DEF 14A of Innospec Inc.

Filed Mar 27, 2025 · FY20240001999371-25-003291

Open on EDGAR

INNOSPEC INC. 8310 South Valley Highway, Suite 350, Englewood, CO 80112
| DIRECTOR COMPENSATION | 41 | | Elements of Director Compensation | 41 | | Director Stock Ownership Guidelines | 42 | | Director Compensation For Fiscal 2024 | 42 | | WHO OWNS OUR STOCK? INFORMATION ABOUT OUR COMMON STOCK OWNERSHIP | 45 | | Stock Ownership of Directors and Executive Officers as of February 15, 2025 | 45 | | Principal Beneficial Owners as at Fiscal Year End 2024 | 46 | | Delinquent Section 16(a) Reports | 46 | | Equity Compensation Plans | 47 | | PROPOSAL 2: ADVISORY APPROVAL OF INNOSPEC’S EXECUTIVE COMPENSATION | 48 | | PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 49 | | Principal Accountant Fees and Services | 49 | | Audit Committee Pre-Approval Policies and Procedures | 50 | | AUDIT COMMITTEE REPORT | 51 | | INFORMATION ABOUT OUR EXECUTIVE OFFICERS | 52 | | COMPENSATION DISCUSSION AND ANALYSIS | 54 | | Executive Summary | 54 | | Say-on-Pay | 57 | | Elements of Pay | 59 | | Other Pay Programs and Policies | 71 | | COMPENSATION COMMITTEE REPORT | 75 | | COMPENSATION TABLES | 76 | | OTHER MATTERS | 93 | | SOLICITATION AND EXPENSES OF SOLICITATION | 93 | | ANNUAL REPORT TO STOCKHOLDERS | 93 | | STOCKHOLDERS’ PROPOSALS FOR THE 2026 ANNUAL MEETING OF STOCKHOLDERS | 94 |
Identifying and Evaluating Nominees for Director
Identifying and Evaluating Nominees for Director The Nominating, Corporate Governance and Sustainability Committee uses a variety of methods for identifying and evaluating nominees for Director. The Nominating, Corporate Governance and Sustainability Committee considers each person’s judgment, experience, independence, understanding of our business or other related industries and such factors as the committee determines relevant in light of the needs of the Board and the Company. The Nominating, Corporate Governance and Sustainability Committee reviews the skills and attributes of Board members within the context of the current make-up of the full Board and regularly assesses the appropriate size of the Board and whether vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating, Corporate Governance and Sustainability Committee considers potential candidates for Director. Candidates may come to the attention of the Nominating, Corporate Governance and Sustainability Committee through current Board members, stockholders or other persons. In addition, during 2019, 2020 and 2021 the Nominating, Corporate Governance and Sustainability Committee retained a professional search firm to assist in identifying and evaluating potential candidates for nomination at the Annual Meeting. In line with our Board Diversity Policy, the Board considers diversity in the nominating process, along with other criteria, for potential Director candidates and specifically requests that females and minority candidates are included in every Director search pool. The recruitment specification for new Directors concentrates on candidates who are seasoned executive officers, with significant relevant experience, both at board level and within relevant industries. The Director candidates are evaluated at regular or special meetings of the Nominating, Corporate Governance and Sustainability Committee and may be considered at any time during the year. The nominees for election at this year’s Annual Meeting of Stockholders were approved for nomination by the Board upon the recommendation of the Nominating, Corporate Governance and Sustainability Committee.
Identifying and Evaluating Nominees for Director
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Identifying and Evaluating Nominees for Director
Our Director recruitment process is as follows:
Identifying and Evaluating Nominees for Director
| Board and Nominating, Corporate Governance and Sustainability Committee determine desired criteria and experience of Director candidates. | | | | Director candidates identified by independent search firm, Board members, officers, employees or stockholders. | | | | Nominating, Corporate Governance and Sustainability Committee evaluates Director candidates against selection criteria, individual characteristics, skills, diversity and qualifications and checks for possible conflicts and independence. | | | | Director candidates are interviewed by members of the Nominating, Corporate Governance and Sustainability Committee, Chairman of the Board and may also meet with the CEO and CFO. | | | | Nominating, Corporate Governance and Sustainability Committee recommends suitable Director candidates to the Board. | | | | Board votes to appoint Director candidates based on an assessment of their qualifications and potential contributions to the Board. | | | | Stockholders vote on the election of the Director nominees at the Annual Meeting of Stockholders. |
Identifying and Evaluating Nominees for Director
The policy of the Nominating, Corporate Governance and Sustainability Committee is to consider properly submitted stockholder nominations for election to the Board. In order for any candidate to be considered by the Nominating, Corporate Governance and Sustainability Committee, and if nominated, included in the Proxy Statement, such recommendation should be received no later than the deadline for submission of stockholder proposals. See “Stockholders’ Proposals for the 2026 Annual Meeting of Stockholders”. Recommendations should be sent to the Corporate Secretary and should specify the nominee’s name, qualification for Board membership and any other information required by the Company’s Bylaws. All properly submitted stockholder nominations for Director candidates received by the Corporate Secretary will be submitted to the Nominating, Corporate Governance and Sustainability Committee for review and consideration. The Nominating, Corporate Governance and Sustainability Committee will consider stockholder recommendations for Director candidates, but the Nominating, Corporate Governance and Sustainability Committee has no obligation to recommend such candidates. Assuming appropriate biographical and background information (including qualifications) is provided for Director candidates recommended by stockholders, the Nominating, Corporate Governance and Sustainability Committee will use the same process to evaluate Director nominees recommended by stockholders as it does to evaluate nominees identified by other sources.
Identifying and Evaluating Nominees for Director
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PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS
PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS The first proposal to be voted on at the meeting is the election of three Class III Directors. The directors elected at this meeting will serve until the 2028 Annual Meeting of Stockholders. The Board has nominated Mr. David F. Landless, Mr. Lawrence J. Padfield and Mr. Patrick S. Williams, current Class III Directors, whose terms expire at the upcoming Annual Meeting of Stockholders, for election to the Board.
PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS
| The Bylaws of the Company provide that the number of directors shall be not less than three nor more than twelve members, the exact number of which shall be determined from time to time by resolution adopted by the Board, and that the Board shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of Directors constituting the entire Board. | The Board recommends that you vote “FOR” each Director nominee. |
PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS
The below chart includes this year’s nominees included in Proposal 1, along with their age, tenure, principal occupation and committee membership:
PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS
| | Age | Independent | Director Since | Board Committee(s) | Principal Occupation | Other Public Board Position(s) | | Mr. David F. Landless | 65 | ✔ | 2016 | Audit Committee Nominating, Corporate Governance and Sustainability Committee. | Retired | Renold plc- Chairman of the Board | | Mr. Lawrence J. Padfield | 69 | ✔ | 2012 | Compensation Committee | Retired | None | | Mr. Patrick S. Williams | 60 |  | 2009 | None | President and Chief Executive Officer | Advansix Inc. NED and member of Compensation and Leadership Development Committee and Chair of the Nominating and Corporate Governance Committee |
PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS
If a nominee becomes unable or unwilling to accept nomination or election, the Board will either select a substitute nominee or reduce the size of the Board. If you have submitted a proxy and a substitute nominee is selected, your shares will be voted for the election of the substitute nominee. The Board has no reason to believe that any nominee would be unable or unwilling to serve if elected. According to the Bylaws and Corporate Governance Guidelines, the Nominating, Corporate Governance and Sustainability Committee recommended to the Board that the Board submit the Class III Directors to the vote of stockholders. The above-named nominees will be elected to the Board on a plurality of the votes of the shares present or represented by proxy at the meeting and entitled to vote.
PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS
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Director Biographies
Director Biographies The following is biographical and other information about our current Directors, including the nominees for election at the Annual Meeting.
Class I Directors
Class I Directors
Class I Directors
| | Ms. Claudia P. Poccia Age: 65 Director since July 1, 2019 Committees: Nominating, Corporate Governance and Sustainability Committee (Chair), Compensation Committee |
Class I Directors
Ms. Poccia is CEO of Grace De Monaco, a wholly owned subsidiary of The Princess Grace Foundation-USA. Grace de Monaco is the first global luxury brand for good and all revenues from the sale of Grace de Monaco products support emerging artists in theater, dance, and film through The Princess Grace Awards program. She continues to serve as CEO of DragonflySage, a strategic consultancy she founded to advise luxury lifestyle and beauty brands, since 2018, and has over 30 years’ experience in the beauty industry. Ms. Poccia also co-founded IdeavationLabs LLC, a beauty incubation platform company, where she served as CEO from 2020- 2021. Previously, Ms. Poccia was the Chief Marketing Officer and Head of International Business Development of bareMinerals for Shiseido Americas Company, a beauty company, having previously served as President/CEO of Gurwitch Products from 2011 to 2015. Prior to that, Ms. Poccia was Global President, Beauty for Avon Products Inc. from 2009 to 2011, having joined them in 2005 as President for the U.S. beauty business. From 1994 to 2005, Ms. Poccia worked for Estee Lauder Companies Inc., in a number of senior executive and business roles including President of Stila Cosmetics and VP of Business Development for the Estee Lauder brand. Her early career included seven years at Avon Products Inc., where she held a number of roles in sales. Ms. Poccia has been Chairman of Luxie Holdings Inc., a beauty products company since May 2019, a Board member of Fashion Group International, a non-profit organization focusing on the fashion industry, since 2018 and is also a board member of Blue Mistral, LLC. Ms. Poccia is recognized as a leader in the beauty industry and was named one of the Top 50 Most Influential People in Beauty by Beauty Inc. She has been the recipient of several awards in the industry including the Cosmetic Executive Women Achiever Award and Women’s Wear Daily Beauty Biz Award for Innovative Marketer. Key Attributes, Experience and Skills:
Class I Directors
| | | | | | | | | | | Senior Leadership Experience | Public Company Board Experience | Chemical Industry Experience | Corporate Governance Experience | Manufacturing/ Operations Experience | Human Capital Management Experience | M&A Experience | Global Experience | Regulatory/ Legal/ Compliance Experience |
Class I Directors
Ms. Poccia has an in-depth knowledge of the international personal care industry, particularly the beauty sector and has held several senior positions during her career. She brings industry knowledge and marketing expertise to the Company. For additional detail see our Board Skills Matrix on page 33.
Class I Directors
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Class I Directors
| | Ms. Elizabeth K. Arnold Age: 60 Director since November 2, 2020 Committees: Audit Committee, Nominating, Corporate Governance and Sustainability Committee |
Class I Directors
Ms. Arnold has served as an independent Director of FreightCar America, Inc., a railroad freight car manufacturer and parts supplier, since 2019, serves as its audit committee chairperson and serves on the nominating and corporate governance committee and compensation committee. From October 2014 to 2019, Ms. Arnold served as the Senior Vice President, Chief Financial Officer and Treasurer of Houghton International, a specialty chemical company with international operations where she also had responsibility for the information technology department,. From October 2012 to April 2014, Ms. Arnold served as the Chief Financial Officer of Physiotherapy Associates where she also had responsibility for the information technology department. Prior to that, Ms. Arnold served as the Chief Financial Officer of Tyco Flow Control from April 2010 to September 2012, having previously served as the Vice President, Corporate Financial Planning & Analysis at Tyco International. Earlier in her career, Ms. Arnold served in numerous roles, including executive leadership positions, for GE, a global high-tech industrial company with products and services ranging from aircraft engines, power generation and oil and gas production to medical imaging. Key Attributes, Experience and Skills:
Class I Directors
| | | | | | | | | | | | | Senior Leadership Experience | Financial Literacy | Public Company Board Experience | Chemical Industry Experience | Corporate Governance Experience | Manufacturing/ Operations Experience | Human Capital Management Experience | M&A Experience | Global Experience | Regulatory/ Legal/ Compliance Experience | Information Security Experience |
Class I Directors
Ms. Arnold has an in-depth knowledge of the chemical industry and has held several senior management positions during her career. She brings industry knowledge and financial expertise and experience in information technology, including cyber security, to the Company. For additional detail, see our Board Skills Matrix on page 33.
Class II Directors
Class II Directors
Class II Directors
| | Mr. Milton C. Blackmore Age: 77 Director since June 1, 2010, Chairman of the Board Committees: Compensation Committee, Audit Committee |
Class II Directors
Mr. Blackmore serves as Non-Executive Chairman of the Company. Mr. Blackmore was most recently the Senior Vice President, Marketing and Product Supply for Sinclair Oil Corporation, one of the largest independent oil companies in the U.S. Sinclair recently merged with Holly Frontier of Dallas, TX, which is now known as HF Sinclair Corporation. Mr. Blackmore served on its board of directors until his retirement in 2009, having previously held a number of senior marketing roles within that company. He was also Chairman of Sinclair Marketing Inc., which is Sinclair Oil Corporation’s convenience store business. Before joining Sinclair in 1995, Mr. Blackmore was with Kerr- McGee Refining Corporation for twenty-six years, progressing through a variety of accounting, marketing and general management positions, ultimately serving as General Manager, Branded Marketing for three years. Mr. Blackmore has a Bachelor of Science degree in Business Administration from Panhandle State University in Oklahoma.
Class II Directors
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Class II Directors
| | | | | | | | | | | Senior Leadership Experience | Financial Literacy | Chemical Industry Experience | Corporate Governance Experience | Manufacturing/ Operations Experience | Human Capital Management Experience | M&A Experience | Global Experience | Regulatory/ Legal/ Compliance Experience |
Class II Directors
Mr. Blackmore has an in-depth knowledge of the chemical industry, particularly the oil sector and has held several senior positions during his career. He brings industry knowledge, financial and marketing expertise to the Company. For additional detail, see our Board Skills Matrix on page 33.
Class II Directors
| | Mr. Leslie J. Parrette Age: 63 Director since January 1, 2022 Committees: Compensation Committee, Nominating, Corporate Governance and Sustainability Committee |
Class II Directors
Mr. Parrette is currently the President of One Page Thinking, a data visualization company he founded in 2003. For more than 20 years, he has served as General Counsel and Chief Compliance Officer for several public companies in domestic and international markets across a variety of industries, including energy trading, electric and gas utilities, natural gas pipelines, aluminum manufacturing, and electrical product distribution. In 2005, he joined Novelis Inc., a subsidiary of Hindalco Industries Ltd., an aluminum rolling and recycling company serving as Senior Vice President, General Counsel, Compliance Officer, and Corporate Secretary until 2020. Prior to this, in 2000, Mr. Parrette joined Aquila, Inc., an international electricity and natural gas utility company, as Senior Vice President, General Counsel, and Secretary. In 1992, he joined Blackwell Sanders, LLP as a Senior Partner and Chair of the law firm’s International Committee. He is a member of the Nominating, Corporate Governance and Sustainability Committee and the Compensation Committee. Mr. Parrette has a Bachelor of Arts degree in Sociology from Harvard College and a J.D. degree from Harvard Law School. Key Attributes, Experience and Skills:
Class II Directors
| | | | | | | | | Senior Leadership Experience | Corporate Governance Experience | Human Capital Management Experience | M&A Experience | Global Experience | Regulatory/ Legal/ Compliance Experience | Information Security Experience |
Class II Directors
Mr. Parrette brings significant legal, compliance and governance expertise to the Board, which is invaluable in a heavily regulated industry in which the Company operates.
Class II Directors
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Class III Directors
Class III Directors
Class III Directors
| | Mr. David F. Landless Age: 65 Director since January 1, 2016 Committees: Audit Committee (Chair), Nominating, Corporate Governance and Sustainability Committee |
Class III Directors
Mr. Landless was the Group Finance Director for Bodycote plc, a U.K. listed company, which provides thermal processing services globally for a wide range of industries including aerospace, automotive, oil and gas and construction, for over 17 years until December 2016. From March 2013 to June 2022, he was a Non-Executive Director for Luxfer Holdings plc; a NYSE listed global materials technology company, and was their Audit Committee Chair until May 2019, when he was appointed Chairman of the Board, which role he relinquished in March 2022 In January 2017, he was appointed a Non-Executive Director of Renold plc, a U.K. listed global manufacturer of specialist industrial chain and machinery transmissions and also was a member of and chaired their Audit Committee until August 2021, from which date he became Chairman of the Board. He is also a Non-Executive Director of Ausurus Group Ltd the holding company of European Metal Recycling (EMR), a large private scrap metal recycling company and was appointed to this role in June 2017. Mr. Landless’ early career includes fourteen years with Courtaulds plc, where he held a number of finance roles, ultimately serving as the Finance Director of Courtaulds Coatings (Holdings) Limited from 1997 to 1999. Mr. Landless is a Chartered Management Accountant and has a Bachelor of Science degree in Management Sciences from the University of Manchester Institute of Science and Technology in the U.K. Key Attributes, Experience and Skills:
Class III Directors
| | | | | | | | | | | | Senior Leadership Experience | Financial Literacy | Public Company Board Experience | Chemical Industry Experience | Corporate Governance Experience | Manufacturing/ Operations Experience | M&A Experience | Global Experience | Regulatory/ Legal/ Compliance Experience | Information Security Experience |
Class III Directors
Mr. Landless brings significant financial expertise and knowledge of financial reporting with his wealth of experience as a Finance Director and as a Non-Executive Director during his career to date. Mr. Landless also has substantial international experience in the chemicals, paint and engineering sectors.
Class III Directors
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Class III Directors
| | Mr. Lawrence J. Padfield Age: 69 Director since December 1, 2012 Committees: Compensation Committee (Chair) |
Class III Directors
Mr. Padfield was a principal and Executive Vice President of Blackline Partners LLC, a closely held private equity and midstream logistics and terminal development company, where he served from 2014 to 2019. He continues to hold the position as the Board Chairman of CAP Technologies, a private U.S. company that has developed and markets a ground-breaking technology for cleaning and coating wire, rebar and plate steel, a position he has held since 2018. Prior to forming Blackline Partners, Mr. Padfield was a founding partner and Vice President of U.S. Development Group LLC, an industry leading biofuel and crude oil terminal development company. Mr. Padfield’s early career includes eighteen years at Shell Oil Company where he held a number of roles in marketing, engineering and product supply, ultimately serving as the Business Development and Acquisitions Manager for their terminal and pipeline business. Mr. Padfield has a degree in Civil Engineering from the University of Missouri. Key Attributes, Experience and Skills:
Class III Directors
| | | | | | | | | | | Senior Leadership Experience | Financial Literacy | Public Company Board Experience | Chemical Industry Experience | Corporate Governance Experience | Manufacturing/ Operations Experience | Human Capital Management Experience | M&A Experience | Regulatory/ Legal/ Compliance Experience |
Class III Directors
Mr. Padfield has almost thirty years’ experience in the oil and gas logistics industry, commercial marketing and business development, and his wealth of knowledge in this sector is a valuable resource to the Company.
Class III Directors
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Class III Directors
| | Mr. Patrick S. Williams Age: 60 Director since May 11, 2009 Committees: None |
Class III Directors
Mr. Williams has served as President and Chief Executive Officer of the Company since his appointment to this position on April 2, 2009 and as a Director of the Company since May 11, 2009. Prior to holding this position, Mr. Williams was Executive Vice President and President, Fuel Specialties of the Company from 2005 to 2009 and in addition assumed responsibility for the global Performance Chemicals business in 2008. He held a number of senior management and sales leadership positions in Innospec Fuel Specialties LLC, including acting as the Chief Executive Officer of this business from 2004 to 2009. Before joining the predecessor company of Innospec Fuel Specialties LLC, Starreon Corporation, in 1993, Mr. Williams established a number of businesses and currently holds equity positions in a small exploration and oil production company and a real estate business. Since February 2020, Mr. Williams has served as a Non-Executive Director of AdvanSix Inc., and as a member of its Compensation and Leadership Development Committee and Chair of the Nominating and Corporate Governance Committee. Key Attributes, Experience and Skills:
Class III Directors
| | | | | | | | | | | Senior Leadership Experience | Public Company Board Experience | Chemical Industry Experience | Corporate Governance Experience | Manufacturing/ Operations Experience | Human Capital Management Experience | M&A Experience | Global Experience | Regulatory/ Legal/ Compliance Experience |
Class III Directors
As the only management representative on the Board, Mr. Williams provides an insider’s perspective in Board discussions about the business and strategic direction of the Company. Mr. Williams has particular experience in the Fuel Specialties, Performance Chemicals and Oilfield Specialties businesses, and brings a wealth of knowledge to the Company.
Class III Directors
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DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Elements of Director Compensation: In 2024, the non-employee director’s compensation was generally a flat annual fee based on the following arrangement: Annual Retainer: •An annual retainer of $175,000, paid quarterly, to the Chairman of the Board. •An annual retainer of $90,000, paid quarterly, for all other NEDs. Additional Annual Retainers for Board Committee duties as follows: •An additional annual retainer of $14,000, paid quarterly, for the Chair of the Compensation Committee. •An additional annual retainer of $20,000, paid quarterly, for the Chair of the Audit Committee. •An additional annual retainer of $11,000, paid quarterly, for the Chair of the Nominating, Corporate Governance and Sustainability Committee. •An additional annual retainer of $5,000, paid quarterly, to the members of the Audit Committee. •No additional daily fees for attendance at Board or Committee meetings or calls, except as provided below. In addition to the compensation arrangements described above: •NEDs may receive an additional daily fee of $2,000 for additional days provided at the specific request of the CEO. •Each NED is entitled to reimbursement for any reasonable out-of-pocket expenses incurred in connection with travel to and from, and attendance at, meetings of the Board or its Committees and related activities. Annual Equity grant: •Each NED also receives an annual grant of equity under the Innospec Inc. Long-Term Incentive Omnibus Plan (the “Omnibus Plan”) in February of each year, equal to $97,500, based on the closing stock price for Company stock on the date prior to grant. In February 2024, such awards were equity awards in the form of restricted stock units granted at zero cost. Restricted stock units vest after three years. •The value of the restricted stock units for the Directors included in the “Director Compensation” table, under the column headed “Stock Awards”; the table discloses the grant date fair value of full value awards made under the Omnibus Plan. The value of the restricted stock units is determined using the number of stock awarded and the grant date fair value for each stock awarded are calculated using the Black-Scholes model, with reference to the underlying stock price, volatility of the Company’s stock price, risk free rate and expected dividend yield. For full value awards with additional characteristics, such as vesting criteria linked to stock market indices or stock price performance, a Monte Carlo simulation is used to model the range of potential outcomes. For further information on the assumptions underlying these grant date fair values refer to Note 18 of the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
DIRECTOR COMPENSATION
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DIRECTOR COMPENSATION FOR FISCAL 2024
DIRECTOR COMPENSATION FOR FISCAL 2024
DIRECTOR COMPENSATION FOR FISCAL 2024
| Name | Fees Earned or Paid in Cash $ | Stock Awards $ | Total $ | | Ms. Elizabeth K. Arnold | 95,000 | 94,294 | 189,294 | | Mr. Milton C. Blackmore | 180,000 | 94,294 | 274,294 | | Mr. David F. Landless | 110,000 | 94,294 | 204,294 | | Mr. Lawrence J. Padfield | 104,000 | 94,294 | 198,294 | | Mr. Robert I. Paller | 55,000 | 0 | 55,000 | | Mr. Leslie J. Parrette | 90,000 | 94,294 | 184,294 | | Ms. Claudia P. Poccia | 101,000 | 94,294 | 195,294 |
DIRECTOR COMPENSATION FOR FISCAL 2024
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DIRECTOR COMPENSATION FOR FISCAL 2024
The number of unexercised options and unvested full value equity awards outstanding as of February 15, 2025 for each NED is detailed in the table below:
DIRECTOR COMPENSATION FOR FISCAL 2024
| Name | Number of Options | Number of Stock Awards | Option Exercise Price $ | Date of Grant | | Ms. Elizabeth K. Arnold | 297 326 | 782 594 652 1,000 | 0.00 109.42 0.00 99.68 0.00 0.00 0.00 | 02.26.24 02.27.23 02.27.23 02.21.22 02.21.22 02.21.22 02.21.22 | | Mr. Milton C. Blackmore | 297 326 300 313 370 880 850 1,030 | 782 594 652 | 0.00 109.42 0.00 99.68 0.00 99.85 95.70 81.07 68.20 70.60 44.18 | 02.26.24 02.27.23 02.27.23 02.21.22 02.21.22 02.22.21 02.24.20 02.25.19 02.20.18 02.21.17 02.22.16 | | Mr. David F. Landless | 297 326 300 313 370 | 782 594 652 | 0.00 109.42 0.00 99.68 0.00 99.85 95.70 81.07 | 02.26.24 02.27.23 02.27.23 02.21.22 02.21.22 02.22.21 02.24.20 02.25.19 | | Mr. Lawrence J. Padfield | 297 326 300 313 370 880 850 1,030 1,035 | 782 594 652 | 0.00 109.42 0.00 99.68 0.00 99.85 95.70 81.07 68.20 70.60 44.18 43.95 | 02.26.24 02.27.23 02.27.23 02.21.22 02.21.22 02.22.21 02.24.20 02.25.19 02.20.18 02.21.17 02.22.16 02.23.15 |
DIRECTOR COMPENSATION FOR FISCAL 2024
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DIRECTOR COMPENSATION FOR FISCAL 2024
| Name | Number of Options | Number of Stock Awards | Grant Price $ | Date of Grant | | Mr. Leslie J. Parrette | 297 325 | 782 594 1,000 651 | 0.00 109.42 0.00 99.94 0.00 0.00 | 02.26.24 02.27.23 02.27.23 05.06.22 05.06.22 05.06.22 | | Ms. Claudia P. Poccia | 297 326 300 | 782 594 652 | 0.00 109.42 0.00 99.68 0.00 99.85 | 02.26.24 02.27.23 02.27.23 02.21.22 02.21.22 02.22.21 |
DIRECTOR COMPENSATION FOR FISCAL 2024
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Basic Compensation Practices
| What We Do | | | ✔Pay for performance | ✔Target executive pay around relevant market data, while also considering tenure, experience, and other factors | | ✔Emphasize long-term performance | ✔Maintain minimum stock ownership guidelines | | ✔Design compensation package with mix of operational and market-based metrics | ✔Engage independent advisors for Compensation Committee | | ✔Clawback requirements for certain performance/incentive awards in addition to a clawback policy adopted by the Company as required by the Dodd-Frank Act and Nasdaq listing standards | |
Basic Compensation Practices
| What We Don’t Do | | | ✖Allow directors and executive officers to hedge or pledge Company securities | ✖Pay dividends on unvested performance shares or units | | ✖Pay tax gross ups to our NEOs | ✖Pay above market interest on deferred compensation | | ✖Allow option repricing without stockholder approval | |
Compensation Elements and Performance Metrics
Compensation Elements and Performance Metrics The Compensation Committee seeks to achieve an appropriate balance between fixed and variable compensation elements to link a significant proportion of compensation to performance. The elements are designed to provide incentive for our NEOs to achieve goals that are important to the Company’s success. No element of compensation is driven exclusively by tax, accounting or regulatory considerations. Further information on each of the key components of compensation is given in the Elements of Pay section below.
Compensation Elements and Performance Metrics
| Compensation Element | Performance Metrics for 2024 | Rationale | | Base Salary | | Fixed component of pay based on specific position Salary ranges determined by job responsibilities and performance, and reference to Comparator Group data | | Management Incentive Compensation Plan (MICP - annual cash incentive) | 80% Corporate/Business performance (Operating Income, Cash Flow) 20% Performance against personal objectives | Rewards operational performance and profitability Rewards achievement of personal objectives relative to current economic and business challenges | | Time-based restricted stock units (“RSUs”) weighted at 30% of the targeted annual equity grant value | | Increases retentive power and overall competitiveness of the Company’s long-term incentive program | | Performance-based restricted stock units (“PSUs”) granted in stock- and cash-settled awards weighted at 70% of the targeted annual equity grant value | 30% Relative Total Shareholder Return (“TSR”) performance vs Comparator Group 30% Revenue growth 40% Earnings per share growth | Full vesting requires delivery of long-term financial and relative TSR performance |
Compensation Elements and Performance Metrics
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Role of the Compensation Committee
Role of the Compensation Committee The Compensation Committee of the Board oversees the Company’s compensation programs and practices for NEOs and other key Executive Officers and Directors. The Compensation Committee reviews and recommends to the full Board approval of compensation for our NEOs, including salary, incentive programs, stock-based awards and compensation, retirement plans, perquisites and supplemental benefits, employment agreements, severance arrangements, change in control arrangements and other executive compensation matters. The Compensation Committee reviews and recommends to the full Board approval of the compensation structure for our Directors at least biennially, including retainers, fees, stock-based awards and other compensation. This review is discussed under the “Director Compensation” section of this Proxy Statement. The processes and procedures for the Compensation Committee oversight of compensation programs are discussed in the “Corporate Governance” section of this Proxy Statement.
Role of the Compensation Consultant
Role of the Compensation Consultant In 2024, advice to the Compensation Committee was provided by Exequity, an independent executive compensation consultancy. Exequity was retained by the Compensation Committee and has met with the Compensation Committee at least once and provided advice at other times during the year, as the Compensation Committee deemed appropriate. Exequity’s services to the Compensation Committee included, among other things, providing perspective on market trends, analyses of market compensation levels and designs, and confirmation of peer group composition. Any other work undertaken by the compensation consultant for the Company must be approved by the Compensation Committee. The Compensation Committee has assessed the independence of Exequity and has determined that the firm does not have any conflict of interest with respect to the Company.
Competitive Market
Competitive Market The Compensation Committee reviews competitive market data from two sources, a Chemical Industry Comparator Group (“Comparator Group”) and a survey provided by Willis Towers Watson, as prepared by the Compensation Committee’s independent compensation consultant. The Comparator Group is the primary source of competitive market data used by the Compensation Committee when reviewing the compensation of the CEO and CFO and a secondary reference for other NEOs. The Comparator Group is reviewed at least biannually by the Compensation Committee. The companies included in the Comparator Group were selected by the Compensation Committee based on several factors, including industry, revenues, and market capitalization.
Competitive Market
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Competitive Market
The Comparator Group for 2024 consists of the following 17 companies:
Competitive Market
| •AdvanSix Inc. •Avient Corporation •H.B. Fuller Company •Minerals Technologies Inc. •Quaker Chemical Corporation •Stepan Company | •American Vanguard Corporation •Balchem Corporation •Ingevity Corporation •NewMarket Corporation •Rayonier Advanced Materials •Tredegar Corporation | •Ashland Inc. •Cabot Corporation •Koppers Holding Inc. •Orion Engineered Carbons S.A. •Sensient Technologies Corporation |
Competitive Market
As a secondary reference for the CEO and CFO and a primary reference for other NEOs, the Compensation Committee reviews Willis Towers Watson survey data for companies with revenues of $1 to $3 billion in revenue. These are standard Willis Towers Watson data sets and were not customized prior to use. References to market data in this CD&A, unless otherwise noted, are to these foregoing sources.
Annual Incentives
Annual Incentives The Company’s Management Incentive Compensation Plan (“MICP”) is a short-term incentive plan, which provides for cash payments based on achievement against pre-determined financial goals approved by the Compensation Committee each year. Targets are set for corporate performance and business unit performance (where appropriate) and for personal performance against pre-determined objectives. All payments under the MICP related to the financial performance element are subject to an overall Corporate Operating Income performance threshold of 90% of the agreed target for the year; if this target is not achieved, no payments under the MICP are made to any individual, regardless of business unit performance. Further, where an individual’s payment under the MICP includes a financial measure for a business unit, the business unit must also achieve a minimum of 90% of the operating income target or the individual will not receive any MICP bonus for that year related to the financial performance element, irrespective of overall corporate performance.
Change for 2024
Change for 2024 In 2024, the Compensation Committee conducted a review of the Company’s MICP program in coordination with Exequity. The Compensation Committee noted that, according to market practice, the personal performance element of annual bonus programs is not normally subject to achievement of a financial performance threshold. Therefore, the Compensation Committee approved payment under the MICP for satisfactory personal performance according to the formula below, irrespective of corporate or business unit performance. Actual MICP Bonus pay-outs are based on the following formula: Mr. Williams’s bonus at target was increased to 100% of his salary in 2024, and his maximum potential bonus is 230% of his salary. The target percentage for the other NEOs is 60% of their respective salaries, with a maximum potential
Change for 2024
| Financial Performance Measure | Target Set for Annual MICP Bonus Purposes | Actual Achieved for MICP Bonus Purposes | Achievement as % of Target | % of Target MICP Bonus Achieved | | Corporate Operating Income (before nonrecurring items) | $188.999 million | $209.414 million | 111% | 155% | | Corporate Free Cash Flow (before nonrecurring items) | $58.984 million | $150.516 million | 255% | 250% |
Change for 2024
| NEO | Target MICP Bonus as a Percentage of Salary | Personal Performance Score | MICP Incentive Award | | Mr. Patrick S. Williams President and Chief Executive Officer | 100% | 46 | $2,343,285 | | Mr. Ian P. Cleminson Executive Vice President and Chief Financial Officer | 60% | 46 | $526,894 | | Dr. Philip J. Boon Executive Vice President and Chief Operating Officer | 60% | 47 | $436,302 | | Mr. Corbin Barnes Senior Vice President, Corporate Development & Investor Relations | 60% | 46 | $341,697 | | Mr. David B. Jones Senior Vice President, General Counsel, Chief Compliance Officer | 60% | 46 | $401,083 |
Change for 2024
| Mr. Patrick S. Williams Personal Performance Goals and Objectives | Actual Performance vs Personal Goals and Objectives | | Lead the focus on the Company’s ESG strategy and drive plans to support the strategy | •Supported development and implementation of a process to ensure that the requirements of the EU Deforestation Regulation are met for applicable commodities imported into Europe either directly or through our direct suppliers •Innospec Cares program, which encourages Innospec employees to nominate local charities for donations, raised almost $200,000 for over 100 local charities, with approximately 112 employee donation applications approved across more than 25 locations around the world; over 160 employees took advantage of our volunteering day program to support our local communities •Supported a project encouraging our manufacturing sites to procure renewable electricity as a key source of energy |
Change for 2024
| Mr. Patrick S. Williams Personal Performance Goals and Objectives | Actual Performance vs Personal Goals and Objectives | | Lead development of our compliance strategy to ensure our program is efficient and effective | •Property and Casualty renewal negotiations were successfully concluded. The renewal terms reflect our strategic effort to maintain favorable terms despite challenging market conditions •Sustained our emphasis on QGP Compliance integration and addressed post-acquisition compliance audit action items, continuing to demonstrate our commitment to regulatory adherence and operational excellence | | Lead development of strategy to drive top line growth while improving profitability | •In 2024, almost 20% of sales overall were from products developed in the last five years •Performance Chemicals delivered double digit growth in operating income over 2023 •Delivered double digit sales revenue growth in key Fuel Specialties applications such as static buildup prevention and marine | | Lead the focus on recruitment, identification and development of high potential employees to support the Company’s talent and resource needs for the future | •Key organizational changes, such as pivotal promotions and strategic new hires driven by the Company’s executive development and succession planning initiatives, have been introduced to maintain leadership continuity while bringing fresh perspectives to advance strategic goals •Introduced a new e-learning platform to provide employees at all levels with enhanced access to valuable development and training resources. This platform underscores our dedication to professional development, ensuring our workforce remains agile and well-equipped for evolving challenges |
Change for 2024
| Mr. Ian P. Cleminson Personal Performance Goals and Objectives | Actual Performance vs Personal Goals and Objectives Awarded Score of 46 out of 50 | | Provide leadership to IT function in driving the process to deliver new Enterprise Resource Planning (“ERP”) platform for Company | •The ERP platform has been successfully deployed in several regions across the Company •Finance has led efforts to progress further deployments in other regions planned for 2025 despite numerous challenges | | Finalize the buyout of the UK Defined Benefit Pension Plan | •Buyout has been finalized, resulting in a significantly stronger balance sheet for the Company | | Ensure Finance has an adequate development plan to deliver high quality next generation personnel and future CFOs | •Action plans have been delivered in the year to progress the development of potential successors in key Finance roles, to include leadership training and exposure to expanded responsibilities within the function and broader business |
Change for 2024
| Dr. Philip J. Boon Personal Performance Goals and Objectives | Actual Performance vs Personal Goals and Objectives Awarded score of 47 out of 50 | | Lead the effort to influence research projects focusing on development of new technologies for Fuel Specialties | •Several new products were selected for full-scale consumer trials in the year, following the filing of associated patent suites •AI modeling has been utilized to support multiple new patented molecules, including a new additive for diesel fuel use | | Drive growth strategy for Fuel Specialties across all regions while improving the business’ operating margins | •The Fuel Specialties division exceeded its targeted operating income and cash flow targets for the year •Full year operating margin improved over 2023 | | Continue supporting efforts to profitably grow the Oilfield Services business in EMEA (Europe, Middle East and Africa) and AsPac (Asia Pacific) regions | •Operating Income targets exceeded in both regions in a record year for profitable growth |
Change for 2024
| Mr. Corbin Barnes Personal Performance Goals and Objectives | Actual Performance vs Personal Goals and Objectives Awarded score of 46 out of 50 | | Manage M&A prospects, inquiries and projects and support integration of new acquisitions | •Have continued to refine target screening process to help pursue the right targets and pass, with confidence, on “Best Ideas” from bankers •Have executed more indications of interest and second rounds of due diligence in 2024 than in recent years •Earnings and cash flow delivered by QGP are tracking broadly in line with our investment case despite challenges in the agricultural market during the year, while the business continues to generate incremental opportunities for growth | | Continue efforts to gain exposure to more of the Company’s top investors | •Of our top 20 shareholders as of the end of 2024, nearly half are active managers •Continued to maintain pace of gaining exposure to our top investors by attending seven investor conferences and NDRs (Non-Deal Roadshows) | | Support effort to ensure the Company’s ESG priorities align with investor expectations | •Helped develop the company’s partnership with the International Justice Mission (IJM) to combat modern slavery through our long-term commitment to source palm-based raw materials responsibly. The partnership has resonated with our customers and investors. |
Change for 2024
| Mr. David B. Jones Personal Performance Goals and Objectives | Actual Performance vs Personal Goals and Objectives Awarded score of 46 out of 50 | | Drive on-going development of the Compliance program, to mitigate risks while supporting business objectives | •Worked with Company business leaders and Board to simplify and enhance effectiveness of Compliance policies to mitigate risk, with particular emphasis on risks related to sanctions, anti-corruption and antitrust legislation | | Work closely with businesses to deliver appropriate compliance programs and processes for key strategic and potentially high-risk regions | •Sustained emphasis on QGP compliance integration through more frequent communication with management, and successfully progressed compliance audit action items | | Deliver cost effective insurance renewal process and continue to drive improvements in process across global business | •Property and Casualty insurance renewal negotiations successfully completed which resulted in favorable, long-term rates despite a challenging market |
Long-Term Incentive Plans
Long-Term Incentive Plans The Compensation Committee believes that equity-based long-term incentive awards are an important element of the overall compensation for the Company’s NEOs. They are designed to provide a focus on achievement of performance goals that help create long-term value for stockholders, act as retention incentives for executives and, through the ownership of Common Stock of the Company, encourage strategic decision-making that is aligned with the interests of stockholders.
Omnibus Plan
Omnibus Plan The Omnibus Plan provides for the grant of non-qualified and incentive stock options, full value awards and cash incentive awards. Full value awards consisting of stock-settled time-based Restricted Stock Unit awards (“RSUs”) and cash and stock-settled performance-based Restricted Stock Unit awards (“PSUs”) were granted under the Omnibus Plan to the NEOs in 2024. RSUs granted under the Omnibus Plan in 2024 become vested on the third anniversary of the date of grant, subject to the participant’s continued employment except as described below. Upon vesting, shares subject to these awards are transferred to the participant’s nominated brokerage account. In the event the participant’s termination date occurs for any reason other than death, disability, retirement, or an involuntary termination without cause, any unvested awards shall be forfeited, and in the event the participant’s termination date occurs by reason of death, disability, retirement or an involuntary termination without cause, unvested awards shall be forfeited unless the Compensation Committee determines otherwise in its sole discretion. Performance-based Restricted Stock Unit awards (“PSUs”) granted under the Omnibus Plan in 2024 require the achievement of specified performance criteria over a three-year performance period to vest as described below. Additionally, PSUs granted in 2024 are subject to the same three-year service vesting requirements described above for RSUs under the Omnibus Plan rules, except in certain circumstances, if a participant ceases to be employed with the Company, all unvested awards are forfeited. If the participant ceases employment by reason of death, disability, retirement, or involuntary termination without cause, all unvested awards are forfeited unless the Compensation Committee determines otherwise in its sole discretion. PSUs granted in 2024 consist both of stock-settled PSUs and cash-settled PSUs. For stock settled PSUs, upon vesting, a number of shares equal to the number of earned stock-settled PSUs are transferred to the participant’s nominated brokerage account. For cash-settled PSUs, upon vesting, the participant shall be entitled to a cash payment equal to the number of earned cash-settled PSUs multiplied by the closing stock price of the Company on the settlement date. The criteria for PSUs made in 2024 under the Omnibus Plan, where vesting is conditional on achievement of specific performance measures, are based on relative performance of TSR versus the Comparator Group, measured over a
Omnibus Plan
| Proportion of the 30% allocated to TSR Vesting | | Proportion of the 30% allocated to growth in Revenue Vesting | | Proportion of the 40% allocated to growth in EPS Vesting | | Total Vesting Percentage |
Omnibus Plan
| Performance Percentile Ranking of TSR vs. Comparator Group from 2024-2026 | Proportion of the 30% allocated to TSR vesting | | 75% | 200% | | 50% | 100% | | 25% | 50% | | Less than 25% | 0% |
Omnibus Plan
Awards vest on a straight-line interpolated basis between each threshold listed above up to the maximum percentage listed in each table. For example, a total growth in EPS of 4% versus the 2024 budget would result in 82.5% of the PSUs vesting. Following a review of market practices and as a part of the transition in 2025 to delivering PSUs aligned with market practices, the Compensation Committee approved a new design for TSR vesting awards in 2024 as described in the table above. Innospec TSR performance is compared to Comparator Group companies and its relative percentile ranking determines the corresponding payout based on the schedule displayed above, with linear interpolation determining payouts between levels listed in the table above. The grants are issued on a date set by the Compensation Committee each year. This is usually after the public announcement of the annual financial results. The Compensation Committee determines the grant date to be used in advance and determines the number of RSUs and PSUs to be granted by dividing the target value for each executive
Omnibus Plan
(determined as described below in the Grant Policy Section) by the price of a share of stock (the stock price used is typically the closing stock price at the end of the day prior to the agreed grant date). The Committee does not consider material non-public information when determining the timing or terms of equity awards, nor do we time disclosures of material non-public information for the purpose of affecting the value of executive compensation with such awards. The RSUs and PSUs granted under the Omnibus Plan are intended to deliver an overall long-term incentive award in line with the grant policy as detailed below.
Grant Policy
| | Fair Value of Grants of RSUs and PSUs as % of base salary | | Chief Executive Officer | 250% | | Executive Officers | 110% |
Grant Policy
| Chief Executive Officer | | Executive Officers | | | Performance rating | Fair Value of Grants of RSUs and PSUs as % of base salary | Performance rating | Fair Value of Grants of RSUs and PSUs as % of base salary | | 1 | 375 | 1 | 165 | | 2 | 312.5 | 2 | 137.5 | | 3 | 250 | 3 | 110 | | 4 | 0 | 4 | 0 | | 5 | 0 | 5 | 0 |
Grant Policy
In 2024, Mr. Williams was granted long-term incentive awards at 150% of the policy levels for this role (which means that the fair value of his RSU and PSU grant amount was equal to 375% of his base salary). In the case of the other NEOs, based on the assessment of their individual performance as approved by the Compensation Committee, Mr. Cleminson, Mr. Jones and Mr. Barnes were eligible for awards at 150% of the policy level (which means that the fair value of their RSU and PSU grant amounts was equal to 165% of their respective base salaries), and Dr. Boon was eligible for awards at 125% of the policy level (which means that the fair value of his RSU and PSU grant amount was equal to 137.5% of his base salary). In line with the Compensation Committee’s policy, 70% of the fair value of the awards due under the policy will be made in the form of cash-settled and stock-settled PSUs under the Omnibus Plan, with the remaining 30% made in the form of RSUs. The Compensation Committee has determined that to help manage burn rates, the level of full value stock-settled awards in any one year should be restricted to a burn rate of no more than 1% of the Company’s stock outstanding with the balance of long-term incentives granted as cash-settled PSUs that do not impact the burn rate. In 2024, the level of RSUs and stock-settled PSUs under the policy was less than 1% of the Company’s stock outstanding.
2022–2024 Additional Long-Term Incentive Plan
2022–2024 Additional Long-Term Incentive Plan In February 2022, the Compensation Committee recommended, and the Board approved an additional long-term incentive plan (“Additional LTIP”) designed to focus key executives on delivery of the Performance Chemicals new growth strategy and on the sustained growth of the larger business and, for the senior executives, delivering on the agreed succession plans for key roles and ESG objectives. The Compensation Committee also considered the importance of NEO and non-NEO retention over the coverage period as well, given labor market challenges at the time the award was approved. The plan covers a three-year period that commenced in January 2022 and ended on December 31, 2024. In recommending the Additional LTIP, the Compensation Committee considered that the Company had a historical practice of providing LTIPs every three to four years. The purpose of these programs was to provide an additional “stretch” incentive for NEOs and other senior employees to pursue long-term goals aligned with shareholder value creation that were not otherwise measured in performance-based incentive plans. Further, other long-term incentive awards did not include “upside” as is typical among Comparator Group companies. As described further in “Changes for 2025”, the Compensation Committee reviewed its long-term incentive award strategy and adopted changes to existing programs. Going forward, the Compensation Committee is discontinuing its practice of regularly recommending LTIPs like the Additional LTIP every three to four years. There are two participant levels in the Additional LTIP, Executive Officer Level and Other Senior Level (which does not include any NEOs). Mr. Williams, Mr. Cleminson, Dr. Boon, Mr. Jones and Mr. Barnes are all participating in the plan as Executive Officer Level participants. The performance measures and weightings for Executive Officer Level participants are: ➣35% weighting on the achievement of a stretch Earnings per Share (“EPS”) target for 2024 of $6.00, which would deliver an additional $33 million in net income to the Company above the Board-approved budget for 2022.
2022–2024 Additional Long-Term Incentive Plan
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2022–2024 Additional Long-Term Incentive Plan
➣35% weighting on the achievement of cumulative revenue target for Performance Chemicals of $1.85 billion over the first three years of the new five-year strategy. ➣20% weighting on the delivery of the agreed ESG plan objectives, as approved by the Board, by end 2024. ➣10% weighting on the delivery of the agreed succession plan objectives for key roles, as approved by the Board, by end 2024. There are five categories of participation for Executive Officer Level participants and nine categories for Other Senior Level participants. The maximum incentive award for each participant in each category is as follows:
2022–2024 Additional Long-Term Incentive Plan
| Executive Officer Level | Maximum Incentive Award Payable | Award payable as at end 2024 | | Mr. Patrick S. Williams | $3,950,000 | $3,950,000 | | Mr. Ian P. Cleminson | $1,125,000 | $1,125,000 | | Dr. Philip J. Boon | $950,000 | $950,000 | | Mr. Corbin Barnes | $500,000 | $529,545 | | Mr. David B. Jones | $500,000 | $529,545 | | Other Senior Level | $290,000 – $1,000,000 | $290,000 – $1,000,000 |
2022–2024 Additional Long-Term Incentive Plan
The Additional LTIP matured on December 31, 2024. The outcome for Executive Officer Level participants, which includes the NEOs, for each Performance Measure is summarized below:
2022–2024 Additional Long-Term Incentive Plan
| Performance Measure | Weightings | Threshold | Target | Actual | | 2024 EPS | 35% | $5.40 | $6.00 | 119% of target set | | Cumulative Performance Chemicals Revenue | 35% | $1.665B | $1.85B | 100% of target set | | Delivery of the agreed ESG plan objectives as approved by the Board | 20% | •Deliver recommendations to ESG Steering Group on ways to reduce carbon emissions from our operations •Complete a climate change weather impact assessment •Assess, review and recommend alternative energy options for use in our operations | | Score of 20 out of 20 as assessed by Compensation Committee | | Delivery of the agreed succession plan objectives for key roles as approved by the Board | 10% | •Deliver agreed training and development programs to potential successors in senior roles •Provide potential successors with wider business exposure and assignment to expanded responsibilities where relevant | | Score of 20 out of 20 as assessed by Compensation Committee |
2022–2024 Additional Long-Term Incentive Plan
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2022–2024 Additional Long-Term Incentive Plan
Based on the outcome of the Performance Measures shown above, all participants in the Additional LTIP qualified for a pay-out at 100% of target for all the Performance Measures according to the weightings assigned to each participant. In the case of the CEO and NEOs, this gave a total pay-out of 100% of the maximum potential payment. The approved payment amounts for each of the NEOs are detailed above and in the Summary Compensation table under the “Non-Equity Incentive Compensation” column. Note that the amounts shown in the table above payable to Mr. Barnes and Mr. Jones are $29,545 more than the maximum payable amounts due to reallocation of amounts payable to certain participants that terminated employment prior to the end of the performance period, which were forfeited and reallocated according to Compensation Committee discretion.
Changes for 2025
Changes for 2025 In 2023 and continuing through 2024, the Compensation Committee conducted a thorough and comprehensive review of its long-term incentive award structure and practices relative to the Comparator Group and general market practices. As described above, the Company began to award full-value awards in 2024 for NEOs and other employees (consisting of RSUs and PSUs as described above), discontinuing awards of stock options. To emphasize performance achievement, awards in 2024 are weighted 70% PSUs and 30% RSUs. The Compensation Committee is maintaining this mix for 2025. The performance goals for the 2025–2027 PSUs continue to be relative TSR, adjusted EPS growth, and revenue growth. In addition, the Compensation Committee recommended and the Board approved changes to the PSU structure, incorporating “upside” of (1) up to 200% of target for relative TSR in 2024 and (2) up to 200% of target for all three categories of performance goals in 2025. In addition, the Compensation Committee did not award a new Additional LTIP in 2025 as it previously would have, following the conclusion of the last Additional LTIP covering the 2022 to 2024 period as described above. As described above, the Compensation Committee discontinued its practice of regularly recommending an additional LTIP to the Board every three to four years.
Nonqualified Deferred Compensation Plan
Nonqualified Deferred Compensation Plan The Company offers a Nonqualified Deferred Compensation Plan (the “Deferred Plan”). The select group of highly compensated employees eligible for the Deferred Plan are designated by the Company in its sole discretion, subject to top hat requirements. Eligible participants are permitted to elect to defer up to 25% of their base salary and up to 100% of any performance-based compensation which is paid in cash. In 2024, Mr. Williams, Mr. Jones and Mr. Barnes were the only NEOs eligible to participate in the Deferred Plan. The Company may make discretionary contributions in any given Deferred Plan year equal to the amount of Company contributions that would have otherwise been allocated to the participant under a qualified plan. In this case, such Company contributions are equal to the amount of the participant’s eligible profit-sharing contributions that exceeds IRS employee plus employer contribution limits under the qualified plan. Additionally, the Company has complete discretion to determine each year whether to make an additional annual contribution on behalf of some or all participants in the Deferred Plan. Other discretionary employer contribution factors may include, but are not
Nonqualified Deferred Compensation Plan
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Nonqualified Deferred Compensation Plan
limited to, achievement of Company financial performance objectives. In 2025, Mr. Williams was credited with a discretionary Company contribution of $36,319, which accrued during fiscal year 2024. In 2025, Mr. Jones was also credited with a discretionary Company contribution of $36,319, which accrued during fiscal year 2024. The amounts deferred are credited to accounts hypothetically invested in investments selected by the participant that mirror the investment alternatives available in the Company’s qualified retirement savings plans subject to Internal Revenue Code (“IRC”) Section 401(a). Each participant in the Deferred Plan is 100% vested in that portion of their account that is attributable to employee elective deferrals. For participants receiving an employer discretionary contribution, the “3 Year Cliff” vesting schedule from the date of contribution applies. Distribution of a participant’s vested accounts for participants who have reached Retirement (i.e. age 50 with a minimum of five years of service) will begin within 60 days of the participant’s separation from service, pursuant to the form of payment selected (lump-sum or installments over a period not to exceed 10 years) on properly executed election forms. Vested account benefits will be paid in one lump sum to the participant’s beneficiary in the event of the participant’s death in service. A participant’s vested account benefits will be paid to the participant in one lump sum in the event of separation from service that is not a Retirement. The Deferred Plan is subject to the rules of IRC Section 409A, which restricts the timing of distributions made to specified employees. As a result, commencement of payments to any eligible NEO participating in the Deferred Plan must be delayed for at least six months after separation from service.
Employment Agreements
Employment Agreements Each of the NEOs has a rolling 12-month employment agreement with the Company. Under these agreements, the Company can terminate the agreement without cause by giving one year’s notice to the NEO. In the case of Mr. Williams, he can terminate the agreement by giving the Company one year’s notice, while the other NEOs are required to give the Company six months’ notice if they wish to terminate the agreement. The employment agreement for each of the NEOs also includes a “Change in Control” clause. This specifies that, in the event of a change in control of the Company, if the Company terminates the NEO within 12 months after the change in control, or if the NEO terminates their employment within 12 months for good reason, the NEO will be entitled to a compensation payment. If the Company terminates the employment of the NEO during this period, the payment is calculated as 24 months’ compensation defined as base salary, bonus at target and any car allowance from the date of notice of termination. If the NEO terminates their employment for good reason during this period, the payment is calculated as 24 months’ compensation, as defined above, from the date of the change in control. In addition, under the rules of the stock option plans, all options would vest on the change in control. The NEOs are treated in the same way as other employees who hold options under the plans. A change in control is deemed to have occurred if a person or group becomes the beneficial owner of 30% or more of the combined voting power of the Company; there is a consolidation or merger and the Company is not the surviving company; the stockholders of the Company approve plans or proposals for a liquidation or dissolution of the Company or, if, following a cash offer or merger, the members of the Board cease to constitute a majority of the Board. In addition, under their employment
Employment Agreements
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Employment Agreements
agreement, each of the NEOs, including the CEO and the CFO, is subject to a 12-month non-solicitation period, with respect to customers and employees, and a 12-month non-compete period, from the date their employment with the Company ends.
Impact of Accounting Treatment
Impact of Accounting Treatment The Company accounts for employee stock options, RSUs, PSUs and its employee Sharesave plan in accordance with generally accepted accounting principles. For further information on stock-based compensation, see Note 18 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| Name & Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Non Equity Incentive Compensation | Change in Pension fund value and other deferred benefits | All Other Compensation | Total | | | | (1) | | (2) | (3) | (4) | | (5) | | | | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Mr. Patrick S. Williams President and Chief Executive Officer | 2024 | 1,380,548 | — | 5,332,447 | — | 6,293,285 | — | 210,104 | 13,216,384 | | | 2023 | 1,381,048 | — | 2,870,922 | 1,183,023 | 1,750,014 | — | 114,856 | 7,299,862 | | | 2022 | 1,314,807 | — | 2,824,426 | 1,120,932 | 2,521,950 | — | 106,374 | 7,888,489 | | Mr. Ian P. Cleminson Executive Vice President and Chief Financial Officer | 2024 | 497,214 | — | 872,370 | — | 1,651,894 | — | 119,653 | 3,141,131 | | | 2023 | 441,733 | — | 360,206 | 164,626 | 392,725 | — | 127,078 | 1,486,368 | | | 2022 | 419,440 | — | 398,601 | 172,157 | 585,208 | — | 120,060 | 1,695,466 | | Dr. Philip J. Boon Executive Vice President, and Chief Operating Officer | 2024 | 472,738 | — | 493,939 | — | 1,386,302 | — | 114,209 | 2,467,188 | | | 2023 | 450,571 | — | 307,370 | 140,577 | 355,621 | — | 132,025 | 1,386,164 | | | 2022 | 431,502 | — | 350,023 | 151,126 | 426,242 | — | 125,322 | 1,484,215 | | Mr. Corbin Barnes Senior Vice President, Corporate Development and Investor Relations | 2024 | 314,188 | — | 412,699 | — | 871,242 | — | 44,533 | 1,642,662 | | | 2023 | 313,773 | — | 261,816 | 120,878 | 280,579 | — | 37,555 | 1,014,601 | | | 2022 | — | — | — | — | — | — | — | — | | Mr. David B. Jones Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary | 2024 | 349,210 | — | 484,326 | — | 930,628 | — | 113,829 | 1,877,993 | | | 2023 | 348,473 | — | 288,086 | 133,155 | 317,475 | — | 96,720 | 1,183,909 | | | 2022 | 319,423 | — | 288,205 | 126,029 | 436,718 | — | 90,321 | 1,260,696 |
SUMMARY COMPENSATION TABLE
Footnotes to “Summary Compensation Table”: (1)Mr. Williams, Mr. Barnes, and Mr. Jones are paid in U.S. dollars. All the other NEOs above are paid in GB Pounds Sterling. For the purposes of the “Summary Compensation Table”, a GB Pound Sterling to U.S. Dollar exchange rate of 1.28 is used for 2022, 2023 and 2024, being the average exchange rate for 2024. (2)The value of the RSUs and PSUs for all NEOs listed above for 2024 discloses the grant date fair value of RSUs and PSUs made under the Omnibus Plan. The value of the RSUs and PSUs is determined using the number of shares of stock awarded and the grant date fair value for each share awarded is calculated using the Black-Scholes model, with reference to the underlying stock price, exercise price of the awards, volatility of the Company’s stock price, risk free rate and expected dividend yield. For PSUs with additional characteristics, such as vesting criteria linked to stock market indices or stock price performance, a Monte Carlo simulation is used to model the range of potential outcomes. For further information on the assumptions underlying these grant date fair values refer to Note 18 of the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. (3)The value of the option awards for all NEOs listed above discloses the grant date fair value of options awarded under the Omnibus Plan and the grant date fair value of any cash incentive awards granted in lieu of stock
SUMMARY COMPENSATION TABLE
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SUMMARY COMPENSATION TABLE
option awards as required by the terms of the grant. The value of the option awards and cash incentive awards are determined using the number of options awarded and, for the cash incentive awards, the number of units awarded, and the grant date fair value for each option or unit made in the year. The grant date fair values on Company stock options and cash incentive awards are calculated in the same way as the full value awards above. No option awards were granted in 2024. (4)The Non-Equity Incentive Compensation for all NEOs listed above for 2024 relates to incentive compensation earned under the MICP for 2024 and the Additional LTIP that had a performance period of 2022 through 2024. The specific amounts earned for each NEO for 2024 under the MICP and the Additional LTIP are described above in the “Compensation Discussion and Analysis”. For 2022 and 2023, the amounts listed under Non-Equity Incentive Compensation relate to incentive compensation earned under the MICP only for such years, as no payments were earned in those years under the Additional LTIP. (5)The amounts reflected under “All Other Compensation” for 2024 are identified in the “All Other Compensation” table below. Other than where specified below, where any perquisites and personal benefits are provided to a NEO which are not generally available on a non-discriminatory basis to all employees in that business unit, their total value for any NEO was less than $10,000 in the year ended December 31, 2024.
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024
| Name and Principal Position | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Plan Awards | | | All other Stock Awards: No. of Securities, Shares of stock or units | All other Options Awards: No. of Securities underlying options | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | | | | | ($) | ($) | ($) | | | | | | ($) | ($) | | Mr. Patrick S. Williams President and Chief Executive Officer(1)(1) | 02/26/24 | — | — | — | 7,696 | 21,378 | 27,791 | — | — | — | 2,894,581 | | (2)(2) | 02/26/24 | — | — | — | — | — | — | 12,216 | — | — | 1,473,005 | | (3)(3) | 02/26/24 | — | — | — | 2,565 | 7,126 | 9,264 | — | — | — | 964,860 | | (4)(4) | — | 609,525 | 1,354,500 | 3,115,350 | — | — | — | — | — | — | — | | Mr. Ian P. Cleminson Executive Vice President and Chief Financial Officer(1)(1) | 02/26/24 | — | — | — | 1,259 | 3,497 | 4,546 | — | — | — | 473,494 | | (2)(2) | 02/26/24 | — | — | — | — | — | — | 1,999 | — | — | 241,039 | | (3)(3) | 02/26/24 | — | — | — | 420 | 1,166 | 1,516 | — | — | — | 157,876 | | (4)(4) | — | 137,053 | 304,562 | 700,494 | — | — | — | — | — | — | — | | Dr. Philip J. Boon Executive Vice President and Chief Operating Officer(1)(1) | 02/26/24 | — | — | — | 985 | 2,736 | 3,557 | — | — | — | 370,454 | | (2)(2) | 02/26/24 | — | — | — | — | — | — | 1,563 | — | — | 188,467 | | (3)(3) | 02/26/24 | — | — | — | 328 | 912 | 1,186 | — | — | — | 123,485 | | (4)(4) | — | 128,660 | 285,912 | 657,598 | — | — | — | — | — | — | — | | Mr. Corbin Barnes Senior Vice President, Corporate Development and Investor Relations(1)(1) | 02/26/24 | — | — | — | 823 | 2,286 | 2,972 | — | — | — | 309,524 | | (2)(2) | 02/26/24 | — | — | — | — | — | — | 1,306 | — | — | 157,477 | | (3)(3) | 02/26/24 | — | — | — | 274 | 762 | 991 | — | — | — | 103,175 | | (4)(4) | — | 88,880 | 252,816 | 581,477 | — | — | — | — | — | — | — | | Mr. David B Jones Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary(1)(1) | 02/26/24 | — | — | — | 966 | 2,683 | 3,488 | — | — | — | 363,278 | | (2)(2) | 02/26/24 | — | — | — | — | — | — | 1,533 | — | — | 184,849 | | (3)(3) | 02/26/24 | — | — | — | 322 | 894 | 1,162 | — | — | — | 121,048 | | (4)(4) | — | 104,328 | 231,840 | 533,232 | — | — | — | — | — | — | — |
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024
Footnotes to “Grants of Plan-Based Awards” table: (1)Stock-settled PSUs, with vesting dependent on achievement of performance measures, issued under the Omnibus Plan (2)RSUs, issued under the Omnibus Plan (3)Cash-settled PSUs, with vesting dependent on achievement of performance measures, issued under the Omnibus Plan. (4)Threshold, target and maximum pay-outs under the MICP •Details of the grant policy and performance criteria for the awards made in 2024 are covered earlier in the Compensation Discussion and Analysis.
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024
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GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024
•The All Other Stock Awards column in the “Grants of Plan-Based Awards” table details the following types of awards made under the Omnibus Plan: RSUs. RSUs granted under the Omnibus Plan in 2024 become vested on the third anniversary of the date of grant, subject to the participant’s continued employment except as described below. Upon vesting, shares subject to these awards are transferred to the participant’s nominated brokerage account. In the event the participant’s termination date occurs for any reason other than death, disability, retirement, or an involuntary termination without cause, any unvested awards shall be forfeited, and in the event the participant’s termination date occurs by reason of death, disability, retirement or an involuntary termination without cause, unvested awards shall be forfeited unless the Compensation Committee determines otherwise in its sole discretion. •The Estimated Future Pay-Outs Under Equity Awards column in the “Grants of Plan-Based Awards” table details the following types of awards made under the Omnibus Plan: PSUs. PSUs granted under the Omnibus Plan in 2024 require the achievement of specified performance criteria over a three-year performance period to vest as described below. Additionally, PSUs granted in 2024 are subject to the same three-year service vesting requirements described above for RSUs under the Omnibus Plan rules, except in certain circumstances, if a participant ceases to be employed with the Company, all unvested awards are forfeited. If the participant ceases employment by reason of death, disability, retirement, or involuntary termination without cause, all unvested awards are forfeited unless the Compensation Committee determines otherwise in its sole discretion. PSUs granted in 2024 consist both of stock-settled PSUs and cash-settled PSUs. For stock settled PSUs, upon vesting, a number of shares equal to the number of earned stock-settled PSUs are transferred to the participant’s nominated brokerage account. For cash-settled PSUs, upon vesting, the participant shall be entitled to a cash payment equal to the number of earned cash-settled PSUs multiplied by the closing stock price of the Company on the settlement date. In 2024, the relative weighting and performance criteria for both the cash-settled and stock-settled PSUs detailed in the rows labelled (1) and (3) were: •30% weighting on the relative performance of the Company’s Total Stockholder Return versus the average Total Stockholder Return of the compensation peer group. The threshold level is set at 25% of the average peer group performance over three years, in which case 50% of the full value awards and cash incentive awards granted at zero cost will vest. The target level is set at 50% of the peer group average performance, in which case 100% of the full value awards and cash incentive awards granted at zero cost will vest and the maximum level is set at 75% of the peer group average performance, in which case 200% of all the granted full value awards and cash incentive awards granted at zero cost will vest •30% weighting on the compound increase per annum in sales revenue. The threshold level is set at a total growth of 2% versus the 2024 budget figure, in which case 30% of the full value awards and cash incentive awards granted at zero cost will vest. The target level is set at a total growth of 5% versus the 2024 budget figure, in which case 100% of the full value awards and cash incentive awards granted at zero cost will vest and the maximum level is set at a total growth of 5% versus the 2024 budget figure, in which case 100% of the granted full value awards and cash incentive awards granted at zero cost will vest •40% weighting on the compound increase per annum in earnings per share (“EPS”). The threshold level is set at a total growth of 2% versus the 2024 budget figure, in which case 30% of the full value awards and cash incentive awards granted at zero cost will vest. The target level is set at a total growth of 5% versus the 2024 budget figure, in which case 100% of the full value awards and cash incentive awards granted at zero cost will vest and the maximum level is set at a total growth of 5% versus the 2024 budget figure in which case 100% of the full value awards and cash incentive awards granted at zero cost will vest
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024
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GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024
MICP. Payment under the MICP is based on achievement of pre-determined financial goals and personal objectives set by the Board each year. The threshold level is set at 90% achievement of the financial goals and the target payment is earned for 100% achievement of the financial goals. The maximum payment is earned for 130% achievement of the financial goals. The potential awards for 2024 are detailed in the table in the row under the grant date heading labelled (4). As this is an annual non-equity incentive plan, no grant date is disclosed.
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2024
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2024
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2024
| | | | Option Awards | | | | | | Stock Awards | | | | Name and Principal Position | | | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Equity Incentive Plans Awards: Number of Securities Underlying Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | | | | | | | ($) | | | ($) | | ($) | | Mr. Patrick S. Williams President and Chief Executive Officer | 4 | 6 | | 1,377 | | 99.68 | 21/02/2032 | | | | | | | 4 | 8 | | 1,326 | | 109.42 | 27/02/2033 | | | | | | | 1 | 6 | | 4,131 | | 99.68 | 21/02/2032 | | | | | | | 1 | 8 | | 3,979 | | 109.42 | 27/02/2033 | | | | | | | 3 | 6 | | | | 0.00 | 15/03/2026 | | | 10,097 | 1,111,276 | | | 3 | 8 | | | | 0.00 | 15/03/2027 | | | 9,726 | 1,070,444 | | | 3 | 9 | | | | 0.00 | 26/02/2027 | | | 7,126 | 784,288 | | | 2 | 6 | | | | 0.00 | 21/02/2025 | | | 30,292 | 3,333,938 | | | 2 | 8 | | | | 0.00 | 27/02/2026 | | | 29,179 | 3,211,441 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | | | 21,378 | 2,352,863 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | 12,216 | 1,344,493 | | | | Mr. Ian P. Cleminson Executive Vice President and Chief Financial Officer | 4 | 6 | | 317 | | 99.68 | 21/02/2032 | | | | | | | 4 | 8 | | 271 | | 109.42 | 27/02/2033 | | | | | | | 1 | 6 | | 950 | | 99.68 | 21/02/2032 | | | | | | | 1 | 8 | | 814 | | 109.42 | 27/02/2033 | | | | | | | 3 | 6 | | | | 0.00 | 21/02/2032 | | | 1,425 | | | | 3 | 8 | | | | 0.00 | 27/02/2033 | | | 1,220 | | | | 3 | 9 | | | | 0.00 | 26/02/2027 | | | 1,166 | | | | 2 | 6 | | | | 0.00 | 21/02/2025 | | | 4,275 | 470,507 | | | 2 | 8 | | | | 0.00 | 27/02/2026 | | | 3,661 | 402,930 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | | | 3,497 | 384,880 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | 1,999 | 220,010 | | | | Dr. Philip J. Boon Executive Vice President and Chief Operating Officer | 4 | 5 | 276 | | | 99.85 | 22/02/2031 | | | | | | | 4 | 6 | | 278 | | 99.68 | 21/02/2032 | | | | | | | 4 | 8 | | 232 | | 109.42 | 27/02/2033 | | | | | | | 1 | 5 | 825 | | | 99.85 | 22/02/2031 | | | | | | | 1 | 6 | | 834 | | 99.68 | 21/02/2032 | | | | | | | 1 | 8 | | 694 | | 109.42 | 27/02/2033 | | | | | | | 3 | 6 | | | | 0.00 | 21/02/2032 | | | 1,251 | | | | 3 | 8 | | | | 0.00 | 27/02/2033 | | | 1,042 | | | | 3 | 9 | | | | 0.00 | 26/02/2027 | | | 912 | | | | 2 | 6 | | | | 0.00 | 21/02/2025 | | | 3,754 | 413,165 | | | 2 | 8 | | | | 0.00 | 27/02/2026 | | | 3,124 | 343,827 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | | | 2,736 | 301,124 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | 1,563 | 172,024 | | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2024
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2024
| | | | Option Awards | | | | | | Stock Awards | | | | Name and Principal Position | | | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Equity Incentive Plans Awards: Number of Securities Underlying Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | | | | | | | ($) | | | ($) | | ($) | | Mr. Corbin Barnes Senior Vice President, Corporate Development and Investor Relations | 4 | 6 | | 598 | | 99.68 | 21/02/2032 | | | | | | | 4 | 8 | | 591 | | 109.42 | 27/02/2033 | | | | | | | 1 | 6 | | 200 | | 99.68 | 21/02/2032 | | | | | | | 1 | 8 | | 197 | | 109.42 | 27/02/2033 | | | | | | | 3 | 6 | | | | 0.00 | 15/03/2026 | | | 897 | | | | 3 | 8 | | | | 0.00 | 15/03/2027 | | | 886 | | | | 3 | 9 | | | | 0.00 | 26/02/2027 | | | 762 | | | | 2 | 6 | | | | 0.00 | 21/02/2025 | | | 2,692 | 296,282 | | | 2 | 7 | | | | 0.00 | 01/05/2025 | | | 2,000 | 220,120 | | | 2 | 8 | | | | 0.00 | 27/02/2026 | | | 2,661 | 292,870 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | | | 2,286 | 251,597 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | 1,306 | 143,738 | | | | Mr. David B. Jones Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary | 4 | 6 | | 229 | | 99.68 | 21/02/2032 | | | | | | | 4 | 8 | | 217 | | 109.42 | 27/02/2033 | | | | | | | 1 | 6 | | 687 | | 99.68 | 21/02/2032 | | | | | | | 1 | 8 | | 651 | | 109.42 | 27/02/2033 | | | | | | | 3 | 6 | | | | 0.00 | 15/03/2026 | | | 1,030 | | | | 3 | 8 | | | | 0.00 | 15/03/2027 | | | 976 | | | | 3 | 9 | | | | 0.00 | 26/02/2027 | | | 894 | | | | 2 | 6 | | | | 0.00 | 21/02/2025 | | | 3,091 | 340,195 | | | 2 | 8 | | | | 0.00 | 27/02/2026 | | | 2,928 | 322,256 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | | | 2,683 | 295,291 | | | 2 | 9 | | | | 0.00 | 26/02/2027 | 1,533 | 168,722 | | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2024
Footnotes to “Outstanding Equity Awards at Fiscal Year End 2024” table: (1)Options issued under the Omnibus Plan. Option awards under the Omnibus Plan which are not exercisable are detailed in the column headed “Number of Securities Underlying Unexercised Options Unexercisable” and those which are exercisable are detailed in the column headed “Number of Securities Underlying Unexercised Options Exercisable” (2)Stock-settled PSUs, RSUs and stock-settled Full Value Awards issued under the Omnibus Plan. Awards granted in 2024 or after are referred to as RSUs and PSUs. Awards granted prior to 2024 that are at zero cost are referred to as Full Value Awards. The number of RSUs, stock-settled PSUs and stock-settled Full Value Awards awarded is detailed in the column headed “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” and the market value of these awards is detailed in the column headed “Equity Incentive Plan Awards: Market or Pay-out Value of Unearned Shares, Units or Other Rights That Have Not Vested”, using the 2024 year end share price of $110.06 as an indication. The number of PSUs, RSUs and Full Value Awards is detailed in the column headed “Number of Shares or Units of Stock than have not vested” and the market value of these awards is detailed in the column headed “Market Value of Shares or Units of Stock That Have not Vested”, using the 2024 year end share price of $110.06 as an indication.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2024
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2024
(3)Cash-settled PSUs and cash-settled Full Value Awards issued under the Omnibus Plan. Cash-settled Full Value Awards granted prior to 2024 were referred to as stock equivalent units or SEUs by the Company. Cash settled PSUs and SEUs under the Omnibus Plan which are not vested are detailed in the column headed “Equity Incentive Plan Awards” and the market value of these awards is detailed in the column headed “Equity Incentive Plan Awards: Market or Pay-out Value of Unearned Shares, Units or Other Rights That Have Not Vested”, using the 2024-year end share price of $110.06 as an indication. (4)Cash Incentive Awards granted with an exercise price set at market price issued under the Omnibus Plan prior to 2024. Cash Incentive Awards granted at market price which are not exercisable are detailed in the column headed “Number of Securities Underlying Unexercised Options Unexercisable” and those which are exercisable are detailed in the column headed “Number of Securities Underlying Unexercised Options Exercisable” (5)Omnibus Options and Cash Incentive Awards have vesting date of February 22, 2024 (6)Omnibus Full Value Awards, Options and Cash Incentive Awards have vesting date of February 21, 2025 (7)Omnibus Full Value Awards have vesting date of May 1, 2025 (8)Omnibus Full Value Awards, Options and Cash Incentive Awards have vesting date of February 27, 2026 (9)Omnibus PSUs and RSUs have vesting date of February 26, 2027 With respect to non-vested or unearned performance-based stock options, cash and stock-settled Full Value Awards, and PSUs reported as of December 31, 2024 in the table is based on the performance achieved for each performance goal in the previous fiscal year (2024), except where performance was below the threshold level, in which case the number of options, shares, cash and stock-settled Full Value Awards and PSUs reported is based on the threshold level, as detailed below: •In the case of the performance-based stock options and cash-settled Full Value Awards which subsequently vested on February 21, 2025, the number of shares reported is based on achieving 433% relative performance for TSR versus the Russell 2000, 48% increase in EPS per annum and 27% growth in gross revenue as this was the actual outcome. •For those stock-settled and cash-settled Full Value Awards, cash incentive awards and PSUs that expire in February 2026, March 2027 or February 2033, the number of shares reported is based on achieving the target level for relative performance of TSR versus the S&P 1500 Chemicals Index, EPS and gross revenue. •For those stock-settled and cash-settled Full Value Awards, cash incentive awards and PSUs that expire in February 2027, March 2028 or February 2034, the number of shares reported is based on achieving the target level for relative performance of TSR versus the compensation peer group; EPS and gross revenue. •The number of shares reported for Mr. Barnes in the case of those which have a vesting date of May 1, 2025, is not subject to achievement of any performance measures and reflects full vesting of shares awarded, as this is the expected outcome. The market value of any shares which have not vested is calculated using the year-end stock price of $110.06, as an indication.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2024
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OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2024
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2024 The following table provides information for the NEOs on exercises of stock options and cash-based awards, which were granted as SEUs during the fiscal year 2024, including the number of shares or SEUs acquired on exercise or transfer and the value realized.
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2024
| Name and Principal Position | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Exercise | | | | ($) | | ($) | | Mr. Patrick S. Williams President and Chief Executive Officer(1) | — | — | 9,667 | 1,198,321 | | (2) | 1,318 | 31,777 | — | — | | (3) | 3,955 | 96,344 | — | — | | (4) | — | — | 29,001 | 3,614,105 | | Mr. Ian P. Cleminson Executive Vice President and Chief Financial Officer(1) | — | — | 1,397 | 173,172 | | (2) | 311 | 7,498 | — | — | | (3) | 931 | 22,651 | — | — | | (4) | — | — | 4,190 | 511,473 | | Dr. Philip J. Boon Executive Vice President and Chief Operating Officer(1) | — | — | 1,238 | 154,911 | | (4) | — | — | 3,715 | 453,490 | | Mr. Corbin Barnes Senior Vice President, Corporate Development and Investor Relations(1) | — | — | 1,000 | 122,980 | | (1) | — | — | 625 | 77,475 | | (4) | — | — | 1,875 | 232,425 | | (4) | — | — | 3,000 | 386,460 | | Mr. David B. Jones Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary(1) | — | — | 914 | 113,299 | | (2) | 189 | 5,432 | — | — | | (2) | 204 | 4,918 | — | — | | (3) | 568 | 16,324 | — | — | | (3) | 609 | 14,561 | — | — | | (4) | — | — | 2,743 | 340,022 | | (4) | — | — | 2,500 | 314,475 |
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2024
Footnotes to the “Option Exercises and Stock Vested during Fiscal 2024” table: (1)Cash incentive awards exercised which were issued at zero cost under the Omnibus Plan (2)Cash incentive awards exercised which were issued at market price under the Omnibus Plan (3)Options exercised which were issued under the Omnibus Plan (4)Full Value awards transferred which were issued under the Omnibus Plan The aggregate dollar amount realized on exercise of option awards, SEUs and matching shares was computed by calculating the closing price of all underlying common stock on the date of exercise or transfer, less the exercise price of the option, multiplied by the number of shares underlying the options or SEUs exercised, or stock transferred.
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2024
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NON-QUALIFIED DEFERRED COMPENSATION
NON-QUALIFIED DEFERRED COMPENSATION The following table provides information regarding The Innospec Inc. Nonqualified Deferred Compensation Plan during fiscal year 2024. Mr. Williams and Mr. Jones were the only NEOs who were eligible to participate in this plan during 2024. More information on the plan is provided in the Compensation Discussion and Analysis section of the Proxy under the section headed “Non-qualified Deferred Compensation Plan”.
NON-QUALIFIED DEFERRED COMPENSATION
| | Executive Contributions in Last Fiscal Year | Registrant Contributions in Last Fiscal Year | Aggregate Earnings (Losses) in Last Fiscal Year | Aggregate Withdrawals/ Distributions | Aggregate Balance at end of last Fiscal Year 2`023 | | | (1) | (2) | (3) | (4) | (5) | | | ($) | ($) | ($) | ($) | ($) | | Mr. Patrick S. Williams President and Chief Executive Officer | — | 36,319 | 14,506 | — | 157,650 | | Mr. David B. Jones Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary | — | 36,319 | 16,617 | — | 97,803 |
Footnotes to the “Non-qualified Deferred Compensation” table
Footnotes to the “Non-qualified Deferred Compensation” table (1)These amounts, if any, are included in the Summary Compensation Table in the “Salary” and “Non-Equity Incentive Compensation” columns for 2024. Neither Mr. Williams nor Mr. Jones made any contributions into the Deferred Compensation plan in 2024. (2)The amounts disclosed for Mr. Williams and Mr. Jones include employer elective deferrals of $36,319 for both, which accrued during fiscal year 2024 and credited to their accounts in 2025. These amounts are included in the Summary Compensation Table in the “All Other Compensation” column for 2024. (3)These amounts are not included in the Summary Compensation Table because Plan earnings were not preferential or above market. (4)Withdrawal and distribution amounts, if any, are not included in the Summary Compensation Table because these are pay-outs of prior years’ earnings and contributions. There were no withdrawals or distributions in 2024. (5)These amounts are as of December 31, 2024, and do not take into account the amounts in the “Registrant Contributions in Last Fiscal Year” column in the table above that were accrued during fiscal year 2024 but were credited to Mr. Williams’ and Mr. Jones’ accounts in 2025 as detailed above.
Footnotes to the “Non-qualified Deferred Compensation” table
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PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between compensation actually paid (CAP), as defined in Item 402(v), and performance.
PAY VERSUS PERFORMANCE
| Year (a) | Summary Compensation Table Total for Principal Executive Officer (PEO) (b)(1) | Compensation Actually Paid to PEO(2)(3) (c) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(1) (d) | Average Compensation Actually Paid to Non-PEO NEOs(2)(3) (e) | Value of Initial Fixed $100 Investment Based On: | | Net Income (millions)(5) (h) | Corporate Operating Income(6) (millions) (i) | | | | | | | Total Shareholder Return (f) | Peer Group Total Shareholder Return(4) (g) | | | | 2024 | $13,216,384 | $11,169,734 | $2,282,244 | $2,148,332 | $113 | $126 | $35.6 | $209.4 | | 2023 | $7,299,862 | $10,144,030 | $1,253,550 | $1,604,203 | $125 | $128 | $139.1 | $182.1 | | 2022 | $7,888,489 | $11,227,698 | $1,375,137 | $1,771,361 | $103 | $112 | $133.0 | $213.3 | | 2021 | $9,897,900 | $6,603,590 | $1,668,578 | $1,305,876 | $90 | $149 | $93.1 | $131.2 | | 2020 | $7,454,445 | $5,431,868 | $1,465,583 | $1,135,176 | $89 | $116 | $28.7 | $63.2 |
PAY VERSUS PERFORMANCE
(1)The PEO listed for 2020, 2021, 2022, 2023, and 2024 is Patrick S. Williams. The Non-PEO remaining NEOs for 2023 and 2024 are Ian P. Cleminson, Philip J. Boon, Corbin Barnes, and David B. Jones. The Non-PEO remaining NEOs for 2021 and 2022 are Ian P. Cleminson, Philip J. Boon, Ian M. McRobbie, and David B. Jones. The Non-PEO remaining NEOs for 2020 are Ian P. Cleminson, Philip J. Boon, Brian R. Watt, and Ian M. McRobbie. (2)The following adjustments relating to equity awards were made to total compensation for each year to determine CAP:
PAY VERSUS PERFORMANCE
| Year | Value of Equity Awards Disclosed in the Summary Compensation Table | Year End Value of Equity Awards Granted During the Covered Year | Change in Fair Value from Prior Year End Fair Value of Outstanding and Unvested Equity Awards | Change in Fair Value from Prior Year End Fair Value of Awards Granted in Prior Years Vesting During the Covered Year | Total Equity Award Adjustments | | 2024 PEO | ($5,332,447) | $4,716,328 | ($1,392,038) | ($38,493) | ($2,046,650) | | 2024 Average Non-PEO NEOs | ($565,834) | $617,831 | ($180,651) | ($5,258) | ($133,912) |
PAY VERSUS PERFORMANCE
(a)The valuation methodologies used to calculate fair values for each measurement date do not materially differ from those used at the time of grant of each respective award. (1)For 2024, no adjustments were made relating to defined benefit and pension plans to determine CAP. (2)Represents the cumulative TSR for the S&P Composite 1500 Specialty Chemicals Index, as disclosed by Innospec for the purposes of Item 201(e) of Regulation S-K. (3)The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year (GAAP Net Income). (4)Corporate Operating Income is the financial performance measure used by the Company in the most recently completed fiscal year to link CAP to the Company’s performance. Corporate Operating Income is calculated from GAAP Operating Income adjusted to exclude certain one-time/nonrecurring costs that are not reflective of the Company’s underlying operations, as further described in the Compensation Discussion and Analysis.
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
Analysis of the Information Presented in the Pay versus Performance Table The graphics below depict the relationship between CAP and Company TSR, S&P Composite 1500 Specialty Chemicals Index TSR (referred to as the “peer group TSR” for purposes of 402(v)), and financial performance. Tabular List of Financial Performance Measures The most important financial performance measures used by the Company to link executive CAP to the Company’s PEO and NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows: •Corporate Operating Income •EPS •Cash Flow •Revenue •Relative TSR
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
Pay Ratio Disclosure In line with the SEC disclosure requirements, the Company has determined the ratio of the total annual compensation of Mr. Williams, CEO, to the total annual compensation of the median employee for 2023, the last completed fiscal year. In 2024, the total annual compensation of the CEO was $13,216,384. The total annual compensation of the median employee was $73,307. As a result, for 2024, the ratio of the CEO’s total annual compensation to the total annual compensation of the median employee was approximately 180 to 1. The median employee was identified by examining compensation information derived from payroll records for all employees, excluding the CEO, who were employed by the Company on November 1, 2023. As of such date, the Company employed approximately 2,100 people, with around 720 of these employees located in the United States and around 1,380 located outside the United States. All employees were included, whether employed on a full-time, part-time, temporary or seasonal basis. In identifying the median employee, the Company selected actual cash compensation for the 12-month period ending December 31, 2022 as the most appropriate measure of compensation, as there has been no change in the employee population or compensation arrangements that would have resulted in a significant change in the pay distribution to the workforce. Cash compensation was defined as base salary (for salaried employees), wages (for hourly employees), bonus and incentive payments earned in 2022, and any cash allowances including shift allowance, car allowance and responsibility allowance, but excluding any payments relating to stock based incentives. In the cases where an individual was employed on November 1, 2023, but had not been employed in 2022, the 2022 compensation of an employee in a similar role and location was used as an estimate. In the cases where a full time or part time permanent employee was not employed by the Company for all of 2022, the compensation was annualized. Compensation was not analyzed for any temporary or seasonal workers. This measure was consistently applied to all employees included in the calculation. To determine the annual total compensation of the CEO, we used the amount reported in the “Total” column of the Summary Compensation Table in this Proxy Statement, which includes salary, stock and option awards, bonus, change in pension value, and all other compensation. The median employee’s total annual compensation for 2024 was calculated in accordance with the same requirements applicable to the CEO’s compensation as reported in the Summary Compensation Table and that number was used to calculate the ratio of the CEO’s pay to that of the median employee. The SEC rules requiring pay ratio disclosure allow companies to exercise a significant amount of flexibility in making the determination as to who is the median employee and do not mandate that each company use the same method. We believe that the pay ratio information above is a reasonable estimate calculated in a manner consistent with the SEC rules. However, the total annual compensation of our median employee is unique to that person and is not necessarily a good indicator of the total annual compensation of any of the other employees of the Company, and it is not comparable to the annual total compensation of employees at other companies. Similarly, we would not expect that the ratio of the CEO’s total annual compensation to that of the median employee to be a number that can be compared to the ratio determined by other companies in any meaningful fashion.
PAY VERSUS PERFORMANCE
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DEF 14A of Innospec Inc.

INNOSPEC INC. 8310 South Valley Highway, Suite 350, Englewood, CO 80112

Identifying and Evaluating Nominees for Director

Identifying and Evaluating Nominees for Director

Identifying and Evaluating Nominees for Director

Identifying and Evaluating Nominees for Director

Identifying and Evaluating Nominees for Director

Identifying and Evaluating Nominees for Director

PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS

PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS

PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS

PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS

PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS

PROPOSAL 1 – ELECTION OF THREE CLASS III DIRECTORS

Director Biographies

Class I Directors

Class I Directors

Class I Directors

Class I Directors

Class I Directors

Class I Directors

Class I Directors

Class I Directors

Class I Directors

Class I Directors

Class II Directors

Class II Directors

Class II Directors

Class II Directors

Class II Directors

Class II Directors

Class II Directors

Class II Directors

Class II Directors

Class II Directors

Class II Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

Class III Directors

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION FOR FISCAL 2024

DIRECTOR COMPENSATION FOR FISCAL 2024

DIRECTOR COMPENSATION FOR FISCAL 2024

DIRECTOR COMPENSATION FOR FISCAL 2024

DIRECTOR COMPENSATION FOR FISCAL 2024

DIRECTOR COMPENSATION FOR FISCAL 2024

DIRECTOR COMPENSATION FOR FISCAL 2024

DIRECTOR COMPENSATION FOR FISCAL 2024

Basic Compensation Practices

Basic Compensation Practices

Compensation Elements and Performance Metrics

Compensation Elements and Performance Metrics

Compensation Elements and Performance Metrics

Role of the Compensation Committee

Role of the Compensation Consultant

Competitive Market

Competitive Market

Competitive Market

Competitive Market

Competitive Market

Annual Incentives

Change for 2024

Change for 2024

Change for 2024

Change for 2024

Change for 2024