DEF 14A of Axalta Coating Systems Ltd.
Filed Apr 22, 2025 · FY20240001193125-25-087815
Our Board of Director Nominees
Our Board of Director Nominees
Our Board of Director Nominees
| Name | Age | Occupation | Standing Committees and Leadership Roles | Other Public Company Boards | | Director Nominees | | | | | | Rakesh Sachdev | 69 | Former chief executive officer | • Non-Executive Board Chair | 3 | | Jan A. Bertsch | 68 | Former financial executive | • Audit (Chair) | 2 | | | | | • Compensation | | | William M. Cook | 71 | Former chief executive officer | • Audit | 1 | | | | | • Compensation (Chair) | | | Tyrone M. Jordan | 63 | Former business executive | • Environment, Health, Safety & Sustainability | 3 | | | | | • Nominating & Corporate Governance | | | Deborah J. Kissire | 67 | Former accounting firm partner | • Compensation | 3 | | | | | • Nominating & Corporate Governance (Chair) | | | Samuel L. Smolik | 72 | Former operations executive | • Audit | 0 | | | | | • Environment, Health, Safety & Sustainability (Chair) | | | Kevin M. Stein | 59 | Chief executive officer | • Environment, Health, Safety & Sustainability | 1 | | | | | • Nominating & Corporate Governance | | | Chris Villavarayan | 54 | Chief Executive Officer and President of Axalta | | 1 | | Mary S. Zappone | 60 | Chief executive officer | • Audit | 0 | | | | | • Nominating & Corporate Governance | |
Executive Compensation Highlights
| • | Double Trigger Vesting Provisions – our equity plan also includes double trigger vesting provisions for long-term equity awards in the event of a Change-in-Control (as defined below). |
Nominees for Election as Directors to Serve Until the 2026 Annual General Meeting of Members
Nominees for Election as Directors to Serve Until the 2026 Annual General Meeting of Members
Nominees for Election as Directors to Serve Until the 2026 Annual General Meeting of Members
| | Rakesh Sachdev Age: 69 Axalta Board Service • Tenure: 4 years (August 2020) • Non-Executive Board Chair Independent |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Overview
| Compensation Component | Amount | | Annual equity retainer – restricted stock units (“RSUs”)(1) | $200,000 | | Annual cash retainer(2) | $75,000 | | Board Chair annual fee(2) | $125,000 | | Audit Committee Chair annual fee(2) | $20,000 | | Compensation Committee Chair annual fee(2) | $17,500 | | Other Committee Chair annual fee(2) | $15,000 |
Overview
| (1) RSUs vest 100% on the first anniversary of the grant date |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation Table 2024
Director Compensation Table 2024 For the year ended December 31, 2024, we provided the compensation set out in the table below to our directors.
Director Compensation Table 2024
| Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Total ($) | | Rakesh Sachdev | 200,000 | 199,979 | 399,979 | | Jan A. Bertsch | 86,429 | 199,979 | 286,408 | | Steven M. Chapman(3) | 32,555 | 86,332 | 118,887 | | William M. Cook | 92,500 | 199,979 | 292,479 | | Tyrone M. Jordan | 75,000 | 199,979 | 274,979 | | Deborah J. Kissire | 90,000 | 199,979 | 289,979 | | Robert M. McLaughlin(4) | 41,126 | 199,979 | 241,105 | | Samuel L. Smolik | 90,000 | 199,979 | 289,979 | | Kevin M. Stein | 75,000 | 199,979 | 274,979 | | Chris Villavarayan(5) | — | — | — | | Mary S. Zappone | 75,000 | 199,979 | 274,979 |
Director Compensation Table 2024
| (1) Amounts reflect the director cash retainer, Board Chair fee and committee chair fees earned in 2024. Such amounts are paid quarterly in arrears and prorated for partial service in any relevant period. |
Director Compensation Table 2024
| (2) The number of RSUs granted for each director in 2024 is calculated by dividing the value of the grant ($200,000 or a prorated portion of such amount for Mr. Chapman as described in this footnote 2) by the closing price of our common shares on the grant date. The amounts in this column reflect the grant date fair value of directors’ stock awards for 2024 computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, which is calculated using the number of shares granted multiplied by the closing price of our common shares on the date of the grant. The grant date for all non-employee directors was February 28, 2024. The aggregate number of awarded RSUs outstanding at 2024 fiscal year-end for each then serving non-employee director is as follows: Mr. Sachdev, 6,157; Ms. Bertsch, 6,157; Mr. Cook, 6,157; Mr. Jordan, 6,157; Ms. Kissire, 6,157; Mr. Smolik, 6,157; Mr. Stein, 6,157; and Ms. Zappone, 6,157. Mr. Chapman received a prorated grant of 2,658 RSUs because he announced his intent to not stand for reelection at the 2024 Annual General Meeting prior to the grant date, which RSUs vested in full on June 6, 2024. On June 6, 2024 (the date of the 2024 Annual General Meeting), Mr. McLaughlin vested in a prorated portion of the 6,157 RSUs granted to him, or 2,658 RSUs (the value of which was approximately $96,406 on such date), upon his ceasing to serve on the Board of Directors following the 2024 Annual General Meeting, which proration also resulted in a modification of his RSU award and a modification date fair value of $223,314 computed in accordance with FASB ASC Topic 718. |
Director Compensation Table 2024
| (3) Mr. Chapman did not stand for reelection to the Board at the 2024 Annual General Meeting and therefore ceased serving as a director at the conclusion of the 2024 Annual General Meeting. |
Director Compensation Table 2024
| (4) Mr. McLaughlin did not stand for reelection to the Board at the 2024 Annual General Meeting and therefore ceased serving as a director at the conclusion of the 2024 Annual General Meeting. |
Director Compensation Table 2024
| (5) Mr. Villavarayan serves as our Chief Executive Officer and President, and, therefore, does not receive compensation for his service as an employee director. |
Pay Outcomes
| • | Based on the plan design set by the Compensation Committee under our 2024 annual bonus plan (“ABP”), the Company’s performance was above target for each of Adjusted EBIT, Adjusted EBIT margin and Free Cash Flow, and our NEOs received an average 2024 ABP payout of approximately 144% of target based on the Company’s financial performance before accounting for individual modifications. |
Pay Outcomes
| • | 2024 marked the end of the performance cycle for performance share unit (“PSU”) awards granted in 2022, with such awards paying out at approximately 26% of target based on the Company’s Adjusted Diluted Earnings Per Share (“Adjusted EPS”) and return on invested capital (“ROIC”) across all performance periods. |
Pay Outcomes
For further discussion of our ABP and PSU awards, see “Annual Performance-Based Compensation” beginning on page 49 and “2022-2024 PSU Payout” beginning on page 56.
2025 Incentive Compensation Program Changes
2025 Incentive Compensation Program Changes In November 2024, the Compensation Committee approved a modified plan design for our 2025 ABP. For the 2025 ABP, Adjusted EBITDA and Adjusted EBITDA margin replaced Adjusted EBIT and Adjusted EBIT margin, respectively, with Free Cash Flow remaining as the third financial metric. The Compensation Committee made this change because Adjusted EBITDA is one of our key externally-reported financial metrics, and it believes that the change further aligns management’s interests with the interests of our shareholders. Like 2024, all employees that are eligible for the 2025 ABP will be subject to the same company-wide ABP targets for the three financial performance metrics, which is consistent with our ONE Axalta philosophy. Individual performance will continue to serve as a modifier to the entirety of the payout earned through achievement of the financial metrics alone, and final payouts will continue to range from 0% to 200% of target. In March 2025, the Compensation Committee also made changes to the plan design for the PSUs issued in 2025. Like the 2024 PSUs, the 2025 PSUs will continue to be split equally between PSUs having a three-year performance target tied to relative total shareholder return and PSUs having a three-year performance target tied to financial performance. For the 2025 PSUs tied to a financial performance target, the Compensation Committee approved the change in the financial performance target from Adjusted EBITDA to Adjusted EPS, which will be measured on a three-year cumulative basis. We are making this change because Adjusted EPS represents another key external performance metric and to maintain separate metrics in our short- and long-term incentive plans.
Pay for Performance
Pay for Performance Total compensation for our NEOs has been allocated between cash and equity compensation, taking into consideration the balance between providing near-term incentives and long-term incentives tied to our financial performance and stock price performance, to align the interests of management with the interests of our shareholders. The variable annual performance-based awards and the long-term equity awards, including the PSU awards, are designed to ensure that total compensation reflects our overall level of success and to motivate the NEOs to meet appropriate performance measures tied to maximizing shareholder value. The mix of base salary, annual bonus and long-term equity incentive compensation for our NEOs is shown in the charts below. The Compensation Committee determined this mix, taking into account market compensation information and with the intention of balancing both long-term and near-term objectives and motivating each NEO to attain those objectives.
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant The Compensation Committee engages an independent compensation consultant on executive compensation matters. The services provided by the independent compensation consultant include:
Role of the Independent Compensation Consultant
| • | attending Compensation Committee meetings, including executive sessions, to present and offer independent recommendations, insights and perspectives on compensation matters; |
Role of the Independent Compensation Consultant
| • | assessing how our executive compensation program aligns with our pay for performance philosophy; |
Role of the Independent Compensation Consultant
| • | informing the Compensation Committee of regulatory and other developments relating to executive compensation practices; |
Role of the Independent Compensation Consultant
| • | assessing the appropriateness of our peer group used to inform our executive compensation program; |
Role of the Independent Compensation Consultant
| • | advising on the design and structure of, as well as the performance targets set under, our annual and long-term compensation plans; |
Role of the Independent Compensation Consultant
| • | conducting an annual risk assessment of our compensation programs; |
Role of the Independent Compensation Consultant
| • | assessing the market competitiveness of our executive compensation program; |
Role of the Independent Compensation Consultant
| • | assessing the market competitiveness of our non-employee director compensation program; and |
Role of the Independent Compensation Consultant
| • | identifying potential changes to our executive compensation and non-employee director compensation programs to maintain market competitiveness, consistency with business strategies, good governance practices and alignment with shareholder interests. |
Role of the Independent Compensation Consultant
Pearl Meyer has served as the Compensation Committee’s independent compensation consultant since 2022 and the Compensation Committee determined that Pearl Meyer does not have a relationship with the Company that would present a conflict of interest with Pearl Meyer serving as the Compensation Committee’s advisor or would impair its independence. In making this determination, the Compensation Committee considered, among other things, the following factors: (1) the amount of fees paid by the Company to Pearl Meyer as a percentage of its total revenue; (2) Pearl Meyer’s policies and procedures to prevent or mitigate conflicts of interest; (3) that there are no other business or personal relationships between Pearl Meyer and members of the Compensation Committee or Axalta executive officers; and (4) none of the representatives of Pearl Meyer who provide compensation services to the Company own any Axalta common shares.
Compensation Peer Group and Survey Data
Compensation Peer Group and Survey Data We believe that total compensation opportunities for our senior management (including the NEOs) should be competitive with comparable opportunities for individuals with similar positions, experience and responsibilities in our marketplace. We use median compensation data from our peer group as a reference point when setting individual compensation and calibrate variable compensation opportunities to provide actual compensation opportunities above peer data when Company and individual performances are strong, while providing for consequences when performance targets are not met. For purposes of setting 2024 compensation for our NEOs, Pearl Meyer provided the Compensation Committee with a comprehensive report that included publicly available compensation data relating to the peer group set forth in the table below as well as compensation data from Willis Towers Watson’s general industry survey. The Compensation Committee utilized the peer group set forth below as the primary reference point for setting the 2024 compensation for our NEOs. The peer group broadly reflects the companies with which we compete for talent, business and investment capital based on the scope of our operations, as measured by revenue and market capitalization. The Company was positioned at the 45th percentile relative to the peer group on the basis of trailing twelve months revenue at the end of June 2023 and the 55th percentile on the basis of market capitalization as of August 8, 2023.
Compensation Peer Group and Survey Data
| Axalta Compensation Peer Group | | | Albemarle Corporation | International Flavors & Fragrances Inc. | | Ashland, Inc. | Minerals Technologies, Inc. | | Avient Corporation | NewMarket Corporation | | Cabot Corporation | Olin Corporation | | Celanese Corporation | PPG Industries Inc. | | Eastman Chemical Co. | RPM International Inc. | | Element Solutions Inc | Stepan Company | | FMC Corporation | The Chemours Company | | H.B. Fuller Company | The Sherwin-Williams Company | | Huntsman Corporation | Tronox Holdings plc |
Annual Performance-Based Compensation
Annual Performance-Based Compensation We structure our compensation programs to reward NEOs based on our performance and the individual executive’s relative contribution to our performance. To emphasize the importance of near-term performance, NEOs are generally eligible to receive annual performance-based awards under our ABP in the event certain specified performance measures are achieved. The ABP pool is determined by the Compensation Committee based upon a pre-established formula with reference to the achievement of company-wide performance targets established annually by the Compensation Committee and based on the Company’s Board-approved budget and financial plan.
2024 Annual Bonus Plan Formula
2024 Annual Bonus Plan Formula In 2024, we aligned the Company’s short-term goals and annual priorities by shifting to one global ABP based on Company-wide financial performance. The financial metrics (Adjusted EBIT, Adjusted EBIT Margin, and Free Cash Flow, each as defined below) did not change with the new global ABP, but all metrics were measured based on total Company performance without regard to business unit or region-specific metrics to determine payout. In addition, the global ABP utilizes a modifier for individual performance, rather than a separate weighted metric, to differentiate the bonus for each employee. Each participant, including NEOs, starts with the same financial funding relative to their target bonus, but their individual bonus may be modified based on performance against their individual goals, alignment with Company behaviors and relative contribution to the Company’s success. Under the terms of the ABP, the NEOs’ annual incentive awards are based on a percentage of their base salaries. Once the achievement of corporate and business financial performance against targets has been determined, the Compensation Committee reviews and approves the individual modifier to be applied to the NEO’s ABP award based on each respective NEO’s business impact, leadership and attainment of individual objectives, as well as other related factors. In addition, in determining the achievement of financial performance targets, the Compensation Committee may account for unusual events such as significant foreign currency exchange rate fluctuations, extraordinary transactions, asset dispositions and purchases, and mergers and acquisitions if, and to the extent, the Compensation Committee does not consider the effect of such events indicative of our performance.
2024 Annual Bonus Plan Target Percentages
2024 Annual Bonus Plan Target Percentages The 2024 target percentage under the ABP approved by the Compensation Committee for each of our NEOs is set forth in the table below. Changes to the 2023 target bonus opportunities of Messrs. Weaver and Awada and Ms. Bausch are set forth in the below table and reflect the expanded responsibilities for such NEOs in 2024.
2024 Annual Bonus Plan Target Percentages
| Name | 2023 Target-level % (of base salary) | Increase | 2024 Target-level % (of base salary) | 2024 Target Bonus Amount | | Chris Villavarayan | 125% | —% | 125% | $1,375,000 | | Carl D. Anderson II | 90% | —% | 90% | $623,937 | | Troy D. Weaver | 70% | 5% | 75% | $450,296 | | Hadi H. Awada | 70% | 5% | 75% | $428,625 | | Shelley J. Bausch | 70% | 5% | 75% | $428,625 |
2024 Annual Bonus Plan – Weighted Company Performance
2024 Annual Bonus Plan – Weighted Company Performance For the year ended December 31, 2024, the financial performance metrics under the ABP were based upon Adjusted EBIT (as defined below), Adjusted EBIT Margin (as defined below) and Free Cash Flow (or FCF) (as defined below) based on total Company performance. We selected Adjusted EBIT because profitable growth is an important measure of the financial performance of our Company, Adjusted EBIT Margin because operating efficiency is essential to drive shareholder value, and Free Cash Flow because we believe the amount of free cash flow that we generate each year is important for us to maintain appropriate working capital, complete acquisitions, pay down gross debt, and otherwise deploy capital, including returning capital to shareholders. For each performance year under the ABP, the Compensation Committee assigns a target, threshold and maximum payout level to each financial performance metric where the actual payout can range from 0% to 200% of the assigned target weighting depending on our achievement of such performance measures. The Compensation Committee sets these targets in order to challenge our executives, including our NEOs, to drive our financial and business performance, taking into account the state of our business, industry dynamics and other business conditions. When setting the ABP targets for 2024, the Compensation Committee considered how the targets compared to the forecasted 2023 results as well as the amounts used for 2023 ABP payouts available at the time targets were approved. In setting the 2024 ABP target for Free Cash Flow, the Compensation Committee considered the impact of the anticipated cash expenditures associated with the 2024 Transformation Initiative, resulting in a target level modestly below the 2023 actual Free Cash Flow result. The following chart sets forth for the 2024 ABP the weighting of each financial performance metric and the threshold, target and maximum performance targets, as well as the actual performance achieved, for the year ended December 31, 2024:
2024 Annual Bonus Plan – Weighted Company Performance
| Metric(1) | Weighting (% of Award Target) | Threshold (50% Payout(2)) | Target (100% Payout(2)) | Maximum (200% Payout(2)) | Actual Performance Achieved | Payout as % of Weighting | Payout (Weighted % of Total Payout) | | Adjusted EBIT | 50% | $643 | $772 | $884 | $835 | 151.3% | 75.7% | | Adjusted EBIT Margin | 25% | 13.9% | 14.9% | 16.6% | 15.9% | 160.9% | 40.2% | | FCF | 25% | $383 | $435 | $544 | $451 | 113.2% | 28.3% | | | | | | | | Total | 144.2% |
2024 Annual Bonus Plan – Weighted Company Performance
| (1) All $ values are in $ millions. |
2024 Annual Bonus Plan – Weighted Company Performance
| (2) Achievement below threshold results in zero payout while achievement in excess of maximum performance is capped at 200% of target for each metric. Results between threshold and target and target and maximum are determined on a linear basis. |
2024 Annual Bonus Plan – Weighted Company Performance
Adjusted EBIT, for purposes of the 2024 ABP, differs from Adjusted EBIT as externally reported for the year ended December 31, 2024 (a reconciliation of which is included in Appendix A) because it excludes the contributions of The CoverFlexx Group acquisition and, consistent with the plan design approved by the Compensation Committee in February 2024, amortization of acquired intangibles is deducted from Adjusted EBIT and step-up depreciation from the acquisition of DuPont Performance Coatings is added to Adjusted EBIT. Adjusted EBIT Margin, for purposes of the 2024 ABP, is calculated by dividing Adjusted EBIT, as described above, by Axalta’s 2024 net sales. Free Cash Flow, for purposes of the 2024 ABP, is defined as Free Cash Flow as externally reported for the year ended December 31, 2024 (a reconciliation of which is included in Appendix A).
2024 Annual Bonus Plan – Individual Modifier
2024 Annual Bonus Plan – Individual Modifier 2024 ABP awards utilize a modifier for individual performance, which is approved by the Compensation Committee for each NEO, that is determined based on each NEO’s performance against individual goals which includes business unit or functional performance, alignment with Company-desired behaviors and relative contribution to the Company’s success, among other factors. The actual modifier can range from 0 to 200% depending on the NEO’s individual contributions during the performance period; however, all individual awards are limited to 200% of the individual’s target bonus for the year. For 2024, the Compensation Committee considered the following key achievements in approving the following modifiers for each of our NEOs.
2024 Annual Bonus Plan – Individual Modifier
| Name | Individual Performance Modifier | 2024 Performance Considerations | | Chris Villavarayan | 100% | • Oversaw development and rollout of the 2026 A Plan, setting Axalta’s three-year growth strategy • Oversaw record financial results in net sales and Adjusted EBITDA for the second consecutive year • Oversaw the development and execution of the 2024 Transformation Initiative | | Carl D. Anderson II | 105% | • Drove strong financial results, including reducing net leverage to 2.5x, the lowest year-end figure in Company history • Enhanced talent development and succession in the Company’s finance function • Strengthened the Company’s cybersecurity posture | | Troy D. Weaver | 95% | • Oversaw year-over-year growth for the Global Refinish business globally amid a challenging macroeconomic backdrop • Oversaw multiple acquisitions, including the acquisition of The CoverFlexx Group, a leading aftermarket coatings business focused on economy customers in North America • Oversaw integration of operations into the Global Refinish business, delivering strong performance against operational metrics | | Hadi H. Awada | 110% | • Exceeded financial targets, delivering on growth in net sales and Adjusted EBIT margin through new business in China and Latin America, as well as pricing actions • Oversaw the integration of operations into the Global Mobility business, exceeding operational metrics • Advanced talent development through introduction of early careers rotational program | | Shelley J. Bausch | 85% | • Oversaw year-over-year financial improvement in Adjusted EBIT and Adjusted EBIT margin • Oversaw the integration of operations into the Global Industrial Coatings business |
2024 Annual Bonus Plan – Results
2024 Annual Bonus Plan – Results Based on the considerations described above, our level of performance in relation to the Company-wide financial performance targets and each NEO’s individual performance modifier, the weighted bonus payout percentage and the ABP awards earned by our NEOs, are set forth in the table below.
2024 Annual Bonus Plan – Results
| Name | 2024 Target Bonus Amount | Financial Performance Metrics Payout % | Individual Performance Modifier | Actual Award | Payout as % of Target | | Chris Villavarayan | $1,375,000 | 144.2% | 100% | $1,982,750 | 144.2% | | Carl D. Anderson II | $623,937 | 144.2% | 105% | $944,703 | 151.4% | | Troy D. Weaver | $450,296 | 144.2% | 95% | $616,860 | 137.0% | | Hadi H. Awada | $428,625 | 144.2% | 110% | $679,885 | 158.6% | | Shelley J. Bausch | $428,625 | 144.2% | 85% | $525,366 | 122.6% |
Long-Term Equity Incentive Awards
Long-Term Equity Incentive Awards Our NEOs are eligible to receive long-term equity incentive awards, which comprise a majority of their compensation opportunity. In 2024, our NEOs received long-term incentive awards under our equity incentive plan, which were allocated 60% in PSUs and 40% in RSUs in order to motivate and retain our NEOs and align their interests with those of our shareholders. All equity types are subject to a risk of forfeiture should the NEO’s employment terminate prior to the vesting date absent certain exceptions. Annual awards under our long-term incentive program were granted (at target value) in 2024 as follows:
Long-Term Equity Incentive Awards
| Name | PSUs ($) | RSUs ($) | Total ($) | | Chris Villavarayan | 3,600,000 | 2,400,000 | 6,000,000 | | Carl D. Anderson II | 1,050,000 | 700,000 | 1,750,000 | | Troy D. Weaver | 675,000 | 450,000 | 1,125,000 | | Hadi H. Awada | 540,000 | 360,000 | 900,000 | | Shelley J. Bausch(1) | 540,000 | 360,000 | 900,000 |
Long-Term Equity Incentive Awards
| (1) PSUs and the unvested portion of the RSUs granted to Ms. Bausch in 2024 were forfeited upon the termination of her employment with the Company in March 2025. |
Performance-Based Stock Awards
Performance-Based Stock Awards 2024 Target PSUs The target number of annual PSUs granted to our NEOs during the year ended December 31, 2024 is listed below.
Performance-Based Stock Awards
| Name | Target Number of Performance Stock Units Granted in 2024 | | Chris Villavarayan | 110,836 | | Carl D. Anderson II | 32,326 | | Troy D. Weaver | 20,780 | | Hadi H. Awada | 16,624 | | Shelley J. Bausch(1) | 16,624 |
Performance-Based Stock Awards
| (1) PSUs granted to Ms. Bausch in 2024 were forfeited upon the termination of her employment with the Company in March 2025. |
Performance-Based Stock Awards
2024 PSUs 50% of the target amount of PSUs granted in 2024 (the “2024 PSUs”) may be earned based on the Company’s performance relative to Adjusted EBITDA and 50% may be earned based on the Company’s relative total shareholder return (“Relative TSR”). The 2024 PSUs with Adjusted EBITDA as the performance metric have a three-year performance period comprising January 1, 2024 through December 31, 2026. The 2024 PSUs with Relative TSR as the performance metric have a three-year performance period commencing on the day immediately prior to the grant date and ending on the day immediately prior to the third anniversary of the grant date. Adjusted EBITDA, for purposes of the 2024 PSUs, means the Company’s earnings before interest, taxes, depreciation and amortization, adjusted for (i) certain non-cash items included within net income, (ii) certain items not indicative of ongoing operating performance and (iii) certain nonrecurring, unusual or infrequent items that have not occurred within the last two years or are not reasonably likely to recur within the next two years, each as determined by the Compensation Committee and subject to certain other adjustments made in the Compensation Committee’s discretion. Relative TSR compares the Company’s total shareholder return against that of companies in the S&P 400 MidCap Index at the end of the performance period. The maximum number of shares that may be earned with respect to the 2024 PSUs is 200% of the target number of shares. The Compensation Committee selected Adjusted EBITDA and Relative TSR as the performance metrics for the 2024 PSUs because they believe these metrics are important indicators of long-term financial performance and shareholder value creation. The Compensation Committee believes that this PSU design incentivizes management to focus on driving both sustainable financial performance and shareholder value. The Compensation Committee set threshold, target and maximum Adjusted EBITDA and Relative TSR performance targets for the applicable performance periods in February 2024 when the 2024 PSUs were awarded, with the performance targets selected based on the Company’s long-term strategic growth plan. The Compensation Committee will determine Adjusted EBITDA and Relative TSR following the end of the applicable performance periods, with the results being measured against that period’s pre-established targets. In making such determinations, the Compensation Committee has discretion to account for unusual events such as significant foreign currency exchange rate fluctuations, extraordinary transactions, asset dispositions and purchases, and mergers and acquisitions if, and to the extent, the Compensation Committee does not consider the effect of such events indicative of our performance. Accelerated vesting may occur upon certain terminations of employment following a Change-in-Control as described below under the section “Severance Arrangements.” The table below sets forth the PSUs, as a percentage of the target PSU grant, that would vest, based on the Company’s achievement of Adjusted EBITDA and Relative TSR, respectively, for the applicable performance periods.
Performance-Based Stock Awards
| 2024 PSUs Vesting Schedule | | | | | Adjusted EBITDA Performance | PSUs that would vest as % of target (Adjusted EBITDA) | Relative TSR Performance | PSUs that would vest as % of target (Relative TSR)(1) | | <Threshold | 0% | <25th percentile | 0% | | Threshold | 50% | 25th percentile | 50% | | Target | 100% | 50th percentile | 100% | | Maximum | 200% | 75th percentile | 200% |
Performance-Based Stock Awards
| (1) If the Company’s absolute total shareholder return is negative, then any award payout shall not exceed 100% of the award target. |
Performance-Based Stock Awards
Earned awards, if any, will vest upon the Compensation Committee’s determination (in 2027) of the Company’s achievement of Adjusted EBITDA and Relative TSR, for the applicable performance periods, subject to the executive’s continued employment as of the date of such determination. Where performance for Adjusted EBITDA or Relative TSR is achieved at a level between threshold and target or target and maximum, the number of PSUs eligible to vest for such metric is calculated using straight-line interpolation. 2022-2024 PSU Payout For PSUs granted in 2022 (the “2022 PSUs”) to our then-serving NEOs, the Compensation Committee reviewed in March 2025 the Company’s performance relative to the Adjusted EPS and ROIC performance targets that the Compensation Committee set in March 2022 for the 2022, 2023 and 2024 performance periods and the three-year cumulative performance period, as well as the Company’s Relative TSR against the S&P 400 Materials Index over the cumulative three-year performance period, which serves as a modifier to the overall award. The below table sets forth the relevant Adjusted EPS and ROIC thresholds, targets and maximums, as well as the actual results, for each of the relevant performance periods. For the 2024 performance period and the cumulative three-year performance period, Adjusted EPS was below threshold and therefore no PSUs were earned for such performance periods based on this metric. ROIC was above threshold but below target, resulting in the vesting of 2.25% and 2.43% of the target 2022 PSUs for the 2024 performance period and the cumulative three-year performance period, respectively, as is shown below. The Company’s TSR over the three-year period was approximately 26%, which resulted in a Relative TSR at the 50th percentile of the peer group, and therefore there was no modification to the overall award, with the 2022 PSUs vesting at approximately 26% of target.
Performance-Based Stock Awards
| (1) Adjusted EPS is defined as the diluted earnings per share of the Company, adjusted for (i) certain non-cash items included within net income, (ii) certain items not indicative of ongoing operating performance or (iii) certain nonrecurring, unusual or infrequent items that have not occurred within the last two years or are not reasonably likely to recur within the next two years, each as determined by the Compensation Committee and subject to certain other adjustments made in the Committee’s discretion. Adjusted EPS for purposes of the 2022 PSUs differs from our externally-reported Adjusted EPS (as set forth in Appendix A for 2023 and 2024) because, consistent with the plan design approved by the Compensation Committee in February 2022, step-up depreciation and amortization from the acquisition of DuPont Performance Coatings is an adjustment to calculate Adjusted EPS for purposes of the 2022 PSUs while amortization of all acquired intangibles is not. In addition, the Compensation Committee, in its discretion, made adjustments to (i) 2022 Adjusted EPS to account for the net impacts of our December 2022 term loan refinancing, headwinds from lockdowns in China related to COVID-19, foreign exchange headwinds and the then-estimated impact of the conflict in Russia-Ukraine, (ii) 2023 Adjusted EPS to account for the net impacts of our December 2022 term loan refinancing and the refinancing of our 2025 Senior Notes in 2023, and (iii) 2024 Adjusted EPS to account for the net impacts of our December 2022 term loan refinancing, the refinancing of our 2025 Senior Notes in 2023 and the acquisitions of André Koch AG in 2023 and The CoverFlexx Group in 2024, in each case, because such impacts were not contemplated at the time targets were set for the 2022 PSUs. |
Performance-Based Stock Awards
| (2) ROIC is calculated as Adjusted EBIT (the same amount determined for purposes of the ABP) divided by invested capital. ROIC for purposes of the 2022 PSUs differs from our externally-reported ROIC (as set forth in Appendix A for 2023 and 2024) because, consistent with the plan design approved by the Compensation Committee in February 2022, ROIC is calculated as Adjusted EBIT divided by invested capital, with invested capital consisting of equity plus debt less cash and cash equivalents, determined as of the beginning of the applicable fiscal year. Our externally-reported ROIC is calculated as Adjusted EBIT, after tax rate, as adjusted, divided by the average of invested capital at the beginning of the period and at the closing of the period. In addition, 2023 and 2024 Adjusted EBIT for purposes of the 2022 PSUs (which is used in the calculation of ROIC) differs from our externally-reported Adjusted EBIT because amortization of acquired intangibles is deducted from, and step-up depreciation from the acquisition of DuPont Performance Coatings is added to, Adjusted EBIT. The Compensation Committee, in its discretion, made adjustments to (i) 2022 ROIC to account for the net impacts of the headwinds from lockdowns in China related to COVID-19, foreign exchange headwinds and the then-estimated impact of the conflict in Russia-Ukraine and (ii) 2024 ROIC to account for the acquisitions of Andrè Koch AG in 2023 and The CoverFlexx Group in 2024, in each case, because such impacts were not contemplated at the time targets were set for the 2022 PSUs. |
RSUs
RSUs RSUs granted under our equity incentive plan generally have vesting schedules that are designed to encourage a recipient’s continued employment and to drive shareholder value. The annual RSUs granted to our NEOs in 2024 vest in three substantially equal annual installments on each of the first three anniversaries of the grant date, subject to the executive’s continued employment on each applicable vesting date. Accelerated vesting may occur upon certain terminations of employment following a Change-in-Control as described below under the section “Severance Arrangements.” The number of annual RSUs granted to our NEOs during the year ended December 31, 2024 is listed below.
RSUs
| Name | Number of RSUs Granted in 2024 | | Chris Villavarayan | 73,893 | | Carl D. Anderson II | 21,553 | | Troy D. Weaver | 13,856 | | Hadi H. Awada | 11,085 | | Shelley J. Bausch(1) | 11,085 |
RSUs
| (1) The then-unvested portion of the RSUs granted to Ms. Bausch in 2024 was forfeited upon the termination of her employment with the Company in March 2025. |
Practices Related to the Grant of Certain Equity Awards
Practices Related to the Grant of Certain Equity Awards We do not currently grant awards of stock options, stock appreciation rights or similar option-like instruments. Accordingly, we have no specific policy or practice on the timing of awards of such options in relation to the timing of our disclosure of material nonpublic information. In the event we determine to grant new awards of such items, the Company will evaluate the appropriate steps to take in relation to the foregoing.
Severance Arrangements
Severance Arrangements Since 2020, the Company has utilized a Restrictive Covenant and Severance Policy (the “Severance Policy”) with respect to all new members of senior leadership, except for the CEO. Messrs. Anderson, Awada and Weaver are all subject to the Severance Policy. Ms. Bausch was subject to the Severance Policy during her employment with the Company. Mr. Villavarayan is party to an Executive Restrictive Covenant and Severance Agreement with the Company (the “Executive Agreement”). The rights of our NEOs under the Executive Agreement and the Severance Policy (as applicable), which are described in the graphic below, are substantially similar, and, as used in this Compensation Discussion and Analysis, references to “Severance Arrangements” should be read to include the Executive Agreement and the Severance Policy, except where otherwise noted . The foregoing amounts are in addition to the payment of all earned but unpaid base salary through the termination date and any other vested benefits to which the executive is entitled under the Company’s benefit plans and arrangements.
Bausch Separation Agreement
Bausch Separation Agreement In connection with Ms. Bausch and the Company mutually agreeing that Ms. Bausch would resign from her position as President, Global Industrial Coatings, effective as of January 27, 2025, the Company and Ms. Bausch entered into a Separation and Release Agreement pursuant to the terms of the Severance Policy. Under the Severance Policy, because the termination of Ms. Bausch’s employment was a “Qualifying Termination,” Ms. Bausch was entitled to, subject to her execution and non-revocation of a general release of claims and compliance with certain restrictive covenants, including non-competition obligations, (1) a cash severance payment in the amount of $1,140,523, payable over 12 months in regular installments and (2) certain other benefits under the terms of the Severance Policy, including a lump sum cash payment in an aggregate amount equal to 12 months of the applicable monthly premium cost that Ms. Bausch would be required to pay to continue qualifying health coverage under COBRA. Under the terms of her Separation and Release Agreement, Ms. Bausch remained employed by the Company until March 7, 2025, and therefore vested in all equity awards that were scheduled to vest during such period and was also entitled to a bonus under the terms of the 2024 ABP. All of Ms. Bausch’s unvested equity awards as of the termination of her employment were forfeited without payment upon the termination of her employment.
Summary Compensation Table
Summary Compensation Table The following table sets forth certain information with respect to the compensation paid to our NEOs for the years ended December 31, 2024, 2023 and 2022.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Compensation Plan ($)(3) | All Other ($)(4) | Total ($) | | Chris Villavarayan | 2024 | 1,089,231 | — | 6,669,447 | — | 1,982,750 | 82,207 | 9,823,635 | | Chief Executive Officer and | 2023 | 1,000,000 | — | 6,397,949 | — | 1,940,000 | 356,056 | 9,694,005 | | President | 2022(5) | — | — | — | — | — | — | — | | Carl D. Anderson II | 2024 | 693,161 | — | 1,945,239 | — | 944,703 | 55,285 | 3,638,388 | | Senior Vice President and | 2023 | 255,769 | 500,000 | 3,756,528 | — | 928,872 | 84,942 | 5,526,111 | | Chief Financial Officer | 2022(5) | — | — | — | — | — | — | — | | Troy D. Weaver | 2024 | 602,196 | — | 1,250,488 | — | 616,860 | 47,978 | 2,517,522 | | President, Global Refinish | 2023 | 536,524 | — | 1,132,380 | — | 535,980 | 46,918 | 2,251,802 | | | 2022 | 504,554 | — | 2,037,654 | — | 286,131 | 44,228 | 2,872,567 | | Hadi H. Awada | 2024 | 575,896 | — | 1,000,397 | | 679,885 | 45,376 | 2,301,554 | | President, Global Mobility | 2023 | 525,366 | — | 905,878 | — | 654,578 | 45,345 | 2,131,167 | | Coatings | 2022 | 505,852 | — | 1,630,116 | — | 232,287 | 38,985 | 2,407,240 | | Shelley J. Bausch | 2024 | 575,896 | — | 1,000,397 | — | 525,366 | 50,025 | 2,151,684 | | Former President, Global | 2023 | 530,673 | — | 905,878 | — | 612,680 | 44,203 | 2,093,434 | | Industrial Coatings | 2022 | 510,962 | — | 1,630,116 | — | 88,496 | 40,384 | 2,269,958 |
Summary Compensation Table
| (1) Reflects base salary actually paid to each NEO for the applicable calendar year. The 2024 base salary rates as approved by the Compensation Committee, effective as of March 11, 2024, were as follows: Mr. Villavarayan, $1,100,000; Mr. Anderson, $693,263; Mr. Weaver, $600,394; Mr. Awada, $571,500; and Ms. Bausch, $571,500. For additional information, see “Compensation Discussion and Analysis – Base Salary.” |
Summary Compensation Table
| (2) Amounts represent the aggregate grant date fair value of stock awards determined in accordance with FASB ASC Topic 718. Refer to Critical Accounting Policies and Estimates in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, for information regarding the assumptions used to value these awards. These values do not represent amounts paid to or realized by the applicable NEO. Stock awards granted in 2024 include both time-based RSUs and performance-based PSUs, and the grant date fair value included for PSUs is based on performance at target levels, which was the assumed probable outcome of such conditions as of the grant date. Assuming that the highest level of performance conditions will be achieved for the PSUs, the grant date values of the total stock awards made in the fiscal year ended December 31, 2024 are as follows: Mr. Villavarayan, $9,599,951; Mr. Anderson, $2,799,938; Mr. Weaver, $1,799,912; Mr. Awada, $1,439,936; and Ms. Bausch, $1,439,936. Two-thirds of the 2024 RSUs and all of the 2024 PSUs granted to Ms. Bausch were forfeited without payment in connection with her termination of employment in March 2025. |
Summary Compensation Table
| (3) Amounts represent awards earned under our 2024 ABP. For additional information, see “Annual Performance-Based Compensation” in “Compensation Discussion and Analysis” above. |
Summary Compensation Table
| (4) Other compensation for the year ended December 31, 2024 includes (i) the value of certain perquisites provided to the NEOs and (ii) our contributions to the NEOs’ 401(k) and deferred compensation plan accounts. |
Summary Compensation Table
| Name | Year | Transportation Related ($) | Individual Liability Insurance ($) | Individual Disability Insurance ($) | Employer Contribution to 401(k) ($) | Employer Contribution to Nonqualified Deferred Compensation Plan ($) | Executive Physicals ($) | Other Payments ($) | Total ($)(i) | | Chris Villavarayan | 2024 | — | 2,363 | 4,460 | 24,150 | 51,234 | — | — | 82,207 | | Carl D. Anderson II | 2024 | — | 2,363 | 4,850 | 24,150 | 23,922 | — | — | 55,285 | | Troy D. Weaver | 2024 | — | 2,363 | 3,919 | 24,150 | 17,546 | — | — | 47,978 | | Hadi H. Awada | 2024 | — | 2,363 | 3,100 | 24,150 | 15,763 | — | — | 45,376 | | Shelley J. Bausch | 2024 | — | 2,363 | 4,887 | 24,150 | 15,775 | 2,850 | — | 50,025 |
Summary Compensation Table
| (i) From time to time the Company allows its employees, including the NEOs, the personal use of tickets for sporting and cultural events previously acquired by the Company for business entertainment purposes. In addition, from time to time a guest of an executive may accompany him or her on a business-related flight aboard a private aircraft. There is no incremental cost to the Company for the use of such tickets or such flights and therefore such items are not reflected in the amounts above. |
Summary Compensation Table
| (5) Executive was not an employee for such year. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards
Grants of Plan-Based Awards
| | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Stock Awards ($)(4) | | Name | Type of Award | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Chris Villavarayan | ABP | | 687,500 | 1,375,000 | 2,750,000 | | | | | | | | PSU | 2/28/2024 | | | | 55,418 | 110,836 | 221,672 | | 4,269,403 | | | RSU | 2/28/2024 | | | | | | | 73,893 | 2,400,045 | | Carl D. Anderson II | ABP | | 311,969 | 623,937 | 1,247,874 | | | | | | | | PSU | 2/28/2024 | | | | 16,163 | 32,326 | 64,652 | | 1,245,198 | | | RSU | 2/28/2024 | | | | | | | 21,553 | 700,041 | | Troy D. Weaver | ABP | | 225,148 | 450,296 | 900,592 | | | | | | | | PSU | 2/28/2024 | | | | 10,390 | 20,780 | 41,560 | | 800,446 | | | RSU | 2/28/2024 | | | | | | | 13,856 | 450,043 | | Hadi H. Awada | ABP | | 214,313 | 428,625 | 857,250 | | | | | | | | PSU | 2/28/2024 | | | | 8,312 | 16,624 | 33,248 | | 640,356 | | | RSU | 2/28/2024 | | | | | | | 11,085 | 360,041 | | Shelley J. Bausch | ABP | | 214,313 | 428,625 | 857,250 | | | | | | | | PSU | 2/28/2024 | | | | 8,312 | 16,624 | 33,248 | | 640,356 | | | RSU | 2/28/2024 | | | | | | | 11,085 | 360,041 |
Grants of Plan-Based Awards
| (1) The amounts shown for the ABP represent estimated possible payouts depending on the Company’s financial performance and the participants’ individual performance. Threshold payout reflects threshold Company performance and a 100% individual performance modifier. Target payout reflects target Company performance and a 100% individual performance modifier. Maximum payout reflects maximum Company performance and a 100% individual performance modifier. The amount that can be earned ranges from 0 to 200% of the target payout amount. The actual amounts earned for 2024 are reported in the Summary Compensation Table. For a full description of the ABP, see “Annual Performance-Based Compensation” in “Compensation Discussion and Analysis” above. |
Grants of Plan-Based Awards
| (2) Represents annual PSUs awarded in 2024, with the number of PSUs equal to the target award value divided by the closing stock price on the grant date. The 2024 PSUs cover a three-year performance period and can vest between 0% to 200% of the target award value. See the “Long-Term Equity Incentive Awards – Performance-Based Stock Awards” section in “Compensation Discussion and Analysis” above for more detail. |
Grants of Plan-Based Awards
| (3) Represents annual RSUs awarded in 2024, with the number of RSUs equal to the award value divided by the closing stock price on the grant date. The RSUs vest in equal annual installments on each of the first, second and third anniversaries of the grant date. See the “Long-Term Equity Incentive Awards – RSUs” section in “Compensation Discussion and Analysis” above for more detail. |
Grants of Plan-Based Awards
| (4) The grant date fair values for RSUs and PSUs were determined in accordance with FASB ASC Topic 718. The grant date fair value for RSUs was determined using the closing stock price on the date of the grant. The grant date fair value for PSUs was determined using a valuation methodology (Monte Carlo simulation model) to account for the market conditions linked to these awards. Refer to Critical Accounting Policies and Estimates in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, for information regarding the assumptions used to value these awards. |
Outstanding Equity Awards
Outstanding Equity Awards The following table provides information regarding the equity awards held by the NEOs as of December 31, 2024.
Outstanding Equity Awards
| Name | Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) | | Chris Villavarayan | 2/28/2024 | | | | | 73,893 | 2,528,618 | | | | | 2/28/2024 | | | | | | | 55,418 | 1,896,404 | | | 2/28/2023 | | | | | 50,560 | 1,730,163 | | | | | 2/28/2023 | | | | | | | 56,879 | 1,946,399 | | Carl D. Anderson II | 2/28/2024 | | | | | 21,553 | 737,544 | | | | | 2/28/2024 | | | | | | | 16,163 | 553,098 | | | 8/14/2023 | | | | | 41,313 | 1,413,731 | | | | | 8/14/2023 | | | | | | | 30,984 | 1,060,272 | | Troy D. Weaver | 2/28/2024 | | | | | 13,856 | 474,152 | | | | | 2/28/2024 | | | | | | | 10,390 | 355,546 | | | 2/28/2023 | | | | | 8,949 | 306,235 | | | | | 2/28/2023 | | | | | | | 10,067 | 344,493 | | | 2/15/2022 | | | | | 4,627 | 158,336 | | | | | 2/15/2022 | | | | | 5,394(5) | 184,581(6) | | | | | 2/25/2019 | 11,574 | | 27.01 | 2/25/2029 | | | | | | | 2/5/2018 | 8,768 | | 29.81 | 2/5/2028 | | | | | | | 2/6/2017 | 8,951 | | 29.48 | 2/6/2027 | | | | | | | 2/2/2016 | 11,006 | | 23.24 | 2/2/2026 | | | | | | | 5/12/2015 | 10,457 | | 32.50 | 5/12/2025 | | | | | | Hadi H. Awada | 2/28/2024 | | | | | 11,085 | 379,329 | | | | | 2/28/2024 | | | | | | | 8,312 | 284,437 | | | 2/28/2023 | | | | | 7,160 | 245,015 | | | | | 2/28/2023 | | | | | | | 8,053 | 275,574 | | | 2/15/2022 | | | | | 3,702 | 126,682 | | | | | 2/15/2022 | | | | | 4,315(5) | 147,661(6) | | | | Shelley J. Bausch | 2/28/2024 | | | | | 11,085 | 379,329 | | | | | 2/28/2024 | | | | | | | 8,312 | 284,437 | | | 2/28/2023 | | | | | 7,160 | 245,015 | | | | | 2/28/2023 | | | | | | | 8,053 | 275,574 | | | 2/15/2022 | | | | | 3,702 | 126,682 | | | | | 2/15/2022 | | | | | 4,315(5) | 147,661(6) | | |
Outstanding Equity Awards
| (1) Annual RSUs granted in February 2022, February 2023 and February 2024 vest one-third on the first, second and third anniversaries of the respective grant dates. The sign-on RSUs granted to Mr. Anderson in August 2023 vest one-third on the first, second and third anniversaries of the grant date. |
Outstanding Equity Awards
| (2) These values equal the number of RSUs multiplied by the closing price of our common shares ($34.22) on December 31, 2024. The actual value of awards at the end of the applicable vesting cycle may vary from the valuations indicated above. |
Outstanding Equity Awards
| (3) Based on performance through December 31, 2024, PSUs for the 2023-2025 performance cycle (granted in February 2023) and for the 2024-2026 performance cycle (granted in February 2024) each reflect a threshold performance payout level (50%). PSUs for the 2023-2025 and 2024-2026 performance cycles will vest, if at all, following the Compensation Committee’s determination of PSUs earned in 2026 and 2027, respectively. |
Outstanding Equity Awards
| (4) These values equal the number of PSUs indicated multiplied by the closing price of our common shares ($34.22) on December 31, 2024. The actual value of awards at the end of the applicable performance cycle may vary from the valuations indicated above. |
Outstanding Equity Awards
| (5) Represents PSUs for the 2022-2024 performance cycle, reflecting the actual performance payout level of approximately 26%, which, as of December 31, 2024, were subject only to service-based vesting requirements as the performance period has ended. In March 2025, the Compensation Committee determined that based on performance through December 31, 2024, the PSUs for the 2022-2024 performance cycle vested at approximately 26% of target. |
Outstanding Equity Awards
| (6) These values equal the number of 2022 PSUs indicated multiplied by the closing price of our common shares ($34.22) on December 31, 2024. The actual value of awards at the date they were determined to vest varied from this value because the price of our common shares was different on such date than it was at December 31, 2024. |
Pension Benefits for 2024
Pension Benefits for 2024 Our NEOs do not participate in any defined benefit pension plans and received no pension benefits during the year ended December 31, 2024.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The following table provides information on the Company’s defined contribution deferred compensation plan, the Axalta Coating Systems, LLC Nonqualified Deferred Compensation Plan (the “NDCP”). For additional information, see the discussion above under “Defined Contribution Plans — Deferred Compensation Plans.”
Nonqualified Deferred Compensation
| Name | Plan | Year | Executive Contributions in Last FY ($)(1) | Company Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals in Last FY ($)(4) | Aggregate Balance at Last FYE ($)(5) | | Chris Villavarayan | NDCP | 2024 | 11,000 | 51,234 | 155 | — | 62,389 | | Carl D. Anderson II | NDCP | 2024 | 29,330 | 23,922 | 153 | — | 53,405 | | Troy D. Weaver | NDCP | 2024 | 24,016 | 17,546 | 18,627 | — | 141,631 | | Hadi H. Awada | NDCP | 2024 | 13,188 | 15,763 | 3,192 | — | 131,376 | | Shelley J. Bausch | NDCP | 2024 | 166,358 | 15,775 | 19,474 | — | 254,872 |
Nonqualified Deferred Compensation
| (1) Reflects elective deferrals of base salary and annual bonus. These amounts, if any, are also reflected in the Summary Compensation Table in the Salary and/or Bonus columns, as applicable. |
Nonqualified Deferred Compensation
| (2) These amounts are also reflected in the Summary Compensation Table in the All Other compensation column. |
Nonqualified Deferred Compensation
| (3) Earnings represent returns on investment alternatives elected by the participant. The investment alternatives are the same as those available to employees under the 401(k) Plan, except that the 401(k) Plan offers a Federal Money Market fund investment that is not offered under the NDCP. |
Nonqualified Deferred Compensation
| (4) Under the NDCP, participants may elect to receive all or a portion of the vested balance of the participant’s account as soon as practicable (but no longer than 90 days) following the earlier of the January 1st or July 1st following the participant’s death, disability or other separation from service, with payment in a lump sum or up to 10 annual installments. A participant may also elect to receive all or a portion of the vested balance of the participant’s account while still providing services, in a lump sum in the calendar month designated by the participant, provided, that, if the participant’s death, disability or separation from service precedes the in-service distribution date elected by the participant, the vested balance of the participant’s account will be distributed in connection with the participant’s death, disability or other separation from service. |
Nonqualified Deferred Compensation
| (5) All or a portion of these amounts have been reported in the Summary Compensation Table for Messrs. Weaver and Awada and Ms. Bausch in previous years. |
Potential Payments upon Termination or Change-in-Control
Potential Payments upon Termination or Change-in-Control
CEO PAY RATIO
CEO PAY RATIO The following is a reasonable estimate, prepared in accordance with SEC rules, of the ratio of the annual total compensation of our Chief Executive Officer to that of our median employee, utilizing the methodology described below. Please note that SEC rules and guidance permit a variety of methodologies, exclusions, estimates and assumptions to be used in determining median employee compensation. In addition, employee populations and compensation programs differ by company. Therefore, the pay ratio reported by other companies may not be comparable to our pay ratio reported below. SEC rules and regulations require a registrant to identify its median employee only once every three years, which we did in 2023. For 2024, we concluded that we could continue to use the same median employee identified in 2023 as we believe that there has been no change in the employee population or employee compensation arrangements, or a change in the employee’s circumstances, that would significantly affect the pay ratio disclosure. We then calculated fiscal year 2024 compensation for the median employee using the same methodology we use for our NEOs as set forth in the Summary Compensation Table. For fiscal year 2024, our median employee’s annual total compensation was $73,065. As set forth in the Summary Compensation Table, our CEO’s annual total compensation for fiscal year 2024 was $9,823,635. Accordingly, the ratio of the annual total compensation of our CEO to our median employee was 134:1. To identify our median employee in 2023, we collected data as of October 15, 2023 for all employees globally and used “base salary” as our Consistently Applied Compensation Measure. As of October 15, 2023, we had a global employee population of approximately 12,155 individuals. We then excluded 594 employees in 15 countries under the 5% de minimis exemption as permitted under SEC rules, where employee counts were as follows: Argentina (11), Colombia (31), Costa Rica (16), Dominican Republic (13), El Salvador (16), Ecuador (8), Guatemala (224), Honduras (21), Indonesia (88), Malaysia (111), Morocco (18), Nicaragua (9), Panama (12), Philippines (8), and Vietnam (8). From the remaining 11,561 employees, we considered the base salary of the remaining population, annualizing base salary for employees hired during 2023 and approximating annual base salary for hourly workers using hourly rates and reasonable estimates of hours worked, in selecting the median employee. As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (as computed in accordance with SEC rules) and certain financial performance of the Company. For further information concerning the Company’s compensation philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Compensation Discussion and Analysis” above.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year | Summary Compensation Table Total for First PEO ($) (1) | Summary Compensation Table Total for Second PEO ($) (1) | Compensation Actually Paid to First PEO ($) (1) | Compensation Actually Paid to Second PEO ($) (1) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (2) | Average Compensation Actually Paid to Non-PEO NEOs ($) (2) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($ millions) | Selected Measure: Adjusted EBIT ($ millions) (4) | | | | | | | | | Total Shareholder Return (3) | Peer Group Total Shareholder Return (3) | | | | (a) | (b)(1) | (b)(2) | (c)(1) | (c)(2) | (d) | (e) | (f) | (g) | (h) | (i) | | 2024 | 9,823,635 | N/A | 10,767,575 | N/A | 2,652,287 | 2,875,437 | $112.57 | $161.74 | $391 | $835 | | 2023 | 9,694,005 | N/A | 11,810,556 | N/A | 3,304,165 | 3,703,188 | $111.74 | $165.83 | $269 | $664 | | 2022 | 10,614,474 | 6,602,134 | 1,261,318 | 4,482,433 | 3,972,278 | 2,812,149 | $83.78 | $142.31 | $192 | $633 | | 2021 | 6,775,219 | N/A | 4,817,133 | N/A | 2,255,922 | 2,040,574 | $108.95 | $146.30 | $264 | $620 | | 2020 | 6,473,355 | N/A | 2,367,048 | N/A | 2,257,115 | 799,916 | $93.91 | $118.05 | $122 | $537 |
Pay Versus Performance Table
| (1) The first principal executive officer (“PEO”) for 2024 and 2023 was Mr. Villavarayan, our CEO, and the only PEO during 2024 and 2023. The first PEO for 2022, 2021 and 2020 was Robert Bryant who served as our CEO for the full years of 2020 and 2021 and through August 31, 2022 for 2022. The second PEO for 2022 was our current Board Chair, Mr. Sachdev, who served as our interim CEO from August 31, 2022 through December 31, 2022. The dollar amounts reported in column (b)(1) for the first PEO are the amounts of total compensation reported for Mr. Villavarayan for 2024 and 2023 and for Mr. Bryant for 2022, 2021 and 2020 in the “Total” column of the Summary Compensation Table in the Company’s proxy statement for each such applicable year. The dollar amount reported in column (b)(2) for the second PEO is the amount of total compensation reported for Mr. Sachdev for 2022 in the “Total” column of the Summary Compensation Table in the Company’s proxy statement for such year. Reconciliation of Compensation Actually Paid for all PEOs reported in columns (c)(1) and (c)(2) are set forth below. |
Pay Versus Performance Table
| (2) The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group, excluding Mr. Villavarayan for 2024 and 2023, Mr. Bryant for 2022, 2021 and 2020 and Mr. Sachdev for 2022, in the “Total” column of the Summary Compensation Table in each applicable year. The NEOs (excluding Messrs. Villavarayan, Bryant and Sachdev) for purposes of calculating the average amounts in each applicable year are as follows: (a) for 2024, Messrs. Anderson, Weaver and Awada and Ms. Bausch; (b) for 2023, Mr. Anderson, Sean Lannon (our former Senior Vice President, Chief Financial Officer), Brian Berube (our former Senior Vice President, General Counsel and Corporate Secretary), Mr. Weaver and Mr. Awada; (c) for 2022, Messrs. Lannon, Weaver, Berube and Awada; (d) for 2021, Messrs. Lannon and Berube, Ms. Bausch and Jacqueline Scanlan (our former Senior Vice President and Chief Human Resources Officer); and (e) for 2020, Messrs. Lannon, Berube, Weaver and Awada and Steven Markevich (our former Executive Vice President and President, Transportation Coatings and Greater China). A reconciliation of Average Compensation Actually Paid to Non-PEO NEOs reported in column (e) is set forth below. |
Pay Versus Performance Table
| (3) For each year, total shareholder return for the Company and the peer group was calculated in accordance with Item 201(e) and Item 402(v) of Regulation S-K. For purposes of this pay versus performance disclosure, our peer group is the same peer group used for purposes of the performance graph included in the Company’s Annual Reports on Form 10-K and reflects the S&P 400 Materials Index for the fiscal years ended December 31, 2024, 2023, 2022 and 2021 and the S&P 500 Chemicals Index for the fiscal year ended December 31, 2020. |
Pay Versus Performance Table
| (4) The Company has determined that Adjusted EBIT is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the Company’s NEOs for the most recently completed fiscal year to Company performance. Adjusted EBIT for compensation purposes is Adjusted EBIT, as externally reported for the applicable fiscal year, further adjusted to reflect certain items for each such fiscal year. The adjustments to 2024 Adjusted EBIT are described in the “Compensation Discussion and Analysis” section of this definitive proxy statement. The adjustments to 2023, 2022, 2021 and 2020 Adjusted EBIT are described in the Company’s definitive proxy statements filed on April 24, 2024, April 25, 2023, April 22, 2022 and March 29, 2021, respectively. In addition to such adjustments, Adjusted EBIT for 2023, 2021 and 2020, as presented above, differs from externally-reported Adjusted EBIT because (a) 2023 Adjusted EBIT, as presented above, deducts amortization of acquired intangibles and adds step-up depreciation from the acquisition of DuPont Performance Coatings; and (b) for consistency of presentation, Adjusted EBIT for 2021 and 2020, as presented above, adds step-up depreciation from the acquisition of DuPont Performance Coatings. 2022 Adjusted EBIT as presented above and as externally reported each include step-up depreciation from the acquisition of DuPont Performance Coatings, as the changes to our presentation of Adjusted EBIT, as discussed in Appendix A, have not been reflected in our externally-reported 2022 Adjusted EBIT. |
Pay Versus Performance Table
A reconciliation of the PEO Summary Compensation Table total compensation to the Compensation Actually Paid (“CAP”) is provided in the following tables for each PEO shown in the table above.
Most Important Measures Used by Axalta to Link Executive Compensation Actually Paid to Company Performance
Most Important Measures Used by Axalta to Link Executive Compensation Actually Paid to Company Performance Adjusted EBIT Free Cash Flow Adjusted EBIT Margin Adjusted EBITDA Relative Total Shareholder Return Adjusted EPS Return on Invested Capital Please see “Annual Performance-Based Compensation” and “Long-Term Equity Incentive Awards” beginning on pages 49 and 53, respectively, for descriptions of how these metrics are used in our executive compensation program.
Pay Versus Performance Relationships
Pay Versus Performance Relationships The following graphical comparisons describe the relationships between certain figures included in the Pay Versus Performance Table for each of 2024, 2023, 2022, 2021, and 2020, including: (a) a comparison between our cumulative total shareholder return and the total shareholder return of the peer group; and (b) comparisons between (i) the compensation actually paid to the PEOs and the average compensation actually paid to our non-PEO NEOs and (ii) each of Axalta’s total shareholder return, net income and Adjusted EBIT.
Pay Versus Performance Relationships
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