DEF 14A of DuPont de Nemours, Inc.
Filed Apr 9, 2020 · FY20190001193125-20-102532
Director Nominees
Director Nominees You are being asked to vote on the election of 12 directors. All directors are elected annually. Detailed information about each director’s background, skills and expertise can be found in Agenda Item 1 — Election of Directors.
Director Nominees
| (As of the date of the Proxy Statement) Name Age Current Position | Independent | Audit Committee | Nomination and Governance Committee | People and Compensation Committee | Environment, Health, Safety & Sustainability Committee | Other Current Public Boards | | Amy G. Brady | | | | | | | | Age 53 Chief Information Officer & Executive Vice President, KeyCorp | X | X | | | X | | | Edward D. Breen | | | | | | | | Age 64 Executive Chair and Chief Executive Officer, DuPont de Nemours, Inc. | | | | | | 2* | | Ruby R. Chandy | | | | | | | | Age 58 Former President, Industrial Division Pall Corporation | X | X | | | CH | 2 | | Franklin K. Clyburn, Jr. | | | | | | | | Age 55 Executive Vice President, Chief Commercial Officer, Merck | X | | X | X | | | | Terrence R. Curtin | | | | | | | | Age 51 Chief Executive Officer, TE Connectivity | X | X | X | | | 1 | | Alexander M. Cutler | | | | | | | | Age 68 Retired Chair and Chief Executive Officer, Eaton | X | | CH | X | | 1 | | Eleuthère I. du Pont | | | | | | | | Age 53 President, Longwood Foundation | X | X | X | | | 1 | | Rajiv L. Gupta | | | | | | | | Age 74 Chairman of Aptiv, PLC | X | | | CH | X | 3 | | Luther C. Kissam | | | | | | | | Age 55 Chair, President & Chief Executive Officer, Albemarle Corp. | X | X | X | | | 1 | | Frederick M. Lowery | | | | | | | | Age 49 Senior Vice President, Thermo Fisher, President Life Sciences and Laboratory Products Groups | X | | | X | X | | | Raymond J. Milchovich | | | | | | | | Age 70 Former Chair and Chief Executive Officer, Foster Wheeler AG | X | | | X | X | | | Steven M. Sterin | | | | | | | | Age 48 Former Executive Vice President & Chief Financial Officer, Andeavor | X | CH | | | X | 1 |
Director Nominees
CH = Chair
Director Nominees
| Mr. Breen currently serves as a director of Comcast Corporation and Corteva. Mr. Breen will not stand for re-election to the Corteva board of directors and his term as a director of Corteva will expire immediately following Corteva’s annual meeting of stockholders, which is expected to occur on April 28, 2020.* |
Director Nominees
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Executive Compensation
| • | Adjustments were made to outstanding equity awards to reflect the conversion into awards denominated in DuPont, Corteva, or Dow common stock. |
2020 Annual Meeting of Stockholders
| BENEFITS | 53 | | Pension Benefits | 53 | | Defined-Benefit Retirement Plans | 53 | | Supplemental Retirement Plans | 55 | | Non-Qualified Deferred Compensation | 56 | | Other Retirement Benefits | 57 | | Potential Payments Upon Termination or Change in Control | 58 | | COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION | 60 | | COMPENSATION COMMITTEE REPORT | 60 | | CEO PAY RATIO | 60 | | AGENDA ITEM 2: ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION | 61 | | AGENDA ITEM 3: RESOLUTION TO APPROVE THE DUPONT 2020 EQUITY AND INCENTIVE PLAN | 62 | | AGENDA ITEM 4: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 71 | | AUDIT COMMITTEE REPORT | 74 | | AGENDA ITEM 5: STOCKHOLDER PROPOSAL – MODIFICATION OF THRESHOLD FOR CALLING SPECIAL STOCKHOLDER MEETINGS | 75 | | AGENDA ITEM 6: STOCKHOLDER PROPOSAL – EMPLOYEE BOARD ADVISORY POSITION | 77 | | ADDITIONAL INFORMATION | 79 | | APPENDIX A – NON-GAAP RECONCILIATION | A-1 | | APPENDIX B – 2020 EQUITY AND INCENTIVE PLAN | B-1 |
AGENDA ITEM 1: ELECTION OF DIRECTORS
AGENDA ITEM 1: ELECTION OF DIRECTORS
Board Composition
Board Composition The Board currently consists of twelve members, with Mr. Breen serving as Executive Chair and Chief Executive Officer and Mr. Cutler serving as Lead Independent Director.
Recommendations and Nominations for Director
Recommendations and Nominations for Director In accordance with the recommendation of the Nomination and Governance Committee, the Board has nominated the individuals listed in the following table for election as directors, to serve for a one-year term that expires at the Annual Meeting in 2021 or until their successors are elected and qualified.
Recommendations and Nominations for Director
| (As of the date of the Proxy Statement) Name Age Current Position | Independent | Audit Committee | Nomination and Governance Committee | People and Compensation Committee | Environment, Health, Safety & Sustainability Committee | Other Current Public Boards | | Amy G. Brady | | | | | | | | Age 53 Chief Information Officer & Executive Vice President, KeyCorp | X | X | | | X | | | Edward D. Breen | | | | | | | | Age 64 Executive Chair and Chief Executive Officer, DuPont de Nemours, Inc. | | | | | | 2* | | Ruby R. Chandy | | | | | | | | Age 58 Former President, Industrial Division Pall Corporation | X | X | | | CH | 2 | | Franklin K. Clyburn, Jr. | | | | | | | | Age 55 Executive Vice President, Chief Commercial Officer, Merck | X | | X | X | | | | Terrence R. Curtin | | | | | | | | Age 51 Chief Executive Officer, TE Connectivity | X | X | X | | | 1 | | Alexander M. Cutler | | | | | | | | Age 68 Retired Chair and Chief Executive Officer, Eaton | X | | CH | X | | 1 | | Eleuthère I. du Pont | | | | | | | | Age 53 President, Longwood Foundation | X | X | X | | | 1 | | Rajiv L. Gupta | | | | | | | | Age 74 Chairman of Aptiv, PLC | X | | | CH | X | 3 | | Luther C. Kissam | | | | | | | | Age 55 Chair, President & Chief Executive Officer, Albemarle Corp. | X | X | X | | | 1 | | Frederick M. Lowery | | | | | | | | Age 49 Senior Vice President, Thermo Fisher, President Life Sciences and Laboratory Products Groups | X | | | X | X | | | Raymond J. Milchovich | | | | | | | | Age 70 Former Chair and Chief Executive Officer, Foster Wheeler AG | X | | | X | X | | | Steven M. Sterin | | | | | | | | Age 48 Former Executive Vice President & Chief Financial Officer, Andeavor | X | CH | | | X | 1 |
Recommendations and Nominations for Director
CH = Chair * Mr. Breen currently serves as a director of Comcast Corporation and Corteva. Mr. Breen will not stand for re-election to the Corteva board of directors and his term as a director of Corteva will expire immediately following Corteva’s annual meeting of stockholders which is expected to occur on April 28, 2020.
Recommendations and Nominations for Director
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Recommendations and Nominations for Director
The Board unanimously recommends a vote FOR the election of ALL of these nominees as directors. The Company’s Bylaws prescribe the voting standard for election of directors as a majority of the votes cast in an uncontested election, such as this one, where the number of nominees does not exceed the number of directors to be elected. Under the Corporate Governance Guidelines, if a nominee who already serves as a director is not elected, that nominee shall offer to tender his or her resignation to the Board. The Nomination and Governance Committee will then recommend to the Board whether to accept or reject the resignation, or whether other action should be taken. Within ninety days of the certification of election results, the Board will publicly disclose its decision regarding whether to accept or reject the resignation. As explained on the accompanying proxy card or voting information, it is the intention of the persons named as proxies to vote executed proxies FOR the candidates nominated by the Board unless contrary voting instructions are provided. If something unanticipated should occur prior to the 2020 Meeting making it impossible for one or more of the candidates to serve as a director, votes will be cast in the best judgment of the persons authorized as proxies. The NYSE rules do not permit brokers with discretionary authority to vote in the election of directors. Therefore, if you hold your shares beneficially and do not provide voting instructions to your bank or broker, your bank or broker will abstain from voting on your behalf and your shares will not be voted in the election of directors. We urge you to promptly provide voting instructions to your broker to ensure that your shares are voted on this matter. Please follow the instructions set forth in the voting information provided by your bank or broker.
Recommendations and Nominations for Director
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DIRECTOR NOMINEES
DIRECTOR NOMINEES Information in the biographies summarizes key qualifications and diversity attributes as they apply to the individual directors to support the conclusion that these individuals are highly qualified to serve on the Board. The information is current as of the date of this Proxy Statement. Each nominee has consented to serve if elected.
DIRECTOR NOMINEES
| AMY G. BRADY | Executive Vice President and Chief Information Officer, KeyCorp | | Age 53 | Ms. Brady is Chief Information Officer (CIO), Executive Vice President at KeyCorp, a bank-based financial services company. In this role, Ms. Brady leads the company’s shared services for technology, operations, data, client and account servicing, security services (including cybersecurity), and procurement. Prior to joining KeyCorp in 2012, Ms. Brady spent 25 years with Bank of America, including as CIO, Enterprise Technology and Operations, where she was responsible for technology and operations delivery for critical enterprise functions including Finance, Risk, Human Resources, Marketing, Legal and Audit. Ms. Brady joined the DuPont Board of Directors in October 2019. Ms. Brady was recommended for nomination to our Board by one of our non-employee directors. | | | Skills and Expertise Ms. Brady’s technology, operations and cybersecurity expertise is a strong asset to the Board. Ms. Brady also has extensive management experience. |
DIRECTOR NOMINEES
| EDWARD D. BREEN | Executive Chair and Chief Executive Officer, DuPont de Nemours, Inc. | | Age 64 | Mr. Breen has served as the Executive Chair of the Board of Directors of DuPont since June 1, 2019 and as Chief Executive Officer since February 18, 2020. Prior to his current role, Mr. Breen served as the Chief Executive Officer of DowDuPont from September 1, 2017 to May 31, 2019. Mr. Breen was named Interim Chairman of the Historical EID Board and Chief Executive Officer on October 16, 2015, and assumed those roles permanently on November 9, 2015. He served as Chairman, from July 2002 to March 2016, and Chief Executive Officer, from July 2002 to September 2012, of Tyco International, plc, a leading global provider of security products and services, fire detection and suppression products and services and life safety products. Prior to joining Tyco, Mr. Breen held senior management positions at Motorola, including as President and Chief Operating Officer, and General Instrument Corporation, including as Chairman, President and Chief Executive Officer. Mr. Breen is a director of Comcast Corporation (since 2014 and 2005 to 2011). Mr. Breen has also served as a director of Corteva since June 1, 2019 but will not stand for re-election in 2020. Mr. Breen is a member of the Advisory Board of New Mountain Capital LLC, a private equity firm. Mr. Breen served as a director of Historical EID from February 2015 to September 2017, a director of DowDuPont from September 2017 to June 2019, and a director of DuPont since June 2019. | | | Skills and Expertise Mr. Breen’s experience leading numerous global companies makes him well suited to lead DuPont during this transformative time and to help enhance the Board’s ability to consider, evaluate and maintain oversight over business strategies and risk management efforts. |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
| RUBY R. CHANDY | Former President of the Industrial Division of Pall Corporation | | Age 58 | Ms. Chandy was the President of the Industrial Division of Pall Corporation, a leading supplier of filtration, separation, and purification technologies, from April 2012 to November 2015. Prior to her time at Pall, Ms. Chandy held leadership positions with several major, global companies including The Dow Chemical Company, Rohm and Haas Corporation, Thermo Fisher Scientific Corporation and Boston Scientific Corporation. Ms. Chandy currently serves on the boards of Ametek Inc. and Flowserve Corporation. She also sits on the Executive Advisory Board of Gryphon Investors, a private equity investment firm and is an executive board member of MIT Sloan. Ms. Chandy joined the Specialty Products Advisory Committee in April 2018 and served as an ex-officio member of the DowDuPont Board from April 2018 to June 2019. Ms. Chandy joined the DuPont Board of Directors in June 2019. | | | Skills and Expertise Ms. Chandy has experience in industrial, medical, life science, specialty materials and microelectronics companies. She is a proven executive with experience in international growth and innovation. Her financial, management, environmental and global expertise brings value to the Board. |
DIRECTOR NOMINEES
| FRANKLIN K. CLYBURN, JR. | Executive Vice President and Chief Commercial Officer, Merck | | Age 55 | Mr. Clyburn has served as the Executive Vice President and Chief Commercial Officer of Merck since 2019. Mr. Clyburn also serves as a member of Merck’s Executive Committee. In his roles at Merck, a publicly traded global pharmaceutical company, Mr. Clyburn is responsible for all operations and P&L across the human health commercial portfolio globally. He previously held various senior leadership positions within the company, most recently serving as President of Global Oncology from 2013 to 2018. He joined Merck in 2008 following eight years as Vice President of various business units at Sanofi-Aventis S. A. (now Sanofi). Earlier in his career, Mr. Clyburn served in a wide range of commercial roles of increasing responsibility at Hoechst Marion Roussel Inc. (now part of Sanofi) from 1994 to 2000. Mr. Clyburn serves as a member of the Executive Leadership Council and is on the board of Trustees of Thomas Edison State University. Mr. Clyburn joined the DuPont Board of Directors in June 2019. | | | Skills and Expertise Mr. Clyburn’s tenure at Merck has provided him with vast experience in research and development operations, the regulatory environment, and marketing and sales. He is globally focused and has great depth in sales and marketing of complex, science-based products. Mr. Clyburn also has extensive management experience. |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
| TERRENCE R. CURTIN | Chief Executive Officer and Board Member, TE Connectivity | | Age 51 | Mr. Curtin assumed the role of CEO at TE Connectivity, a global technology leader in connectivity and sensor solutions, in March 2017. Prior to the CEO role, Mr. Curtin served as TE’s President, where he was responsible for all of the company’s businesses and mergers and acquisitions activities. Mr. Curtin previously led TE’s Industrial Solutions business segment and also served as TE’s Chief Financial Officer. Prior to his time with TE Connectivity, Mr. Curtin spent eleven years at Arthur Andersen LLP in positions of increasing responsibility. Mr. Curtin has served on the board of directors of TE Connectivity since March 2016. He is also a member of the board of directors of the US-China Business Council. Mr. Curtin joined the DuPont Board of Directors in June 2019. | | | Skills and Expertise Mr. Curtin’s experience as the Chief Executive Officer of a global technology company provides him with expertise as a global-minded leader with strong corporate governance skills, M&A experience and technology. He also brings a depth of experience in finance and accounting. |
DIRECTOR NOMINEES
| ALEXANDER M. CUTLER | Former Chairman and Chief Executive Officer, Eaton | | Age 68 | Mr. Cutler served as the Chairman and Chief Executive Officer of Eaton, a global, diversified industrial manufacturer, from 2000 to 2016. Mr. Cutler formerly served as Eaton’s President and Chief Operating Officer, Executive Vice President and Chief Operating Officer-Controls and Executive Vice President-Operations. He serves on the boards of KeyCorp, United Way Services of Greater Cleveland, and the Musical Arts Association. Mr. Cutler served as a director of Historical EID from 2008 until September 2017, he served as a director of DowDuPont from September 2017 to June 2019, and joined the DuPont Board of Directors in June 2019. Skills and Expertise Mr. Cutler has a wealth of global business management, finance, investor relations, marketing and supply chain and logistics experience as former Chairman and Chief Executive Officer of Eaton. As Lead Independent Director and Chair of the Nomination and Governance Committee, he provides the Board with important insights in the areas of corporate governance and government relations based on his past position as Chair of The Business Roundtable Corporate Governance Committee as well as his various board positions. |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
| ELEUTHÈRE I. DU PONT | President, Longwood Foundation | | Age 53 | Mr. du Pont has served as President of the Longwood Foundation, a private foundation principally supporting charitable organizations, since 2008. He previously served as senior vice president, operations and chief financial officer of drugstore.com from 2007 to 2008. Prior to that time, Mr. du Pont served as president and chief financial officer of Wawa, Inc. Mr. du Pont serves on the boards of WSFS Financial Corporation and Burris Logistics. Mr. du Pont served on the Historical EID board of directors from 2006 until the effective date of the Merger Transaction. In September 2017, Mr. du Pont joined the Specialty Products Advisory Committee and served as an ex-officio member of the DowDuPont Board until June 2019. Mr. du Pont joined the DuPont Board of Directors in June 2019. Skills and Expertise From his experiences as president, chief financial officer and corporate director, Mr. du Pont brings to the Board expertise on corporate governance, accounting, finance, human resources, information technology, investment management, investor relations and procurement. He also brings a unique perspective from his roles leading safety, supply chain and operations. |
DIRECTOR NOMINEES
| RAJIV L. GUPTA | Chairman of Aptiv, PLC | | Age 74 | Mr. Gupta has served as Chairman of Aptiv, a global technology company that develops safer, greener and more connected solutions enabling the future of mobility, since March of 2015. Prior to Aptiv, Mr. Gupta spent the majority of his career at Rohm and Haas. He served as its Chairman and Chief Executive Officer from 1999 to 2009. He joined Rohm and Haas in 1971 and held numerous leadership roles throughout his tenure. Mr. Gupta also serves on the board of directors of Arconic Inc. and Avantor Inc., where he is also the Chairman of the board of directors. Mr. Gupta is a Senior Advisor to New Mountain Capital LLC, a private equity firm. Mr. Gupta is a past chairman of the American Chemistry Council and the Society of Chemical Industry, America Section. Mr. Gupta joined the Specialty Products Advisory Committee in June 2018 and served as an ex-officio member of the DowDuPont Board from June 2018 to June 2019. Mr. Gupta joined the DuPont Board of Directors in June 2019. Skills and Expertise Mr. Gupta’s professional experience, including as Chairman and CEO of a global public company and other board positions, enables him to contribute his expertise in corporate leadership, public company governance, strategic analysis, operations, and executive compensation matters. |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
| LUTHER C. KISSAM | Chair, President and Chief Executive Officer, Albemarle Corporation | | Age 55 | Mr. Kissam was elected Chief Executive Officer of Albemarle Corporation, a global specialty chemicals company with leading positions in lithium, bromine and refining catalysts, effective September 2011. He was elected to Albermarle’s board of directors in 2011 and named Chairman of the board in 2016. Mr. Kissam joined Albermarle in 2003 as Vice President, General Counsel and Corporate Secretary and served as Senior Vice President, Manufacturing and Law, and Corporate Secretary from January 2008 until his promotion to President in March 2010. Prior to joining Albermarle, Mr. Kissam served as President, General Counsel and Secretary of Merisant company, a manufacturer of artificial sweeteners. Mr. Kissam is a current director of the Citadel Foundation, serves as a director for the Albemarle Foundation, and serves on the board of the Charlotte Sports Foundation. Mr. Kissam joined the Specialty Products Advisory Committee in April 2018 and served as an ex-officio member of the DowDuPont Board from April 2018 to June 2019. Mr. Kissam joined the DuPont Board of Directors in June 2019. | | | Skills and Expertise As the CEO of a global company, Mr. Kissam has developed extensive knowledge in the areas of leadership, global business, corporate finance, safety, risk oversight, mergers and acquisitions, management and corporate governance. |
DIRECTOR NOMINEES
| FREDERICK M. LOWERY | Senior Vice President and President, Life Sciences Solutions and Laboratory Products, Thermo Fisher Scientific Inc. | | Age 49 | Mr. Lowery has served as Senior Vice President and President, Life Sciences Solutions and Laboratory Products of Thermo Fisher Scientific Inc., a publicly traded provider of products and services for life sciences, healthcare and applied markets since 2017. In his role, Mr. Lowery leads the BioProduction, Laboratory Products and Laboratory Chemicals businesses, as well as several functions within Life Sciences Solutions. Since joining Thermo Fisher in 2005, he has held a number of senior leadership positions across businesses. Prior to his time at Thermo Fisher, Mr. Lowery was with Maytag Corporation from 1999 to 2005 and began his career as an engineer at General Motors Company. Mr. Lowery is a member of the Boston Renaissance Charter Public School Board of Trustees and a member of the Tennessee Tech University Foundation Board. Mr. Lowery joined the DuPont Board of Directors in June 2019. | | | Skills and Expertise With his engineering and science backgrounds, Mr. Lowery brings science and technology perspective combined with senior management capabilities to the Board. Mr. Lowery has a wealth of global experience and has developed operating teams, launched innovative new products and acquired businesses. Additionally, he brings strong manufacturing knowledge and experience. |
DIRECTOR NOMINEES
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DIRECTOR NOMINEES
| RAYMOND J. MILCHOVICH | Former Chairman and Chief Executive Officer, Foster Wheeler AG | | Age 70 | Mr. Milchovich served as Chief Executive Officer from 2001 to 2010 and Non-Executive Chairman of the Board and Consultant from 2010 to November 2011 of Foster Wheeler AG, a company that engineered and constructed facilities for oil and gas, liquid natural gas, refining, chemical, pharmaceutical and power industries. He also served as a director of Nucor Corporation from 2002 to 2007 and 2012 to May 2017 and Lead Director from September 2013 to February 2017. Mr. Milchovich served as a director of Historical Dow from 2015 until the effective date of the Merger Transaction when he became a director of DowDuPont. Mr. Milchovich resigned from the DowDuPont board of directors as of June 30, 2018, at which time he joined the Specialty Products Advisory Committee and then served as an ex-officio member of the DowDuPont board of directors. Mr. Milchovich joined the DuPont Board of Directors in June 2019. | | | Skills and Expertise Mr. Milchovich brings global business and leadership experience as former Lead Director of Nucor Corporation and former Chief Executive Officer of Foster Wheeler AG. He also possesses finance and accounting expertise including experience with, and direct involvement in and supervision of, the preparation of financial statements and risk management. His additional public company board experience provides additional corporate governance and compensation experience and financial expertise. |
DIRECTOR NOMINEES
| STEVEN M. STERIN | Former Executive Vice President and Chief Financial Officer, Andeavor | | Age 48 | Mr. Sterin served as an executive with Andeavor from 2014 until the merger of Andeavor with Marathon Petroleum Company in October 2018. He also served as President, Chief Financial Officer and a member of the board of directors for Andeavor Logistics GP, LLC from 2014 to 2018. From 2007 to 2014, Mr. Sterin was the Senior Vice President and Chief Financial Officer of Celanese Corporation, a global technology and specialty material company. He previously served as Corporate Controller and Principal Accounting Officer of Celanese. Mr. Sterin also spent six years with Reichhold, Inc., a global chemical company, in a variety of financial positions, including director of tax and treasury in the Netherlands, Global Treasurer and Vice President of Finance. Mr. Sterin’s career started with Price Waterhouse. Mr. Sterin currently serves as a Senior External Advisor to McKinsey & Company. He has served on the board of directors of Kosmos Energy since July 2019. Mr. Sterin joined the Specialty Products Advisory Committee in December 2017 and served as an ex-officio member of the DowDuPont Board until June 2019. Mr. Sterin joined the DuPont Board of Directors in June 2019. | | | Skills and Expertise Mr. Sterin has over 10 years of large public company CFO experience and has led financial functions including investor relations, business planning and analysis, capital markets and treasury, accounting and controlling, customer credit, internal audit, enterprise risk management, and tax. Mr. Sterin also has experience with information technology and cyber security services. |
DIRECTOR NOMINEES
| ✓ | AGENDA ITEM 1: ELECTION OF DIRECTORS The Board of Directors recommends that you vote FOR all 12 director nominees. |
DIRECTOR NOMINEES
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DIRECTOR COMPENSATION
DIRECTOR COMPENSATION DuPont compares its non-employee director compensation programs, designs and compensation elements to the same peer group used for executive compensation, as described in the “Peer Group and Benchmarking” section of the Compensation Discussion and Analysis. DuPont targets the median compensation of the peer group for all director compensation elements. The following tables provide information concerning the compensation provided to DuPont’s non-employee directors in 2019. For a description of compensation paid to Mr. Breen as Executive Chair, see the Compensation Discussion & Analysis and Summary Compensation Table in this Proxy Statement.
Director Compensation for 2019
Director Compensation for 2019
Director Compensation for 2019
| Name | Fees Earned or Paid in Cash ($)(a) | Stock Awards ($)(b) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(c) | All Other Compensation ($)(d) | Total ($) | | Lamberto Andreotti | 38,333 | - | - | 125 | 38,458 | | Ajay Banga | 28,750 | - | - | - | 28,750 | | Jacqueline Barton | 33,750 | - | - | - | 33,750 | | James A. Bell | 37,500 | - | - | - | 37,500 | | Amy G. Brady | 38,333 | 99,159 | - | 75 | 137,568 | | Robert A. Brown | 38,333 | - | - | 125 | 38,458 | | Ruby R. Chandy | 105,833 | 170,464 | - | 300 | 276,597 | | Franklin K. Clyburn, Jr. | 57,500 | 170,464 | - | 175 | 228,139 | | Terrence R. Curtin | 57,500 | 170,464 | - | 175 | 228,139 | | Alexander M. Cutler | 154,167 | 170,464 | - | 20,784 | 345,415 | | Richard Davis | 28,750 | - | - | - | 28,750 | | Eleuthère I. du Pont | 95,833 | 170,464 | - | 13,007 | 279,304 | | Jeff M. Fettig | 108,750 | - | - | - | 108,750 | | Rajiv L. Gupta | 108,333 | 170,464 | - | 1,157 | 279,954 | | Marillyn A. Hewson | 28,750 | - | - | 125 | 28,875 | | Lois D. Juliber | 46,667 | - | - | 125 | 46,792 | | Luther C. Kissam IV | 95,833 | 170,464 | - | 300 | 266,597 | | Frederick M. Lowery | 57,500 | 170,464 | - | 175 | 228,139 | | Raymond J. Milchovich | 95,833 | 170,464 | - | 300 | 266,597 | | Paul Polman | 28,750 | - | - | - | 28,750 | | James M. Ringler | 28,750 | - | - | - | 28,750 | | Ruth G. Shaw | 35,000 | - | - | - | 35,000 | | Steven M. Sterin | 113,333 | 170,464 | - | 300 | 284,097 | | Lee M. Thomas | 38,333 | - | - | 125 | 38,458 | | Patrick J. Ward | 50,000 | - | - | 125 | 50,125 |
Director Compensation for 2019
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Director Compensation for 2019
DIRECTOR COMPENSATION (continued)
Director Compensation for 2019
| For Messrs. Banga, Bell, Davis, Fettig, Polman, and Ringler and Mses. Barton and Shaw, who no longer serve on the Board, these figures represent fees paid prior to the Dow Spin-off on April 1, 2019. For Ms. Hewson, who no longer serves on the Board, these figures represent fees paid prior to her retirement on March 31, 2019. For Messrs. Andreotti, Brown, Thomas and Ward and Ms. Juliber, who no longer serve on the Board, these figures represent fees paid prior to the Corteva Spin-off on May 31, 2019. For Messrs. Clyburn, Curtin, and Lowery, these figures represent fees paid for the period from June 1, 2019 through December 31, 2019. For Ms. Brady, these figures represent fees paid for the period from October 9, 2019 through December 31, 2019. In addition to the annual retainer, the amount in this column includes lead independent director and committee chair fees.(a) |
Director Compensation for 2019
| The full grant date fair value of Restricted Stock Units granted on June 3, 2019 is based on $76.10 per share with a total value of $170,464 in accordance with the same standard applied for financial accounting purposes, Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. For Ms. Brady, the full grant date fair value of Restricted Stock Units granted on October 9, 2019 is based on $64.81 per share with a total value of $99,159 in accordance with the same standard applied for financial accounting purposes, FASB ASC Topic 718.(b) |
Director Compensation for 2019
| Historical EID maintained a discontinued Retirement Income Plan for Non-Employee Directors. This plan was assumed by Corteva at the time of the Corteva Spin-off and no new pension plan was implemented at DuPont. No above-market earnings were accrued under the Non-Qualified Deferred Compensation plan maintained for non-employee directors.(c) |
Director Compensation for 2019
| Includes Historical EID and DuPont-paid accidental death and disability insurance premiums, along with Imputed income for Mr. Gupta’s spouse’s travel, and accruals made in 2019 for non-employee directors under Historical EID and DuPont’s discontinued directors’ charitable gift plans.(d) |
Defined Terms
Defined Terms CD&A – Compensation Discussion & Analysis CEO – Chief Executive Officer EPS – Earnings Per Share GAAP – Generally Accepted Accounting Principles IRC – U.S. Internal Revenue Code, as amended LTI – Long-Term Incentive NEO – Named Executive Officer PSU – Performance Share Unit RSU – Restricted Stock Unit SEC – U.S. Securities & Exchange Commission STIP – Short-Term Incentive Program Adjusted Corporate Net Income – Net (loss) income from continuing operations available for DuPont common stockholders excluding after-tax significant items, after-tax impact of amortization expense associated with intangibles acquired as part of the Merger Transaction and the after-tax impact of non-operating pension/other post-employment benefits/(“OPEB”)/charges. The Business Units that make up the Non-Core segment will be excluded. Adjusted Operating EBITDA – Earnings (“income from continuing operations before income taxes”) before interest, depreciation, amortization, non-operating pension / OPEB benefits / charges and foreign exchange gains (losses), adjusted to exclude significant items and earnings associated with the Non-Core business. Adjusted EPS – Earnings per common share from continuing operations-diluted, excluding the after-tax impact of significant items, after-tax impact of amortization expense associated with intangibles acquired as part of the Merger Transaction and the after-tax impact of non-operating pension/ OPEB benefits/charges. Pro Forma Adjusted EPS – Earnings per common share from continuing operations – diluted excluding the after-tax impact of significant items, the after-tax impact of amortization expense associated with intangibles acquired as part of the Merger Transaction, the after-tax impact of non-operating pension / OPEB benefits / charges and the after-tax impact of costs historically allocated to the materials science and agriculture businesses that did not meet the criteria to be recorded as discontinued operations. Adjusted ROIC – Adjusted Net Operating Profit After Tax (“NOPAT”), defined as income from continuing operations after taxes, excluding after-tax significant items, after-tax amortization expense and after-tax interest expense / (debt + equity – goodwill – intangibles). The Business Units that make up the Non-Core segment will be excluded. Net Trade Working Capital: Accounts and Notes Receivable – Trade plus Inventory less Accounts Payable – Trade. Operating EBITDA – Earnings (“Income from continuing operations before income taxes”) before Interest, Depreciation, Amortization, non-operating pension / OPEB benefits / charges, and foreign exchange gains / losses, adjusted to exclude significant items. Pro forma Operating EBITDA – Earnings (i.e. pro forma income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, non-operating pension / OPEB benefits / charges, and foreign exchange gains / losses, excluding the impact of costs historically allocated to the materials science and agriculture businesses that did not meet the criteria to be recorded as discontinued operations and adjusted to exclude significant items. Organic Revenue – Net sales excluding the impacts of currency and portfolio. Pro Forma – Prepared in accordance with Article 11 of Regulation S-X. See Appendix A for further information. Total Shareholder Return – Total return on a company’s stock to an investor defined as the adjusted close price at the end of the performance period divided by the adjusted close price at the beginning of the performance period. Adjusted close price incorporates re-invested dividends, stock splits and new offerings. Beginning close price is based on average closing price over 20 trading days immediately prior to the first day of the performance period. Ending close price is based on average closing price over the last 20 trading days of the performance period. See Appendix A for further information, including a reconciliation of non-GAAP measures to the most directly comparable U.S. GAAP financial measures.
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY Effective August 31, 2017, The Dow Chemical Company and its consolidated subsidiaries (“Historical Dow”) and E. I. du Pont de Nemours and Company and its consolidated subsidiaries (“Historical EID”) completed the previously announced merger of equals transaction contemplated by the Agreement and Plan of Merger dated as of December 11, 2015, as amended on March 31, 2017 (the “Merger Transaction”). The Merger Transaction resulted in each of Historical Dow and Historical DuPont surviving as subsidiaries of DowDuPont Inc. (“DowDuPont”). In 2019, DowDuPont separated into three independent, publicly traded companies: Corteva Inc. (“Corteva”), Dow Inc. (“Dow”), and DuPont de Nemours, Inc. (formerly known as DowDuPont Inc., “DuPont” or the “Company”). The separation of Dow was completed on April 1, 2019 (the “Dow Spin-off”) and the separation of Corteva was completed on June 1, 2019 (the “Corteva Spin-off”). On December 15, 2019, DuPont entered into a definitive agreement for the merger of International Flavors & Fragrances Inc. (“IFF”) and DuPont’s Nutrition & Biosciences (“N&B”) business in a Reverse Morris Trust transaction (the “Proposed N&B Transaction”). The Proposed N&B Transaction is expected to close by the end of the first quarter of 2021, subject to approval by IFF stockholders and other customary closing conditions, including regulatory approvals and receipt by DuPont of an opinion of tax counsel. In anticipation of the completion of the separation of DowDuPont into three separate publicly traded companies during 2019, the DowDuPont Board of Directors decided not to develop separate executive compensation programs at the DowDuPont level. Rather, the executive officers of DowDuPont continued to be employees of, and participants in, the compensation and benefit programs of Historical Dow and Historical EID, as applicable. Additionally, in light of the complexities associated with introducing long-term performance-based awards for a period in which the separations would occur, the DowDuPont Board of Directors determined that long-term incentive plan awards for 2019 would be made in the form of RSUs. The decision was also made that payouts under the 2019 STIP would be tied solely to the achievement of DuPont pro forma Operating EBITDA to focus executive officers on promoting the delivery of earnings in a year of significant transition. In anticipation and following completion of the separations in 2019, the DuPont People and Compensation Committee (the “Compensation Committee”) reviewed compensation for the Company’s executive officers to ensure competitiveness with market, focus on performance and alignment with stockholder interests. As a result, the Compensation Committee made the following changes for 2019:
EXECUTIVE SUMMARY
| • | Adjustments were made to outstanding equity awards to reflect the conversion into awards denominated in DuPont, Corteva, or Dow common stock. |
EXECUTIVE SUMMARY
| • | The Compensation Committee strongly believes that executive pay should be performance based and aligned with stockholder interests. In August 2019, certain NEOs were granted Transformation Awards in the form of PSUs and Stock Options to align the new executive team to the achievement of key financial performance measures of Adjusted ROIC and Adjusted EBITDA, and to motivate for stock price improvement. |
EXECUTIVE SUMMARY
| • | The 2020 STIP will include a portfolio of metrics which the Company believes are critical indicators of performance: Adjusted EPS, Organic Revenue, Operating EBITDA, and Net Trade Working Capital. Additionally, the STIP opportunity for Business Unit Presidents will be aligned more closely to the results of their individual Business Units. |
EXECUTIVE SUMMARY
| • | The 2020 Long-Term Incentive program for executives will be delivered through PSUs (weighted at 60%), Stock Options (weighted at 20%) and RSUs (weighted at 20%). The 2020 PSUs includes Adjusted ROIC |
EXECUTIVE SUMMARY
| and Adjusted Corporate Net Income as equally weighted performance measures. The 2020 PSU design also incorporates relative Total Shareholder Return as a modifier of overall performance results. |
Program Structure and Alignment with Core Principles
| • | Reinforce business strategies and drive long-term sustained stockholder value. |
Executive Compensation Governance Practices
| ✓ Active stockholder engagement ✓ Strong links between executive compensation outcomes and company financial and market performance ✓ Each component of target pay benchmarked with respect to the peer group or the general market, as applicable ✓ Carefully structured peer group with annual Compensation Committee review ✓ Significant focus on performance-based pay ✓ Stock ownership requirements of six times base salary for the CEO and Executive Chairman and three times base salary for the other NEOs ✓ 100% independent Compensation Committee ✓ Clawback policy covering both cash and equity ✓ Use of executive compensation statements (“tally sheets”) ✓ Independent compensation consultant reporting to the Compensation Committee | ✗ No single-trigger change in control agreements ✗ No option repricing, reloads, exchanges or options granted below market value without stockholder approval ✗ No excise tax gross ups ✗ No plans that encourage excess risk taking ✗ No hedging or pledging of Company’s securities ✗ No liberal share counting ✗ No excess dilution through careful monitoring of burn rate and overhang ✗ No minimum payouts under the Long-Term Incentive Plan |
COMPONENTS OF EXECUTIVE COMPENSATION AND BENEFITS
| Component | Purpose | | Base Salary | Provides a regular source of income for NEOs and acts as a foundation for other pay components (e.g., annual incentive targets for NEOs are expressed as a percentage of base salary). | | Annual Incentive | Rewards employees for achieving critical financial and operational goals. | | Long-Term Incentive | Aligns the interests of executives with stockholders by linking pay and performance with the goal of accelerating growth, profitability and stockholder value. Aids the Company in retaining its NEOs and other key employees. | | Benefits and Perquisites | Executives participate in the same benefit programs that are offered to other salaried employees. | | | Limited perquisites are provided to executives to facilitate strong performance on the job and enhanced productivity. |
2019 NEO Targeted Total Direct Compensation Summary
| Name | 2019 Base Salary ($) | 2019 Target Annual Incentive ($) | 2019 Target Long-Term Incentive ($) | Targeted Total Direct Compensation ($) | | Edward D. Breen | 1,000,000 | 3,185,820(a) | 9,000,000(b) | 13,185,820 | | C. Marc Doyle | 1,200,000 | 1,800,000 | 8,000,000(b) | 11,000,000 | | Jeanmarie F. Desmond | 700,000 | 700,000 | 2,500,000(b) | 3,900,000 | | Matthias Heinzel(c) | 816,104 | 816,104 | 1,400,000(b) | 3,032,208 | | Rose Lee | 625,000 | 625,000 | 1,250,000(b) | 2,500,000 | | Raj Ratnakar | 475,000 | 332,500 | 700,000 | 1,507,500 |
2019 NEO Targeted Total Direct Compensation Summary
| Mr. Breen’s employment agreement provides that the 2019 STIP target dollar amount be maintained at the value it was when he was CEO ($3,185,820).(a) |
2019 NEO Targeted Total Direct Compensation Summary
| Mr. Heinzel is a German employee and his salary and bonus are paid in Euros. U.S. Dollar amounts in this Proxy Statement with respect to Mr. Heinzel have been converted from Euros at a rate of 1.11 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each day in December 2019.(c) |
Base Salary
Base Salary Base salary is a fixed portion of compensation based primarily on an individual’s skills, job responsibilities and experience, as well as more subjective factors such as the assessment by the Compensation Committee of individual NEO performance. Base salaries for executives are benchmarked against similar jobs at other companies, and as appropriate versus the respective peer group and general industry information. Base salaries for the NEOs as of December 31, 2019 and December 31, 2018, respectively, are shown in the table below. The decrease for Mr. Breen represents his change in role from CEO to Executive Chairman.
Annual Incentive Compensation
Annual Incentive Compensation Annual incentives are designed to reward executives for the achievement of annual financial and performance goals and are an important component of the Company’s overall compensation program. The Compensation Committee reviews the target annual cash incentive award opportunities (which are expressed as a percentage of annual base salary) for executive officers each year as part of its annual executive compensation review.
Annual Incentive Compensation
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Annual Incentive Compensation
Annual incentive opportunity for the NEOs as of December 31, 2019 and December 31, 2018, respectively, are shown in the table below.
Annual Incentive Compensation
| Name | 2018 Target STIP ($) | 2019 Target STIP ($) | Percent/ Change in Target | | Edward D. Breen(a) | 3,185,820 | 3,185,820 | 0% | | C. Marc Doyle | 800,000 | 1,800,000 | 125% | | Jeanmarie F. Desmond | 384,000 | 700,000 | 82% | | Matthias Heinzel | 512,820 | 816,104 | 59% | | Rose Lee | 357,000 | 625,000 | 75% | | Raj Ratnakar | — | 332,500 | — | | Howard I. Ungerleider(b) | 1,332,313 | — | — |
Annual Incentive Compensation
| Mr. Breen’s employment agreement provides that 2019 STIP target dollar amount be maintained at the value it was when he was CEO ($3,185,820).(a) |
Annual Incentive Compensation
| Mr. Ungerleider left the Company in connection with the Dow Spin-off on April 1, 2019 and became the President and CFO of Dow. DuPont did not make any determinations with respect to Mr. Ungerleider’s 2019 annual incentive target prior to his departure.(b) |
Annual Incentive Compensation
Payouts under the 2019 STIP were tied solely to the achievement of pro forma Operating EBITDA for the Company to focus executive officers on promoting the delivery of earnings in a year of significant transition. Additionally, the Committee can modify an executive’s STIP award using an individual performance factor ranging from 0% to 150% to reflect personal performance and contributions to the Company’s success. All awards are capped at a maximum payout of 200%. The following targets and payout calculations apply to all NEOs with the exception of Mr. Ungerleider. Mr. Ungerleider’s short-term incentive target for 2019 was set by the Dow Compensation Committee after the Dow Spin-off on April 1, 2019 and was aligned to performance of Dow. For 2019, the Compensation Committee set threshold, target and maximum performance at the following levels:
Annual Incentive Compensation
| Metric | Threshold ($mm) | Target ($mm) | Maximum ($mm) | | Pro Forma Operating EBITDA* | 5,035 | 5,923 | 6,811 |
Annual Incentive Compensation
* See Appendix A for a reconciliation of non-GAAP measures to the most directly comparable U.S. GAAP financial measures. Performance threshold and maximum were set at 85% and 115% of target, respectively. The Compensation Committee believed the target level of performance was a challenging goal for 2019. Based on performance, payouts can range as follows: 0% for below threshold performance, 50% for performance at threshold, and 200% for maximum performance. Payouts for performance between, respectively, threshold and target performance and target and maximum performance will be interpolated on a linear basis. As such, participants have 3.3 percentage points in payout deducted for each one percent change in performance below target, and receive 6.6 percentage points in payout for each percent change above target. Performance threshold was set at 85% for all metrics and 115% for maximum. The table below highlights the 2019 results relative to the business performance:
Annual Incentive Compensation
| Metric | Target ($mm) (100%) | 2019 Actual ($mm) | Payout Percentage | | Pro Forma Operating EBITDA* | 5,923 | 5,640 | 84.4% |
Annual Incentive Compensation
| 38 | |
Annual Incentive Compensation
The Compensation Committee exercised discretion to exclude income, related directly and indirectly to the settlement of certain contract obligations, attributable to the Hemlock Semi-Conductor (“HSC”) joint venture and the Company’s trichlorosilane business (“TCS”) from the target and actual results due to non-operating performance. The table below highlights the adjusted 2019 results and the payout percentage for each NEO:
Annual Incentive Compensation
| Metric | Adjusted Target ($mm) (100%) | Adjusted 2019 Actual ($mm) | Adjusted Payout Percentage | | Pro Forma Operating EBITDA* | 5,585 | 5,268 | 81.1% |
Annual Incentive Compensation
* See Appendix A for a reconciliation of non-GAAP measures to the most directly comparable U.S. GAAP financial measures. The 2019 STIP payment for all NEOs, excluding Mr. Ungerleider, was based solely on the financial payout result of 81.1%. The Compensation Committee did not use the individual performance factor to modify payout results. Mr. Ungerleider left the Company in connection with the Dow Spin-off on April 1, 2019 and became the President and CFO of Dow. DuPont did not make any determinations with respect to Mr. Ungerleider’s 2019 annual incentive target prior to his departure. Mr. Ungerleider’s short-term incentive target for 2019 was set by the Dow Compensation Committee after the Dow Spin-off and was aligned to performance of Dow.
Annual Incentive Compensation
| Name | Year End Base Salary ($) | STIP Target Percent | STIP Target Amount ($) | Payout Percentage | Total STIP Payout Amount ($) | | | Edward D. Breen | 1,000,000 | 100% | 3,185,820(a) | | 81.1% | 2,583,700 | | C. Marc Doyle | 1,200,000 | 150% | 1,800,000 | | 81.1% | 1,459,800 | | Jeanmarie F. Desmond | 700,000 | 100% | 700,000 | | 81.1% | 567,700 | | Matthias Heinzel | 816,104 | 100% | 816,104 | | 81.1% | 661,860 | | Rose Lee | 625,000 | 100% | 625,000 | | 81.1% | 506,875 | | Raj Ratnakar | 475,000 | 70% | 332,500(b) | | 81.1% | 269,658 |
Annual Incentive Compensation
| Mr. Breen’s employment agreement provides that 2019 STIP target dollar amount be maintained at the value it was when he was CEO ($3,185,820).(a) |
Annual Incentive Compensation
| Mr. Ratnakar’s offer letter provides that he receive a non-prorated STIP payout for 2019.(b) |
Long-Term Incentive Compensation
Long-Term Incentive Compensation The Compensation Committee views long-term compensation as a critical executive compensation program element that aligns executives’ interests with those of stockholders. Long-term incentives represent a significant portion of an executives’ overall compensation package. The Compensation Committee reviews the target LTI award opportunities for executive officers each year as part of its annual executive compensation review.
Long-Term Incentive Compensation
| | 39 |
Long-Term Incentive Compensation
The table below details the LTI awards granted to NEOs in 2019:
Long-Term Incentive Compensation
| Named Executive Officer | 2019 Annual Awards Grant Date Value ($)(a) | Transformation Awards Grant Date Value ($)(a)(b) | Special Awards Grant Date Value ($)(a) | Total Awards Grant Date Value ($)(a) | | Edward D. Breen | 12,700,000 | 3,000,000 | — | 15,700,000 | | C. Marc Doyle | 5,500,000(c) | 3,000,000 | — | 8,500,000 | | Jeanmarie Desmond | 2,000,000 | 2,000,000 | — | 4,000,000 | | Matthias Heinzel | 1,000,000 | 1,500,000 | 3,500,000(d) | 6,000,000 | | Rose Lee | 1,000,000 | 1,500,000 | — | 2,500,000 | | Raj Ratnakar | — | 1,500,000 | 3,800,000(e) | 5,300,000 | | Howard I. Ungerleider(f) | — | — | — | — |
Long-Term Incentive Compensation
| Actual values shown in the Grants of Plan Based Awards table will vary slightly from the amount shown above as DuPont only issues awards in whole shares.(a) |
Long-Term Incentive Compensation
| Messrs. Breen and Doyle received 100% of their Transformation Award in PSUs. Mr. Heinzel and Mses. Desmond and Lee received 60% of their Transformation Award in PSUs and 40% of their value in Stock Options.(b) |
Long-Term Incentive Compensation
| 2019 annual grant value for Mr. Doyle was increased in line with the market for his role.(c) |
Long-Term Incentive Compensation
| Mr. Heinzel’s special one-time RSU grant is described in further detail in the “M. Heinzel Special Compensation” section.(d) |
Long-Term Incentive Compensation
| Mr. Ratnakar received a new hire grant.(e) |
Long-Term Incentive Compensation
| Mr. Ungerleider did not receive any grants in 2019 prior to the Dow Spin-off on April 1, 2019, at which time he left the Company and became the President and CFO of Dow.(f) |
Long-Term Incentive Compensation
Considering the timing of DowDuPont’s separation into three independent, publicly-traded companies, the Compensation Committee determined that PSUs were not an appropriate form of award for the annual grant, particularly given the three-year measurement convention utilized previously at Historical EID. As a result, in February 2019, the Compensation Committee determined that the 2019 annual grant for all DuPont executive officers would be made in the form of RSUs. After the separation of Dow and Corteva, DuPont granted Transformation Awards in the form of 100% PSUs for the Executive Chairman and CEO and a split of 60% PSUs and 40% Stock Options for other NEOs and key leaders vital to the transformation of DuPont. The Transformation Awards align the new executive team to the achievement of key financial performance measures, Adjusted ROIC and Adjusted Operating EBITDA, and incentivize stock price appreciation.
Transformation PSUs
Transformation PSUs Transformation PSUs are earned and vest based on the achievement of Adjusted ROIC and Adjusted Operating EBITDA goals. Each measure is weighted equally at 50%.
Transformation PSUs
| | | Performance and Payout Range | | | | Metric | Weighting | Threshold 50% Payout | Target 100% Payout | Maximum 200% Payout | | Adjusted ROIC Growth(a) | 50% | 50 Basis Points | 250 Basis Points | 500 Basis Points | | Adjusted Operating EBITDA Growth(b) | 50% | 3% | 6% | 9% |
Transformation PSUs
| Threshold, Target, and Maximum amounts reflected above are the basis point increases in Adjusted ROIC Growth measured as a point-to-point comparison between July 1, 2019 and December 31, 2021 to achieve the corresponding payout.(a) |
Transformation PSUs
| Adjusted Operating EBITDA Growth is measured on the basis of growth over the prior period with three discrete periods: (1) Adjusted and re-stated 2nd half 2018 versus 2nd half 2019 (20%), (2) Year-end 2019 versus Year-end 2020 (40%), (3) Year-end 2020 versus Year-end 2021 (40%). The resulting two-and-a-half-year performance percentage is the weighted average percent growth for the three discreet periods.(b) |
Transformation Stock Options
Transformation Stock Options Stock Options closely align to stockholder interests as they only have value if the stock price increases after the grant date. The exercise price for the Transformation Stock Options equals the closing price on the grant date. Transformation Stock Options cliff vest on December 31, 2021 and expire after ten years.
Transformation Stock Options
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DowDuPont Synergy and Speed to Spin Incentives
| Metric | Weighting | Business Performance and Payout Ranges (a)(b) | | | Actual | | Payout | | | | Threshold | Target | Maximum | | | | | | | (Synergy: 50% Payout Spin: 25% Payout) | (100% Payout) | (200% Payout) | | | | | Synergy Capture | 66% | $2.94 B | $3.0 B | $3.45 B | >$ | 3.45 B | 200% | | Dow Spin-off | 17% | 22 months | 19 months | 16 months | | 19 months | 100% | | Corteva Spin-off | 17% | 24 months | 21 months | 18 months | | 21 months | 100% | | | | | | | | Total | 166% | | SpecCo Synergy Capture | | $784MM | $800MM | $920MM | >$ | 920MM | 200% |
DowDuPont Synergy and Speed to Spin Incentives
| Payouts were interpolated on a linear basis for performance between, respectively, threshold and target performance and target and maximum performance.(a) |
Treatment of Equity Awards Outstanding at the Time of the Dow and Corteva Spin-offs
Treatment of Equity Awards Outstanding at the Time of the Dow and Corteva Spin-offs
Employer Method
Employer Method DowDuPont stock options and restricted stock units, other than those granted to employees on February 15, 2018 and awards granted to certain non-Dow executives, were generally adjusted using the “employer method” as follows:
Employer Method
| • | At the time of the Dow Spin-off, all DowDuPont equity awards held by individuals who remained with DowDuPont remained awards of DowDuPont, with an appropriate adjustment to account for the spin-off of Dow. |
Employer Method
| • | At the time of the Corteva Spin-off, all DowDuPont equity awards held by employees who remained with DuPont remained awards of DuPont (except that awards held by certain employees with no defined future role were converted into awards covering both Corteva and DuPont), with appropriate adjustments to account for the spin-off of Corteva and the Reverse Stock Split (as defined below). |
Shareholder Method
Shareholder Method DowDuPont (i) stock options and restricted stock units granted on February 15, 2018, (ii) outstanding performance stock unit awards and restricted stock awards and (iii) awards held by non-employee directors of DowDuPont were generally adjusted using the “shareholder method” as follows:
Shareholder Method
| • | At the time of the Dow Spin-off, all such equity awards were converted into awards of each of Dow and DowDuPont and adjusted based on the Dow Spin-off ratio and the relative closing share prices of Dow and DowDuPont common stock upon the spin-off. |
THE COMPENSATION PROCESS
| • | Competitive analysis: Median levels of compensation for similar jobs and job levels in the market, taking into account revenue relative to the peer group. |
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant The Compensation Committee has retained Frederic W. Cook & Co., Inc. (“F.W. Cook”) as the independent compensation consultant on executive and director compensation matters. F.W. Cook reported directly to the Compensation Committee and did not provide services to DuPont other than those provided to the Compensation Committee. F.W. Cook’s responsibilities included:
Role of the Independent Compensation Consultant
| • | Advising the Compensation Committee on trends and issues in executive compensation. |
Role of the Independent Compensation Consultant
| • | Reviewing and advising on the group of companies in the peer group. |
Role of the Independent Compensation Consultant
| • | Consulting on the competitiveness of the compensation structure and levels of DuPont’s executive officers and non-employee directors. |
Role of the Independent Compensation Consultant
| | 43 |
Role of the Independent Compensation Consultant
| • | Providing advice and recommendations related to the compensation and design of DuPont’s compensation programs. |
Role of the Independent Compensation Consultant
| • | Reviewing and advising on materials provided to the Compensation Committee for discussion and approval. |
Role of the Independent Compensation Consultant
| • | Participating in Compensation Committee meetings as requested and communicating with the Chair of the Compensation Committee between meetings. |
Role of the Independent Compensation Consultant
F.W. Cook has multiple safeguards and procedures in place to maintain the independence of the consultants in their executive compensation consulting practice, and the Compensation Committee has determined that the compensation consultant’s work has not raised any conflicts of interest. The Compensation Committee has considered factors relevant to F.W. Cook’s independence from management under SEC rules and has determined that F.W. Cook is independent from management.
Peer Group and Benchmarking
Peer Group and Benchmarking The Compensation Committee, with the support of the management team and F.W. Cook, created a DuPont peer group that has been utilized throughout the year, including when making 2019 compensation decisions. The criteria reviewed when setting the peer group, that became the basis of the DuPont peer group, were as follows:
Peer Group and Benchmarking
| • | Revenues (1/3 to 3 times DuPont FY 2018 revenues) |
Peer Group and Benchmarking
| • | Market Capitalization (1/3 to 3 times DuPont market capitalization as of 6/10/2019) |
Peer Group and Benchmarking
| • | Industry (Industrials, Specialty Chemicals, Agriculture, Construction and Materials) |
Peer Group and Benchmarking
| • | Global presence |
Peer Group and Benchmarking
| • | Capital Intensity |
Peer Group and Benchmarking
| • | Profit Margin |
Peer Group and Benchmarking
| • | Competitor for talent |
Peer Group and Benchmarking
Following the Dow and Corteva Spin-offs, the Committee re-evaluated the peer group and concluded that several peers no longer fit the criteria for inclusion; these include AbbVie Inc., Archer-Daniels-Midland Company, Bunge Limited, Gilead Sciences, Inc. and LyondellBasell Industries N.V. Additionally, the Committee added Lockheed Martin Corporation, Medtronic plc, The Sherwin-Williams Corporation and United Technologies Corporation. The following companies comprise the peer group that was used for market comparisons, benchmarking, and setting executive compensation:
Peer Group and Benchmarking
| 3M Company | Ecolab Inc. | Johnson Controls International plc | | Air Products and Chemicals, Inc. | Emerson Electric Co. | Lockheed Martin Corporation | | Caterpillar, Inc. | Honeywell International Inc. | Medtronic plc | | Celanese Corporation | Illinois Tool Works Inc. | PPG Industries, Inc. | | Corning Incorporated | Ingredion Incorporated | The Sherwin-Williams Company | | Danaher Corporation | International Paper Company | United Technologies Corporation |
Peer Group and Benchmarking
| 44 | |
Compensation and Risk Management
material adverse effect on the Company. In conducting the review in 2019, the Company completed an inventory of its incentive compensation plans and policies. The evaluation covered a wide range of practices and policies including: the balanced mix between pay elements, the balanced mix between short-term and long-term programs, caps on incentive payouts, governance controls in place to establish, review and approve goals, use of multiple performance measures, discretion on individual awards, use of stock ownership guidelines, provisions in severance/change in control policies, use of a clawback policy, and Compensation Committee oversight of compensation programs.
Summary Compensation Table
Summary Compensation Table The following table summarizes the compensation of the NEOs for the fiscal year ended December 31, 2019.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(a) | Option Awards ($)(b) | Non Equity Incentive Plan Compensation ($)(c) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($)(d) | All Other Compensation ($)(e)(o) | Total ($) | | Edward D. Breen(f) Executive Chairman | 2019 | 1,387,833 | — | 15,700,061 | — | 2,583,700 | — | 601,156 | 20,272,750 | | | 2018 | 1,930,800 | — | — | 12,700,004 | 3,300,510 | — | 743,988 | 18,675,301 | | | 2017 | 643,600(g) | — | 10,000,044 | 1,600,006 | 1,472,686 | — | 75,666 | 13,792,002 | | C. Marc Doyle(h) Former Chief Executive Officer | 2019 | 1,116,667 | — | 8,500,070 | — | 1,459,800 | 415,677 | 168,420 | 11,660,634 | | | 2018 | 787,500 | — | — | 3,500,005 | 868,000 | 713,290 | 168,750 | 6,037,545 | | Jeanmarie Desmond(i) Former Chief Financial Officer | 2019 | 680,000 | — | 3,200,073 | 800,005 | 1,729,700 | 164,939 | 87,880 | 6,662,597 | | Matthias Heinzel(j) President, Nutrition and Biosciences | 2019 | 727,632 | 62,777(k) | 5,400,004 | 600,001 | 2,008,798 | 286,864 | 48,121 | 9,134,197 | | Rose Lee President, Safety and Construction | 2019 | 586,667 | — | 1,900,014 | 600,001 | 1,906,875 | — | 86,206 | 5,079,763 | | Raj Ratnakar(l) Senior Vice President, Chief Strategy Officer | 2019 | 316,667 | 200,000(m) | 2,800,013 | 2,500,008 | 269,658 | — | 27,225 | 6,113,570 | | Howard l. Ungerleider(n) Former Chief Financial Officer | 2019 | 253,225 | — | — | — | — | — | 54,523 | 307,747 | | | 2018 | 1,103,144 | — | 5,000,007 | 4,150,005 | 1,310,996 | 330,919 | 99,625 | 11,994,697 | | | 2017 | 1,062,377 | — | 6,964,140 | 1,245,017 | 1,675,641 | — | 18,842,394 | 29,789,568 |
Summary Compensation Table
Totals in the above table might not equal the summation of the columns due to rounding amounts to the nearest dollar.
Summary Compensation Table
| Amounts represent the aggregate grant date fair value of awards in the year of grant in accordance with the same standard applied for financial accounting purposes, FASB ASC Topic 718. Value of the Performance Share program, shown at Target, if valued assuming a maximum payout, the value of the awards would be: Mr. Breen, $18,700,110; Mr. Doyle, $11,500,119; Ms. Desmond, $4,400,119; Mr. Heinzel, $6,300,005; Ms. Lee, $2,800,015 and Mr. Ratnakar, $3,700,014. A discussion of the assumptions used in calculating these values can be found in Note 21 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.(a) |
Summary Compensation Table
| DuPont’s valuation for financial accounting purposes uses the widely accepted Black-Scholes option valuation model. Options awarded on May 1, 2019 had a grant date fair value of $7.29 per option and an exercise price of $37.31, and options awarded on August 5, 2019 had a grant date fair value of $11.85 per option and an exercise price of $66.06. A discussion of the assumptions used in calculating these values can be found in Note 21 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.(b) |
Summary Compensation Table
| Individual Annual Incentive Compensation results are detailed in the “Annual Incentive Compensation” section of the CD&A and reflect income paid in 2020 for performance achieved in 2019. In addition, Non-Equity Incentive Plan Compensation for Mr. Heinzel, Mses. Desmond and Lee include the Synergy award described in the “DowDuPont Synergy and Speed to Spin Incentives” section of the CD&A.(c) |
Summary Compensation Table
| The Change in Pension Value for 2019 is shown as zero for Mr. Ungerleider as no defined benefit pension will be payable by DuPont. Messrs. Breen and Ratnakar and Ms. Lee were not participants in the Historical EID pension or DuPont’s Pension Restoration Plan. Amounts shown for Messrs. Doyle and Heinzel and Ms. Desmond represent the change in pension value. DuPont does not credit participants in the non-qualified plans with above-market earnings; therefore, no such amounts are reflected here.(d) |
Summary Compensation Table
| Amounts shown for 2017 All Other Compensation for Mr. Ungerleider include the Executives’ Supplemental Retirement Plan (“ESRP”) and Elective Deferral Plan (“EDP”) distributions of previously earned but deferred compensation and non-qualified benefit payments were triggered by a change in control as a result of the Merger Transaction. Detailed information regarding the obligation to make distributions due to change in control provisions under the terms of these non-qualified plans were provided on pages 60 and 61 of the 2018 Proxy Statement, the joint proxy statement/prospectus, included in the registration statement on Form S-4 filed by DowDuPont with the SEC on March 1, 2016 (File No. 333-209869), as last amended on June 7, 2016, and declared effective by the SEC on June 9, 2016 (the “Registration Statement”). In addition to the Registration Statement, such change in control distributions were also described on the Form 8K-12B filed by DowDuPont with the SEC on September 1, 2017, as well as the Company’s 2018 report on Form 10-K.(e) |
Summary Compensation Table
| | 47 |
Summary Compensation Table
| Upon closing of the Merger Transaction, participants could elect to (i) receive a lump-sum payment or (ii) direct Historical Dow to purchase an annuity on their behalf using the after-tax proceeds of the lump sum (the “ESRP Choice Annuity”). The ESRP Choice Annuity option was designed and offered to allow participants to select an annuity option identical to what they would have received in the absence of a change in control an accelerated lump sum payment. The ESRP Choice Annuity was not intended to confer any additional benefit beyond the original annuity option. Structuring requirements resulted in a distribution and tax reimbursement in order to provide this equivalent option consistent with the intended ESRP design. |
Summary Compensation Table
| The distributions triggered by the Merger Transaction are separate and distinct from change in control and severance arrangements. Post-merger, Mr. Ungerleider continued to accrue these non-qualified benefits. |
Summary Compensation Table
i. Mr. Ungerleider: ESRP ($14,995,603), ESRP Choice Annuity program tax reimbursement ($2,646,883), and EDP ($1,141,503)
Summary Compensation Table
| Mr. Breen served as Chief Executive Officer through March 31, 2019, and Chairman and Chief Executive Officer through May 31, 2019. Mr. Breen became Executive Chairman on June 1, 2019. Mr. Breen also became Chief Executive Officer of the Company on February 17, 2020.(f) |
Summary Compensation Table
| Amount shown for 2017 compensation for Mr. Breen only represents salary earned from September 1, 2017 through December 31, 2017. As Historical Dow was determined to be the accounting acquirer, 2017 compensation for Mr. Breen is only shown for the portion of the year reflecting service to the Company post-merger.(g) |
Summary Compensation Table
| Mr. Doyle became Chief Executive Officer on June 1, 2019 and left the Company on February 17, 2020.(h) |
Summary Compensation Table
| Ms. Desmond became Chief Financial Officer on April 1, 2019 and left the Company on February 17, 2020.(i) |
Summary Compensation Table
| Mr. Heinzel is a German employee and his salary, bonus, and other non-equity related compensation items are paid in Euros. U.S. Dollar amounts in this Proxy statement with respect to Mr. Heinzel have been converted from Euros at a rate of 1.11 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each day in December 2019.(j) |
Summary Compensation Table
| Mr. Heinzel received a “13th Month” Payment equal to one month of his base salary.(k) |
Summary Compensation Table
| Mr. Ratnakar joined the Company on May 1, 2019.(l) |
Summary Compensation Table
| Mr. Ratnakar’s offer letter provided a sign-on bonus in the amount of $200,000.(m) |
Summary Compensation Table
| Mr. Ungerleider left the Company in connection with the Dow Spin-off on April 1, 2019 and became the President and CFO of Dow.(n) |
Summary Compensation Table
| All Other Compensation includes; perquisites and other personal benefits; and employer contributions; to both qualified and non-qualified defined contribution plans, as applicable.(o) |
Summary Compensation Table
The following table details these amounts:
Summary Compensation Table
| Name | Perquisites and Other Personal Benefits ($)(1) | Contributions to Defined Contribution Plans ($) | | Edward D. Breen | 188,905 | 412,251 | | C. Marc Doyle | — | 168,420 | | Jeanmarie Desmond | 41 | 87,839 | | Matthias Heinzel(2) | 45,622 | 2,499 | | Rose Lee | 9,265 | 76,941 | | Raj Ratnakar | — | 27,225 | | Howard I. Ungerleider | 10,249 | 44,274 |
Summary Compensation Table
| The following other compensation items exceeded $10,000 in value:(1) |
Summary Compensation Table
i. Mr. Breen: Personal use of company aircraft ($188,905) as required by Company policy for security and immediate availability purposes ii. Mr. Ungerleider: Financial and tax planning iii. Mr. Heinzel: Company provided automobile, financial and tax planning, hotel expenses related to his commuter assignment
Summary Compensation Table
| 48 | |
Summary Compensation Table
| Perquisites and other personal benefits include: personal use of aircraft (as required by the Company for security and immediate availability reasons) and related travel expenses, company car, tax reimbursements, financial planning support, and expenses related to Mr. Heinzel’s commuter assignment: hotel expenses and tax equalization (no reportable equalization for 2019). Personal use of aircraft includes use of corporate aircraft for travel to outside board meetings. The incremental cost to the Company of personal use of Company aircraft is calculated based on published industry rates by Conklin & de Decker Associates, Inc. for the variable operating costs to the Company including fuel, landing, catering, handling, aircraft maintenance and pilot travel costs. Fixed costs, which do not change based upon usage, such as pilot salaries or depreciation of the aircraft or maintenance costs not related to personal travel, are excluded. NEOs also are provided a tax reimbursement for taxes incurred when a spouse travels for business purposes as it is sometimes necessary for spouses to accompany NEOs to business functions. These taxes are incurred because of the Internal Revenue Service’s rules governing business travel by spouses and the Company reimburses the associated taxes. No NEO is provided a tax reimbursement for personal use of aircraft. Tax reimbursements may also be provided for certain Company provided or reimbursed relocation expenses, if applicable. |
Summary Compensation Table
| | 49 |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table provides additional information about plan-based compensation disclosed in the Summary Compensation Table. This table includes both equity and non-equity awards. All equity awards are based on the actual units and values on the original grant date and have not been converted to reflect the Dow or Corteva Spin-off adjustments or Reverse Stock Split as described in the “Treatment of Equity Awards Outstanding at the Time of the Dow and Corteva Spin-offs” section of the CD&A.
Grants of Plan-Based Awards
| Name | Grant Date | Date of Action by the Compensation Committee | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(a) | All Other Option Awards: Number of Securities Underlying Options (#)(b) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards (#)(c) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Edward D. Breen | 2/14/2019 | 2/14/2019 | — | 3,185,820(d) | 6,371,640 | | | | | | | | | | 2/14/2019 | 2/14/2019 | | | | | | | 241,170 | | | 12,700,012 | | | 8/5/2019 | 8/5/2019 | | | | 22,707 | 45,414 | 90,828 | | | | 3,000,049 | | C. Marc Doyle | 2/14/2019 | 2/14/2019 | — | 1,800,000 | 3,600,000 | | | | | | | | | | 2/14/2019 | 2/14/2019 | | | | | | | 104,444 | | | 5,500,021 | | | 8/5/2019 | 8/5/2019 | | | | 22,707 | 45,414 | 90,828 | | | | 3,000,049 | | Jeanmarie Desmond | 2/14/2019 | 2/14/2019 | — | 700,000 | 1,400,000 | | | | | | | | | | 2/14/2019 | 2/14/2019 | | | | | | | 37,980 | | | 2,000,027 | | | 8/5/2019 | 8/5/2019 | | | | 9,083 | 18,166 | 36,332 | | | | 1,200,046 | | | 8/5/2019 | 8/5/2019 | | | | | | | | 67,511 | 66.06 | 800,005 | | Matthias Heinzel | 2/14/2019 | 2/14/2019 | — | 816,104 | 1,632,208 | | | | | | | | | | 2/14/2019 | 2/14/2019 | | | | | | | 18,990 | | | 1,000,013 | | | 8/5/2019 | 8/5/2019 | | | | 6,812 | 13,624 | 27,248 | | | | 900,001 | | | 8/5/2019 | 8/5/2019 | | | | | | | | 50,633 | 66.06 | 600,001 | | | 12/17/2019 | 10/25/2019 | | | | | | | 54,500 | | | 3,499,990 | | Rose Lee | 2/14/2019 | 2/14/2019 | — | 625,000 | 1,250,000 | | | | | | | | | | 2/14/2019 | 2/14/2019 | | | | | | | 18,990 | | | 1,000,013 | | | 8/5/2019 | 8/5/2019 | | | | 6,812 | 13,624 | 27,248 | | | | 900,001 | | | 8/5/2019 | 8/5/2019 | | | | | | | | 50,633 | 66.06 | 600,001 | | Raj Ratnakar | 5/1/2019 | 5/1/2019 | — | 332,500 | 665,000 | | | | | | | | | | 5/1/2019 | —(e) | | | | | | | 50,925 | | | 1,900,012 | | | 5/1/2019 | —(e) | | | | | | | | 260,632 | 37.31 | 1,900,007 | | | 8/5/2019 | 8/5/2019 | | | | 6,812 | 13,624 | 27,248 | | | | 900,001 | | | 8/5/2019 | 8/5/2019 | | | | | | | | 50,633 | 66.06 | 600,001 | | Howard I. Ungerleider(f) | | | — | — | — | | | | | | | |
Grants of Plan-Based Awards
| Restricted Stock Unit awards as described in the “Long-Term Incentive Compensation” section of the CD&A.(a) |
Grants of Plan-Based Awards
| Stock Option awards as described in the “Long-Term Incentive Compensation” section of the CD&A.(b) |
Grants of Plan-Based Awards
| Amounts represent the aggregate grant date fair value of awards in the year of grant in accordance with the same standard applied for financial accounting purposes consistent with the values shown in the Summary Compensation Table, FASB ASC Topic 178.(c) |
Grants of Plan-Based Awards
| Amounts include the full, contractually agreed upon values for 2019 as noted in the tables in the “Annual Incentive Compensation” section of the CD&A.(d) |
Grants of Plan-Based Awards
| Grant was issued under delegation from the Compensation Committee in relation to his hire. Mr. Ratnakar became an executive officer of the Company on June 1, 2019 following the Corteva Spin-off.(e) |
Grants of Plan-Based Awards
| Mr. Ungerleider left the Company in connection with the Dow Spin-off on April 1, 2019 and became the President and CFO of Dow. DuPont did not make any determinations with respect to Mr. Ungerleider’s 2019 compensation prior to his departure.(f) |
Grants of Plan-Based Awards
| 50 | |
Outstanding Equity Awards
Outstanding Equity Awards The following table lists outstanding equity grants for each NEO as of December 31, 2019. The table includes outstanding equity grants from past years as well as the current year and include awards denominated in Dow or Corteva common stock as described in the “Treatment of Equity Awards Outstanding at the Time of the Dow and Corteva Spin-offs” section of the CD&A and have been adjusted to reflect the Reverse Stock Split.
Outstanding Equity Awards
| | | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Stock Ticker | Number of Securities Underlying Unexercised Options (#) Exercisable(a) | Number of Securities Underlying Unexercised Options (#) Unexercisable(a) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(b) | Market Value of Shares or Units of Stock That Have Not Vested ($)(b)(c) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(d) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(c)(d) | | Edward D. Breen | 05/13/2015 | DD | | | | | 928 | 59,578 | | | | | 06/05/2015 | DD | | | | | 142 | 9,116 | | | | | 11/06/2015 | DD | 170,933 | — | 74.48 | 11/05/2022 | | | | | | | 02/02/2017 | DD | 75,970 | 37,985 | 85.81 | 02/01/2027 | | | | | | | 11/06/2017 | DD | 23,926 | 11,964 | 101.44 | 11/05/2027 | | | | | | | 02/15/2018 | DD | 91,275 | 182,550 | 103.76 | 02/14/2028 | | | | | | | 02/14/2019 | DD | | | | | 82,022 | 5,265,812 | | | | | 08/05/2019 | DD | | | | | | | 45,414 | 2,915,579 | | | 05/13/2015 | CTVA | | | | | 928 | 27,432 | | | | | 06/05/2015 | CTVA | | | | | 142 | 4,198 | | | | | 11/06/2015 | CTVA | 170,933 | — | 30.10 | 11/05/2022 | | | | | | | 02/02/2017 | CTVA | 75,970 | 37,985 | 34.68 | 02/01/2027 | | | | | | | 11/06/2017 | CTVA | 23,926 | 11,964 | 41.00 | 11/05/2027 | | | | | | | 02/15/2018 | CTVA | 91,275 | 182,550 | 41.94 | 02/14/2028 | | | | | | | 02/14/2019 | CTVA | | | | | 82,044 | 2,425,221 | | | | | 05/13/2015 | DOW | | | | | 954 | 52,212 | | | | | 06/05/2015 | DOW | | | | | 146 | 7,991 | | | | | 11/06/2015 | DOW | 170,933 | — | 52.24 | 11/05/2022 | | | | | | | 02/02/2017 | DOW | 75,970 | 37,985 | 60.19 | 02/01/2027 | | | | | | | 11/06/2017 | DOW | 23,927 | 11,963 | 71.15 | 11/05/2027 | | | | | | | 02/15/2018 | DOW | 91,275 | 182,550 | 72.78 | 02/14/2028 | | | | | | | 02/14/2019 | DOW | | | | | 84,337 | 4,615,764 | | | | C. Marc Doyle | 02/05/2014 | DD | 2,806 | — | 67.22 | 02/04/2021 | | | | | | | 02/04/2015 | DD | 15,883 | — | 80.07 | 02/03/2022 | | | | | | | 07/29/2015 | DD | | | | | 53,008 | 3,403,144 | | | | | 02/03/2016 | DD | 39,754 | — | 66.21 | 02/02/2026 | | | | | | | 02/02/2017 | DD | 28,438 | 14,220 | 85.81 | 02/01/2027 | | | | | | | 02/15/2018 | DD | 25,154 | 50,309 | 103.76 | 02/14/2028 | | | | | | | 02/14/2019 | DD | | | | | 73,799 | 4,737,904 | | | | | 08/05/2019 | DD | | | | | | | 45,414 | 2,915,579 | | | 02/15/2018 | CTVA | 25,154 | 50,309 | 41.94 | 02/14/2028 | | | | | | | 02/15/2018 | DOW | 25,155 | 50,308 | 72.78 | 02/14/2028 | | | | | | Jeanmarie Desmond | 02/04/2015 | DD | 9,529 | — | 80.07 | 02/03/2022 | | | | | | | 02/03/2016 | DD | 8,745 | — | 66.21 | 02/02/2026 | | | | | | | 02/02/2017 | DD | 5,687 | 2,844 | 85.81 | 02/01/2027 | | | | | | | 02/15/2018 | DD | 4,312 | 8,624 | 103.76 | 02/14/2028 | | | | | | | 02/14/2019 | DD | | | | | 26,837 | 1,722,904 | | | | | 08/05/2019 | DD | — | 67,511 | 66.06 | 08/04/2029 | | | 18,166 | 1,166,257 | | | 02/15/2018 | CTVA | 4,312 | 8,624 | 41.94 | 02/14/2028 | | | | | | | 02/15/2018 | DOW | 4,312 | 8,624 | 72.78 | 02/14/2028 | | | | | | Matthias Heinzel | 02/04/2015 | DD | 1,984 | — | 80.07 | 02/03/2022 | | | | | | | 02/03/2016 | DD | 6,183 | — | 66.21 | 02/02/2026 | | | | | | | 02/02/2017 | DD | 7,110 | 3,555 | 85.81 | 02/01/2027 | | | | | | | 02/15/2018 | DD | 5,749 | 11,499 | 103.76 | 02/14/2028 | | | | | | | 07/27/2018 | DD | | | | | 20,935 | 1,344,033 | | | | | 02/14/2019 | DD | | | | | 13,419 | 861,484 | | | | | 08/05/2019 | DD | — | 50,633 | 66.06 | 08/04/2029 | | | 13,624 | 874,661 | | | 12/17/2019 | DD | | | | | 54,500 | 3,498,900 | | | | | 02/15/2018 | CTVA | 5,749 | 11,500 | 41.94 | 02/14/2028 | | | | | | | 02/15/2018 | DOW | 5,750 | 11,499 | 72.78 | 02/14/2028 | | | | |
Outstanding Equity Awards
| | 51 |
Outstanding Equity Awards
| | | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Stock Ticker | Number of Securities Underlying Unexercised Options (#) Exercisable(a) | Number of Securities Underlying Unexercised Options (#) Unexercisable(a) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(b) | Market Value of Shares or Units of Stock That Have Not Vested ($)(b)(c) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(d) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(c)(d) | | Rose Lee | 02/04/2015 | DD | 7,941 | — | 80.07 | 02/03/2022 | | | | | | | 02/03/2016 | DD | 13,251 | — | 66.21 | 02/02/2026 | | | | | | | 02/02/2017 | DD | 9,953 | 4,977 | 85.81 | 02/01/2027 | | | | | | | 02/15/2018 | DD | 5,749 | 11,500 | 103.76 | 02/14/2028 | | | | | | | 02/14/2019 | DD | | | | | 13,419 | 861,484 | | | | | 08/05/2019 | DD | — | 50,633 | 66.06 | 08/04/2029 | | | 13,624 | 874,661 | | | 02/15/2018 | CTVA | 5,749 | 11,500 | 41.94 | 02/14/2028 | | | | | | | 02/15/2018 | DOW | 5,750 | 11,500 | 72.78 | 02/14/2028 | | | | | | Raj Ratnakar | 05/01/2019 | DD | — | 121,128 | 80.29 | 04/30/2029 | 23,875 | 1,532,748 | | | | | 08/05/2019 | DD | — | 50,633 | 66.06 | 08/04/2029 | | | 13,624 | 874,661 | | Howard l. Ungerleider(e) | 02/15/2018 | DD | 29,826 | 59,652 | 103.73 | 02/14/2028 | — | — | — | — |
Outstanding Equity Awards
| Stock Option award grants vest in three equal installments on the first, second and third anniversaries of the grant date shown in the table. Awards granted in August 2019 to Messrs. Heinzel and Ratnakar and Mses. Desmond and Lee fully vest on December 31, 2021.(a) |
Outstanding Equity Awards
| RSU award grants vest in three equal installments on the first, second, and third anniversaries of the grant date shown in the table. Awards granted to Mr. Breen in 2015 in his capacity as a non-employee director (prior to his being named CEO of Historical EID) must be held until his retirement from service on the Board. Award granted to Mr. Heinzel in July 2018 will fully vest on the third anniversary of the grant date shown in the table. Award granted to Mr. Heinzel in December 2019 will have 75% of units vest March 31, 2021 and the remaining units vest December 17, 2022. Award granted to Mr. Doyle in July 2015 will fully vest in 2020.(b) |
Outstanding Equity Awards
| Market values based on the December 31, 2019 closing stock price of $64.20 per share of DuPont common stock, $29.56 per share of Corteva common stock, and $54.73 per share of Dow common stock.(c) |
Outstanding Equity Awards
| PSUs granted August 5, 2019 are shown at the target level of performance. The total actual number of shares to be delivered will be determined at the end of the performance period.(d) |
Outstanding Equity Awards
| Mr. Ungerleider left the Company in connection with the Dow Spin-off on April 1, 2019 and became the President and CFO of Dow.(e) |
Outstanding Equity Awards
| 52 | |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table summarizes the value received from stock option exercises and stock grants vested during 2019.
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(a)(b) | Value Realized on Vesting ($) | | Edward D. Breen | — | — | 414,600 | 25,533,996 | | C. Marc Doyle | — | — | 94,601 | 5,466,612 | | Jeanmarie Desmond | — | — | 4,518 | 434,298 | | Matthias Heinzel | — | — | 36,177 | 3,646,231 | | Rose Lee | — | — | 18,656 | 2,492,803 | | Raj Ratnakar | — | — | — | — | | Howard I. Ungerleider | 2,753 | 121,585 | 66,130 | 3,689,418 |
Option Exercises and Stock Vested
| Reflects delivery of shares from the 2017 Performance Share program, the 2017 Synergy PSU grants, and Mr. Heinzel’s 2016 Restricted Stock Units grant.(a) |
Option Exercises and Stock Vested
| Reflects vesting in DuPont, Corteva, and Dow shares. Shares acquired prior to June 1, 2019 have been adjusted to reflect the Reverse Stock Split on June 1, 2019.(b) |
Pension Benefits
Pension Benefits The following table lists the pension program participation and actuarial present value of each NEO’s defined benefit pension, if any, as of December 31, 2019.
Pension Benefits
| Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(a) | Payment During Last Fiscal Year ($) | | Edward D. Breen(b) | Historical EID DuPont Pension Plan | — | — | — | | | DuPont Pension Restoration Plan | — | — | — | | C. Marc Doyle | Historical EID DuPont Pension Plan | — | — | — | | | DuPont Pension Restoration Plan | 23.23 | 3,604,775 | — | | Jeanmarie Desmond | Historical EID DuPont Pension Plan | — | — | — | | | DuPont Pension Restoration Plan | 29.54 | 1,753,996 | — | | Matthias Heinzel(b) | DuPont Alters—und Risikovorsorge II Plan | 17.00 | 1,089,602 | — | | | Versorgungslohn | 15.00 | 624,312 | — | | Rose Lee(b) | Historical EID DuPont Pension Plan | — | — | — | | | DuPont Pension Restoration Plan | — | — | — | | Raj Ratnakar(b) | Historical EID DuPont Pension Plan | — | — | — | | | DuPont Pension Restoration Plan | — | — | — | | Howard I. Ungerleider(c) | | — | — | — |
Pension Benefits
| The form of payment, interest rate, and mortality are based on assumptions noted in the description below.(a) |
Pension Benefits
| Messrs. Breen, Heinzel and Ratnakar and Ms. Lee are not eligible to, and do not, participate in either of DuPont’s Pension or Pension Restoration Plans.(b) |
Pension Benefits
| Mr. Ungerleider participated in the Historical Dow Employees’ Pension Plan and Historical Dow’s Executives’ Supplemental Retirement Plan. Mr. Ungerleider left the Company in connection with the Dow Spin-off on April 1, 2019 and became the President and CFO of Dow. See the proxy statement for Dow’s 2020 annual meeting of stockholders filed with the SEC on February 28, 2020 for information regarding Mr. Ungerleider’s service and accumulated benefit under these plans as well as descriptions of the plans.(c) |
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation The following table provides information on compensation the NEOs have elected to defer as described in the narrative that follows.
Non-Qualified Deferred Compensation
| Name | Executive Contributions in Last Fiscal Year ($)(a) | Company Contributions in Last Fiscal Year ($)(b) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) | | Edward D. Breen | 254,701 | 379,551 | 414,293 | — | 2,754,692 | | C. Marc Doyle | 92,480 | 135,720 | 135,830 | — | 924,974 | | Jeanmarie Desmond | 39,659 | 57,739 | 107,446 | — | 684,038 | | Matthias Heinzel(c) | — | — | — | — | — | | Rose Lee | 32,269 | 46,841 | 5,901 | — | 267,858 | | Raj Ratnakar | 6,825 | 9,050 | 34 | — | 17,096 | | Howard I. Ungerleider(d) | 10,462 | 30,592 | 18,538 | — | 152,976 |
Non-Qualified Deferred Compensation
| Executive contributions are included in salary for 2019 in the Summary Compensation Table.(a) |
Non-Qualified Deferred Compensation
| Company contributions are included in All Other Compensation for 2019 in the Summary Compensation Table.(b) |
Non-Qualified Deferred Compensation
| All plans under which Mr. Heinzel participates are considered tax qualified.(c) |
Non-Qualified Deferred Compensation
| For Mr. Ungerleider, reflects amounts as of April 1, 2019. Mr. Ungerleider left the Company in connection with the Dow Spin-off on April 1, 2019 and became the President and CFO of Dow.(d) |
Historical EID and DuPont Non-Qualified Deferred Compensation Programs
Historical EID and DuPont Non-Qualified Deferred Compensation Programs Historical EID offered non-qualified deferred compensation programs under which eligible participants could voluntarily elect to defer some portion of base salary, STIP, or LTI awards until a future date. Deferrals were credited to an account, and earnings were calculated thereon in accordance with the applicable investment option or interest rate. With the exception of the Historical EID Retirement Savings Restoration Plan, there were no company contributions or matches. The Historical EID Retirement Savings Restoration Plan was adopted to restore company contributions that would be lost due to IRC limits on compensation that can be contributed under Historical EID’s tax-qualified savings plan. Effective with the Corteva Spin-off, the Company adopted new deferred compensation programs that mirrored those provided by Historical EID. The following provides an overview of the various deferral options as of December 31, 2019. DuPont Retirement Savings Restoration Plan (“RSRP”): Under the RSRP, NEOs can elect to defer their eligible compensation (generally, base salary plus STIP) that exceeds the regulatory limits ($280,000 in 2019) in increments of 1% up to 6%. DuPont matches participant contributions on a dollar-for-dollar basis up to 6% of eligible pay. DuPont also makes an additional contribution of 3% of eligible compensation. Participant investment options under the RSRP mirror the options available under the tax-qualified 401(k) plan. Distributions may be made in the form of a lump sum or annual installments after separation from service. Management Deferred Compensation Plan (“MDCP”): Under the MDCP, NEOs can elect to defer the receipt of up to 60% of their base salary and/or STIP award. The Company does not match deferrals under the MDCP. Participants may select from among seven core investment options under the MDCP for amounts deferred, including DuPont Common Stock units with dividend equivalents credited as additional stock units. In general, distributions may be made in the form of a lump sum at a specified future date if prior to separation from service, or a lump sum or annual installments after separation from service.
Historical EID and DuPont Non-Qualified Deferred Compensation Programs
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Base Salary, Annual Incentive and Other Benefits – Retirement, Death, or Disability
| • | Non-qualified deferred compensation programs as shown in the Non-Qualified Deferred Compensation Table and accompanying narrative. |
Base Salary, Annual Incentive and Other Benefits – Retirement, Death, or Disability
| • | Pension benefits, as applicable, as shown in the Pension Benefits Table and described in the accompanying narrative. |
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control DuPont has put provisions in place to ensure continuity of management in a potential change in control environment. This Plan is structured to protect the interests of stockholders by including a “double-trigger” mechanism that results in a severance payout only when:
Potential Payments upon Termination or Change in Control
| • | A change of control is consummated, and |
Potential Payments upon Termination or Change in Control
| • | The executive’s employment is terminated by the company without cause, or by the executive for good reason within a specified period following the change in control. |
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
| Name | Type of Benefit | Involuntary Termination Without Cause ($) | Change in Control ($)(a) | | Edward D. Breen | Severance(b) | 13,000,000 | 13,000,000 | | | LTI Acceleration(c) | — | 16,408,883 | | | Increase in Present Value of Pension | N/A | N/A | | | Health & Welfare Benefits | 36,567 | 36,567 | | | Outplacement & Financial Planning | 9,900 | 9,900 | | | Tax Reimbursement | — | — | | C. Marc Doyle(d) | Severance | 6,256,066 | — | | | LTI Acceleration | 5,427,270 | — | | | Increase in Present Value of Pension | — | — | | | Health & Welfare Benefits | 37,819 | — | | | Outplacement & Financial Planning | 9,900 | — | | | Tax Reimbursement | — | — | | Jeanmarie Desmond(e) | Severance | 2,201,553 | — | | | LTI Acceleration | 950,065 | — | | | Increase in Present Value of Pension | 331,641 | — | | | Health & Welfare Benefits | — | — | | | Outplacement & Financial Planning | 25,980 | — | | | Tax Reimbursement | — | — | | Matthias Heinzel | Severance(f) | 7,377,728 | 8,193,832 | | | LTI Acceleration | 5,991,471 | 5,991,471 | | | Increase in Present Value of Pension | — | — | | | Health & Welfare Benefits | — | — | | | Outplacement & Financial Planning | 25,800 | 33,800 | | | Tax Reimbursement | — | — | | Rose Lee | Severance | 2,500,000 | 3,125,000 | | | LTI Acceleration | 1,148,538 | 1,148,538 | | | Increase in Present Value of Pension | N/A | N/A | | | Health & Welfare Benefits | 25,883 | 34,511 | | | Outplacement & Financial Planning | 15,300 | 19,520 | | | Tax Reimbursement | — | — | | Raj Ratnakar | Severance | 1,543,750 | 1,947,500 | | | LTI Acceleration | 1,532,748 | 1,532,748 | | | Increase in Present Value of Pension | N/A | N/A | | | Health & Welfare Benefits | 24,345 | 32,460 | | | Outplacement & Financial Planning | 2,640 | 2,640 | | | Tax Reimbursement | — | — | | Howard I. Ungerleider(g) | Severance | — | — | | | LTI Acceleration | — | — | | | Increase in Present Value of Pension | — | — | | | Health & Welfare Benefits | — | — | | | Outplacement & Financial Planning | — | — | | | Tax Reimbursement | — | — |
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
| An executive must meet the double trigger requirement of being involuntarily terminated within two years of a change in control in order to receive benefits.(a) |
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
| Per his employment agreement, Mr. Breen maintains the severance level he was eligible for at the time of the agreement; the product of 3 times June 1, 2019 base salary ($1,000,000) and target bonus ($1,000,000), as well as a prorated bonus at target. Additionally, Mr. Breen has a retention award equivalent to $6,000,000 that becomes payable in the case of an involuntary termination without cause or after continued employment through December 31, 2020.(b) |
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
| Excludes LTI awards granted to Mr. Breen in his capacity as a non-employee director prior to his being named CEO of DuPont.(c) |
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
| Amounts listed for Mr. Doyle are actual values paid upon involuntary termination without cause effective February 17, 2020. The severance value includes a pro-rated STIP at target, due to be paid in 2021. If actual STIP is greater than target, then he will receive the pro-rated actual STIP amount. Amounts listed for Mr. Doyle include reimbursement of certain attorney’s fees in connection with his separation from service.(d) |
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
| Amounts listed for Ms. Desmond are actual values paid upon involuntary termination without cause effective February 17, 2020. The severance value includes a lump sum paid in 2020 in lieu of the Health & Welfare Benefits and a pro-rated STIP at target, due to be paid in 2021. If actual STIP is greater than target, then they will receive the pro-rated actual STIP amount.(e) |
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
| Mr. Heinzel’s severance amount includes the retention benefits described in the “M. Heinzel Special Compensation” section.(f) |
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
| Mr. Ungerleider left the Company at the time of the Dow Spin-off on April 1, 2019 and became the President and CFO of Dow, and, therefore, as of such date, is not eligible for any Retirement Benefits from DuPont.(g) |
INVOLUNTARY TERMINATION OR CHANGE IN CONTROL VALUES
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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, the following information is provided about the relationship of the annual total compensation of the Company’s employees (other than the CEO) and the annual total compensation for the CEO, C. Marc Doyle. For 2019:
CEO PAY RATIO
| • | The annual total compensation for the median employee was $86,294, and |
CEO PAY RATIO
| • | The annual total compensation of the CEO, as reported in the Summary Compensation Table was $11,660,634. |
CEO PAY RATIO
Based upon the calculation of compensation for both the CEO and the median employee, the estimated ratio of CEO pay to median employee pay for 2019 was 135:1. The pay ratio presented above is a reasonable estimate. Because SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions, the pay ratio may not be comparable to the pay ratio reported by other companies. As a result of the population changes involved with the Dow and Corteva Spin-offs, DuPont determined that a new median employee should be selected. The median employee identified in 2019 from the population of all employees worldwide as of October 31, 2019 utilizing base pay rather than Summary Compensation Table compensation. The Company calculated annual base pay based on a reasonable estimate of hours worked during 2019 for hourly workers, and upon salary levels for the remaining employees. The Company used a valid statistical sampling methodology to identify employees who the Company expected to be paid within a 5% range of the median. The Company selected an employee from that group as the median employee for purposes of preparing the ratio of CEO pay to median employee pay.
CEO PAY RATIO
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Federal Income Tax Effects
| • | Code Section 409A. To the extent that any award under the Plan is or may be considered to involve a nonqualified deferred compensation plan or deferral subject to Code Section 409A, the terms and administration of such award shall comply with the provisions of such section and final regulations issued thereunder. |
Future Director Nominees through Proxy Access
Future Director Nominees through Proxy Access Under the Company’s Bylaws, if you wish to nominate a director through proxy access, you must give advance written notification to the Office of the Corporate Secretary. For the 2021 Meeting, written notice must be received by the Office of the Corporate Secretary between the close of business on November 10, 2020, and the close of business on December 10, 2020. Such notices must comply with the procedural and content requirements of the Bylaws. The full text of the Bylaws is available at https://www.investors.dupont.com/investors/dupont-investors/corporate-governance/default.aspx.