DEF 14A of Balchem Corp
Filed Apr 25, 2025 · FY20240001140361-25-015747
II. Director Nominees Snapshot
II. Director Nominees Snapshot The following three Class 1 directors stand for election at the Annual Meeting. Assuming their election, the Class 1 directors will hold office until the 2028 annual meeting or until their successors have been elected and qualified.
II. Director Nominees Snapshot
| | Name | Age | Director Since | Other Public Boards | Committee Membership | | | Theodore Harris | 60 | 2015 | 1 | | | | Monica Vicente | 59 | 2023 | 0 | Audit | | | Matthew Wineinger | 58 | 2015 | 0 | Executive Compensation |
IV. Executive Compensation
| What We DO | What We DON’T DO | | Target total direct compensation for our NEOs around relevant market data, while also considering tenure, experience, and other factors. | Allow hedging or pledging of Company securities for any employee (including our NEOs) or director. | | Pay for performance and, accordingly, a significant portion of each NEO’s total compensation opportunity is “at risk” and dependent upon achievement of specific corporate and individual performance goals, resulting in lesser emphasis on fixed base salary. | Encourage unnecessary or excessive risk-taking as a result of our compensation policies and practices. | | Base our short-term incentive plan on explicit and quantifiable corporate and business segment financial performance metrics that are set at the beginning of each year. | Have employment agreements with any of our NEOs other than as described in the section of this proxy statement titled “Executive Compensation.” | | Complement our annual compensation to each NEO with time-based and performance-based multi-year vesting schedules and performance cycles for equity incentive awards. | Provide a defined benefit pension plan for our NEOs. | | Have annual base salary adjustments that are based, primarily, on prior-year individual performance. | Provide for “gross ups” for excise taxes imposed with respect to Section 280G (change-in-control payments) or Section 409A (nonqualified deferred compensation) of Internal Revenue Code of 1986, as amended (the “Code”). | | Adopted an Incentive-Based Compensation Recovery Policy, or clawback policy, pursuant to which the Company can seek reimbursement of either cash or equity-based incentive compensation in the event of a financial restatement due to the Company’s material noncompliance with any financial reporting requirement under the securities laws. | Provide for single-trigger vesting acceleration upon a change in control under the Company’s Executive Severance Policy. | | Maintain a Compensation Committee, which is comprised solely of independent directors. | Allow: (i) any repricing of options and Stock Appreciation Rights (“SARs”) without shareholder approval or (ii) for the unlimited transferability of awards. | | Have stock ownership guidelines for our directors and executive officers. | | | Subject awards under the Amended 2017 Plan to minimum vesting periods and maximum annual per-person limits. | | | Double-trigger vesting acceleration upon a change in control under the Company’s Executive Severance Policy. | | | Ensure that a significant portion of our non-employee director compensation consists of long-term equity awards. | | | Consult with outside experts to determine the overall competitiveness of the Company’s executive compensation program. | |
Directors Standing for Re-Election
Directors Standing for Re-Election
NOMINEES’ BIOGRAPHICAL INFORMATION
NOMINEES’ BIOGRAPHICAL INFORMATION
NOMINEES’ BIOGRAPHICAL INFORMATION
| Theodore Harris Class 1 Director, Chairman of the Board (Term expires 2025) Age: 60 Director since 2015, Chairman since 2017 | Professional Highlights | | | • Director, Chief Executive Officer and President of Balchem Corporation since April 2015, and Chairman of the Board of Directors since January 2017. | | | • Prior to joining the Company, Mr. Harris was employed by Ashland Global Holdings Inc. (formerly Ashland Inc.) (NYSE), a specialty chemical company. During his tenure at Ashland, he held a number of management positions and ultimately held the position of Senior Vice President/Ashland, President, Performance Materials, from November of 2014 to April 2015. | | | Other Current Public Company Directorships | | | • Pentair plc (NYSE) | | | Board Qualifications | | | Mr. Harris has led the Company since April 2015, effectively using his extensive knowledge and deep understanding of the Company’s global business, operations, people and strategic priorities to lead the Company in achieving its vision of “making the world a healthier place.” Mr. Harris’ broad managerial, international, operational and sales experience, as well as his proven track record of developing and implementing strategies for delivering sustainable, profitable growth, make him a valuable member and Chairman of our Board. |
NOMINEES’ BIOGRAPHICAL INFORMATION
| Monica Vicente Class 1 Director (Term expires 2025) Age: 59 Independent Director since 2023 | Professional Highlights | | | • Senior Vice President and Chief Financial Officer of Fresh Del Monte Produce Inc., a global agricultural company, since April 2022. | | | • Prior to that, she served as Vice President, Corporate Finance at Fresh Del Monte for 19 years. | | | Committee Assignments | | | • Audit | | | Other Current Public Company Directorships | | | • None | | | Board Qualifications | | | Ms. Vicente’s experience as a current CFO for a global public company brings substantial financial expertise to our Board. She has extensive financial expertise across global and regional finance, financial planning and analysis, investor relations and procurement for a global public company. She has experience in SEC reporting and controlling, tax and treasury as well. Ms. Vicente brings these relevant experiences, strategic business acumen, and relevant food industry expertise to our Board. |
NOMINEES’ BIOGRAPHICAL INFORMATION
| Matthew Wineinger Class 1 Director and Lead Director (Term expires 2025) Age: 58 Independent Director since 2015 | Professional Highlights | | | • Since June 2015, Mr. Wineinger has been the President and Chief Executive Officer of United Sugars Producers and Refiners Cooperative (formerly, United Sugars Corporation until October 2023), a privately held, leading marketer of sugar. | | | • President, Bulk Ingredients of Tate & Lyle PLC (LSE) from June 2010 to November 2014 and prior to that, President, Food and Industrial Ingredients from March 2008 to June 2010. | | | Committee Assignments | | | • Executive, Chair | | | • Compensation, Chair | | | Other Current Public Company Directorships | | | • None | | | Board Qualifications | | | Mr. Wineinger’s over thirty years of extensive global, operational and strategic industry experience, together with his previous knowledge of manufacturing operations involving many of the Company’s current raw materials, make him a valuable member of our Board, particularly as the Company focuses on development and supply of products to human nutrition markets. Mr. Wineinger has served as Lead Director and Chair of our Compensation Committee and Executive Committee since February 2023. |
NOMINEES’ BIOGRAPHICAL INFORMATION
UPON RECOMMENDATION BY THE CORPORATE GOVERNANCE AND NOMINATING COMMITTEE, THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF THE ABOVE NOMINEES AS DIRECTORS.
CONTINUING DIRECTORS’ BIOGRAPHICAL INFORMATION
CONTINUING DIRECTORS’ BIOGRAPHICAL INFORMATION
CONTINUING DIRECTORS’ BIOGRAPHICAL INFORMATION
| David Fischer Class 3 Director (Term expires 2026) Age: 62 Independent Director since 2010 | Professional Highlights | | | • Retired director and President and Chief Executive Officer of Greif, Inc. (NYSE), a supplier of industrial packing systems from November 2011 to October 2015. President and Chief Operating Officer of Greif from 2007 to 2011, and from 2004 to 2007, Senior Vice President and Divisional President, Industrial Packaging & Services - Americas. | | | • A co-founder and chairman of the board of directors of 10x Engineered Materials, a manufacturer of high-tech abrasives for industrial applications. | | | Committee Assignments | | | • Executive | | | • Compensation | | | • Governance | | | Other Current Public Company Directorships | | | • Ingredion Incorporated (NYSE) | | | Board Qualifications | | | Mr. Fischer’s management and leadership skills, developed over years of responsibility for complex, global manufacturing operations, and his intimate knowledge of mergers and acquisitions, position him as a critical component of our Board as we look to grow both organically and by acquisition. |
CONTINUING DIRECTORS’ BIOGRAPHICAL INFORMATION
| Kathleen Fish Class 2 Director (Term expires 2027) Age: 67 Independent Director since 2022 | Professional Highlights | | | • Prior to her retirement, Ms. Fish was Chief Research, Development and Innovation Officer for The Procter & Gamble Company (NYSE: PG) (“P&G”) (NYSE) (2017 – 2020). | | | • Chief Technology Officer, P&G (2014 – 2017) | | | Committee Assignments | | | • Executive | | | • Compensation | | | • Governance, Chair | | | Other Current Public Company Directorships | | | • Origin Materials, Inc. (Nasdaq) | | | Board Qualifications | | | Ms. Fish’s executive leadership skills along with her expertise in the field of innovation, research, and new product development, including in highly regulated industries and direct to consumer markets provide valuable insights to the Board in driving growth and overseeing governance and risk. Ms. Fish has served as Chair of our Governance Committee since February 2023. |
CONTINUING DIRECTORS’ BIOGRAPHICAL INFORMATION
| Daniel Knutson Class 3 Director (Term expires 2026) Age: 68 Independent Director since 2018 | Professional Highlights | | | • Mr. Knutson served as the Executive Vice President for Special Projects at Land O’Lakes, Inc., an agribusiness and food co-operative, until his retirement at the end of 2017. | | | • From 2000 to 2017, Mr. Knutson served as Executive Vice President and Chief Financial Officer at Land O’Lakes, where he oversaw corporate finance, accounting, treasury, audit, information technology and strategy and played key roles in many of Land O’Lakes’ transactions. In addition, he was responsible for Land O’Lakes’ investment in Moark LLC. | | | Committee Assignments | | | • Audit, Chair | | | • Compensation | | | Other Current Public Company Directorships | | | • None | | | Nominee Qualifications | | | Our Company’s financial compliance programs and policies benefit from Mr. Knutson’s input and skilled guidance. Mr. Knutson’s animal feed and human food industry experience, combined with his financial and international business management experience, makes him a valuable member of our Board. Mr. Knutson has served as Chair of our Audit Committee since June 2018. |
CONTINUING DIRECTORS’ BIOGRAPHICAL INFORMATION
| Olivier Rigaud Class 2 Director (Term expires 2027) Age: 60 Independent Director since 2023 | Professional Highlights | | | • Mr. Rigaud has been Chief Executive Officer and Chair of the Board of Management for Corbion N.V., a global food and biochemicals company based in the Netherlands, since August 2019. He also serves as a member of the Executive Committee at Corbion N.V. | | | • Chief Executive Officer of Naturex, a global specialty ingredients company for the food & beverage, nutrition & health, and personal care industries. Prior to joining Corbion N.V., Mr. Rigaud successfully finalized the sale of Naturex to Givaudan. | | | Committee Assignments | | | • Audit | | | • Governance | | | Other Current Public Company Directorships | | | • Corbion N.V. (Euronext Amsterdam) | | | Board Qualifications | | | Mr. Rigaud brings over thirty years of relevant industry expertise and strong global business acumen, including extensive M&A and strategic experience, to our Board. He is also well-versed on sustainability and corporate social responsibility matters. As CEO at Corbion N.V., he leads an organization of 2,500 employees, 16 industrial sites, and 6 R&D and Innovation centers. Mr. Rigaud is a French national working out of the Netherlands, and brings unique and diverse international perspective, relevant CEO experience, and insights to our Board. |
General
| ○ | Are intended to align the interests of directors and management with the long-term interests of Balchem’s shareholders. |
Compensation Committee
| (3) recommend to the Board for approval the compensation of directors; |
Compensation Committee
| (4) administer the Company’s equity compensation plans; and |
Compensation Committee
The Compensation Committee solicits input from our CEO with respect to the performance of our executive officers and their compensation levels no less frequently than annually, usually in the first quarter. The members of our Compensation Committee have extensive and varied experience with various 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. The Compensation Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee or, to the extent permitted by applicable law, to any other body or individual. In particular, the Compensation Committee may delegate the approval of certain transactions to a subcommittee consisting solely of members of the Compensation Committee who are “non-employee directors” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended. In setting 2024 director and executive compensation, the Compensation Committee engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”) as their independent executive compensation advisory firm to provide survey data and advice on market trends on director and executive compensation. Each year, the Compensation Committee evaluates the independence and quality of the services provided by its independent compensation consultant. The Compensation Committee considered the independence of Pearl Meyer under applicable SEC rules and regulations and Nasdaq listing standards. Based on its review, the Compensation Committee determined that Pearl Meyer was independent and that there were no conflicts of interest with respect to Pearl Meyer’s work for the committee. In early 2025, the Compensation Committee reviewed with senior management its recommendations and basis for Company performance goals for payouts of 2025 annual incentive awards and long-term compensation awards. Following this discussion, the Compensation Committee set the 2025 Company performance goals for annual incentive awards and long-term compensation awards and also approved the long-term compensation awards. For information regarding the Compensation Committee’s role, absence of conflicts and fees, among other matters, see “Compensation Discussion and Analysis.”
Board Chair
Board Chair The Board believes that establishing the right leadership structure is key to ensuring appropriate oversight of management and creating a strategic, forward-looking Board. The right leadership structure will vary depending on the needs of the Company and the Board’s assessment of the CEO. In evaluating its leadership structure, the Board considers a number of factors, including the CEO’s experience and leadership, the Board and Committee processes and procedures, shareholder feedback and best practices. Balchem’s Governance Committee continuously reviews the functioning of the Board and leadership structure and makes recommendations to the Board regarding the CEO, Chairman of the Board (the “Chair”) and Lead Director.
Board Chair
| • | Our Corporate Governance Guidelines do not require the Chair to be an independent director and do not require separation of the Chairman and CEO positions. However, per our Corporate Governance Guidelines, the Board appoints a Lead Director who functions to reinforce the independence of the Board of Directors, and is appointed from the independent directors. |
Board Chair
| • | The Board and the Governance Committee regularly consider the appropriate leadership structure for the Company and have concluded that the Company and its shareholders are best served by the Board and the Governance Committee retaining discretion to determine whether the same individual should serve as both CEO and Chair. |
Board Chair
| • | The Board and the Governance Committee believe it is important to retain the flexibility to make this determination based on what it believes will provide the best leadership structure for the Company at any given time. |
Board Chair
Mr. Harris, our CEO and President, has been the Chair since January 1, 2017. The Board and the Governance Committee currently believe the Company and its shareholders are best served by having Mr. Harris serve in both positions. The Board and the Governance Committee believe several factors support this decision. These include:
Board Chair
| • | The combined Chair and CEO structure promotes decisive leadership, ensures clear accountability and enhances our ability to communicate with a single and consistent voice to shareholders, employees and other stakeholders. |
Board Chair
| • | Mr. Harris has an extensive understanding and grasp of our business and operations, competitive pressures and the challenges the Company faces in the current environment, and has demonstrated leadership and management skills, and is best situated to lead and focus discussions on those critical matters affecting the Company, which increases the effectiveness of Board meetings. |
Board Chair
| • | Finally, the combination of the Chair and the CEO position succeeds because of the engaged, knowledgeable involvement of our Board in combination with our culture of open communication with the CEO and senior management, enabling the CEO to be an effective conduit between management and the Board. |
Director Compensation
Director Compensation The Compensation Committee periodically reviews, in consultation with their independent executive compensation advisory firm, to ensure alignment of Non-Executive Director compensation with current market and peer group practices. The non-equity components of the non-executive director compensation structure remain unchanged for 2024 compared to the prior year. For 2024, these amounts are as follows:
Director Compensation
| (1) Annual Cash Retainer for each non-executive director – $65,000; |
Director Compensation
| (2) Annual Fee for Lead Director – $20,000; |
Director Compensation
| (3) Annual Fee for Audit Committee Chair – $15,000; |
Director Compensation
| (4) Annual Fee for Compensation Committee Chair – $10,000; and |
Director Compensation
| (5) Annual Fee for the Governance Committee Chair – $10,000. |
Director Compensation
Directors also received equity awards composed of Time-Based Restricted Shares and Stock Options (in each case as defined below) as more fully discussed in the table below. The following table sets forth the fees, equity awards, and other compensation earned, paid, or awarded to each of the Company’s Non-Executive Directors for the fiscal year ended December 31, 2024.
Director Compensation
| Name | Retainer & Fees | Stock Awards(1) | All Other Compensation ($) | Total ($) | | David Fischer | $65,000 | $153,653 | $2,000(3) | $220,653 | | Kathleen Fish | $75,000 | $153,653 | $0 | $228,653 | | Daniel Knutson | $80,000 | $153,653 | $0 | $233,653 | | Joyce Lee(2) | $65,000 | $153,653 | $0 | $218,653 | | Olivier Rigaud | $65,000 | $153,653 | $0 | $218,653 | | Monica Vicente | $65,000 | $153,653 | $0 | $218,653 | | Matthew Wineinger | $95,000 | $153,653 | $0 | $248,653 |
Director Compensation
| (1) On February 8, 2024, each Non-Executive Director, was granted 540 Time-Based Restricted Shares and 1,730 Stock Options. The Time-Based Restricted Shares cliff vest after three years. The grant date fair value per share of each share of restricted stock was $143.43. The Stock Options have a strike price of $143.43 per share and expire on February 8, 2034. |
Director Compensation
| (2) On October 16, 2024, the Corporate Governance and Nominating Committee accepted the resignation of Ms. Lee as a Director. Ms. Lee’s 2024 grant of Time-Based Restricted Shares and Stock Options were forfeited as a result. |
Director Compensation
| (3) Reflects matching Company contributions under Balchem’s matching charitable donation program available to all employees and directors up to $2,000 per year. |
Director Compensation
The following table shows the aggregate number of Stock Options and stock awards outstanding for each outside director as of December 31, 2024:
Director Compensation
| Name | Aggregate Stock Options Outstanding as of 12/31/2024 | Aggregate Unvested Stock Awards as of 12/31/2024 | | David Fischer | 17,307 | 1,579 | | Kathleen Fish | 5,267 | 1,579 | | Daniel Knutson | 17,307 | 1,579 | | Joyce Lee(1) | 0 | 0 | | Olivier Rigaud | 1,730 | 540 | | Monica Vicente | 1,730 | 540 | | Matthew Wineinger | 17,307 | 1,579 |
Director Compensation
| (1) As explained above, Ms. Lee resigned as Director as of October 16, 2024. |
Director Compensation
Under the Time-Based Restricted Shares grant agreements for grants made in 2024, restricted shares vest in full, three years from grant, or upon an earlier change in control of the Company, provided the director is a director of the Company on that date. The Time-Based Restricted Shares will also vest in full upon the director’s death. In the event of the director’s disability, retirement (in accordance with our Director Retirement Policy) or the director’s resignation due to a conflict of interest or serious health issue, the number of Time-Based Restricted Shares that vest equals the product of:
Director Compensation
| (A) 1/36 of the total number of Time-Based Restricted Shares subject to the applicable grant; and |
Director Compensation
| (B) the number of full months that the director has served on the Board from the date of the grant to the date of the director’s retirement or resignation, as applicable; and all Restricted Shares not so vested shall be immediately forfeited. |
Director Compensation
Under the Stock Option grant agreements for grants made in 2024, the Stock Options have a term of ten years from the grant date and become exercisable 20% after 1 year, 40% after 2 years and 40% after 3 years, beginning on the first anniversary of the grant date, or upon an earlier change in control of the Company, provided the director is a director of the Company on that date. The Stock Options will also become fully exercisable in full upon the director’s death. In the event of the director’s disability, retirement (in accordance with our Director Retirement Policy) or the director’s resignation from the Board of Directors due to a conflict of interest or serious health issue, the options continue to vest and become exercisable in accordance with the applicable vesting schedule. If a director voluntarily retires:
Director Compensation
| (1) in accordance with the Director Retirement Policy discussed above and the combination of the Director’s age and years of service as a member of the Board is equal to or greater than 75; or |
Director Compensation
| (2) prior to the conclusion of his or her term in which he or she reaches the age of 70 and the combination of the Director’s age and years of service as a member of the Board is equal to or greater than 75 and he/she has given the Company one (1) year’s prior written notice to the Company of his/her intention to retire; |
Director Compensation
then:
Director Compensation
| (A) all Stock Options shall continue to vest and become exercisable in accordance with their original vesting schedule; and |
Director Compensation
| (B) All Time-Based Restricted Shares shall continue to vest in accordance with their original vesting schedule. |
Director Compensation
The Company does not pay any other direct or indirect compensation to directors. The Company has a Stock Ownership Policy that applies to directors. See “Stock Ownership Requirements; Trading Limitations” on page 42 of this Proxy Statement. This Compensation Discussion and Analysis (“CD&A”) provides a detailed description of our executive compensation philosophy and programs, the compensation decisions the Compensation Committee has made under those programs and the factors considered in making those decisions. This CD&A focuses on the compensation of our NEOs.
Compensation Objectives and Philosophy
Compensation Objectives and Philosophy At Balchem, we strive to attract and retain key executives who will consistently deliver short- and long-term value to our shareholders through the realization of our specific business objectives. These include consistent, sustained growth in earnings, cash flow and return on investments. We seek to offer competitive salaries, cash incentives, equity awards and benefit plans consistent with peer entities, while also considering the Company’s financial performance. Rewarding key employees who contribute to the continued success of the Company through cash compensation and equity participation are key elements of the Company’s compensation policy. The Company’s executive compensation policy is designed to establish a direct link between executive compensation and the performance of the Company by rewarding individual results and the achievement of annual corporate goals through salary and cash bonus awards, and to provide equity awards to incentivize executives to generate enhanced shareholder value. Consistent with this philosophy, the Compensation Committee favors a “pay for performance” approach. As a result, our compensation program contains a mix of stable and at-risk compensation components, where a significant percentage of executive compensation is variable and tied to corporate performance.
What We Do and Don’t Do
| What We DO | What We DON’T DO | | Target total direct compensation for our NEOs around relevant market data, while also considering tenure, experience, and other factors. | Allow hedging or pledging of Company securities for any employee (including our NEOs) or director. | | Pay for performance and, accordingly, a significant portion of each NEO’s total compensation opportunity is “at risk” and dependent upon achievement of specific corporate and individual performance goals, resulting in lesser emphasis on fixed base salary. | Encourage unnecessary or excessive risk-taking as a result of our compensation policies and practices. | | Base our short-term incentive plan on explicit and quantifiable Corporate and business segment financial performance metrics that are set at the beginning of each year. | Have employment agreements with any of our NEOs other than as described in the section of this proxy statement titled “Executive Compensation.” | | Complement our annual compensation to each NEO with time-based and performance-based multi-year vesting schedules and performance cycles for equity incentive awards. | Provide a defined benefit pension plan for our NEOs. | | Have annual base salary adjustments that are based, primarily, on prior-year individual performance. | Provide for “gross ups” for excise taxes imposed with respect to Section 280G (change-in-control payments) or Section 409A (nonqualified deferred compensation) of Internal Revenue Code of 1986, as amended (the “Code”). | | Adopted an Incentive-Based Compensation Recovery Policy, or clawback policy, pursuant to which the Company can seek reimbursement of either cash or equity-based incentive compensation in the event of a financial restatement due to the Company’s material noncompliance with any financial reporting requirement under the securities laws. | Provide for single-trigger vesting acceleration upon a change in control under the Company’s Executive Severance Policy. | | Maintain a Compensation Committee, which is comprised solely of independent directors. | Allow: (i) any repricing of options and Stock Appreciation Rights (“SARs”) without shareholder approval or (ii) for the unlimited transferability of awards. | | Have stock ownership guidelines for our directors and executive officers. | | | Subject awards under the Amended 2017 Plan to minimum vesting periods and maximum annual per-person limits. | | | Double-trigger vesting acceleration upon a change in control under the Company’s Executive Severance Policy. | | | Ensure that a significant portion of our non-employee director compensation consists of long-term equity awards. | | | Consult with outside experts to determine the overall competitiveness of the Company’s executive compensation program. | |
Awards Under Incentive Plan
Awards Under Incentive Plan In addition, and driven in part by our efforts to maintain best practices in executive compensation, the following features are included in the Amended and Restated Balchem Corporation 2017 Omnibus Incentive Plan (the “Amended 2017 Plan”):
Awards Under Incentive Plan
| • | Limitation on Shares: The maximum number of shares which may be issued under the Amended 2017 Plan is 2,400,000 shares; |
Awards Under Incentive Plan
| • | No Repricing of Stock Options or SARs: No repricing (or amendments or replacements related to a repricing) of outstanding Stock Options/SARs is allowed without shareholder approval; |
Awards Under Incentive Plan
| • | No Discounted Awards: The exercise price per share of stock under a Stock Option or SAR award must be not less than the fair market value of our Common Stock on the date of grant; |
Awards Under Incentive Plan
| • | Minimum Vesting: Except for 5% of the shares authorized for grant under the Amended 2017 Plan and other limited exceptions, awards (other than cash performance awards) are generally subject to a minimum vesting period of one year; |
Awards Under Incentive Plan
| • | Dividends or Dividend Equivalents: Dividends or dividend equivalents otherwise payable on an unvested award will accrue and be paid only when the vesting conditions applicable to the underlying award have been satisfied; |
Awards Under Incentive Plan
| • | No Liberal Share Recycling: Recycling of shares used to satisfy the exercise price or taxes for any awards is prohibited; |
Awards Under Incentive Plan
| • | No Liberal Change in Control: The consummation of a merger or similar transaction and a minimum acquisition of 50% of the outstanding shares is required before a change-in-control occurs; |
Awards Under Incentive Plan
| • | No Automatic “Single-Trigger” Vesting on Change in Control: There is no automatic acceleration of any outstanding awards upon the occurrence of a change in control; |
Awards Under Incentive Plan
| • | Limitations on Awards to Non-Employee Directors: In the case of awards to non-employee directors, the maximum amount or value that may be granted in any calendar year (inclusive of cash compensation) may not exceed $800,000; and |
Awards Under Incentive Plan
| • | Compensation Recovery: In the event that the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirements under the securities laws, the Compensation Committee would have the discretion to require reimbursement or forfeiture of certain excess performance-based awards received by certain executive officers of the Company during the three completed fiscal years immediately preceding the date that the Company is required to prepare an accounting restatement. |
Compensation Committee Methodology
| • | The CEO completes an annual performance assessment for each of the other NEOs, which is reviewed and considered by the Compensation Committee. |
Compensation Committee Methodology
| • | The Compensation Committee conducts an annual performance appraisal of the CEO using evaluation information solicited from each independent Board member and recommends to the Board the annual compensation package for the CEO. |
Compensation Consultants
Compensation Consultants The Compensation Committee has authority to engage attorneys, accountants and consultants, including executive compensation consultants, to solicit input concerning compensation matters, and to delegate any of its responsibilities to one or more directors or members of management, where it deems such delegation appropriate and permitted under applicable law. To better understand the compensation practices of similar companies, the Compensation Committee from time to time, reviews data gathered from a custom peer group. In late 2023, the Compensation Committee, upon close consultation with Pearl Meyer, completed a review and update of Balchem’s peer group. Peer group information serves as the primary reference point for the Compensation Committee with Pearl Meyer’s market survey data used as a secondary reference. The peer group was refreshed in December 2023 and was used for benchmarking purposes in 2024.
2024 Peer Group Companies
2024 Peer Group Companies The following companies comprised our peer group for 2024:
2024 Peer Group Companies
| Ashland Global Corp. | Hain Celestial Group | Minerals Technologies | | Avient Corp. | H.B. Fuller Co. | MGP Ingredients | | Azek Company | Hexcel | Quaker Chemical Corp. | | Cabot Corp. | Ingevity Corp. | Sensient Technologies | | Celsius Holdings | Innospec Inc. | The Simply Good Foods Co. | | CSW Industrials | J&J Snack Foods Corp. | Stepan Co. | | Element Solutions | Lancaster Colony Corp. | Treehouse Foods | | FMC Corp. | | |
2024 Peer Group Companies
This peer group was developed based on comparability to the Company in terms of industry and size (revenue and market capitalization). In December 2023, based upon a peer group review and recommendations from Pearl Meyer, the Compensation Committee approved the current peer group. The changes were made to enhance the alignment of the peer group with the current size of Balchem and the markets that we serve.
Benchmarks
Benchmarks While compensation survey data and benchmarking are useful guides for comparative purposes, we believe that a successful compensation program also requires the application of judgment and subjective determinations, particularly with respect to individual performance. Accordingly, our Compensation Committee applies its judgment to adjust and align each individual element of our compensation program with the broader objectives of the program. For example, we consider other factors, including, but not limited to, the Company’s historical compensation trends; recommendations of the CEO; the performance of the Company, its operating units and their respective executives; market factors such as the health of the economy and of the industries served by the Company; the availability of executive talent; executives’ length of service; and internal assessments and recommendations regarding particular executives.
Base Salary
Base Salary Base salary is the fixed component of pay based on each NEO’s job responsibilities, performance and competitive benchmark data. Annual incentive cash bonuses and long-term compensation also are based on a percentage of base salary. To ensure we attract and retain the leadership talent required to successfully lead the Company, NEO base salaries are targeted to be competitive with base salary compensation paid to peer group NEOs and other relevant external benchmarks derived from established market survey information. In establishing NEO base salaries, the Compensation Committee also considers:
2024 ICP Discussion
| Metric | 2024 Result | Actual vs. Target | Payout Percentage | | Adjusted EBITDA | $250.3 million | 103.8% | 122.9% | | Revenue | $953.7 million | 99.1% | 86% | | Free Cash Flow | $147.2 million | 110.4% | 200% |
Equity Based Compensation – Long-Term Incentive Program (“LTIP”)
Equity Based Compensation – Long-Term Incentive Program (“LTIP”) Our NEOs have significant responsibility for the management, growth and long-term success of the Company. Consequently, the Compensation Committee believes that a significant portion of their compensation be a variable, at-risk equity component that is aligned with the creation over time of value for shareholders and stakeholders while supporting critical retention and key leadership development efforts.
LTIP Awards
LTIP Awards The Compensation Committee establishes each NEO’s “Target Equity Multiplier,” which is multiplied by the NEOs’ base salary to determine the “Target Equity Value” and expressed as the dollar value of the LTIP award. The Target Equity Multiplier for each NEO is shown below:
LTIP Awards
| NEO | Target Equity Multiplier (of Base Salary) | | Ted Harris | 3.30 | | C. Martin Bengtsson | 2.25 | | Frederic Boned | 1.50 | | Hatsuki Miyata | 1.50 | | Martin Reid | 1.30 |
LTIP Awards
The Target Equity Value is then converted into equity awards based upon the fair value on the date LTIP awards are granted, usually in February of each calendar year, as computed in accordance with FASB Accounting Standards Codification 718. Although the Compensation Committee approves the LTIP equity in this time frame, it also reviews competitive market data for NEOs from time to time. The Compensation Committee may grant LTIP awards at other times during the year because of new appointments, promotions or other special circumstances. Our Compensation Committee does not time the grants of incentive awards around our release of undisclosed material information. The Compensation Committee may in its discretion adjust individual grants based upon individual performance. The Target Equity Value is granted through a mix of stock options (“Stock Options”), time-based restricted shares (“Time-Based Restricted Shares”) and Performance Shares (as defined below) as follows:
LTIP Awards
| • | 25% of the 2024 Target Equity Value is awarded as Stock Options with an exercise price equal to the fair market value of our Common Stock on the date of grant. Stock Options have a ten-year term and vest 20% after Year 1, 40% after Year 2 and 40% after Year 3. |
LTIP Awards
| • | 25% of the 2024 Target Equity Value is awarded as Time-Based Restricted Shares which are granted at the fair market value of our Common Stock on the date of grant and cliff vest three (3) years from said date. |
LTIP Awards
| • | 25% of the 2024 Target Equity Value is awarded as EBITDA performance shares (“EBITDA Performance Shares”). The number of EBITDA Performance Shares that will vest (or not vest) is based upon the attainment of a pre-determined Company EBITDA performance target over the three (3) fiscal years beginning with the fiscal year in which the grant was made (“Performance Period”). The EBITDA Performance Shares will vest (or not vest) at the end of the Performance Period. |
LTIP Awards
| • | 25% of the 2024 Target Equity Value is awarded as Total Shareholder Return performance shares (the “TSR Performance Shares” and collectively with the EBITDA Performance Shares, the “Performance Shares”). The number of TSR Performance Shares that will vest (or not vest) is based upon the relative Company TSR vs. the Russell 2000 Index over the three (3) fiscal years beginning with Performance Period. |
LTIP Awards
The 2024-2026 Performance Period will conclude at the end of fiscal 2026 and the awards will pay out, to the extent earned, in shares of common stock in February 2027.
2022 Performance Share Payout Discussion
2022 Performance Share Payout Discussion On February 12, 2025, the Compensation Committee, following its review of the Company’s EBITDA and TSR performance from the 2022-2024 Performance Period, approved the following payout for the 2022 Performance Share grant:
2022 Performance Share Payout Discussion
| 2022 PSU GRANTS EBITDA (50% Weight) | | | | | | | | 2021 FY EBITDA | 2024 FY EBITDA | Actual EBITDA Growth (2022-2024) | Threshold EBITDA Growth (50% of Target Payout) | Target EBITDA Growth (100% of Target Payout) | Maximum EBITDA Growth (200% of Target Payout) | EBITDA Payout as a % of Target | | $176.1 | $230.6 | 31.0% | 10.0% | 24.2% | 31.5% | 192.4% |
2022 Performance Share Payout Discussion
| 2022 PSU GRANTS - Relative TSR (50% Weight) | | | | | | | Balchem TSR | Russell 2000 25th %'ile (50% of Target Payout) | Russell 2000 50th %'ile (100% of Target Payout) | Russell 2000 75th %'ile (200% of Target Payout) | Balchem %'ile Rank | TSR Payout % of Target | | 8.0% | -65.5% | -16.9% | 31.3% | 63.7 | 154.7% |
2022 Performance Share Payout Discussion
In aggregate, the 2022-24 Performance Shares (PSUs) vested in 172.4% of the target units originally granted.
Clawback Policy
| (i) non-equity incentive plan awards that are earned solely or in part by satisfying a financial reporting measure performance goal; |
Clawback Policy
| (ii) bonuses paid from a bonus pool, where the size of the pool is determined solely or in part by satisfying a financial reporting measure performance goal; |
Clawback Policy
| (iv) restricted stock, stock options and performance share units that are granted or vest solely or in part on satisfying a financial reporting measure performance goal; and |
Clawback Policy
| (v) proceeds from the sale of shares acquired through an incentive plan that were granted or vested solely or in part on satisfying a financial reporting measure performance goal. |
Employment Agreements
Employment Agreements The Company has employment agreements with Mr. Harris and has entered into the Bengtsson Offer Letter, which are described below under the section of this proxy statement titled “Termination of Employment and Change in Control Arrangements.” Other than such agreements, there are no agreements or understandings between the Company and any NEO that guarantee continued employment or any level of compensation, including incentive or bonus payments. The Company does not have a written policy regarding employment agreements. There is no provision in foregoing agreements or in any employment or other arrangement with any other executive officer whereby any tax gross-up payment to cover any excise taxes on excess parachute payments will be made.
Executive Severance Policy
Executive Severance Policy On February 12, 2025, the Compensation Committee approved the adoption of the Balchem Corporation Executive Severance Policy (the “Executive Severance Policy”). Eligible participants in this Policy (“Participants”) are those employees who are designated by the Board as executive officers for purposes of the Securities Exchange Act of 1934, as amended. Pursuant to the Executive Severance Policy, in the event the Company or its subsidiaries terminates the employment of a Participant without Cause outside of a Change in Control Period (such terms as defined in the Executive Severance Policy) and such Participant has been employed by the Company for at least one year prior to such termination, then (1) such Participant is entitled to receive cash severance in an amount equal to the sum of a specified multiple of such Participant’s base salary plus a specified multiple of such Participant’s target annual bonus opportunity and COBRA coverage at the Company’s expense for the length of the severance period set forth in the Executive Severance Policy (or earlier if benefits are provided by a new employer); and (2) such Participant’s outstanding equity awards will be treated in accordance with the relevant equity award agreement. Notwithstanding the foregoing, the Compensation Committee, in its discretion and in lieu of all or a portion of the cash payable under (1) above, can accelerate the vesting of all or a portion of such Participant’s outstanding equity awards, provided that the aggregate fair market value of such accelerated equity awards is at least equal to the aggregate amount of such cash payable, pursuant to the terms of the Executive Severance Policy. Further, subject to the terms and conditions of the Executive Severance Policy, in the event a Participant incurs an Involuntary Termination within a Change in Control Period (such terms as defined in the Executive Severance Policy), then (1) such Participant is entitled to receive cash severance in an amount equal to the sum of a specified multiple of such Participant’s base salary plus a specified multiple of such Participant’s target annual bonus opportunity and COBRA coverage at the Company’s expense for the length of the severance period set forth in the Executive Severance Policy (or earlier if benefits are provided by a new employer); and (2) the vesting of such Participant’s time-based equity awards will immediately accelerate in full, with performance deemed achieved at target levels.
Payment for Termination without Cause
| | Annualized Base Salary Multiple | Annualized Target Bonus Multiple | Severance Period (months) | | Chief Executive Officer | 2 | 2 | 24 | | Chief Financial Officer | 1 | 1 | 12 | | Other Participants | 1 | 1 | 12 |
Payment for Involuntary Termination within a Change in Control Period
Payment for Involuntary Termination within a Change in Control Period
Payment for Involuntary Termination within a Change in Control Period
| | Annualized Base Salary Multiple | Annualized Target Bonus Multiple | Severance Period (months) | | Chief Executive Officer | 3 | 3 | 36 | | Chief Financial Officer | 2 | 2 | 24 | | Other Participants | 2 | 2 | 24 |
Risk Considerations in Our Compensation Program
| — | The variable portions of compensation (cash bonus and equity) are designed to reward both short- and long-term corporate performance. |
Risk Considerations in Our Compensation Program
| ○ | For short-term performance, our cash bonus is awarded based primarily on corporate and business segment performance goals or targets. |
Risk Considerations in Our Compensation Program
| ○ | For long-term performance, our Stock Options generally vest ratably over three years and are only valuable if our stock price increases over time. Our Time-Based Restricted Share grants and Performance Share grants generally cliff vest in three years. |
Risk Considerations in Our Compensation Program
| • | The variable elements of compensation are a sufficient percentage of overall compensation to motivate executives to produce superior short- and long-term corporate results, while the fixed element is also sufficient such that executives are not encouraged to take unnecessary or excessive risks in doing so. |
Risk Considerations in Our Compensation Program
| • | The use of Adjusted EBITDA as the contingent factor upon which ICP cash incentive depends, encourages our executives to take a balanced approach that focuses on corporate profitability, rather than other measures such as revenue targets, which may create incentives for management to drive sales without regard to cost structure. No payout is made under the ICP program if we are not sufficiently profitable. |
Risk Considerations in Our Compensation Program
| • | Our ICP and LTIP awards are capped for each participant, which mitigates excessive risk-taking. Even if the Company dramatically exceeds its Adjusted EBITDA target, the awards are limited. Conversely, there is no ICP or LTIP award unless minimum performance levels of applicable goals are achieved. |
Summary Compensation Table
Summary Compensation Table The following table sets forth the compensation earned by our NEOs:
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus (1) | Stock Awards (2) | Stock Options (2) | Non-equity Incentive Plan Compensation (3) | Deferred Compensation Earnings (4) | All Other Compensation (5) | Total | | Ted Harris, Chairman, President and Chief Executive Officer | 2024 | $1,155,000 | $0 | $2,862,289 | $957,241 | $1,843,753 | $0 | $54,486 | $6,872,769 | | | 2023 | $1,155,000 | $0 | $2,601,958 | $867,121 | $1,219,937 | $0 | $45,691 | $5,889,707 | | | 2022 | $1,100,000 | $0 | $2,476,850 | $7,137,150 | $1,189,293 | $0 | $44,972 | $11,948,265 | | C. Martin Bengtsson, Executive Vice President and Chief Financial Officer | 2024 | $572,149 | $0 | $904,470 | $302,755 | $596,901 | $0 | $32,100 | $2,408,375 | | | 2023 | $527,337 | $0 | $671,295 | $224,961 | $329,433 | $0 | $30,600 | $1,783,626 | | | 2022 | $502,226 | $0 | $601,307 | $201,299 | $329,903 | $0 | $32,000 | $1,666,735 | | Frederic Boned, Senior Vice President and General Manager, Human Nutrition and Health | 2024 | $518,125 | $0 | $593,513 | $200,353 | $537,999 | $0 | $32,100 | $1,882,090 | | | 2023 | $432,765 | $50,000 | $319,662 | $106,345 | $198,832 | $0 | $30,600 | $1,138,204 | | | 2022 | $65,385 | $0 | $419,400 | $0 | $150,000 | $0 | $51,662 | $686,447 | | Hatsuki Miyata, Executive Vice President, Chief Legal Officer and Secretary | 2024 | $471,136 | $0 | $498,706 | $169,187 | $393,215 | $0 | $32,600 | $1,564,844 | | | 2023 | $435,870 | $0 | $319,662 | $106,345 | $209,399 | $0 | $46,147 | $1,117,423 | | | 2022 | $176,539 | $0 | $534,000 | $0 | $218,809 | $0 | $46,319 | $975,667 | | Martin Reid, Senior Vice President and Chief Supply Chain Officer | 2024 | $468,078 | $0 | $452,235 | $151,378 | $390,066 | $0 | $32,100 | $1,493,857 | | | 2023 | $454,920 | $0 | $335,647 | $114,525 | $218,571 | $0 | $30,600 | $1,154,263 | | | 2022 | $437,423 | $0 | $319,777 | $108,701 | $202,836 | $0 | $32,000 | $1,100,737 |
Summary Compensation Table
| (1) Reflects the value of cash sign-on bonus. |
Summary Compensation Table
| (2) The amounts included in the “Stock Awards” and “Stock Options” columns reflect the aggregate grant date fair value as computed in accordance with FASB Accounting Standards Codification 718 adjusted to eliminate service-based forfeiture assumptions used for financial reporting purposes. A discussion of the assumptions used in valuation of Stock Options may be found in “Note 3 – Shareholders’ Equity” in the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 21, 2025. For the fiscal years ended December 31, 2021 - 2024, the awards reported in the “Stock Awards” column above consist of Performance Shares and Time-Based Restricted Shares. The grant date fair value of the Performance Shares is reflected at target payout based on the probable outcome of the applicable performance conditions. The maximum value for the Performance Shares is as follows: (i) for 2024: Mr. Harris - $3,376,342; Mr. Bengtsson - $1,067,119; Mr. Boned - $699,938; Ms. Miyata - $588,063; Mr. Reid - $533,560; (ii) for 2023: Mr. Harris – $3,189,879; Mr. Bengtsson – $823,016; Mr. Boned - $392,176; Ms. Miyata - $392,176; Mr. Reid - $411,508; and (iii) for 2022: Mr. Harris – $3,523,546; Mr. Bengtsson – $856,034; Mr. Boned – N/A; Ms. Miyata - N/A; Mr. Reid - $455,631, with the foregoing being calculated by multiplying the number of shares that would be granted upon achievement of the highest performance conditions by the price on the grant date. For Ms. Miyata, the Stock Awards column for 2022 reflects sign-on Time-Based Restricted shares granted in part in recognition of the value in unvested equity and other benefits from her prior employer that she forfeited. In September 2022, the Compensation Committee approved a one-time retention grant comprised of 130,000 stock options with a grant date of September 15, 2022, and an estimated grant date fair value of approximately $6.3 million for Mr. Harris as part of the Company’s retention strategy and consistent with its pay-for-performance compensation philosophy. This stock options award grant is structured in four tranches with increasing exercise prices: (a) 25% at fair market value as of grant date (“FMV”); (b) 25% at FMV plus 10% premium; (c) 25% at FMV plus 15% premium; and (d) 25% at FMV plus 20% premium. Further, the options vest over a five-year period with: (a) 25% vesting on the third anniversary of the grant date; (b) 25% vesting on the fourth anniversary of the grant date; and (c) 50% vesting on the fifth anniversary of the grant date. The options expire on the tenth anniversary of the grant date. |
Summary Compensation Table
| (3) Reflects the value of cash incentive bonuses earned under the Company’s ICP. |
Summary Compensation Table
| (4) The Deferred Compensation Plan does not provide above-market or preferential earnings. |
Summary Compensation Table
| (5) The amounts listed in the “All Other Compensation” column for fiscal 2024 include actual and estimated matching by the Company under the 401(k) Plan, and other perquisites and personal benefits, and details about these amounts are set forth in the table below. |
Summary Compensation Table
| Name | Company 401k Plan Matching | Other Perquisites | Total All Other Compensation | | Ted Harris | $20,700 | $33,786 | $54,486 | | C. Martin Bengtsson | $20,700 | $11,400 | $32,100 | | Frederic Boned | $20,700 | $11,400 | $32,100 | | Hatsuki Miyata | $20,700 | $11,900 | $32,600 | | Martin Reid | $20,700 | $11,400 | $32,100 |
Summary Compensation Table
For Mr. Harris, the amounts other than 401(k) contributions reflect: (i) an automobile allowance; (ii) the reimbursement of certain expenses related to his use of a financial planner; (iii) amounts associated with the insurance and maintenance of Mr. Harris’ automobile; (iv) the reimbursement of automobile expenses that are related to Company business; and (v) employee award points. For Ms. Miyata, the amounts other than 401(k) contributions reflect: (i) an automobile allowance; (ii) matching Company contributions under Balchem’s matching charitable donation program available to all employees and directors up to $2,000 per year; and (iii) employee award points. For each NEO other than Mr. Harris and Ms. Miyata, the amounts other than 401(k) contributions reflect (i) an automobile allowance and (ii) employee award points.
2024 Grants of Plan-Based Awards
2024 Grants of Plan-Based Awards
2024 Grants of Plan-Based Awards
| Name | Grant Date | Grant Type | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock (#) | All Other: Number of Securities Underlying Stock Options (#) | Exercise Price of Stock Option(3) ($/Share) | Grant Date Fair Value of Stock and Option Awards(4) ($) | | | | | Threshold | Target | Maximum | Threshold (#) | Target (#) | Maximum (#) | | | | | | Ted Harris | | ICP | $0 | $1,270,500 | $2,541,000 | | | | | | | | | | 02/08/2024 | Performance Shares | | | | 5,885 | 11,770 | 23,540 | | | | | | | 02/08/2024 | Time-Based Restricted Shares | | | | | | | 6,650 | | | | | | 02/08/2024 | Stock Options | | | | | | | | 21,500 | $143.43 | | | | | | | | | | | | | | | $3,819,530 | | C. Martin Bengtsson | | ICP | $0 | $429,112 | $858,224 | | | | | | | | | | 02/08/2024 | Performance Shares | | | | 1,860 | 3,720 | 7,440 | | | | | | | 02/08/2024 | Time-Based Restricted Shares | | | | | | | 2,100 | | | | | | 02/08/2024 | Stock Options | | | | | | | | 6,800 | $143,43 | | | | | | | | | | | | | | | $1,207,225 | | Frederic Boned | | ICP | $0 | $310,875 | $621,750 | | | | | | | | | | 02/08/2024 | Performance Shares | | | | 1,220 | 2,440 | 4,880 | | | | | | | 02/08/2024 | Time-Based Restricted Shares | | | | | | | 1,380 | | | | | | 02/08/2024 | Stock Options | | | | | | | | 4,500 | $143.43 | | | | | | | | | | | | | | | $793,866 | | Hatsuki Miyata | | ICP | $0 | $282,682 | $565,363 | | | | | | | | | | 02/08/2024 | Performance Shares | | | | 1,025 | 2,050 | 4,100 | | | | | | | 02/08/2024 | Time-Based Restricted Share Awards | | | | | | | 1,160 | | | | | | 02/08/2024 | Stock Options | | | | | | | | 3,800 | $143.43 | | | | | | | | | | | | | | | $667,893 | | Martin Reid | | ICP | $0 | $280,847 | $561,694 | | | | | | | | | | 02/08/2024 | Performance Shares | | | | 930 | 1,860 | 3,720 | | | | | | | 02/08/2024 | Time-Based Restricted Shares | | | | | | | 1,050 | | | | | | 02/08/2024 | Stock Options | | | | | | | | 3,400 | $143.43 | | | | | | | | | | | | | | | $603,612 |
2024 Grants of Plan-Based Awards
| (1) The maximum amounts equal 200% of target. Additional information regarding the design of the ICP is included in the Compensation Discussion and Analysis. |
2024 Grants of Plan-Based Awards
| (2) The target number of shares shown in the table reflects the number of shares of our Common Stock earned if performance is achieved at target levels. All shares will be awarded net of applicable tax withholding. Dividend equivalents accrue during the performance cycle and will be paid out in shares, net of applicable tax withholding, based on the actual number of shares earned for the performance cycle, if any. |
2024 Grants of Plan-Based Awards
| (3) The exercise price equals the closing price of our Common Stock on the grant date except as otherwise indicated. |
2024 Grants of Plan-Based Awards
| (4) The amounts represent the grant date fair value of the awards as computed in accordance with FASB ASC Topic 718. |
Outstanding Equity Awards at Fiscal Year End 2024
Outstanding Equity Awards at Fiscal Year End 2024 The following table shows outstanding Stock Options classified as exercisable and not currently exercisable as of December 31, 2024 for each NEO. The table also discloses the number and value of unvested Time-Based Restricted Shares and Performance Shares as of December 31, 2024.
Outstanding Equity Awards at Fiscal Year End 2024
| Name | | | | | Stock Awards | | Performance Awards | | | | # Of Securities Unexercised Underlying Options | | | | | | | | | | Exercisable(1) | Not currently Exercisable(1) | Option Exercise Price/share | Option Expiration Date | Number of Unvested Shares | $(3) | Number of Unvested Shares(2) $ | $(3) | | Ted Harris | 25,930 | 0 | 85.40 | 2/21/2027 | | | | | | | 18,800 | 0 | 74.57 | 2/15/2028 | | | | | | | 28,300 | 0 | 84.09 | 2/13/2029 | | | | | | | 24,500 | 0 | 111.94 | 2/13/2030 | | | | | | | 21,900 | 0 | 119.13 | 2/11/2031 | | | | | | | 12,300 | 8,200 | 138.07 | 2/10/2032 | | | | | | | 0 | 32,500 | 125.71 | 9/15/2032 | | | | | | | 0 | 32,500 | 138.28 | 9/15/2032 | | | | | | | 0 | 32,500 | 144.57 | 9/15/2032 | | | | | | | 0 | 32,500 | 150.85 | 9/15/2032 | | | | | | | 4,240 | 16,960 | 138.09 | 2/8/2033 | | | | | | | 0 | 21,500 | 143.43 | 2/8/2034 | 18,910 | $3,082,330 | 36,080 | $5,881,040 | | C. Martin Bengtsson | 15,000 | 0 | 85.33 | 2/4/2029 | | | | | | | 6,000 | 0 | 84.09 | 2/13/2029 | | | | | | | 4,800 | 0 | 111.94 | 2/13/2030 | | | | | | | 5,300 | 0 | 119.13 | 2/11/2031 | | | | | | | 3,000 | 2,000 | 138.07 | 2/10/2032 | | | | | | | 1,100 | 4,400 | 138.09 | 2/8/2033 | | | | | | | 0 | 6,800 | 143.43 | 2/8/2034 | 5,170 | $842,710 | 9,800 | $1,597,400 | | Frederic Boned | 520 | 2,080 | 138.09 | 2/8/2033 | | | | | | | 0 | 4,500 | 143.43 | 2/8/2034 | 5,150 | $839,450 | 3,860 | $629,180 | | Hatsuki Miyata(4) | 520 | 2,080 | 138.09 | 2/8/2033 | | | | | | | 0 | 3,800 | 143.43 | 2/8/2034 | 3,264 | $532,032 | 3,470 | $565,610 | | Martin Reid | 2,500 | 0 | 118.96 | 2/8/2031 | | | | | | | 3,300 | 0 | 119.13 | 2/11/2031 | | | | | | | 1,620 | 1,080 | 138.07 | 2/10/2032 | | | | | | | 560 | 2,240 | 138.09 | 2/8/2033 | | | | | | | 0 | 3,400 | 143.43 | 2/8/2034 | 2,630 | $428,690 | 5,000 | $815,000 |
Outstanding Equity Awards at Fiscal Year End 2024
| (1) Stock Options granted under the Amended 2017, the 2017 Plan, and the 1999 Plan have a term of ten years from the grant date and become exercisable 20% after 1 year, 60% after 2 years and 100% after 3 years, beginning on the first anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year End 2024
| (2) Time-Based Restricted Shares vest three years from the date of grant. Performance Shares vest in three years and are reflected at target payout based on the probable outcome of the performance conditions. The following table provides information with respect to the final vesting dates of each outstanding restricted stock award (both Time-Based Restricted Shares and Performance Shares) held by each NEO as of December 31, 2024. |
Outstanding Equity Awards at Fiscal Year End 2024
| (3) Value is computed based on the closing price of our Common Stock on December 31, 2024, which was $163.00 per share. |
Outstanding Equity Awards at Fiscal Year End 2024
| Final Vesting Date | Ted Harris | Martin Bengtsson | Frederic Boned | Hatsuki Miyata | Martin Reid | | Jan. 1, 2025 | 12,760 | 3,100 | | | 1,650 | | Feb. 10, 2025 | 5,980 | 1,450 | | | 770 | | July 27, 2025 | | | | 1,334(4) | | | Oct. 31, 2025 | | | 3,000 | | | | Jan. 1, 2026 | 11,550 | 2,980 | 1,420 | 1,420 | 1,490 | | Feb. 8, 2026 | 6,280 | 1,620 | 770 | 770 | 810 | | Jan. 1 2027 | 11,770 | 3,720 | 2,440 | 2,050 | 1,860 | | Feb. 8, 2027 | 6,650 | 2,100 | 1,380 | 1,160 | 1,050 | | Total | 54,990 | 14,970 | 9,010 | 6,734 | 7,630 |
Outstanding Equity Awards at Fiscal Year End 2024
| (4) In connection with the hiring of Ms. Miyata as Executive Vice President, Chief Legal Officer and Secretary, the Company provided in part that Ms. Miyata would receive 4,000 shares of Company Time-Based Restricted Shares, which will vest ratably over three years after the date of grant (July 27, 2022), with one third vesting each year beginning in 2023. These Time-Based Restricted Shares were granted in part in recognition of the value in unvested equity and other benefits from her prior employer that she forfeited. |
Option Exercises and Stock Vested in 2024
Option Exercises and Stock Vested in 2024 The following table sets forth certain information regarding options and stock awards exercised and vested, respectively, by each of our NEOs during the fiscal year ended December 31, 2024.
Option Exercises and Stock Vested in 2024
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Ted Harris | 34,350 | $3,303,814 | 26,699(2) | $3,840,952 | | C. Martin Bengtsson | 0 | N/A | 6,425(2) | $924,312 | | Frederic Boned | 0 | N/A | 0 | N/A | | Hatsuki Miyata | 0 | N/A | 1,333(3) | $240,980 | | Martin Reid | 0 | N/A | 5,463(2) | $785,268 |
Option Exercises and Stock Vested in 2024
| (1) Value realized represents the excess of the fair market value of the shares at the time of exercise over the exercise price of the options. |
Option Exercises and Stock Vested in 2024
| (2) Reflects the vesting of (a) Performance Shares granted in 2021 under the Fiscal 2021 – 2023 Performance Share awards including dividend equivalent shares; and (b) Time-based Restricted Shares granted in 2021, subject to a three-year vesting requirement. The Performance Shares were subject to performance goals for the performance period ended December 31, 2023, with the number of TSR Performance Shares vesting representing 153.9% of the target shares and the EBITDA Performance Shares vesting representing 200.0% of the target shares. Awards vested on February 8, 2024. See “LTIP Awards” beginning at Page 41 above). Values realized for Performance Shares earned are based on the closing share prices $143.43 on February 8, 2024, the date the Compensation Committee determined that the performance targets for the performance period ended December 31, 2023 had been met. |
Option Exercises and Stock Vested in 2024
| (3) Reflects the vesting of Time-based Restricted Shares which vest ratably over three years after the grant date (July 27, 2022), with one third vesting each year beginning in 2023. These Time-Based Restricted Shares were granted in part in recognition of the value in unvested equity and other benefits from Ms. Miyata’s prior employer that she forfeited. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation For a description of the Balchem Deferred Compensation Plan, see “Balchem Deferred Compensation Plan” at page 45 above. Information regarding deferred elections under the Deferred Compensation Plan are included in the table below:
Nonqualified Deferred Compensation
| Name | NEO Contributions in Last Fiscal Year(1) ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) | | Ted Harris | $0 | $442,844 | $0 | $4,847,692 | | C. Martin Bengtsson | $0 | $0 | $0 | $0 | | Frederic Boned | $0 | $0 | $0 | $0 | | Hatsuki Miyata | $0 | $0 | $0 | $0 | | Martin Reid | $0 | $0 | $0 | $0 |
Nonqualified Deferred Compensation
| (1) NEO contributions include any deferrals of annual compensation, including earned awards under the ICP. These amounts are included in the NEOs’ compensation under either “Salary” or “Non-Equity Incentive Compensation”. |
Termination of Employment and Change in Control Arrangements
| Benefits and Payments Upon Termination(1) | | | | | | Event | Base Salary | ICP Bonus(2) | Acceleration of Vesting Stock Options and Restricted Shares(3) | Total | | Voluntary termination by Mr. Harris, upon Mr. Harris’ death or termination for Cause(4) | $0 | $1,843,753 | $0 | $1,843,753 | | Termination by the Company for other than Cause, Mr. Harris’ death or in response to a notice from that he intends to terminate the Harris Agreement or by Mr. Harris for Good Reason(5) | $2,310,000 | $1,843,753 | $0 | $4,153,753 | | Termination by Company prior to the second anniversary of a Change in Control for other than for Cause, Mr. Harris’ death or in response to a notice from that he intends to terminate the Harris Agreement | $2,310,000 | $1,843,753 | $13,020,200 | $17,173,953 | | Voluntary termination by Mr. Harris prior to the second anniversary of a Change in Control | $1,155,000 | $1,843,753 | $13,020,200 | $16,018,953 |
CEO Pay Ratio
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, set forth below is disclosure regarding the relationship of the annual total compensation of our employees and the total annual compensation of Mr. Harris, our Chairman, President and CEO. Mr. Harris had 2024 annual total compensation of $6,872,769 as reflected in the Summary Compensation Table included in this Proxy Statement. Our median employee’s annual total compensation for 2024 was $57,332. Therefore, the ratio of Mr. Harris’ 2024 annual total compensation to that of our median employee is approximately 120 to 1. We identified the median employee by examining the 2024 total cash compensation for all individuals, excluding our CEO, who were employed by us on December 31, 2024, the last day of our payroll year. We included all employees whether they were employed on a full-time, part-time or seasonal basis. We did not make any assumptions, adjustments, or estimates with respect to total cash compensation, and annualized the compensation for any full-time employees who were not employed by the Company for all of 2024. We believe the use of total cash compensation for all employees is a consistently applied compensation measure because we do not widely distribute annual equity awards to employees. Approximately four percent of our employees receive annual equity awards. After identifying the median employee based on total cash compensation, we calculated annual total compensation for such employee using the same methodology that we use for our NEOs as set forth in the 2024 Summary Compensation Table. Given the different methodologies that various public companies will use to determine their pay ratio, the CEO Pay Ratio reported above should not be used as a basis for comparison between companies. The following table sets forth the compensation for our Chief Executive Officer and the average compensation for our other named executive officers, both as reported in the Summary Compensation Table and with certain adjustments to reflect the “compensation actually paid” (“CAP”) to such individuals, as defined under SEC rules, for each of 2024, 2023, 2022, 2021 and 2020. The table also provides information on our cumulative total shareholder return (“TSR”), the cumulative TSR of our peer group, Net Income (which we refer to as “Net Earnings” in the Consolidated Statements of Earnings in our Form 10-K) and Adjusted EBITDA over such years in accordance with SEC rules.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year | Summary Compensation Table Total for Ted Harris(1) $ | Compensation Actually Paid to Ted Harris(2)(2a) $ | Average Summary Compensation Table Total for Non-CEO NEOs(3) $ | Average Compensation Actually Paid to Non-CEO NEOs(2)(2a)(3) $ | Year-end value of $100 invested on 12/31/2019 in(4): | | Net Income(5) (in millions) $ | Adjusted EBITDA(6) (in millions) $ | | | | | | | BCPC $ | Peer Group Total Shareholder Return $ | | | | 2024 | 6,872,769 | 8,371,060 | 1,837,292 | 2,265,811 | 164.52 | 118.83 | 128.48 | 250.3 | | 2023 | 5,889,707 | 10,939,071 | 1,298,379 | 1,667,102 | 149.36 | 124.91 | 108.54 | 230.9 | | 2022 | 11,948,265 | 7,975,827 | 1,190,453 | 608,803 | 121.95 | 123.18 | 105.37 | 215.7 | | 2021 | 5,761,673 | 12,201,461 | 1,260,686 | 2,362,829 | 167.40 | 142.61 | 96.10 | 189.8 | | 2020 | 4,620,255 | 5,611,326 | 1,022,275 | 1,366,466 | 113.96 | 115.20 | 84.62 | 174.2 |
Pay Versus Performance Table
| (1) The Principal Executive Officer (“PEO”) for all five fiscal years is Ted Harris, the Company's Chairman, President and Chief Executive Officer. |
Pay Versus Performance Table
| (2) CAP for the PEO and average CAP for our other NEOs in each of 2024, 2023, 2022, 2021, and 2020 reflect the respective amounts set forth in the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules. CAP values reflected in the table above do not reflect the actual amount of compensation earned by or paid to the PEO and our other NEOs during the applicable year. For information regarding the decisions made by our Executive Compensation Committee in regards to the PEO’s and our other NEOs’ compensation for fiscal year 2024, see the section titled “Compensation Discussion and Analysis” of this proxy statement. |
Pay Versus Performance Table
| | 2024 | | 2023 | | 2022 | | 2021 | | 2020 | | | | Harris, Ted | Average Non-CEO NEOs | Harris, Ted | Average Non-CEO NEOs | Harris, Ted | Average Non-CEO NEOs | Harris, Ted | Average Non-CEO NEOs | Harris, Ted | Average Non-CEO NEOs | | Total Compensation from Summary Compensation Table | $6,872,769 | $1,837,292 | $5,889,707 | $1,298,379 | $11,948,265 | $1,190,453 | $5,761,673 | $1,260,686 | $4,620,255 | $1,022,275 | | Adjustments for Equity Awards | | | | | | | | | | | | Adjustment for grant date values in the Summary Compensation Table | $(3,819,530) | $(818,149) | $(3,469,079) | $(549,611) | $(9,614,000) | $(520,728) | $(2,890,856) | $(513,216) | $(2,253,423) | $(371,859) | | Year-end fair value of unvested awards granted in the current year | $4,846,555 | $1,038,255 | $4,208,750 | $666,945 | $8,784,799 | $438,360 | $5,056,198 | $886,531 | $2,511,162 | $506,755 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | $641,096 | $217,391 | $3,744,224 | $213,440 | $(2,243,152) | $(345,097) | $4,165,417 | $717,164 | $622,749 | $175,648 | | Fair values at vest date for awards granted and vested in current year | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— |
Pay Versus Performance Table
| | 2024 | | 2023 | | 2022 | | 2021 | | 2020 | | | | Harris, Ted | Average Non-CEO NEOs | Harris, Ted | Average Non-CEO NEOs | Harris, Ted | Average Non-CEO NEOs | Harris, Ted | Average Non-CEO NEOs | Harris, Ted | Average Non-CEO NEOs | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | $(182,798) | $(11,543) | $555,762 | $37,239 | $(747,011) | $(141,472) | $93,812 | $9,036 | $104,515 | $30,921 | | Forfeitures during current year equal to prior year-end fair value | $— | $— | $— | $— | $(203,699) | $(19,401) | $— | $— | $— | $— | | Dividends or dividend equivalents not otherwise included in total compensation | $12,968 | $2,565 | $9,708 | $709 | $50,625 | $6,688 | $15,217 | $2,628 | $6,068 | $2,726 | | Total Adjustments for Equity Awards | $1,498,291 | $428,519 | $5,049,364 | $368,723 | $(3,972,438) | $(581,650) | $6,439,788 | $1,102,143 | $991,071 | $344,191 | | Compensation Actually Paid (as calculated) | $8,371,060 | $2,265,811 | $10,939,071 | $1,667,102 | $7,975,827 | $608,803 | $12,201,461 | $2,362,829 | $5,611,326 | $1,366,466 |
Pay Versus Performance Table
| (2a) The following summarizes the valuation assumptions used for stock option awards included as part of Compensation Actually Paid: |
Pay Versus Performance Table
| - | Expected life of each stock option is based on the “simplified method” using an average of the remaining vest and remaining term, as of the vest/FYE date. |
Pay Versus Performance Table
| - | Strike price is based on each grant date closing price and asset price is based on each vest/FYE closing price. |
Pay Versus Performance Table
| - | Risk free rate is based on the Treasury Constant Maturity rate closest to the remaining expected life as of the vest/FYE date. |
Pay Versus Performance Table
| - | Historical volatility is based on daily price history for each expected life (years) prior to each vest/FYE date. Closing prices provided by S&P Capital IQ are adjusted for dividends and splits. |
Pay Versus Performance Table
| - | Represents annual dividend yield on each vest/FYE date. |
Pay Versus Performance Table
| (3) Non-CEO NEOs reflect the average Summary Compensation Table total compensation and average Compensation Actually Paid for the following executives by year: |
Pay Versus Performance Table
2024: Martin Bengtsson, Martin Reid, Hatsuki Miyata, Frederic Boned 2023: Martin Bengtsson, Martin Reid, Hatsuki Miyata, Frederic Boned 2022: Martin Bengtsson, Jim Hyde, Martin Reid, Jonathan Griffin, Hatsuki Miyata 2021: Martin Bengtsson, Jim Hyde, Mark Stach, William Backus, Martin Reid 2020: Martin Bengtsson, Jim Hyde, Mark Stach, William Backus, Scott Mason
Pay Versus Performance Table
| (4) TSR is cumulative (assuming $100 was invested on December 31, 2019) for the measurement periods beginning on December 31, 2020 and ending on December 31 of each of 2024, 2023, 2022, 2021, and 2020, respectively, calculated in accordance with Item 201(e) of Regulation S-K. The peer group for purposes of this table is the Dow Jones U.S. Specialty Chemicals Index. Historic stock price performance is not necessarily indicative of future stock performance. |
Pay Versus Performance Table
| (5) Reflects “Net Earnings” in the Company’s Consolidated Statements of Earnings included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2024, 2023, 2022, 2021, and 2020. |
Pay Versus Performance Table
| (6) Adjusted EBITDA is the financial measure from the tabular list of Company Performance Metrics below which, in the Company’s assessment, represents the most important financial measure used by the Company to link compensation and performance in 2024. Adjusted EBITDA as used in this Proxy Statement is a non-GAAP financial measure calculated by adding interest, taxes, depreciation, amortization, and other expenses to earnings. |
Relationship between Compensation Actually Paid and Company Performance Measures
Relationship between Compensation Actually Paid and Company Performance Measures
(unaudited)
| (7) Nonqualified deferred compensation plan (income) expense: Gains and losses on rabbi trust assets related to our nonqualified deferred compensation plan are recorded in other (income) expense while the offsetting increases or decreases to the deferred compensation liability are recorded within earnings from operations. The increases and decreases in the deferred compensation liability are driven by market volatility and are not a true reflection of company performance. We believe excluding these amounts from our non-GAAP financial measures is useful to investors because these items are inconsistent in amount based on market conditions causing comparison of current and historical financial results to be difficult. |