a new Employee Onboarding program |
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| • | Succession plan buildout for more than 75% of Orion’s employees whose primary work involves processing and using data vs. adding value through activities like maintenance, operations, and transportation |
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| • | Investment in a new platform to further enhance Orion’s mentor/mentee program |
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| • | Training of over 80% of employees, who received 40 or more hours of training in 2023, more than doubling the average training hours as compared to the prior year |
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| • | Establishment of a global women’s affinity group, EmpowHER |
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| • | Improvement of female representation, with females representing 29% of all new hires in 2023 (compared to 22% in 2022) and 21% of females in manager roles (compared to 19% in 2022) |
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The 2023 employee engagement survey showed continued positive trends and marked improvement in a number of areas including training, employee recognition, employee communications and performance feedback. We saw a 1,100 basis point improvement in employees falling into the “Most Effective” category indicating both high engagement and high enablement. We will continue to solicit regular feedback from our employees to bolster our action plans to further support our strategy to attract, retain, engage and develop our employees and to position Orion as an employer of choice. In 2023, Orion has been elected as one of the Top Workplaces in Houston. The voluntary attrition rate at Orion was at 3.25%. We believe that the low rate at Orion is the result of our focus on what’s important to our employees. Succession Planning The Board is responsible for determining a succession plan for the CEO in the event of an emergency or otherwise. At least annually, the Board reviews a succession plan developed by the CEO and sets the policies and principles for selecting a successor to the CEO, both in an emergency situation and in the ordinary course of business. The succession plan includes an assessment of the experience, performance, skills, leadership capability and planned career paths for possible successors to the CEO. The Board’s Nominating, Sustainability and Governance Committee reviews and discusses with the CEO the succession plans to be presented to the Board in accordance with the above. In addition, the CEO updates the Board at least annually on the assessment of senior leadership positions to ensure we have leadership with the right skills in place to ensure business continuity and building a refined and resilient company to meet the needs of our evolving business. Board Meetings The Board currently holds at least four, typically five, Board meetings a year, with further meetings or working sessions to occur (or action to be taken by unanimous consent) at the discretion of the Board. The Board typically visits one production site per year, however in 2023 this meeting was canceled due to labor unrest in the country’s transportation network. Specific locations are selected based on technology developments, the importance of the site, and with a goal to expose the Board to a diverse set of employee teams in terms of nationality. The meetings are usually accompanied by certain Board committee meetings or working sessions in addition to the Board meeting. Compared to the Board or committee meetings, Board or committee working sessions do not include resolutions taken by the Board or committee but rather focus on specific topics, like company strategy or earnings documentation review. The Board also conducts production site visits that allow for a direct interaction with Orion employees and a hands-on review of the Company’s local strategies and initiatives. Consequently, for two days in April 2024, the Board of Directors visited the Company’s Berre/France facility, which produces acetylene black, a product used in battery applications for electric vehicles. The agenda for each Board meeting is prepared by the Chairman (or a designee of the Chairman) together with the Company’s CEO and General Counsel. Management provides to all directors the agenda and appropriate materials in advance of meetings. Agendas and topics for Board and committee meetings are developed through discussions among management and members of the Board and its committees. During 2023, our Board met seven times, including video conference meetings and working sessions and acted ten times by unanimous written consent. In 2023, all directors attended 100% of the meetings of the Board and the committees on which they served. We do not currently have a policy on director attendance at our annual meetings, but all our directors attended our annual shareholder meeting in 2023. Executive Sessions To ensure free and open discussion and communication among the independent directors of the Board, the independent directors meet in executive sessions, which form a part of each regular Board meeting. Executive sessions also take place with the Senior Vice President, Global Operations and Safety. The Chairman of the Board or the General Counsel acting as company secretary presides at the executive sessions. If the Chairman of the Board were not present, the independent directors designate the director who will preside at the executive sessions. The Audit Committee has separate executive sessions with the Chief Financial Officer, Internal Audit Director and our independent auditors.
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Board Committees The Board has three standing committees: the Audit Committee, the Compensation Committee and the Nominating, Sustainability and Governance Committee. Each of these committees reports to the Board as it deems appropriate and as the Board may request. The Board has adopted written charters for each of the committees. From time to time, special committees may be established under the direction of our Board when necessary to address specific issues. Accordingly, the Board has established an Executive Committee in 2019. This Committee consists of the Chairman of the Board, Mr. Smith, the Chairman of the Audit Committee, Mr. Huck, the Chairwoman of the Nominating, Sustainability and Governance Committee, Ms. Galvin and the Chief Executive Officer, Mr. Painter. This Committee does not meet on a regular basis but meets as needed to deal with urgent or quickly moving matters, when it is not feasible to get the entire Board together. It may also be used to conduct investigations or examine potential conflicts of interest, although it has not had to do so to date. The Executive Committee did not hold meetings in 2023. Deliberations or actions by this Committee are communicated to the full Board as soon as practicable and the Committee is not intended to be a substitute for the Board. The table below sets forth the financial year 2023 membership of the Board and its standing committees and the number of meetings including working sessions held during 2023:
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| Director Name: | Age | Gender | Country of Origin | Other Public Boards | Director Since | Audit Committee | Compensation Committee | Nominating, Sustainability and Governance Committee | Executive Committee | Committee Meeting Attendance | | Tony L. Davis(1) | 55 | M | U.S.A. | – | July 2022 | | | | | 100% | | Kerry A. Galvin | 63 | F | U.S.A. | – | August 2018 | | | C | | 100% | | Paul Huck Financial Expert | 74 | M | U.S.A. | – | July 2014 | C | | | | 100% | | Mary Lindsey Financial Expert | 68 | F | U.S.A. | 2 | July 2020 | | | | | 100% | | Didier Miraton | 65 | M | France | – | July 2014 | | | | | 100% | | Yi Hyon Paik | 68 | M | South Korea | 1 | July 2020 | | | | | 100% | | Corning F. Painter Non-Independent | 61 | M | U.S.A. | – | Sept. 2018 | | | | | 100% | | Dan F. Smith Chair of Board of Directors | 78 | M | U.S.A. | 1 | July 2014 | | C | | C | 100% | | Hans-Dietrich Winkhaus Financial Expert | 86 | M | Germany | – | July 2014 | | | | | 100% | | Michel Wurth | 70 | M | Luxembourg | 1 | July 2020 | | | | | 100% | | Number of 2023 meetings | | | | | | 8* | 4 | 4 | 0 | |
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| * Includes working sessions | Member | C Chair |
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| (1) Mr. Tony L. Davis joined the Nominating, Sustainability and Governance Committee in July 2022, and served through his resignation from the Board to focus on other commitments and not as a result of any disagreement with the Company, effective December 27, 2023. |
Senningerberg, April 29, 2024
The 2024 membership of the Board and its standing committees are generally expected to remain the same as it was in 2023, except for the composition of the Nominating, Sustainability and Governance Committee, with Mr. Tony L. Davis no longer serving on it.
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| 26 | Orion S.A. | 2024 Proxy Statement |
Senningerberg, April 29, 2024
AUDIT COMMITTEE Kerry A. Galvin Paul Huck (Chair) Mary Lindsey Hans-Dietrich Winkhaus
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| Members | | | Our Audit Committee consists of Ms. Galvin, Mr. Huck (serving as chair of the committee), Ms. Lindsey and Mr. Winkhaus. The Board has determined that the members of the Audit Committee are independent for purposes of serving on such committee under the NYSE listing standards and applicable law, including Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended. In addition, the Board has determined that each current member of the Audit Committee is financially literate under the NYSE listing standards and that Messrs. Huck and Winkhaus as well as Ms. Lindsey qualify as “audit committee financial experts,” as such term is defined in Item 407(d) of Regulation S-K. The Audit Committee operates pursuant to an Audit Committee Charter, which was approved and adopted by the Board and is posted on the Company’s website under the Investors and Corporate Governance links at https://investor.orioncarbons.com/governance/governance-documents/default.aspx. The duties and responsibilities of the Audit Committee are set forth in its charter. | |
Senningerberg, April 29, 2024
The Audit Committee’s Primary Purposes And Responsibilities Are In Particular To Assist Board Oversight Of:
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| • | the Company’s accounting and financial reporting processes and the integrity of the Company’s financial statements and Form 10-K and 10-Q filings; |
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| • | the Company’s compliance with legal and regulatory requirements; |
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| • | the effectiveness of internal controls over financial reporting including the control environment to address and mitigate information technology and related cybersecurity risks; |
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| • | financial (including tax) risk exposure and management, including mitigation actions; |
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| • | the independent auditors’ qualifications and independence; |
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| • | the performance of the independent auditors and the Company’s internal audit function, and providing to the Company a report in conformity with Item 407(d)(3)(i) of Regulation S-K; and |
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| • | reporting to the full Board its discussions for considerations and actions when appropriate. |
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To carry out its purposes, the Audit Committee has in particular the following duties and responsibilities:
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| 1. | with respect to the independent auditors, |
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| (i) it is responsible for reviewing and making recommendations to the Board with regard to the appointment and the approval of the compensation of the independent auditors and oversight of the work of the independent auditors (including the resolution of any disagreements between management and the independent auditors regarding financial reporting), who shall report directly to the Audit Committee; the appointment of the independent auditors shall be subject to shareholder approval; |
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| (ii) to obtain from the independent auditors in connection with any audit a timely report relating to the Company’s annual audited financial statements describing all critical accounting policies and practices used; |
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| (iii) | to review and evaluate the qualifications, performance and independence of the lead partner of the independent auditors; |
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| 2. | with respect to the internal auditing department, |
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| (i) to review the appointment of the head of the internal auditing department; |
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| (ii) to review and approve proposed internal audit plan and make recommendations concerning internal audit projects; and |
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| (iii) | to review and discuss summaries of the internal auditing department on their work; |
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| 3. | with respect to accounting principles and policies, financial reporting and internal control over financial reporting, |
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| (i) to review and discuss with management, the internal auditing department and the independent auditors significant issues and practices relating to accounting principles and policies, financial reporting and internal control over financial reporting; |
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| (ii) to consider any reports or communications (and management’s and/or the internal audit department’s responses thereto) submitted to the Audit Committee by the independent auditors required by or referred to in applicable International Accounting Standards Board, PCAOB or other applicable standards; |
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| (iii) | the Audit Committee will: |
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| • | review the Form 10-K and 10-Qs of the Company, and consider whether they are complete, consistent with information known to Audit Committee members, and reflect appropriate accounting principles; and |
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| 2024 Proxy Statement | Orion S.A. | 27 |
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| (iv) to meet with management, the independent auditors and, if appropriate, the director of the internal auditing department: |
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| • | to discuss the scope of the annual audit; |
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| • | to review and discuss the annual audited financial statements and quarterly financial statements and related reports, including the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; |
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| • | to discuss any significant matters arising from any audit, including any audit problems or difficulties, whether raised by management, the internal auditing department or the independent auditors, relating to the Company’s financial statements; |
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| • | to discuss any difficulties the independent auditors encountered in the course of the audit, including any restrictions on their activities or access to requested information and any significant disagreements with management; to discuss any “management” or “internal control” letter issued, or proposed to be issued, by the independent auditors to the Company; |
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| • | to review the form of opinion the independent auditors propose to render to the Board and shareholders; and |
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| • | to discuss, as appropriate: (a) any major issues regarding accounting principles and financial statement presentations, including the adequacy of the Company’s internal controls and any special audit steps adopted in light of material control deficiencies; (b) analyses prepared by management and/or the independent auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements; and (c) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company; |
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| (v) to inquire of the Company’s chief executive officer and chief financial officer as to the existence of any significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and as to the existence of any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting; |
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| (vi) to discuss guidelines and policies governing the process by which senior management of the Company manages the Company’s exposure to risk, and to discuss the steps management has taken to monitor and control such exposures; |
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| (vii) | to obtain from the independent auditors assurance that the audit was conducted in a manner consistent with Section 10A of the Exchange Act, which sets forth certain procedures to be followed in any audit of financial statements required under the Exchange Act; |
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| (viii) | to discuss with the Company’s General Counsel any significant legal, compliance or regulatory matters that may have a material effect on the financial statements or the Company’s business, financial statements or compliance policies, including material notices to or inquiries received from governmental agencies; |
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| (ix) to discuss and review the type and presentation of information to be included in earnings press releases; |
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| (x) to discuss the types of financial information and earnings guidance provided, and the types of presentations made, to analysts and rating agencies; |
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| 4. | with respect to reporting and recommendations, |
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| (i) to review the Audit Committee charter at least annually and recommend any changes to the full Board; |
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| (ii) to report its activities to the full Board on a regular basis and to make such recommendations with respect to the above and other matters as the Audit Committee may deem necessary or appropriate; |
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| (iii) | to prepare and review with the Board an annual performance evaluation of the Audit Committee, |
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| (5) Includes the shares of restricted stock and/or restricted stock units that have vested or will vest, and will be converted to shares with voting rights, on or before June 30, 2024. The RSUs held by the executive officers exclude vested RSUs that have not been converted to shares and do not allow for voting rights. |
Security Ownership of Certain Beneficial Owners
| Name and Principal Position | Year | Base Salary ($) | Bonus(1) ($) | Stock Awards(2) ($) | Non-Equity Incentive Compensation Plan(3) ($) | All Other Compensation(5) ($) | Total ($) | | Corning F. Painter Chief Executive Officer | 2023 | 1,045,000 | — | 6,157,673 | 365,750 | 16,816 | 7,585,239 | | | 2022 | 1,000,000 | — | 2,745,091 | 930,000 | 15,506 | 4,690,597 | | | 2021 | 955,500 | — | 3,603,048 | 1,326,234 | 14,500 | 5,899,282 | | Jeff Glajch Chief Financial Officer | 2023 | 472,500 | — | 1,193,238 | 107,494 | 16,816 | 1,790,048 | | | 2022 | 320,192 | — | 755,262 | 193,556 | 112,203 | 1,381,213 | | Sandra Niewiem(4) SVP, Global Specialty Carbon Black and EMEA Region | 2023 | 377,151 | — | 438,908 | 79,202 | 87,775 | 983,036 | | | 2022 | 330,687 | — | 138,958 | 153,769 | 57,785 | 681,199 | | | 2021 | 305,512 | — | 169,690 | 212,025 | 46,352 | 733,580 | | Pedro Riveros SVP, Global Rubber Carbon Black and Americas Region | 2023 | 408,042 | 75,000 | 515,230 | 85,689 | 16,816 | 1,100,777 | | | 2022 | 377,817 | 50,000 | 148,214 | 175,685 | 15,506 | 767,222 | | | 2021 | 353,100 | — | 223,201 | 245,051 | 14,500 | 835,853 | | Carlos Quinones SVP, Global Operations | 2023 | 380,512 | — | 480,464 | 79,908 | 16,816 | 957,700 | | | 2022 | 358,975 | — | 140,812 | 166,923 | 15,506 | 682,216 | | | 2021 | 326,340 | — | 206,461 | 226,480 | 14,500 | 773,781 |
Sandra Niewiem
| | | | | | Value of $100 Initial Fixed Investment | | | | | Year | Summary Compensation Table Total for PEO(1) $ | Compensation Actually Paid to PEO(2) $ | Average Summary Compensation Table Total for Non-PEO NEOs(3) $ | Average Compensation Actually Paid to Non-PEO NEOs(4) $ | Company Total Shareholder Return(5) $ | Total Average Shareholder Return of S&P Small-Cap 600 & S&P Small-Cap Chemicals Indices(6) $ | Net Income ($ millions)(7) $ | Adjusted EBITDA ($ millions)(8) $ | | 2023 | 7,585,239 | 23,334,808 | 1,207,890 | 2,558,056 | 137.14 | 93.89 | 104 | 332.3 | | 2022 | 4,690,597 | 7,141,073 | 840,821 | 940,221 | 124.63 | 82.20 | 106 | 312.3 | | 2021 | 5,899,282 | 4,780,304 | 824,244 | 567,016 | 151.95 | 114.18 | 135 | 268.4 | | 2020 | 2,882,368 | 2,731,917 | 622,172 | 584,761 | 132.45 | 123.36 | 18.0 | 200.0 |
Sandra Niewiem
| (2) The dollar amounts reported in this column represent the amount of “compensation actually paid” to Mr. Painter, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Painter during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following equity award adjustments were made to Mr. Painter’s total compensation for each applicable year to determine the compensation actually paid. The assumptions used for determining the fair values shown in this table do not differ materially from those used to determine the fair values disclosed as of the grant date of such awards. |
Sandra Niewiem
| (4) The dollar amounts reported in this column represent the average amount of “compensation actually paid” to the NEOs as a group excluding Mr. Painter, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group excluding Mr. Painter during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following equity award adjustments were made to the average total compensation for the NEOs as a group excluding Mr. Painter for each year to determine the compensation actually paid, using the same methodology described above in Note 2. The assumptions used for determining the fair values shown in this table do not differ materially from those used to determine the fair values disclosed as of the grant date of such awards. |
Sandra Niewiem
| Name | Fees Earned in Cash(1) ($) | Stock Awards(2)(3) ($) | Total ($) | | Kerry Galvin | 130,000 | 137,500 | 267,500 | | Paul Huck | 132,000 | 137,500 | 269,500 | | Mary Lindsey | 110,000 | 137,500 | 247,500 | | Didier Miraton | 107,000 | 137,500 | 244,500 | | Yi Hyon Paik | 105,000 | 137,500 | 242,500 | | Dan F. Smith | 230,000 | 137,500 | 367,500 | | Hans-Dietrich Winkhaus | 110,000 | 137,500 | 247,500 | | Michel Wurth(4) | 105,000 | 137,500 | 242,500 | | Anthony L. Davis(5) | 105,000 | — | 105,000 |