DEF 14A of Kronos Worldwide Inc
Filed Mar 25, 2025 · FY20240001257640-25-000009
Q:Assuming a quorum is present, what vote is required to elect a director nominee?
Q:Assuming a quorum is present, what vote is required to elect a director nominee?
Q:Assuming a quorum is present, what vote is required to elect a director nominee?
| A: | Under applicable state law and our governing documents, a plurality of affirmative votes of the holders of our outstanding shares of common stock represented and entitled to vote at the meeting is necessary to elect each director nominee. Our governing documents do not authorize cumulative voting. Accordingly, the director nominee with the most votes for a particular seat will be elected to that seat. Only shares that are voted in favor of a particular nominee will be counted toward that nominee’s achievement of a plurality. There is no “against” option, and votes that are “withheld” or not cast, including broker/nominee non-votes, will not be counted toward that nominee’s achievement of a plurality. |
Q:Assuming a quorum is present, what vote is required to elect a director nominee?
Valhi and NLKW have each indicated its intention to have its shares of our common stock represented at the meeting and to vote such shares FOR the election of each of the director nominees named in this proxy statement. If Valhi alone attends the meeting in person or by proxy and votes as indicated, the stockholders will elect all of the nominees named in this proxy statement to the board of directors.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our bylaws provide that the board of directors shall consist of one or more members as determined by our board of directors or stockholders. Our board of directors has currently set the number of directors at eight and recommends the eight director nominees named in this proxy statement for election at our 2025 annual stockholder meeting. The directors elected at the meeting will hold office until our 2026 annual stockholder meeting and until their successors are duly elected and qualified or their earlier removal or resignation. All of the nominees are currently members of our board of directors whose terms will expire at the 2025 annual meeting. All of the nominees have agreed to serve if elected. If any nominee is unable to serve or for good cause will not serve as a director at the time of the annual meeting, the proxy holders may vote your shares for any alternate nominee selected by the board of directors, unless you withhold authority to vote for such unavailable nominee. The board of directors believes that all of its nominees will be available for election at the meeting and will serve if elected. OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE FOLLOWING NOMINEES FOR DIRECTOR. Nominees for Director. All of our nominees have extensive senior management and policy-making experience or significant accounting experience. Each of the nominees is knowledgeable about our business. Each of our independent directors is financially literate. The board of directors considered each nominee’s specific business experiences described in the biographical information provided below in determining whether to nominate him or her for election as a director. James M. Buch, age 64, has served on our board of directors and as our chief executive officer since 2022 and as our president since 2021. He previously served as our chief operating officer from 2015 to 2022 and as our chief operating officer, global commercial from 2014 to 2015. He currently serves as senior vice president of Contran. Previously, he served Titanium Metals Corporation as its vice president from 2001 to 2011 and as its executive vice president, commercial from 2011 to 2013. Mr. Buch has extensive experience with our business, during which he developed general management, senior executive, corporate governance, finance and financial accounting oversight experience. Loretta J. Feehan, age 69, has served as chair of the board (non-executive) of us, CompX, NL and Valhi since 2017 and as a director of each such company since 2014. She is a certified public accountant who consults on financial and tax matters. Prior to forming her own practice, she served as a tax partner with Deloitte and Touche LLP serving primarily corporate clients. Ms. Feehan also taught continuing education courses from 2002 to 2016 to tax practitioners around the country for Accountant’s Education Services. She has been a financial advisor to Lisa K. Simmons since prior to 2020. Ms. Feehan has 11 years of experience as a director of us, CompX, NL and Valhi. She has over 47 years of financial and tax accounting and auditing experience, certain years of which were as a partner in one of the largest international accounting firms. John E. Harper, age 63, has served on our board of directors since 2016. Mr. Harper is currently a private investor. He previously served as vice president and chief financial officer of Dell Services, a business unit of the global information technology company Dell, Inc., from 2009 to 2014. Prior to the 2009 acquisition of Perot Systems Corporation, a worldwide provider of information technology services and business solutions, by Dell, he worked for 16 years with Perot Systems, most recently as their chief financial officer. Before joining Perot Systems, he worked for nine years in the audit practice of Ernst & Young LLP, serving a number of industries including technology, manufacturing, education and oil and gas. From 2015 to 2016, Mr. Harper served as a director and chairman of the audit committee and member of the compensation committee of Rackspace Hosting, Inc., a world leader in the managed cloud segment of the business information technology market. Mr. Harper is a certified public accountant. He has served as a director and on the audit committee of NL since prior to 2020 and on NL’s management development and compensation committee since 2024. He is a member of our audit committee and our management development and compensation committee. Mr. Harper has nine years of experience on the boards of directors and audit committees of Kronos Worldwide and NL. He also has senior executive, operating, corporate governance, finance, financial accounting and auditing experience from one of the largest independent international public accounting firms and from other publicly held entities for which he currently serves or formerly served. Kevin B. Kramer, age 65, has served on our board of directors since 2023. He has served as senior advisor to the chief executive officer of ATI Inc. (previously named Allegheny Technologies, Incorporated), a publicly traded global manufacturer of specialty materials and components supplying the aerospace, defense, energy, medical, consumer electronics and automotive industries, since 2023. He previously served as senior vice president, chief commercial and marketing officer for ATI from 2014 to 2023. Prior to joining ATI, Mr. Kramer worked for Stoneridge, Inc. where he was president—Stoneridge wiring division and vice president from 2012 to 2014. Earlier experience includes serving as president—growth initiatives and president—wheel and transportation products for Alcoa, Inc. from 2004 to 2012 and serving in various roles for Goodyear Tire and Rubber Company from 1983 to 2004. From 2022 until 2023, Mr. Kramer served as a director and on the audit committee of CompX and Valhi. Since 2023, he has served as a director and on the audit committee of NL. He is a member of our audit committee. Mr. Kramer has over one year of experience on the boards of directors and audit committees of Kronos Worldwide and NL. He also has senior executive, operating, corporate governance, finance, and financial accounting oversight experience from a publicly traded company and other companies for which he has served.
ELECTION OF DIRECTORS
Meredith W. Mendes, age 66, has served on our board of directors since 2018. Since 2024, Ms. Mendes has served as chief financial officer and a founding partner of Pierson Ferdinand LLP, a full-service law firm with more than 200 lawyers in over 20 U.S. markets and London, where she is responsible for finance, accounting, tax, financial planning and analysis, treasury, payroll and related functions. From 2022 to 2023, Ms. Mendes served as the chief executive officer of Matthew Pritzker Company LLC, a single-family office. From 2020 to 2022, she served as chief operating officer and a partner of Gresham Partners, LLC, an independent wealth management and investment advisory firm, where she was responsible for finance, technology, cybersecurity, client and investment operations, facilities, legal and other support functions. From 2005 to 2020, Ms. Mendes served as executive director and chief operating officer of Jenner & Block LLP, a law firm with more than 500 attorneys with offices across the United States and in London, where she was responsible for firm-wide operations relating to finance, technology, facilities and real estate, human resources and other support functions. From 1999 to 2005, Ms. Mendes served as executive vice president and worldwide chief financial officer of Daniel J. Edelman, Inc., a global communications marketing firm. From 2019 to 2023, Ms. Mendes served as a director and on the audit and nominating and corporate governance committees of Quanex Building Products Corporation (NYSE: NX), a manufacturer of window and door, and kitchen and bath cabinet components sold to original equipment manufacturers. From 2016 to 2019, Ms. Mendes served as a director and on the audit and nominating and corporate governance committees of Inland Residential Properties Trust, Inc., a real estate investment trust sponsored by Inland Real Estate Investment Corporation, which acquired and managed a portfolio of multi-family properties located primarily in the top 100 U.S. metropolitan statistical areas. Ms. Mendes has a law degree from Harvard Law School, a Master of Business Administration degree with a finance concentration from the University of Chicago Booth School of Business and an AB (magna cum laude) from Brown University. Ms. Mendes is an Illinois certified public accountant. Ms. Mendes has earned her CERT Certificate in Cybersecurity Oversight from the Software Engineering Institute of Carnegie Mellon University. Ms. Mendes has served as a director and on the audit committee of NL since prior to 2020. She is a member of our audit committee. Ms. Mendes has seven years of experience on the boards of directors and audit committees of Kronos Worldwide and NL. She also has senior executive, operating, corporate governance, finance and financial accounting oversight experience from other publicly and privately held entities for which she currently serves or formerly served. Cecil H. Moore, Jr., age 85, has served on our board of directors since 2003. Mr. Moore is currently a private investor and retired from KPMG LLP in 2000 after 37 years in which he served in various capacities with the public accounting firm. Among other positions, he served as managing partner of the firm’s Dallas, Texas office from 1990 to 1999. Prior to 1990, Mr. Moore was partner-in-charge of the audit and accounting practice of the firm’s Dallas, Texas office for 12 years. From 2014 to 2016, Mr. Moore served as a director and chairman of the audit committee of Sizmek Inc., a former publicly held on-line advertising business that was spun-off in 2014 by Digital Generation, Inc. From 2011 to 2014, he served as a director and chairman of the audit committee of Digital Generation, Inc., a former publicly held provider of digital technology services to media outlets. From 2003 until 2009, Mr. Moore served as a director and chairman of the audit committee of Perot Systems. Mr. Moore is a certified public accountant. Since prior to 2020, he has served as a director and on the audit committee of NL, serving as chairman of its audit committee since 2019; and he has served as a member of NL’s management development and compensation committee since 2019, and as that committee’s chairman since 2024. From 2016 until 2019, he served as a director and as the chairman of the audit committee of CompX. He is a member of our management development and compensation committee and the chairman of our audit committee. Mr. Moore has over 21 years of experience on the boards of directors and audit committees of Kronos Worldwide and NL. He also has senior executive, operating, corporate governance, finance, financial accounting and auditing experience from one of the largest independent international public accounting firms and from other publicly held entities for which he currently serves or formerly served. Michael S. Simmons, age 53, has served on our board of directors and as our vice chairman of the board since 2023. He previously served as our executive vice president, finance from 2022 to 2023; as our senior vice president, finance from 2021 to 2022; and as our vice president, finance from 2019 to 2021. He currently serves as vice chairman of the board, president and chief executive officer of Valhi; as vice chairman of the board of NL and CompX; and as president and chief executive officer of Contran. He has served as a director of Valhi and CompX since 2022 and as a director of NL and Contran since 2023. Mr. Simmons has served in accounting and financial positions (including officer positions) with various companies related to us and Contran since 2018. From 1994 to 2018, Mr. Simmons was employed by PwC, most recently as a managing director. Mr. Simmons is not related to Lisa K. Simmons, who may be deemed to control Kronos Worldwide. Mr. Simmons has extensive experience with our business. He also has senior executive, operating, corporate governance, finance, financial accounting and auditing experience with us, from one of the largest independent international public accounting firms, and from other publicly and privately held entities related to us for which he currently serves or formerly served. Dr. R. Gerald Turner, age 79, has served on our board of directors since 2003. He has served since 1995 as president of Southern Methodist University in Dallas, Texas. He held previous executive and administrative positions at the University of Mississippi, the University of Oklahoma and Pepperdine University. He served from 2001 to 2020 as a trustee of the American Beacon Funds and American Beacon Select Funds, each a registered management investment company. He served on the board of directors of J.C. Penney Company from 1995 to 2019. Dr. Turner is a member of our audit committee and chairman of our management development and compensation committee. Dr. Turner has over 21 years of experience on our board of directors, audit committee and management development and compensation committee. He also has senior executive, operating, corporate governance, finance and financial accounting oversight experience from a large, non-profit, private educational institution for which he currently serves and from other publicly held entities for which he currently serves or formerly served.
2024 Summary Compensation Table (1)
2024 Summary Compensation Table (1)
2024 Summary Compensation Table (1)
| | | | | All Other | | | Name and Principal Position | Year | Salary | Bonus | Compensation | Total | | Michael S. Simmons (2) | 2024 | $932,000(3) | $-0- | $-0- | $932,000 | | Vice Chairman of the Board | | | | | | | James M. Buch | 2024 | 2,247,000(3) | -0- | -0- | $2,247,000 | | President and Chief Executive | 2023 | 2,138,000(3) | -0- | -0- | 2,138,000 | | Officer | 2022 | 1,772,000(3) | -0- | -0- | 1,772,000 | | Brian W. Christian | 2024 | 1,856,000(3) | -0- | -0- | 1,856,000 | | Executive Vice President and Chief | 2023 | 1,690,000(3) | -0- | -0- | 1,690,000 | | Operating Officer | 2022 | 1,474,000(3) | -0- | -0- | 1,474,000 | | Tim C. Hafer | 2024 | 1,017,000(3) | -0- | -0- | 1,017,000 | | Executive Vice President and | 2023 | 1,022,000(3) | -0- | -0- | 1,022,000 | | Chief Financial Officer | 2022 | 879,000(3) | -0- | -0- | 879,000 | | John A. Sunny | 2024 | 954,000(3) | -0- | -0- | 954,000 | | Executive Vice President and | 2023 | 933,000(3) | -0- | -0- | 933,000 | | Chief Information Officer | 2022 | 802,000(3) | -0- | -0- | 802,000 |
2024 Summary Compensation Table (1)
| (1) Certain non-applicable columns have been omitted from this table. |
2024 Summary Compensation Table (1)
| (2) Mr. Simmons is one of our named executive officers only for 2024. |
2024 Summary Compensation Table (1)
| (3) The amounts shown in the 2024 Summary Compensation Table as salary for each of the named executive officers represent the portion of the fees we paid pursuant to our ISA with Contran with respect to the services such officer rendered to us and our subsidiaries. The ISA charges disclosed for Contran employees who perform executive officer services for us and our subsidiaries are based on various factors described in the Compensation Discussion and Analysis section of this proxy statement. Our management development and compensation committee considers the factors described in the Compensation Discussion and Analysis section of this proxy statement in determining whether to recommend that our board of directors approve the aggregate proposed ISA fee with Contran. As discussed in the Compensation Discussion and Analysis section of this proxy statement, our management development and compensation committee does not consider any ISA charge from Contran to any other publicly held parent or sister company of ours, although such charge is separately reviewed by the management development and compensation committee of the applicable company. |
2024 Summary Compensation Table (1)
No Grants of Plan-Based Awards. During 2024, no named executive officer received any plan-based awards from us or our subsidiaries. No Outstanding Equity Awards at December 31, 2024. We have never granted any stock options to purchase shares of our common stock or shares of our common stock that were subject to vesting restrictions. At December 31, 2024, none of our named executive officers held any stock options exercisable for shares of common stock of our parent or subsidiary corporations or held any equity incentive awards for such shares. We do not have policies or practices on the timing of awards of options in relation to the disclosure of material nonpublic information because we do not award options. No Option Exercises or Stock Vested. None of our named executive officers held shares of our stock or of our parent or subsidiary corporations that were subject to vesting restrictions in 2024. During 2024, no named executive officer exercised any stock options issued by us. Pension Benefits. We do not have any defined benefit pension plans in which our named executive officers participate. Nonqualified Deferred Compensation. We do not owe any nonqualified deferred compensation to our named executive officers. Pay Ratio Disclosure SEC rules require annual disclosure of the ratio of a registrant’s median employee’s annual total compensation to the total annual compensation of its chief executive officer. For 2024, the total annual compensation (as disclosed in the 2024 Summary Compensation Table) of James M. Buch, our chief executive officer, is $2,247,000; the reasonable estimate of the median of the annual total compensation of all of our employees except our chief executive officer, calculated in a manner consistent with Item 402(u) of Regulation S-K, is $89,469, and the ratio of such two amounts is 25 to 1. For purposes of this disclosure, our “median employee” was estimated using a simple random sample statistical sampling technique, pursuant to which we and each of our consolidated subsidiaries worldwide selected every seventh employee listed on their first payroll register for the month of October 2023. Based on the random sample of our employees, and using the 2023 base salary (or equivalent for hourly employees) for each employee in the random sample as reflected in our payroll records, the median employee was estimated by determining the employee in such random sample who had the median 2023 base salary (or equivalent for hourly employees). Base salary (or equivalent) amounts were annualized for any employee who had less than a full year of service during 2023. In determining the median employee, we used the applicable average exchange rates for the month of October 2023. There has been no change in our employee population or employee compensation arrangements since that median employee was identified that we believe would significantly impact our pay ratio disclosure. For providing the median employee’s annual total compensation in U.S. dollars, we used the applicable average exchange rate for all of 2024. Director Compensation. Our directors who are not employees of Contran or one of its subsidiaries or affiliates are eligible for cash compensation for their service as one of our directors. The table below reflects the annual rates of their retainers for 2024.
2024 Summary Compensation Table (1)
| | 2024 Director | | | Retainers | | Each director | $50,000* | | Chair of the board | $50,000 | | Chairman of our audit committee and any member of our audit committee whom the board identified as an “audit committee financial expert” (provided that if one person served in both capacities only one such retainer was paid) | $45,000 | | Other members of our audit committee | $25,000 | | Members of our other committees | $5,000 |
2024 Summary Compensation Table (1)
* Effective July 1, 2024, the annual retainer for directors was increased from $40,000 to $50,000. Additionally, our eligible directors receive a fee of $1,000 per day for attendance at meetings of the board of directors or its committees and an hourly rate (not to exceed $1,000 per day) for other services rendered on behalf of our board of directors or its committees. If a non-employee director who was first elected to our board prior to 2022 dies while serving on our board of directors, his or her designated beneficiary or estate will be entitled to receive a death benefit equal to the annual retainer then in effect. We reimburse our directors for reasonable expenses incurred in attending meetings and in the performance of other services rendered on behalf of our board of directors or its committees. As preapproved by our management development and compensation committee, on the day of each of our annual stockholder meetings, each of our eligible directors elected on that day receives a grant of shares of our common stock under our 2012 Director Stock Plan, with the number of shares received by each eligible director equal in value to $20,000 (rounded up or down to the nearest 50 shares), based on the closing price of a share of our common stock on the date of grant, but not more than 10,000 shares. These shares are fully vested and tradable immediately on their date of grant, other than restrictions under applicable securities laws. Our corporate governance guidelines include stock ownership guidelines for our non-employee directors (that is, directors who are not employed by us or one of our affiliates), which provide that non-employee directors may not sell shares of our common stock acquired as part of the annual stock grants unless, immediately after any such sale, they will hold a number of shares of our common stock (including shares owned by their immediate family members residing in the same household) having a value of at least three times our base annual cash retainer for service as a director. The following table provides information with respect to compensation each of our eligible directors earned for their 2024 director services provided to us. 2024 Director Compensation (1)
2024 Summary Compensation Table (1)
| | Fees Earned or | | | | Name | Paid in Cash (2) | Stock Awards (3) | Total | | Loretta J. Feehan | $104,000 | $19,685 | $123,685 | | John E. Harper | 101,500 | 19,685 | 121,185 | | Kevin B. Kramer | 79,000 | 19,685 | 98,685 | | Meredith W. Mendes | 99,000 | 19,685 | 118,685 | | Cecil H. Moore, Jr. | 104,000 | 19,685 | 123,685 | | R. Gerald Turner | 84,000 | 19,685 | 103,685 | | Thomas P. Stafford (4) | 17,500 | -0- | 17,500 |
2024 Summary Compensation Table (1)
| (1) Certain non-applicable columns have been omitted from this table. |
2024 Summary Compensation Table (1)
| (2) Represents cash retainers and meeting fees the director earned for director services he or she provided to us in 2024. |
2024 Summary Compensation Table (1)
| (3) Represents the value of 1,550 shares of our common stock we granted to each of these directors on May 15, 2024. For the purposes of this table, we valued these stock awards at the $12.70 closing price per share of such shares on their date of grant, consistent with the requirements of Financial Accounting Standards Board Accounting Standards Codification Topic 718. |
2024 Summary Compensation Table (1)
| (4) Gen. Stafford (ret.) served as a member of our board of directors until his death in March 2024. A death benefit of $70,000 was also paid by Kronos Worldwide to his designated beneficiary or estate following his death. |
2024 Summary Compensation Table (1)
Pay Versus Performance. The Pay Versus Performance Table below summarizes compensation values previously reported in the Summary Compensation Table of our proxy statements and other information, as required by SEC rules. We did not use any specific financial performance measures to link executive compensation of our named executive officers to company performance for 2024; see the discussion in the Compensation Discussion and Analysis section of this proxy statement. As used in this section (including the charts below), “NEOs” means the persons designated in our proxy statement as our named executive officers for the applicable year, and “PEO” means our principal executive officer.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| (a) | (b) | (b-2) | (c) | (c-2) | (d) | (e) | (f) | (g) | (h) | | | | | | | Average | | Value of Initial Fixed $100 | | | | | Summary | Summary | | | Summary | Average | Investment Based on: | | | | | Compensation | Compensation | Compensation | Compensation | Compensation | Compensation | Kronos | Peer | | | | Table | Table | Actually | Actually | Table | Actually | Worldwide | Group | Net | | | Total for | Total for | Paid to | Paid to | Total for | Paid to | Total | Total | Income | | | PEO | PEO | PEO | PEO | Non-PEO | Non-PEO | Shareholder | Shareholder | (Loss) | | | Graham (1) | Buch (1) | Graham (1)(2) | Buch (1)(2) | NEOs (3) | NEOs (2)(3) | Return (4) | Return (4) | ($) | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ( in millions) | | 2024 | n/a | 2,247,000 | n/a | 2,247,000 | 1,189,750 | 1,189,750 | 98 | 111 | 86.2 | | 2023 | n/a | 2,138,000 | n/a | 2,138,000 | 1,119,189 | 1,119,189 | 95 | 179 | (49.1) | | 2022 | 4,570,000 | 1,772,000 | 4,570,000 | 1,772,000 | 993,792 | 993,792 | 83 | 168 | 104.5 | | 2021 | 3,735,000 | n/a | 3,735,000 | n/a | 1,215,200 | 1,215,200 | 125 | 210 | 112.9 | | 2020 | 3,623,000 | n/a | 3,623,000 | n/a | 1,309,200 | 1,309,200 | 118 | 141 | 63.9 |
Pay Versus Performance Table
| (1) Our only PEO for 2020 and 2021 was Robert D. Graham, and our only PEO for 2023 and 2024 was James M. Buch. In 2022, we had two PEOs: Mr. Graham served as our chief executive officer until May 2022, when Mr. Buch succeeded him in that position. Both Mr. Buch and Mr. Graham were executive officers for all of 2022, with Mr. Buch previously serving as president and chief operating officer until his promotion in May 2022 and with Mr. Graham continuing to serve as our vice chairman until December 31, 2022; the compensation amounts for each of them in this table reflect the full year. |
Pay Versus Performance Table
| (2) For purposes of this table, the term “compensation actually paid” is the total compensation reported in the Summary Compensation Table in our proxy statement, adjusted (if applicable) as required by SEC rules; no such adjustments are applicable for the officers and years reported in this table. See the footnotes to our Summary Compensation Table in the applicable year’s proxy statement for a discussion of what we report for compensation for our named executive officers who are Contran employees and perform services to us and our subsidiaries pursuant to the ISA. |
Pay Versus Performance Table
(3)The non-PEO NEOs for each year were as follows: 2024: Michael S. Simmons, Brian W. Christian, Tim C. Hafer, John A. Sunny 2023: Brian W. Christian, Benjamin R. Corona, Tim C. Hafer, John A. Sunny 2022: Brian W. Christian, Benjamin R. Corona, Tim C. Hafer, John A. Sunny 2021: James M. Buch, Brian W. Christian, Andrew B. Nace, Tim C. Hafer, James W. Brown 2020: James M. Buch, James W. Brown, Brian W. Christian, Andrew B. Nace, Kelly D. Luttmer
Pay Versus Performance Table
| (4) Total shareholder return (TSR) amounts show the value at December 31 of each year, assuming an original investment of $100 at December 31, 2019 and reinvestment of cash dividends and other distributions to stockholders. For the peer group TSR, the peer group is comprised of the same companies as in our performance graph in Part II, Item 5 of our annual report on Form 10-K for the fiscal year ended December 31, 2024, namely The Chemours Company and Tronox Holdings plc. |
Pay Versus Performance Table
The following chart shows the relationship between the amounts in columns (c) and (c-2) and in column (e) of the Pay Versus Performance Table, and the total shareholder return (TSR) amounts in columns (f) and (g) of the Pay Versus Performance Table. It also shows the relationship between our TSR and the peer group TSR. The following chart shows the relationship between the amounts in columns (c) and (c-2) and in column (e) of the Pay Versus Performance Table, and our net income as shown in column (h) of the Pay Versus Performance Table. Compensation Policies and Practices as They Relate to Risk Management. We believe that the risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on us. In reaching this conclusion, we considered the following:
Pay Versus Performance Table
| ● | we do not grant equity awards to our employees, officers or other persons who provide services to us under our ISA with Contran, which mitigates taking excessive or inappropriate risk for short-term gain that might be rewarded by equity compensation; |
Pay Versus Performance Table
| ● | our executive officers employed by us are eligible to receive incentive bonus payments that are determined on a discretionary basis and do not guarantee the employee a particular level of bonus based on the achievement of a specified performance or financial target, which also mitigates taking excessive or inappropriate risk for short-term gain; |
Pay Versus Performance Table
| ● | our other key employees are eligible to receive bonuses determined in part on the achievement of specified performance or financial targets, but the chance of such employees undertaking actions with excessive or inappropriate risk for short-term gain in order to achieve such bonuses is mitigated because: |
Pay Versus Performance Table
| o | our executive officers employed by us who are responsible for setting the specified performance or financial targets are not eligible to receive bonuses based on the achievement of the targets, but instead are only eligible for the discretionary-based bonuses described above; and |
Pay Versus Performance Table
| o | there exist ceilings for our other key employee bonuses (which are not a significant part of their compensation) regardless of the actual level of our financial performance achieved; |
Pay Versus Performance Table
| ● | our officers and other persons who provide services to us under our ISA with Contran do not receive compensation from us directly and are employed by Contran, one of our parent corporations, which aligns such officers and persons with the long-term interests of our stockholders; |
Pay Versus Performance Table
| ● | since we are a controlled company, as previously discussed, management has a strong incentive to understand and perform in the long-term interests of our stockholders; and |
Pay Versus Performance Table
| ● | our experience is that our employees are appropriately motivated by our compensation policies and practices to achieve profits and other business objectives in compliance with our oversight of material short and long-term risks. |
Pay Versus Performance Table
For a discussion of our compensation policies and practices for our executive officers, please see the Compensation Discussion and Analysis section of this proxy statement. Compensation Consultants. Neither our board of directors, management development and compensation committee nor management has engaged any compensation consultants.