DEF 14A of Goodyear Tire & Rubber Co /Oh/
Filed Mar 10, 2025 · FY20240001193125-25-051087
PROXY STATEMENT SUMMARY
| 62 | Option Exercises and Stock Vested | | 62 | Defined Contribution Plan Benefits | | 63 | Pension Benefits | | 66 | Nonqualified Deferred Compensation | | 67 | Potential Payments Upon Termination or Change-in-Control | | 73 | Director Compensation Table | | 75 | Risks Related to Compensation Policies and Practices | | 75 | Pay Ratio | | 76 | Item 402(v) Pay Versus Performance Table | | 80 | Beneficial Ownership of Common Stock | | 83 | Related Person Transactions | | 84 | Principal Accountant Fees and Services | | 85 | Report of the Audit Committee | | 86 | Proposal 3 – Approval of Amendment of 2022 Performance Plan | | 97 | Proposal 4 – Ratification of Appointment of Independent Registered Public Accounting Firm | | 99 | Proposal 5 – Shareholder Proposal | | 102 | General Information | | 102 | Shares Voting | | 102 | Vote Required | | 103 | Attending the Virtual Annual Meeting | | 103 | Adjourned Meeting | | 104 | Voting Shares Held in Street Name | | 104 | Savings Plan Shares | | 104 | Voting of Proxy | | 105 | Revocability of Proxy | | 105 | Confidentiality | | 105 | Shareholders Sharing the Same Address | | 106 | Form 10-K | | 106 | Costs of Solicitation | | 106 | Submission of Shareholder Proposals and Nominations | | 107 | Other Business | | 108 | Exhibits | | 108 | Exhibit A - Use of Forward-Looking Statements | | 110 | Exhibit B - Use of Non-GAAP Financial Measures | | 111 | Exhibit C - 2022 Performance Plan, as amended |
PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS The Board of Directors has selected the following twelve nominees recommended by the Governance Committee for election to the Board of Directors. The directors will hold office from their election until the next Annual Meeting of Shareholders, or until their successors are elected and qualified. If any of these nominees for director becomes unavailable, the persons named in the proxy intend to vote for an alternate designated by the current Board of Directors. Mr. Mahendra-Rajah resigned from the Board effective January 15, 2025. Goodyear and the Board of Directors are deeply grateful to Mr. Mahendra-Rajah for his leadership and guidance during his tenure on the Board.
Norma B. Clayton
Norma B. Clayton
Norma B. Clayton
| Director Since: November 28, 2022 Committees: Compensation Corporate Responsibility and Compliance (Chairperson) Executive Age: 66 | CURRENT PRINCIPAL OCCUPATION: Retired. Formerly Vice President for Learning, Training and Development of The Boeing Company DESCRIPTION OF BUSINESS EXPERIENCE: Ms. Clayton was Vice President for Learning, Training and Development of The Boeing Company, an aerospace manufacturer, from July 2007 until her retirement in March 2016. Ms. Clayton joined Boeing in February 1995 where she held a variety of leadership roles across engineering, plant operations and optimization, manufacturing excellence, quality and product safety, sourcing, supply chain and procurement, and human resources. Prior to joining Boeing, she spent several years leading plant operations and sourcing at Lockheed Martin, and prior to that, she held management roles in manufacturing and engineering at General Electric, after starting her career at General Motors. | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: Nucor Corporation (2021 – present) Ms. Clayton is also currently the Chair of the Board of Trustees of Tuskegee University. Ms. Clayton’s global leadership experience in manufacturing, operations, technology, innovation and human resources will be valuable to Goodyear and its shareholders as it continues to build its business in a fast-evolving industry. |
Norma B. Clayton
| | ELECTION OF DIRECTORS |
James A. Firestone
James A. Firestone
James A. Firestone
| Director Since: December 3, 2007 Committees: Compensation (Chairperson) Finance Executive Age: 70 | CURRENT PRINCIPAL OCCUPATION: Retired. Formerly Executive Vice President and President, Corporate Strategy and Asia Operations of Xerox Corporation DESCRIPTION OF BUSINESS EXPERIENCE: Mr. Firestone was Executive Vice President and President, Corporate Strategy and Asia Operations of Xerox Corporation from January 2014 until his retirement on October 31, 2016. Mr. Firestone was President, Corporate Operations from October 2008 to December 2013 and President of Xerox North America from October 2004 to September 2008. Before joining Xerox in 1998, Mr. Firestone worked for IBM Corporation as general manager of the Consumer Division and for Ameritech Corporation as president of Consumer Services. He began his business career in 1978 with American Express, where during his 15-year tenure he ultimately rose to President, Travelers Cheques. | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: None Mr. Firestone has extensive executive management experience in positions of increasing responsibility, including most recently as a senior executive officer of Xerox Corporation, which is of similar size and global complexity as Goodyear. He also has over 20 years of profit and loss management responsibility, as well as significant international business experience and merger and acquisition experience. These experiences provide him with unique and valuable insights as a director of Goodyear, particularly with respect to operations and finance matters. |
Werner Geissler
Werner Geissler
Werner Geissler
| Director Since: February 21, 2011 Committees: Audit Finance Age: 71 | CURRENT PRINCIPAL OCCUPATION: Retired. Formerly Vice Chairman, Global Operations of The Procter & Gamble Company Operating Partner of Advent International DESCRIPTION OF BUSINESS EXPERIENCE: Mr. Geissler was Vice Chairman, Global Operations of The Procter & Gamble Company from August 2007 until his retirement on December 31, 2014, and was Group President, Central & Eastern Europe, Middle East and Africa from July 2004 to July 2007. He joined Procter & Gamble in 1979 and held positions of increasing responsibility in various brand and general management and operations roles in Europe, the Middle East, Central Asia, Japan, Africa and the United States. | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: Philip Morris International Inc. (2015 – present) Mr. Geissler, a native of Germany, has deep executive management experience, including as a senior executive officer of Procter & Gamble, where he oversaw Procter & Gamble’s extensive worldwide business operations. He has significant international business experience and profit and loss management responsibility. These experiences provide him with valuable insights as a director of Goodyear, particularly with respect to consumer marketing and international, operations and finance matters. |
Werner Geissler
| | ELECTION OF DIRECTORS |
Joseph R. Hinrichs
Joseph R. Hinrichs
Joseph R. Hinrichs
| Director Since: July 25, 2023 Committees: Compensation Corporate Responsibility and Compliance Age: 58 | CURRENT PRINCIPAL OCCUPATION: President and Chief Executive Officer of CSX Corporation DESCRIPTION OF BUSINESS EXPERIENCE: Prior to joining CSX, a leading supplier of rail-based freight transportation in North America, in September 2022, Mr. Hinrichs served as president of Ford Motor Company’s global automotive business, where he led its $160-billion automotive operations. As part of this role, he oversaw Ford’s global business units and the Ford and Lincoln brands, as well as leading all of Ford’s automotive skill teams, including Product Development, Purchasing, Manufacturing, Labor Affairs, Marketing and Sales, Government Affairs, Information Technology, and Sustainability, Safety and Environmental Engineering. During his tenure at Ford, Mr. Hinrichs also served as executive vice president and president of Global Operations, executive vice president and president of the Americas, president of Asia Pacific and Africa, chairman and chief executive officer of Ford China, and president and chief executive officer of Ford Motor Company, Canada Ltd. | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: CSX Corporation (2022 – present) Ascend Wellness Holdings (2021 – 2022) Mr. Hinrichs brings more than 30 years of experience in the global automotive, manufacturing and energy sectors to the Company’s Board of Directors. He brings an unwavering commitment to operational excellence, extensive experience building global businesses through investment in people and culture and a deep understanding of balancing safety and efficiency. |
Laurette T. Koellner
Laurette T. Koellner
Laurette T. Koellner
| Director Since: February 23, 2015 Chairman of the Board Committees: Compensation Governance (Chairperson) Executive (Chairperson) Age: 70 | CURRENT PRINCIPAL OCCUPATION: Retired. Formerly President of Boeing International and Executive Chairman of International Lease Finance Corporation DESCRIPTION OF BUSINESS EXPERIENCE: Ms. Koellner most recently served as Executive Chairman of International Lease Finance Corporation, formerly an aircraft leasing subsidiary of American International Group, Inc. (“AIG”), from June 2012 until its sale in May 2014. Prior to AIG, she served in a variety of executive roles at The Boeing Company, an aerospace company, including Executive Vice President, Member of the Office of the Chairman, President of Connexion By Boeing, President of Boeing International, and a seven-year membership on Boeing’s most senior leadership team. While at Boeing, she also served as Vice President and General Auditor, Vice President and Corporate Controller, and Chief Human Resources and Administration Officer. | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: Nucor Corporation (2015 – present) Papa John’s International, Inc. (2014 – present) Celestica Inc. (2009 – January 2025) Ms. Koellner has significant senior executive management experience, including extensive international business experience, as well as financial and human resources experience. Her service in leadership positions on several public company boards of directors provides her with the necessary skills to be Chairman and also provides us with important insights on business practices in a variety of industries. |
Laurette T. Koellner
| | ELECTION OF DIRECTORS |
Karla R. Lewis
Karla R. Lewis
Karla R. Lewis
| Director Since: April 12, 2021 Committees: Finance (Chairperson) Governance Executive Age: 59 | CURRENT PRINCIPAL OCCUPATION: President and Chief Executive Officer of Reliance, Inc. DESCRIPTION OF BUSINESS EXPERIENCE: Ms. Lewis is currently Chief Executive Officer of Reliance, Inc., a leading global diversified metal solutions provider and the largest metals service center company in North America, a position she was elected to on January 1, 2023. She joined Reliance in 1992 as Corporate Controller and has held various positions of increasing responsibility since then including serving as Chief Financial Officer from 1999 until January 2021 and President from January 2021 until December 2022. While serving as Chief Financial Officer, she was promoted to Senior Vice President in 2000, Executive Vice President in 2002 and Senior Executive Vice President in 2015. For four years prior to joining Reliance, Ms. Lewis was employed by Ernst & Young LLP (Ernst & Whinney) as a certified public accountant. | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: Reliance, Inc. (2021 – present) Ms. Lewis has over 30 years of financial management experience from her service as Controller and Chief Financial Officer of Reliance. She also possesses extensive merger and acquisitions and integration experience, having worked on many such transactions during her career at Reliance. These experiences will be valuable to Goodyear and its shareholders in both the near-term and in the years to come. |
John E. McGlade
John E. McGlade
John E. McGlade
| Director Since: December 5, 2012 Committees: Audit (Chairperson) Governance Executive Age: 71 | CURRENT PRINCIPAL OCCUPATION: Retired. Formerly Chairman, President and Chief Executive Officer of Air Products and Chemicals, Inc. DESCRIPTION OF BUSINESS EXPERIENCE: Mr. McGlade was Chairman, President and Chief Executive Officer of Air Products and Chemicals, Inc., a global provider of atmospheric, process and specialty gases, from March 2008 until his retirement on July 1, 2014. He joined Air Products in 1976 and held various positions of increasing responsibility, including as Group Vice President, Chemicals Group, and President and Chief Operating Officer. | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: None Mr. McGlade has strong leadership skills and extensive management, international and operating experience. He has also had responsibility for the environment, health, safety and quality function during his career at Air Products. These experiences provide him with unique and valuable insights as a director of Goodyear, particularly with respect to operations matters. Mr. McGlade’s tenure as a Chief Executive Officer of a publicly traded company also provides him the necessary skills to be Chairperson of our Audit Committee and to be an “audit committee financial expert.” |
John E. McGlade
| | ELECTION OF DIRECTORS |
Max H. Mitchell
Max H. Mitchell
Max H. Mitchell
| Director Since: July 25, 2023 Committees: Audit Finance Age: 61 | CURRENT PRINCIPAL OCCUPATION: Chairman of the Board, President and Chief Executive Officer of Crane Company DESCRIPTION OF BUSINESS EXPERIENCE: Mr. Mitchell is President and Chief Executive Officer of Crane Company, a global manufacturer of innovative and technology-led solutions for the aerospace, defense, space and process flow industries, a position he has held since 2014. He was appointed to the additional role of Chairman in April 2024. Mr. Mitchell joined Crane in 2004, and has served as President and Chief Operating Officer, Executive Vice President and Chief Operating Officer, and President of Crane’s Process Flow Technologies Group. Before joining Crane, Mr. Mitchell served in various senior operating roles within the Danaher Corporation and Pentair. He began his career with the Ford Motor Company in finance and operations. | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: Crane Company (2014 – present) Crane NXT, Co. (2023 – 2024) Lennox International (2016 – 2022) Mr. Mitchell’s expertise includes developing and driving corporate strategy and optimizing portfolio results, extensive knowledge of, and experience with, global markets, broad international and domestic mergers and acquisitions expertise, and driving a performance-based culture. Mr. Mitchell’s experience as a Chief Executive Officer of a publicly traded company also provides him the necessary skills to be an “audit committee financial expert.” |
Hera Siu
Hera Siu
Hera Siu
| Director Since: December 4, 2019 Committees: Corporate Responsibility and Compliance Finance Age: 65 | CURRENT PRINCIPAL OCCUPATION: Retired. Formerly Corporate Vice President and Chief Executive Officer, Greater China, of Cisco Systems, Inc. DESCRIPTION OF BUSINESS EXPERIENCE: Ms. Siu was Chief Executive Officer, Greater China, for Cisco Systems, Inc., a leading global technology company, from July 2017 until her retirement in September 2020. She previously served as Chief Operating Officer, Greater China, of Cisco from November 2016 until June 2017. From February 2014 to June 2016, she served as Senior Vice President and Managing Director, Greater China, for Pearson, LLC, a global education company that leverages technology to enhance teaching and learning. Ms. Siu was employed by SAP, a global software and data processing firm, as Senior Vice President, and then President, of | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: Vallourec SA (2021 – present) ASMPT Limited (2022 – present) TeamViewer AG (2021 – February 2025) China and Hong Kong from April 2010 to June 2013, and as Senior Vice President, e-Commerce, Asia Pacific Region, from July 2013 to January 2014. Ms. Siu also previously held positions of increasing responsibility and leadership for companies including Nortel, Inc., Hong Kong Telecom, Ltd., Computer Associates, Inc., and Nokia Telecommunications, Ltd. Ms. Siu possesses more than 30 years of management experience, with a strong understanding of outcome-based solutions and emerging business models. Her extensive technology background and deep knowledge of the China marketplace will be extremely valuable to Goodyear and its shareholders as Goodyear continues to focus on expanding its business. |
Hera Siu
| | ELECTION OF DIRECTORS |
Mark W. Stewart
Mark W. Stewart
Mark W. Stewart
| Director Since: January 29, 2024 Committees: Executive Age: 57 | CURRENT PRINCIPAL OCCUPATION: Chief Executive Officer and President of The Goodyear Tire & Rubber Company DESCRIPTION OF BUSINESS EXPERIENCE: Mr. Stewart joined Goodyear in January 2024. Previously, from December 2018 to January 2024, he served as Chief Operating Officer of North America and a member of the Group Executive Council of Stellantis N.V., a leading global automaker and provider of innovative mobility solutions. Previously, Mr. Stewart served as vice president, Customer Fulfillment, at Amazon, serving as the lead executive for customer fulfillment across 200 operations facilities in North America, leading operations, procurement, construction and engineering, and teams dedicated to pursuing automation, artificial intelligence, advanced robotics and conveyance. Prior to Amazon, Mr. Stewart was executive vice president and chief operating officer for ZF TRW Automotive, a role culminating from over two decades of increasing responsibility, starting with plant, production and quality management roles and advancing to lead Tower | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: None Automotive’s Western Europe business as executive vice president, TRW’s North America Passenger Car and Commercial Global Steering business as vice president and general manager and TRW’s Asia Pacific business as vice president. Over the course of his career, Mr. Stewart has overseen diverse manufacturing and fulfillment operations across the globe, and has been based in the U.S., Belgium, Germany and China. Mr. Stewart’s extensive automotive industry experience and knowledge of global markets, manufacturing, operations, fulfillment and technology provides our Board with valuable perspectives that are necessary to advance Goodyear’s business and the interests of our shareholders. As Chief Executive Officer, he will also provide the Board with management’s perspective on important issues that we are facing. |
Michael R. Wessel
Michael R. Wessel
Michael R. Wessel
| Director Since: December 6, 2005 Committees: Corporate Responsibility and Compliance Age: 65 | CURRENT PRINCIPAL OCCUPATION: President of The Wessel Group Incorporated DESCRIPTION OF BUSINESS EXPERIENCE: Mr. Wessel has served as President of The Wessel Group Incorporated, a government and political affairs consulting firm, since May 2006. Prior to founding The Wessel Group, he served as Senior Vice President of the Downey McGrath Group, a government affairs consulting firm, from March 1999 to December 2005 and as Executive Vice President from January 2006 to April 2006. Mr. Wessel is an attorney with over 30 years of experience as an economic and international trade policy advisor in Washington, D.C. Mr. Wessel has acted as an advisor to Congressman Richard Gephardt, both in the U.S. House of Representatives and to his presidential campaigns in 1987-88 and 2003-04, to the Clinton/Gore Transition | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: None Office in 1992 and 1993, and to Senator John Kerry’s presidential campaign in 2004. Mr. Wessel also served as a Commissioner on the U.S.-China Economic and Security Review Commission from April 2001 to December 2024. Mr. Wessel’s extensive experience with public policy matters and his government service, including as an advisor to former Majority Leader Gephardt and as an appointee on government commissions, provides us with valuable perspectives on public policy matters impacting trade, international economic affairs and other matters of importance to Goodyear. |
Michael R. Wessel
| | ELECTION OF DIRECTORS |
Roger J. Wood
Roger J. Wood
Roger J. Wood
| Director Since: July 25, 2023 Committees: Audit Governance Age: 62 | CURRENT PRINCIPAL OCCUPATION: Retired. Formerly Co-Chief Executive Officer of Tenneco, Inc. DESCRIPTION OF BUSINESS EXPERIENCE: Mr. Wood served as co-chief executive officer of Tenneco, Inc., one of the world’s leading designers, manufacturers and marketers of automotive products for original equipment and aftermarket customers, from 2018 to 2020. Mr. Wood previously served as chairman and chief executive officer of Fallbrook Technologies, a developer of transmission technologies, having joined in January 2018. He also served as president and chief executive officer of Dana Holding Corporation, a leading global supplier of highly engineered driveline, sealing and thermal management technologies for the automotive industry. He joined Dana after a 26-year career with BorgWarner Incorporated, a global product leader in delivering innovative and sustainable mobility solutions, serving most recently as executive vice president and group president for the Engine group. | OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2020: Brunswick Corp, (2012 – present) PHINIA Inc. (2023 – present) Tenneco, Inc. (2016 – 2020) Mr. Wood brings more than three decades of industry leadership and expertise in global operations to Goodyear’s Board. His experience as a CEO of several public manufacturing companies provides unique insight and significant knowledge to the Board in the areas of manufacturing operations, business management, global operations and strategic planning, and also provides him the necessary skills to be an “audit committee financial expert.” |
Roger J. Wood
Your Board of Directors unanimously recommends that shareholders vote FOR each of the nominees for director named in this Proxy Statement (Proposal 1).
COMPENSATION DISCUSSION AND ANALYSIS TABLE OF CONTENTS
| 34 | Annual Incentive Plan | | 39 | Long-Term Compensation | | 39 | 2024 Grants of Performance-Based Incentives | | 42 | 2024 Financial Performance | | 45 | Impact of TSR Modifier and ESG Index on 2022-2024 Long-Term Incentive Awards | | 47 | 2024 Restricted Stock Unit Grants | | 48 | Retirement and Other Benefits | | 48 | Retirement Benefits | | 49 | Severance and Change-in-Control Benefits | | 50 | Perquisites and Other Benefits | | 51 | Executive Deferred Compensation Plan | | 52 | Compensation Policies and Practices | | 52 | Stockholding Guidelines | | 52 | Insider Trading Policy | | 52 | Prohibition on Hedging and Pledging | | 53 | Recovery of Compensation and Claw-Back Policy |
2024 PAYOUTS REFLECT MEANINGFUL PROGRESS ON ADVANCING GOODYEAR FORWARD
2024 PAYOUTS REFLECT MEANINGFUL PROGRESS ON ADVANCING GOODYEAR FORWARD Our 2024 pay outcomes reflect pay-for-performance alignment and meaningful progress on our Goodyear Forward transformation plan in the face of significant growth in low-end imports that impacted the consumer replacement industry in key markets. Despite these challenges, the Company has continued to execute the Goodyear Forward plan and successfully delivered five consecutive quarters of margin expansion and growth in segment operating income. In our annual incentive plan, the Company achieved below target results for free cash flow (FCF) and segment operating income margin (SOI Margin) metrics based on total company performance. As a result, for 2024, the Compensation Committee approved a 72% payout for overall company performance in our annual incentive plan. In addition, the Compensation Committee approved 41%, 54% and 117% payouts, respectively, for our Americas, EMEA and Asia Pacific business units. Based on individual performance, each officer had an opportunity to have their payout increased or decreased. For 2024, the Compensation Committee increased payouts up to 10% for two named executive officers based on the recommendation of the CEO. For the completed 2022-2024 performance cycle, the payout for performance on our long-term awards was 69%, including the impact of the TSR modifier of 0.8x and the ESG index which increased payouts by 25 percentage points. Earnings for the 2024 performance period under each of our 2022-2024, 2023-2025 and 2024-2026 long-term awards were approved at 81%, driven by near target performance on our net income metric and below target achievement on our cash flow return on capital (CFROC) metric. Actual payouts for the outstanding long-term awards remain subject to continued employment, the TSR modifier, and a Strategic Initiatives (SI) Index or 3-year margin growth metric, as applicable. Our 2024 payouts reflect the continued rigor of our compensation program goals and meaningful progress on meeting our Goodyear Forward goals, despite a persistently challenging environment throughout 2024.
2024 PAYOUTS REFLECT MEANINGFUL PROGRESS ON ADVANCING GOODYEAR FORWARD
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Compensation Philosophy and Strategy |
2024 PAYOUTS REFLECT MEANINGFUL PROGRESS ON ADVANCING GOODYEAR FORWARD
Compensation Philosophy and Strategy The following core principles form the foundation of the compensation program for our executives, including the named executive officers:
2024 PAYOUTS REFLECT MEANINGFUL PROGRESS ON ADVANCING GOODYEAR FORWARD
| FIRST, compensation programs should motivate our executives to take actions that are aligned with our short- and long-term strategic objectives, and appropriately balance risk versus potential reward. | SECOND, as executives move to a greater level of responsibility, the percentage of their pay based on performance should increase to ensure the highest level of accountability to shareholders. | | THIRD, performance pay should offer an opportunity for above average compensation when our performance exceeds our goals balanced by the risk of below average compensation when it does not. | FOURTH, the percentage of total compensation paid in the form of equity should also increase as executives have increasing responsibility for corporate performance, thereby more closely aligning their interests with those of our shareholders. |
INDEPENDENT COMPENSATION CONSULTANT
INDEPENDENT COMPENSATION CONSULTANT The Compensation Committee has the authority to retain outside advisors, including compensation consultants, to assist it in evaluating actual and proposed compensation for our officers. In August 2021, the Compensation Committee selected Exequity as its independent compensation consultant, and Exequity continued as the Compensation Committee’s independent outside advisor through 2024.
INDEPENDENT COMPENSATION CONSULTANT
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Process for Determining Executive Compensation |
INDEPENDENT COMPENSATION CONSULTANT
As part of their engagement, the compensation consultant reviewed our executive compensation peer group and conducted a competitive analysis of compensation for the named executive officers as well as an analysis of the share usage, dilution and overhang of our equity compensation plan. The compensation consultant also assisted the Compensation Committee with a variety of other issues, including setting CEO compensation, the design and establishment of performance metrics and goals under our variable incentive plans, reviewing our compensation risk analysis and reviewing this Compensation Discussion and Analysis. In addition, the compensation consultant reviewed and provided recommendations regarding our non-management director compensation program and made presentations to the Compensation Committee on trends and regulatory developments in executive compensation. When requested by the Compensation Committee, an Exequity representative attends Compensation Committee meetings and participates in private sessions with the Compensation Committee, and Committee members are free to consult directly with Exequity as desired. The compensation consultant works with Goodyear management only under the direction of the Compensation Committee and does not provide any advice or consulting services to the Company beyond matters involving executive and director compensation.
COMPENSATION PEER GROUP
COMPENSATION PEER GROUP The Compensation Committee annually reviews the pay levels and practices of peer companies in order to assess the competitive positioning of Goodyear’s pay levels and plan designs. For these purposes, the Compensation Committee utilizes the following peer group: FOR 2024 COMPENSATION DECISIONS, THE PEER GROUP CONSISTED OF:
COMPENSATION PEER GROUP
| Adient plc | Emerson Electric Co. | PPG Industries, Inc. | | Aptiv PLC | Fluor Corporation | Stanley Black & Decker, Inc. | | BorgWarner Inc. | Kimberly-Clark Corporation | Textron Inc. | | Cummins Inc. | Lear Corporation | Trane Technologies plc | | Dana Inc. | PACCAR Inc. | Whirlpool Corporation | | Eaton Corporation plc | Parker-Hannifin Corporation | |
COMPENSATION PEER GROUP
Our peer group consists of 17 companies selected according to their similarity to our size and complexity, operations, products, revenues, markets, availability of executive pay information, and any other information the Compensation Committee deems appropriate. Such companies are likely to have executive positions comparable in breadth, complexity and scope of responsibility to ours. The peer group does not include other companies in the tire industry because no other U.S.-based tire company is similar in size and complexity to us, and non-U.S.-based tire companies do not publish comparable compensation information. We consider median market levels of compensation when setting total target compensation levels for our officers. The actual positioning of target compensation relative to the median varies based on each executive’s experience and skill set, and generally results in executives who are new in their role being placed lower in the range and those with more experience being placed higher in the range. We emphasize variable compensation because it minimizes fixed expense associated with salary and enables total compensation to fluctuate directly with performance against operating goals, strategic and operational
COMPENSATION PEER GROUP
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Process for Determining Executive Compensation |
COMPENSATION PEER GROUP
performance objectives and changes in share price. This approach aligns overall costs with performance and provides executives with a leveraged and attractive compensation opportunity that varies based on results. The Compensation Committee, together with our compensation consultant, annually reviews the peer group. For 2024 compensation decisions, the Compensation Committee removed Tenneco Inc. from the peer group because it ceased to be publicly traded in November 2022. The Compensation Committee did not make any additional changes to its peer group for 2024 compensation decisions. Data with respect to comparable elements of total target compensation is compiled for the peer group of companies described above from available sources, including, in most cases, the most recently available annual proxy statements and other SEC filings that address executive compensation matters.
TARGET SETTING
| • | Annual and long-term operating plans |
TARGET SETTING
| • | Input from its compensation consultant and management |
TARGET SETTING
The Compensation Committee set the performance metrics, and related weightings and targets, for our 2024 executive compensation program in the beginning of March 2024. The Compensation Committee believes that the performance metrics it established will focus management’s attention on the key drivers of our business and that the performance targets it established are rigorous, while providing meaningful motivational value to our executives. The achievement of these performance targets would ensure that we continue to meet the significant challenges we face, are a stronger competitor and are positioned for ongoing recovery from volatile economic conditions as well as long-term growth. Generally, the Compensation Committee prefers to set targets that exceed prior years’ results. However, it also understands that this method is not always practical, especially in our highly cyclical industry that can be impacted by external forces beyond the control of management. For Mr. Stewart’s replacement awards, the Compensation Committee set the performance metrics and related weightings at the time of his offer to correspond with the metrics and weightings of awards held by other executive officers. The Compensation Committee set the targets on March 1, 2024 when it set financial performance targets for all long-term awards. For a discussion of our annual incentive plan metrics, targets and performance, see “Annual Compensation — Annual Incentive Plan – Annual Incentive Plan Metrics and Targets,” and for a discussion of our long-term incentive plan metrics, targets and performance, see “Long-Term Compensation — 2024 Grants of Performance-Based Incentives — Long-Term Compensation Metrics and Targets.” For a discussion of Mr. Stewart’s replacement awards, see “CEO Offer Letter”.
TARGET SETTING
The mix of long-term compensation between cash-based long-term incentives, performance shares and restricted stock units is based, in part, on the market value of our Common Stock, the number of shares available for grant under our shareholder-approved equity compensation plan, and considerations relating to managing the dilutive effect of share-based awards. CEO Offer Letter In connection with Mr. Stewart’s appointment as our Chief Executive Officer and President on January 29, 2024, we entered into an offer letter pursuant to which Mr. Stewart receives an annual base salary of $1,400,000 and participates in our annual incentive plan, with a target annual incentive of 160% of his annual base salary ($2,240,000), and our long-term incentive program, with a 2024 grant value of $9,000,000. The Compensation Committee also considered that Mr. Stewart would forfeit certain unvested compensation upon the termination of employment with his prior employer to join Goodyear and determined that, in order to make a competitive offer, it was necessary and appropriate to make Mr. Stewart whole with respect to such forfeited awards. In replacement of forfeited awards at his prior employer, Mr. Stewart received (1) a payment of $8,560,000, paid 50% in cash and 50% in Common Stock, for awards from his prior employer that would have been payable or fully vested in 2024, and (2) a long-term incentive award with a grant value of $11,415,000, delivered $9,805,000 in performance share units and $1,610,000 in restricted stock units, for long-term awards from his prior employer that would have been payable or fully vested over the next three years. The long-term incentive replacement awards approximate the value of and vest on the same schedule as the forfeited awards and were made on the following terms:
TARGET SETTING
| | Value | Metrics | | 2024 Performance Share Units | $4,830,000 | 50% CFROC and 50% Net Income with a 1-year TSR modifier | | 2024-2025 Performance Share Units | 4,975,000 | 50% CFROC and 50% Net Income for each year with a 2-year TSR modifier | | 2024 Restricted Stock Units | 1,610,000 | Time-based vesting |
BASE SALARY
| The Compensation Committee reviews the salaries of our executives annually against competitive market data. The Compensation Committee determined that base salary increases were appropriate for each of Ms. Zamarro, Mr. Phillips and Mr. Helsel to better align their pay with compensation paid to executives with similar responsibility and experience. Consistent with the requirements of our master labor agreement with the USW, the base salaries of our CEO and the other executive officers are at or below the market-average, in aggregate. | Name | 2023 Base Salaries | 2024 Base Salaries(1) | | | Stewart | — | $1,400,000 | | | Zamarro | 725,000 | 840,000 | | | Delaney | 790,000 | 790,000 | | | Phillips | 650,000 | 715,000 | | | Helsel | 620,000 | 680,000 | | | Kramer | 1,450,000 | 1,450,000 | | | McClellan | 805,000 | 805,000 | | | (1) Mr. Stewart’s base salary was effective January 29, 2024. The other base salary increases were effective January 1, 2024. | | |
ANNUAL INCENTIVE PLAN
ANNUAL INCENTIVE PLAN ANNUAL INCENTIVE PLAN METRICS AND TARGETS All of our named executive officers are eligible to earn cash incentives under our annual incentive plan. For 2024, the Compensation Committee reduced the number of performance metrics to focus on key drivers of our Goodyear Forward transformation plan. The performance metrics in the annual incentive plan emphasized the importance of our profitability by adding Segment Operating Margin (SOI Margin) at a 40% weighting and our generation of cash by increasing Free Cash Flow (FCF) from a 20% to 40% weighting. In addition, the Compensation Committee reduced the weighting of strategic objectives from 30% to 20%, including company-focused strategic objectives tied to important, measurable, non-financial business priorities. Payouts for corporate officers are based on overall company results. Payouts for operating unit officers are based 50% on their operating unit’s performance and 50% on overall company results for SOI Margin and FCF and on overall company results for strategic objectives. We believe these weightings hold our operating unit executives most accountable for financial results in the areas where they have the most control and influence, but also motivate them to work cooperatively with other operating units to maximize results for the entire Company. Actual payouts can range from 0% to 200% of target.
ANNUAL INCENTIVE PLAN
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Annual Compensation |
ANNUAL INCENTIVE PLAN
The following table shows our 2024 annual compensation targets compared to our 2023 actual results (dollars in millions):
ANNUAL INCENTIVE PLAN
| Metric | 2024 Target | 2023 Actual(1) | | SOI Margin | 7.50% | 4.80% | | Free Cash Flow | $100 | $406 |
ANNUAL INCENTIVE PLAN
| 1 | Excluding impact of foreign currency, if applicable. |
ANNUAL INCENTIVE PLAN
Our SOI Margin target for 2024 is aligned to our Goodyear Forward transformation plan and our goal to expand margin. The target for 2024 reflects a significant improvement over our 2023 SOI Margin. Our Free Cash Flow target for 2024 is lower than our 2023 actual, driven by an anticipated increase in capital expenditures in 2024 of $300 million related to Goodyear Forward initiatives. ANNUAL INCENTIVE PLAN PAYOUTS In February 2025, the Compensation Committee reviewed actual results for 2024 with respect to achievement of the company-wide and operating unit performance objectives. The table below shows the performance objectives, actual results for 2024 and corresponding payout percentage under our annual incentive plan for the SOI Margin and FCF metrics.
ANNUAL INCENTIVE PLAN
| | Total Company Results Under Annual Incentive Plan | | | | | | | | 50% | 100% | 200% | Actual Result | % Achieved | Weighted Payout Percentage | | Overall Company Performance (2024): | | | | | | | | Segment Operating Income Margin | 5.75% | 7.50% | 7.75% | 6.37% | 78% | 31.2% | | Free Cash Flow | $0 | $100 | $250 | $46 | 78% | 31.2% |
ANNUAL INCENTIVE PLAN
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Annual Compensation |
ANNUAL INCENTIVE PLAN
The table below shows the payout percentages under our annual incentive plan for each of our operating units.
ANNUAL INCENTIVE PLAN
| | Operating Unit Results Under Annual Incentive Plan | | | | | SOI Margin % Achieved | FCF % Achieved | Total % Achieved | | Americas | 0% | 0% | 0% | | EMEA | 64% | 0% | 26% | | Asia Pacific | 143% | 200% | 152% |
ANNUAL INCENTIVE PLAN
“SOI Margin,” as defined in our incentive plans, means total segment operating income divided by net sales. Total segment operating income is the sum of the individual strategic business units’ segment operating income determined in accordance with US GAAP and net sales is calculated in accordance with US GAAP, each as adjusted per the tables below. Our 2024 Segment Operating Income for purposes of our annual incentive plans was calculated as follows:
ANNUAL INCENTIVE PLAN
| ($ in millions) | 2024 | | Total segment operating income (as reported) | $1,318 | | Insurance | (143) | | Foreign exchange | 31 | | Total segment operating income, as adjusted | $1,206 |
ANNUAL INCENTIVE PLAN
Our 2024 Net Sales for purposes of our annual incentive plans was calculated as follows:
ANNUAL INCENTIVE PLAN
| ($ in millions) | 2024 | | Net Sales (as reported) | $18,878 | | Foreign exchange | 62 | | Net Sales, as adjusted | $18,940 |
ANNUAL INCENTIVE PLAN
$1,206 million in segment operating income divided by $18,940 million in net sales resulted in an overall company SOI Margin of 6.37% for purposes of our incentive plans.
ANNUAL INCENTIVE PLAN
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Annual Compensation |
ANNUAL INCENTIVE PLAN
“Free cash flow,” as defined in our incentive plans, means the Company’s cash flows from operating activities, less capital expenditures and also excludes rationalization payments and pension contributions and direct payments. Our 2024 “free cash flow” also reflected the impact of certain other items noted in the table below. Our 2024 “free cash flow” for purposes of our incentive plans was calculated as follows:
ANNUAL INCENTIVE PLAN
| ($ in millions) | 2024 | | Cash flows from operating activities (as reported) | $698 | | Capital expenditures | (1,188) | | Rationalization payments | 198 | | Goodyear Forward payments | 105 | | Proceeds from asset sales | 97 | | Insurance recoveries greater than annual operating plan | (91) | | Pension contributions and direct payments | 69 | | Insurance recoveries for damaged Property Plant & Equipment | 62 | | Turkey economic conditions | 41 | | Strategic investment | 35 | | Foreign exchange | 20 | | Free cash flow, as adjusted | $46 |
ANNUAL INCENTIVE PLAN
In response to feedback from shareholders, we reduced the weighting of strategic objectives from 30% to 20%. The strategic objectives consist of metrics on new mobility weighted at 10%, and greenhouse gas emissions and PEC maturity, each weighted at 5%. The Compensation Committee evaluated achievement against the objective goals described below to determine the payout with respect to each goal. In aggregate, the payout was 10% out of a maximum of 20%.
ANNUAL INCENTIVE PLAN
| Metric | Goals | Achievement | Weighted Payout Percentage | | New Mobility | Advance strategic growth initiative, Tires as a Service (TaaS), through attaining 36,000 vehicles contracted by the end of 2024 | Not Achieved | 0% | | Greenhouse Gas (GHG) Emissions | 14% reduction of manufacturing Scope 1 and Scope 2 GHG emissions versus our 2019 manufacturing Scope 1 and Scope 2 GHG emissions baseline | Achieved | 5% | | PEC Maturity | People Environment Care maturity attainment of 3.39 by year end 2024 | Achieved | 5% |
ANNUAL INCENTIVE PLAN
The Compensation Committee established an aggregate incentive pool for all officers and determined the calculated payout for each officer. Then, the CEO assessed the officer’s contributions towards Company goals and made his recommendations with respect to individual payout amounts to the Compensation Committee, which considered the CEO’s recommendations and determined the final payouts. The Compensation Committee undertook the same process for the CEO and made the determination as to the final payout amount for the CEO.
ANNUAL INCENTIVE PLAN
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Annual Compensation |
ANNUAL INCENTIVE PLAN
The Compensation Committee approved the following awards for our named executive officers under our annual incentive plan:
ANNUAL INCENTIVE PLAN
| Name | Target Award ($) | Actual Award ($) | Actual Award as a % of Target Award | | Stewart | $2,068,640 | $1,489,421 | 72% | | Zamarro | 840,000 | 688,800 | 82% | | Delaney | 790,000 | 426,600 | 54% | | Phillips | 643,500 | 495,495 | 77% | | Helsel | 578,000 | 416,160 | 72% | | Kramer | 1,350,240 | 972,173 | 72% | | McClellan | 212,520 | 87,133 | 41% |
ANNUAL INCENTIVE PLAN
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Long-Term Compensation |
ANNUAL INCENTIVE PLAN
Long-Term Compensation On March 1, 2024, the Compensation Committee made long-term incentive awards to executive officers. The target long-term incentive grants were composed of three components: (a) restricted stock units (RSUs) constituting approximately 30% of the target opportunity, (b) stock-settled performance units (PSUs) constituting approximately 30% of the target opportunity, and (c) cash-settled performance units (EPUs) constituting approximately 40% of the target opportunity. In 2024, the Compensation Committee increased the weighting of the stock-settled performance units from 20% to 30% and decreased the weighting of the cash-settled performance units from 50% to 40%. The following table summarizes the target award values for our executives in accordance with our annual long-term program:
ANNUAL INCENTIVE PLAN
| | | | Performance-Based Awards | | | | | Stock-Settled Awards | | | | Name | Aggregate Target Award | 2024-2026 RSUs(1) | 2024-2026 PSUs(2) | 2024-2026 EPUs | | Stewart | $9,000,000 | $2,700,000 | $2,700,000 | $3,600,000 | | Zamarro | 3,350,000 | 1,005,000 | 1,005,000 | 1,340,000 | | Delaney | 2,900,000 | 870,000 | 870,000 | 1,160,000 | | Phillips | 1,800,000 | 540,000 | 540,000 | 720,000 | | Helsel | 1,625,000 | 487,500 | 487,500 | 650,000 |
ANNUAL INCENTIVE PLAN
| 1 | See the “Grants of Plan-Based Awards” Table at page 58 for information regarding the number of restricted stock units actually granted, which was determined by dividing the amount in this column by the closing market price of our Common Stock on the date of grant. |
ANNUAL INCENTIVE PLAN
| 2 | See the “Grants of Plan-Based Awards” Table at page 58 for information regarding the target number of performance shares actually granted, which was determined by dividing the amount in this column by the closing market price of our Common Stock on the date of grant. |
ANNUAL INCENTIVE PLAN
The Compensation Committee did not make long-term awards to Mr. Kramer and Mr. McClellan in 2024 due to their respective retirements.
2024 GRANTS OF PERFORMANCE-BASED INCENTIVES
| • | The payout is based on our consolidated results over a three-year performance cycle. Performance is measured 40% on Net Income, 40% on Cash Flow Return On Capital (“CFROC”), and 20% on 3-Year Margin Growth, with targets for Net Income and CFROC established at the beginning of each year. |
2024 GRANTS OF PERFORMANCE-BASED INCENTIVES
| • | The payout based on financial performance can range from 0% to 200% for the 2024-2026 performance cycle based on actual results on the financial metrics. |
2024 GRANTS OF PERFORMANCE-BASED INCENTIVES
| • | The payout for the financial metrics is subject to a modifier (0.8x to 1.2x) based on three-year relative total shareholder return (TSR) versus peer companies over the entire three-year performance cycle ending December 31, 2026. Performance at the 55th percentile is required to achieve a 1.0x modifier, with the modifier capped at 1.0x if absolute TSR is negative over the three-year period, regardless of relative performance. |
2024 GRANTS OF PERFORMANCE-BASED INCENTIVES
| • | The overall maximum payout is 200% of target. |
2024 GRANTS OF PERFORMANCE-BASED INCENTIVES
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Long-Term Compensation |
2024 GRANTS OF PERFORMANCE-BASED INCENTIVES
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Long-Term Compensation |
2024 GRANTS OF PERFORMANCE-BASED INCENTIVES
Relative Total Shareholder Return (TSR) Modifier To add further rigor to the long-term awards and ensure executives are focused on Goodyear’s stock price performance and aligned with our shareholders, the Compensation Committee also provided that the awards will be modified based on Goodyear’s relative total shareholder return performance versus an index of 20 highly relevant peer companies. This modifier is designed to assess Goodyear’s success in creating shareholder value relative to other capital-intensive automotive and cyclical industrial companies with comparable leverage and strong correlations to Goodyear’s Common Stock performance. This group of companies better reflects our relative success in enhancing shareholder value than would comparisons to the peer companies used for benchmarking executive pay or a broad-based market index like the S&P 500, which we used for grants made prior to 2022. This approach has the further benefit of creating greater comparability throughout economic cycles. The Compensation Committee believes this reflects the understanding investors have of risk and reward in making investment decisions. THE COMPARISON GROUP CONSISTS OF:
2024 GRANTS OF PERFORMANCE-BASED INCENTIVES
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Long-Term Compensation |
2024 FINANCIAL PERFORMANCE
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Long-Term Compensation |
2024 FINANCIAL PERFORMANCE
“Net income,” as defined in our long-term incentive plans, means the Company’s net income, excluding charges (after-tax and minority interest) for rationalizations, certain asset write-offs and accelerated depreciation, goodwill and intangible asset impairment charges, certain pension curtailment and settlement charges, charges relating to the refinancing of debt, changes in tax valuation allowances and other discrete tax items, and the cumulative effect of accounting changes. Our 2024 “net income” also excluded the impact of certain other items noted in the table below. Our 2024 “net income” for purposes of our long-term incentive plans was calculated as follows:
2024 FINANCIAL PERFORMANCE
“Cash flow return on capital,” as defined in our long-term incentive plans, means free cash flow, as adjusted, divided by the sum of average net fixed assets and average working capital. See also the reconciliation of “free cash flow” on page 37. Our 2024 cash flow return on capital for purposes of our long-term incentive plans was calculated as follows:
2024 FINANCIAL PERFORMANCE
| ($ in millions) | 2024 | | Free cash flow, as adjusted for annual incentive plan | $46 | | Foreign exchange | (20) | | Free cash flow, as adjusted for long-term incentive plans | 26 | | Average working capital + average net fixed assets | 10,900 | | CFROC | 0.24% |
2024 FINANCIAL PERFORMANCE
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Long-Term Compensation |
2024 FINANCIAL PERFORMANCE
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Long-Term Compensation |
2024 FINANCIAL PERFORMANCE
| Name | Aggregate Target Award(1) | Portion of Actual Award Payable in Cash(2) | Portion of Actual Award Payable in Shares (# of Shares)(2) | | Replacement Award, 2024 PSU, 2024 Performance Period | | | | | Stewart | $4,498,725 | $— | 331,269 | | Replacement Award, 2024-2025 PSU, 2024 Performance Period | | | | | Stewart | $2,441,167 | $— | 170,607 |
2024 FINANCIAL PERFORMANCE
| 2 | Payable contingent on continued service through December 31, 2024 for the 2022-2024 award, December 31, 2025 for the 2023-2025 award, and December 31, 2026 for the 2024-2026 award, and subject to a three-year relative TSR modifier for each award, a three-year ESG Index for the 2022-2024 awards, and a three-year Strategic Initiatives Index for the 2023-2025 award. The CEO Replacement Awards are payable contingent on continued service through May 15, 2025 for the 2024 PSU and May 15, 2026 for the 2024-2025 PSU, and subject to relative TSR modifiers of equivalent length. |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS Our stock was at the 17th percentile of companies in the comparison group during the three-year period ended December 31, 2024, resulting in a TSR modifier of 0.80 times. See pages 41 and 42 for more information on the calculation of the TSR modifier. To determine achievement on the ESG Index, the Compensation Committee evaluated performance of the ESG Index goals against the objective criteria developed at the beginning of the three-year performance period ended December 31, 2024 for the 2022-2024 awards. Achieving one goal would result in an ESG Index of plus 15 percentage points and achieving both goals would result in an ESG Index of plus 25 percentage points. The Compensation Committee determined that the Company achieved both goals resulting in an ESG Index of plus 25 percentage points. The goals and achievements are summarized below:
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| Metric | Goals | Achievement | | Greenhouse Gas Emissions | Progress towards Scope 1 and Scope 2 GHG emission goals—14% reduction versus our 2019 baseline | 23% Reduction Achieved | | Sustainability | Develop tire with 85% sustainable content consistent with our durability and rolling resistance standards and DOT requirements. | Developed tire with 90% sustainable content Achieved |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Long-Term Compensation |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
The Compensation Committee approved the payout of shares of Common Stock and cash to the named executive officers with respect to the 2022-2024 performance cycle as follows.
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| | Cash Award ($) | | | | | | | | Performance Period | | | | | | | Name | 2022 (1) | 2023 (2) | 2024 | Impact of TSR Modifier | Impact of ESG Index | Total Payout of 2022-2024 Awards | | Stewart | $— | $— | $— | $— | $— | $— | | Zamarro | 25,500 | 36,800 | 60,800 | (24,700) | 56,400 | 154,800 | | Delaney | 158,678 | 228,700 | 377,900 | (153,178) | 350,100 | 962,200 | | Phillips | 79,356 | 114,300 | 189,000 | (76,556) | 175,000 | 481,100 | | Helsel | 66,600 | 96,000 | 158,600 | (64,200) | 147,000 | 404,000 | | Kramer | 603,500 | 869,800 | 1,437,800 | (582,300) | 1,331,400 | 3,660,200 | | McClellan | 158,678 | 228,700 | 377,900 | (153,178) | 350,100 | 962,200 |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| 1 | Previously reported, to the extent applicable, in the Proxy Statement dated March 13, 2023. |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| 2 | Previously reported, to the extent applicable, in the Proxy Statement dated. March 7, 2024. |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| | Shares Award (# of Shares) | | | | | | | | Performance Period | | | | | | | Name | 2022 (1) | 2023 (2) | 2024 | Impact of TSR Modifier | Impact of ESG Index | Total Payout of 2022-2024 Awards | | Stewart | — | — | — | — | — | — | | Zamarro | 658 | 949 | 1,568 | (635) | 1,452 | 3,992 | | Delaney | 4,097 | 5,904 | 9,760 | (3,954) | 9,039 | 24,846 | | Phillips | 2,048 | 2,951 | 4,880 | (1,976) | 4,518 | 12,421 | | Helsel | 1,719 | 2,477 | 4,094 | (1,658) | 3,793 | 10,425 | | Kramer | 15,584 | 22,459 | 37,127 | (15,035) | 34,377 | 94,512 | | McClellan | 4,097 | 5,904 | 9,760 | (3,954) | 9,039 | 24,846 |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| 1 | Previously reported, to the extent applicable, in the Proxy Statement dated March 13, 2023. |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| 2 | Previously reported, to the extent applicable, in the Proxy Statement dated March 7, 2024. |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Long-Term Compensation |
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
The Compensation Committee approved the payout of shares of Common Stock to Mr. Stewart with respect to the 2024 performance cycle of his one-year replacement PSU award as follows:
IMPACT OF TSR MODIFIER AND ESG INDEX ON 2022 – 2024 LONG-TERM INCENTIVE AWARDS
| | Shares Award (# of Shares) | | | | | | Performance Period | | | | | Name | 2024 | Impact of TSR Modifier | Impact of ESG Index | Total Payout of 2024 Replacement Award | | Stewart | 331,269 | (66,254) | n/a | 265,015 |
2024 RESTRICTED STOCK UNIT GRANTS
2024 RESTRICTED STOCK UNIT GRANTS Restricted stock units granted in 2024 to the named executive officers have the following terms:
2024 RESTRICTED STOCK UNIT GRANTS
| • | the restricted stock units ratably vest and convert into shares of Common Stock each year during the three years following the grant date, contingent on continued service to the vesting date, and |
2024 RESTRICTED STOCK UNIT GRANTS
| • | restricted stock units accrue dividend equivalents, if any, that are subject to the same vesting requirements as the underlying restricted stock units. |
2024 RESTRICTED STOCK UNIT GRANTS
The portion of long-term compensation provided in the form of restricted stock units grants each year is determined based on the availability of Common Stock under our equity compensation plans, as well as market data on long-term compensation. The table below shows the aggregate grant date fair value and the number of restricted stock units granted to each of our named executive officers in 2024.
2024 RESTRICTED STOCK UNIT GRANTS
| Name | Aggregate Grant Date Fair Value ($) | Number of Restricted Stock Units (#) | | Stewart(1) | $4,309,989 | 364,944 | | Zamarro | 1,004,995 | 85,097 | | Delaney | 869,996 | 73,666 | | Phillips | 539,988 | 45,723 | | Helsel | 487,494 | 41,278 | | Kramer(2) | — | — | | McClellan(2) | — | — |
2024 RESTRICTED STOCK UNIT GRANTS
| 1 | Includes RSUs granted to Mr. Stewart as part of his replacement award. |
2024 RESTRICTED STOCK UNIT GRANTS
| 2 | The Compensation Committee did not grant RSUs to Mr. Kramer or Mr. McClellan in 2024 due to their respective announced retirements. |
2024 RESTRICTED STOCK UNIT GRANTS
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Retirement and Other Benefits |
2024 RESTRICTED STOCK UNIT GRANTS
Retirement and Other Benefits
RETIREMENT BENEFITS
RETIREMENT BENEFITS Retirement benefits are important to attracting, motivating and retaining talented executives with a history of leadership and to providing retirement replacement income. Retirement benefits are an important factor in an executive’s decision to accept or reject a new position. We provide our named executive officers with retirement benefits under both tax-qualified and non-qualified retirement plans. Tax-qualified plan benefits are pursuant to a defined benefit pension plan, the Goodyear Salaried Pension Plan (the “Salaried Plan”), which was frozen effective December 31, 2008, and a defined contribution plan, the Goodyear Employee Savings Plan for Salaried Employees (the “Savings Plan”). Non-qualified plan benefits are pursuant to a defined benefit plan, the Goodyear Supplementary Pension Plan (the “Supplementary Plan”), which was closed to new entrants effective December 31, 2021. We also maintain a non-qualified defined benefit Excess Benefit Plan, which was also frozen effective December 31, 2008, that pays an additional pension benefit over that paid from the Salaried Plan if a participant does not meet the eligibility requirements of the Supplementary Plan. For all employees who do not meet the eligibility requirements of the Supplementary Plan, there is also a corresponding non-qualified defined contribution Excess Benefit Plan (the “DC Plan”) that mirrors the retirement contributions feature of the Savings Plan. Effective January 1, 2022, the DC Plan provides a performance-based benefit to designated participants, pursuant to which contributions are equal to the participant’s annual base salary paid during the applicable performance period, limited to twelve (12) months, plus the award to be payable under the annual incentive plan, if any, multiplied by the applicable percentage set forth below based on company-wide achievement under the annual incentive plan:
SEVERANCE AND CHANGE-IN-CONTROL BENEFITS
SEVERANCE AND CHANGE-IN-CONTROL BENEFITS Our Executive Severance and Change in Control Plan (the “Executive Severance Plan”) provides for the payment of severance benefits to our officers, including all of the named executive officers, if their employment is terminated under certain circumstances during certain periods before or within two years following a change-in-control of the Company. The Executive Severance Plan does not provide for any excise tax gross-ups or walk-away rights. The Executive Severance Plan is designed to attract, retain and motivate officers, provide for stability and continuity in the event of an actual or threatened change-in-control, and ensure that our officers are able to devote their full time and attention to the Company’s operations in the event of an actual or threatened change-in-control. The Executive Severance Plan and the related change-in-control triggers (commonly referred to as “double triggers”) generally provide for the payment of severance benefits if employment is terminated under certain circumstances during certain periods before or within two years following a change-in-control of the Company. The change-in-control triggers in our equity compensation plans are substantially similar to those in the Executive Severance Plan. We selected the specific change-in-control triggers used in the Executive Severance Plan and our equity compensation plans, such as the acquisition of 20% or more of Goodyear’s Common Stock, a significant change in the composition of the Board of Directors or the acquisition of actual control of Goodyear, based upon our review of market practices, including provisions included in similar agreements of other public companies. Based upon that review, we determined that the terms and conditions of the Executive Severance Plan, including the specific change-in-control triggers, were consistent with market practices. The Executive Severance Plan also provides severance benefits to our officers, including each of the named executive officers, if their employment is terminated by us other than for Cause (as defined in the Executive Severance Plan), death or disability, and other than in connection with a change-in-control. To be eligible to receive benefits under the Executive Severance Plan, an officer must execute a release and agree, among other things, to certain confidentiality, non-disparagement, non-solicitation and non-competition covenants.
SEVERANCE AND CHANGE-IN-CONTROL BENEFITS
| | COMPENSATION DISCUSSION AND ANALYSIS | | | Retirement and Other Benefits |
SEVERANCE AND CHANGE-IN-CONTROL BENEFITS
The Compensation Committee believes that our severance benefits are in the best interests of the Company and our shareholders, are a necessary component of a competitive compensation program, and are in line with severance benefits in place at other companies. For additional information regarding the terms of the Executive Severance Plan and benefits payable under that plan, see “Potential Payments Upon Termination or Change-in-Control” at page 67.
STOCKHOLDING GUIDELINES
All shares of Common Stock owned outright by officers (or their spouses) and held by them in the Goodyear stock fund of the Savings Plan, shares of restricted stock or restricted stock units, and share equivalent units held in our deferred compensation plan are counted as ownership in assessing compliance with the guidelines. Unvested performance shares and unexercised stock options are not counted toward compliance with the guidelines. The stock price used in assessing compliance with the guidelines as of May 1st of each year will be the average closing stock price for the prior 200-day period. If an officer has met their stockholding requirement, they are required to retain 25% of the net shares received from any vested shares of Common Stock or any exercised options for at least one year from the date of vesting or exercise and may only sell or otherwise dispose of shares to the extent they will still meet their stockholding requirement following that sale or disposition. During 2024, each of our named executive officers complied with our stockholding guidelines and satisfied, or is working towards satisfying, their stockholding requirement.
RECOVERY OF COMPENSATION AND CLAW-BACK POLICY
RECOVERY OF COMPENSATION AND CLAW-BACK POLICY Claw-Back Policy In October 2023, we adopted a compensation recovery policy (i.e., “claw-back” policy) in compliance with Rule 10D-1 of the Exchange Act and Nasdaq listing standards. The claw-back policy provides for the recovery of the amount of incentive compensation erroneously awarded to certain current and former officers (“covered officers”) during the prior three fiscal years if the Company is required to prepare an accounting restatement due to the material noncompliance with any financial reporting requirement under the securities laws. Subject to limited exceptions, the amount subject to recovery equals the excess that the covered officer received over the amount that would have been paid to the covered officer after taking into account the accounting restatement. The claw-back policy applies to incentive compensation received on or after October 2, 2023. In addition, our claw-back policy goes beyond the minimum requirements of the Nasdaq listing standards by providing the Compensation Committee discretion to recover additional amounts paid to elected officers, in the event of misconduct that results in a violation of law or Company policy that causes significant financial or reputational harm to the Company. Additional amounts recoverable by the Company include any bonus or other incentive-based or equity-based compensation, regardless of whether based on attainment of a financial reporting measure, and any profits realized from the sale of securities during a specified time period. The Compensation Committee will determine the method for recouping incentive compensation under the claw-back policy, which may include, without limitation, requiring reimbursement of compensation paid; seeking recovery of any gain realized on the vesting, exercise, sale, settlement, transfer or other disposition of equity-based awards; offsetting amounts from compensation otherwise owed; and/or cancelling outstanding vested or unvested awards. Other Recovery of Compensation If the Compensation Committee determines that an officer has engaged in conduct detrimental to the Company, the Compensation Committee may take a range of actions to remedy this conduct, prevent its recurrence and impose appropriate discipline. Discipline would vary depending on the facts and circumstances, and may include (1) termination of employment, (2) cancelling or reducing any outstanding compensatory grants or awards, (3) initiating an action for breach of fiduciary duty or fraud which could include recovery of any unjustly obtained incentive compensation, and (4) requiring reimbursement of compensation or other payments in accordance with provisions of the Sarbanes-Oxley Act of 2002, our claw-back policy described above or the terms of the relevant compensation plan. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities. In addition, under our equity compensation plans, the Compensation Committee may require a plan participant who engages in competition with us within 18 months after their termination of employment to return or forfeit the realized value of all awards under those plans during such period of time that the Compensation Committee determines. Our Executive Severance Plan also provides for the recovery or forfeiture of severance payments if a person receiving payments pursuant to the plan violates certain confidentiality, non-disparagement, non-solicitation and non-competition covenants.
EXECUTIVE COMPENSATION
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | | Mark W. Stewart(8) | 2024 | $1,299,487 | $4,280,000 | $16,798,406 | $— | $2,267,021 | $ — | $1,061,125 | $25,706,039 | | Chief Executive Officer and President | | | | | | | | | | | Christina L. Zamarro | 2024 | 840,000 | 375,000 | 1,661,518 | — | 1,374,541 | 845,392 | 87,765 | 5,184,216 | | Executive Vice President | 2023 | 725,000 | — | 2,122,986 | — | 1,189,350 | 435,273 | 113,175(7) | 4,585,784 | | and Chief Financial Officer | | | | | | | | | | | Christopher R. Delaney | 2024 | 790,000 | — | 1,612,572 | — | 1,643,483 | 870,165 | 30,652 | 4,946,872 | | President, Europe, Middle | 2023 | 781,667 | — | 1,324,749 | — | 1,809,800 | 633,472 | 29,853 | 4,579,541 | | East and Africa | 2022 | 760,000 | — | 1,471,271 | — | 951,128 | 173,290 | 24,789 | 3,380,478 | | David E. Phillips | 2024 | 715,000 | — | 964,258 | — | 1,140,959 | 493,689 | 20,575 | 3,334,481 | | Senior Vice President and | 2023 | 633,333 | 100,000 | 678,585 | — | 1,160,426 | 419,492 | 14,504 | 3,006,340 | | General Counsel | 2022 | 591,667 | — | 718,028 | — | 632,734 | — | 21,364 | 1,963,793 | | Christopher P. Helsel | 2024 | 680,000 | — | 871,853 | — | 990,361 | 1,176,777 | 61,276 | 3,780,267 | | Senior Vice President and Chief Technology Officer | | | | | | | | | | | Richard J. Kramer(8) | 2024 | 845,833 | — | 1,241,883 | — | 4,596,873 | 3,068,287 | 8,504,082 | 18,256,958 | | Retired Chairman, Chief | 2023 | 1,433,333 | — | 4,915,483 | — | 6,592,600 | 1,666,533 | 132,353 | 14,740,302 | | Executive Officer and | 2022 | 1,366,667 | — | 5,658,051 | — | 3,109,500 | — | 183,130 | 10,317,348 | | President | | | | | | | | | | | Stephen R. McClellan(8) | 2024 | 204,299 | — | 333,822 | — | 1,053,455 | 1,851,383 | 3,071,438 | 6,514,397 | | Retired President, Americas | 2023 | 796,667 | — | 1,324,749 | — | 2,071,225 | 659,383 | 89,091 | 4,941,115 | | | 2022 | 770,000 | — | 1,471,271 | — | 1,011,698 | — | 103,882 | 3,356,851 |
EXECUTIVE COMPENSATION
| No nonqualified deferred compensation earnings are required to be reported because the Deferred Compensation Plan does not provide for “above-market” or preferential earnings as defined in applicable SEC rules and regulations. |
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Grants of Plan-Based Awards |
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Grants of Plan-Based Awards |
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Outstanding Equity Awards at Fiscal Year-End |
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Outstanding Equity Awards at Fiscal Year-End |
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Option Exercises and Stock Vested |
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Pension Benefits |
EXECUTIVE COMPENSATION
Pension Benefits Goodyear’s Salaried Pension Plan is a defined benefit plan qualified under the Code in which U.S.-based salaried employees hired before January 1, 2005 participate, including Mr. Helsel, Mr. Kramer and Mr. McClellan. Accruals in the Salaried Plan were frozen effective December 31, 2008. The Salaried Plan was designed to provide tax-qualified pension benefits for most Goodyear salaried employees. The Salaried Plan contains formulas based on age and service. These formulas are multiplied by five-year average compensation below and above a breakpoint ($51,000 in 2008, the year the Salaried Plan was frozen), with the result representing a lump sum benefit under the plan. Compensation is held to the qualified plan limit under the Code, which was $230,000 for 2008. A portion of the benefit may be paid by employee contributions. Effective December 31, 2007, all active participants in the Salaried Plan became vested and are entitled to a benefit upon any termination of employment. Benefits are available on a five-year certain and continuous annuity basis at age 65, by converting the lump sum to an annuity. Annuity benefits payable to a participant who retires prior to age 65 are subject to a reduction for each month retirement precedes age 65. Benefits under the Salaried Plan are funded by an irrevocable tax-exempt trust. Participation in the Salaried Plan was frozen effective December 31, 2004. Subsequent hires, including Mr. Stewart, Ms. Zamarro, Mr. Delaney and Mr. Phillips participate in the retirement contributions feature of the Savings Plan. Under the Savings Plan, each participant receives an allocation each pay period equal to a percentage of compensation, with compensation held to the qualified plan limit under the Code. Effective January 1, 2009, Salaried Plan participants, including Mr. Helsel, Mr. Kramer and Mr. McClellan, also began receiving allocations under the retirement contributions feature of the Savings Plan. Goodyear also maintains the Supplementary Plan, a non-qualified plan which provides additional retirement benefits to our officers, including all of the named executive officers other than Mr. Stewart. The Supplementary Plan was closed to new entrants effective December 31, 2021. The Supplementary Plan provides pension benefits to participants who retire with at least 30 years of service, retire after age 55 with at least ten years of service or retire after age 65 with at least five years of service. The formula for an annuity benefit is based on a percentage determined using credited service (22% with 10 years, 38% with 20 years, 48% with 30 years and 54% with 40 years) times five-year average compensation above the breakpoint ($84,300 in 2024), with compensation inclusive of base salary and annual incentive payments. The five-year average compensation uses the highest five calendar years, not necessarily consecutive, out of the last ten years. Benefits are offset for the Salaried Plan, the retirement contributions feature of the Savings Plan, applicable non-U.S. benefits and certain prior employer benefits. Under the Supplementary Plan, benefits payable to a participant who retires prior to age 62 are subject to a reduction of 0.4% for each month retirement precedes age 62. All benefits from the Supplementary Plan will be paid in a lump sum. For participants considered to be among the top 50 wage earners of the Company, benefits cannot be distributed prior to six months after separation of service. Mr. Helsel, Mr. Kramer and Mr. McClellan are vested in their Supplementary Plan benefits. Ms. Zamarro, Mr. Delaney and Mr. Phillips are not vested in their Supplementary Plan benefits. Mr. Stewart is not a participant in the Supplementary Plan due to its closure to new entrants effective December 31, 2021. Mr. Helsel was eligible for immediate commencement of the benefit from the Salaried Plan as of December 31, 2024. Mr. Kramer and Mr. McClellan were eligible for immediate commencement of the benefit from the Salaried Plan as of their
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Pension Benefits |
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Pension Benefits |
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Nonqualified Deferred Compensation |
EXECUTIVE COMPENSATION
| | EXECUTIVE COMPENSATION | | | Potential Payments Upon Termination or Change-in-Control |
EXECUTIVE SEVERANCE PLAN
| | EXECUTIVE COMPENSATION | | | Potential Payments Upon Termination or Change-in-Control |
EXECUTIVE SEVERANCE PLAN
| | EXECUTIVE COMPENSATION | | | Potential Payments Upon Termination or Change-in-Control |
EXECUTIVE SEVERANCE PLAN
| | EXECUTIVE COMPENSATION | | | Potential Payments Upon Termination or Change-in-Control |
QUANTIFICATION OF TERMINATION BENEFITS
| | EXECUTIVE COMPENSATION | | | Potential Payments Upon Termination or Change-in-Control |
QUANTIFICATION OF TERMINATION BENEFITS
| | EXECUTIVE COMPENSATION | | | Potential Payments Upon Termination or Change-in-Control |
QUANTIFICATION OF TERMINATION BENEFITS
| | EXECUTIVE COMPENSATION | | | Director Compensation Table |
QUANTIFICATION OF TERMINATION BENEFITS
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | | Clayton | $140,920 | $160,000 | $— | $300,920 | | Firestone | 155,000 | 160,000 | 2,095 | 317,095 | | Geissler | 130,000 | 160,000 | 557 | 290,557 | | Hinrichs | 130,000 | 160,000 | 1,395 | 291,395 | | Koellner | 329,766 | 160,000 | — | 489,766 | | Lewis | 145,000 | 160,000 | — | 305,000 | | Mahendra-Rajah(3) | 130,000 | 160,000 | 1,533 | 291,533 | | McGlade | 155,000 | 160,000 | — | 315,000 | | Mitchell | 130,000 | 160,000 | — | 290,000 | | Palmore(4) | 39,437 | — | 2,284 | 41,721 | | Siu | 130,000 | 160,000 | 617 | 290,617 | | Wessel | 130,000 | 160,000 | — | 290,000 | | Williams(4) | 39,437 | — | — | 39,437 | | Wood | 130,000 | 160,000 | 1,361 | 291,361 |
QUANTIFICATION OF TERMINATION BENEFITS
| | EXECUTIVE COMPENSATION | | | Director Compensation Table |
QUANTIFICATION OF TERMINATION BENEFITS
| | EXECUTIVE COMPENSATION | | | Director Compensation Table |
QUANTIFICATION OF TERMINATION BENEFITS
| | EXECUTIVE COMPENSATION | | | Item 402(v) Pay Versus Performance Table |
QUANTIFICATION OF TERMINATION BENEFITS
| 2 | The following table sets forth the adjustments made to the SCT Total for PEO1 and PEO2 during 2024 to determine compensation actually paid (CAP) to such PEO, with “fair value” calculated in accordance with ASC Topic 718 as of the end of the specified period: |
QUANTIFICATION OF TERMINATION BENEFITS
| | EXECUTIVE COMPENSATION | | | Item 402(v) Pay Versus Performance Table |
QUANTIFICATION OF TERMINATION BENEFITS
| | EXECUTIVE COMPENSATION | | | Item 402(v) Pay Versus Performance Table |
Compensation Actually Paid and Company TSR
Compensation Actually Paid and Company TSR The following table illustrates the value of our CEO and other NEOs’ CAP and net income:
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income
| | EXECUTIVE COMPENSATION | | | Item 402(v) Pay Versus Performance Table |
Compensation Actually Paid and Net Income
The following table illustrates the value of our CEO and other NEOs’ CAP and the Company’s SOI (Company-Selected Measure):
Compensation Actually Paid and SOI
Compensation Actually Paid and SOI
Compensation Actually Paid and SOI
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Compensation Actually Paid and SOI
The following table compares the Company’s TSR to the Peer Group TSR: