UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant    ☒                            x

Filed by a Party other than the Registrant    ☐o

Check the appropriate box:

HEXCEL CORPORATION

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Date Filed:Hexcel Corporation Two Stamford Plaza 281 Tresser Boulevard Stamford, Connecticut 06901-3238

Notice of Annual Meeting of Stockholders

 

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Hexcel Corporation

Two Stamford Plaza

281 Tresser Boulevard

Stamford, Connecticut 06901-3238

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be held on May 4, 20179, 2019

 

The Annual Meeting of Stockholders of Hexcel Corporation will be held in the Community Room, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, Connecticut, on May 4, 20179, 2019 at 10:30 a.m. local time for the following matters:purposes:

 

1.

To elect ten individuals (Nick L. Stanage, Joel S. Beckman, Lynn Brubaker, Jeffrey C. Campbell, Cynthia M. Egnotovich, W. Kim Foster, Thomas A. Gendron, Jeffrey A. Graves, Guy C. Hachey and David L. Pugh)nine directors to serve as directors until the next annual meeting of stockholders and until their successors are duly elected and qualified;

2.	To conductvote on a proposal to approve, on an advisory vote to approvebasis, the company’s 20162018 executive compensation;

3.	To conduct an advisory vote on a proposal to approve an amendment to the frequency of conducting an advisory vote regarding executive compensation;Hexcel Corporation 2013 Incentive Stock Plan;

4.	To vote on a proposal to ratify the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm for 2017;2019; and

5.	To transact such other business as may properly come before the meeting or any adjournments or postponements thereof.

Stockholders

The Board of record atDirectors has fixed the close of business on March 9, 2017 will be13, 2019, as the record date for determination of the stockholders entitled to vote at the meeting andor any adjournments or postponements. A list of these stockholders will be available for inspection at the executive offices of Hexcel and will also be available for inspection at the annual meeting.postponements thereof.

 

		By order of the board of directors
		By order of the Board of Directors Gail E. Lehman Executive Vice President, General Counsel and Secretary   Gail E. Lehman Executive Vice President, General Counsel and Secretary

Dated: March 17, 201722, 2019

YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND COMPLETEWE ENCOURAGE YOU TO VOTE BY PROXY EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING.

ENCLOSEDIMPORTANT NOTICE REGARDING THE
AVAILABILITY OF PROXY CARD AND RETURN IT PROMPTLY INMATERIALS FOR THE ENCLOSED
STOCKHOLDER MEETING TO BE HELD ON MAY 9, 2019

The proxy statement, annual report to stockholders and related materials are available on our website at
PRE-ADDRESSED, POSTAGE-PAID, RETURN ENVELOPE.http://investors.hexcel.com/financials/proxy-materials.

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Hexcel Corporation

Two Stamford Plaza

281 Tresser Boulevard

Stamford, Connecticut 06901-3238

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

To be held on May 4, 2017

THE MEETING

This proxy statement is furnished to the holders of common stock of Hexcel Corporation (“Hexcel” or the “company”) common stock, in connection with the solicitation of proxies by Hexcel on behalf of the Board of Directors of the company (the “board of directors” or the “board”) for use at the Annual Meeting of Stockholders, or any adjournments or postponements of the meeting (the “Annual Meeting”)thereof, to be held on May 4, 2017.9, 2019 (the “Annual Meeting”). This proxy statement and the accompanying proxy/voting instructionproxy card are first being distributed or made available to stockholders on or about March 17,22, 2019.

HEXCEL CORPORATION  |  2019 Proxy Statement

 

2019 Proxy Statement Summary

This summary highlights selected information contained in this proxy statement. Please read the entire proxy statement carefully before voting your shares.

The Meeting

TO BE HELD ON:		May 9, 2019
TIME:		10:30 am, local time
PLACE:		Community Room, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, Connecticut 06901
RECORD DATE:		You will be eligible to vote your shares of common stock at the Annual Meeting if you were astockholder of record at the close of business on March 13, 2019. As of that date, 84,868,544shares of common stock were issued and outstanding. The holders of 42,434,273 shares willconstitute a quorum at the Annual Meeting.

Proposals and Board Recommendations

Proposal No.		Proposal	Board Recommendation	See Page
1		Elect nine directors	FORall nominees	1
2		Approve, on an advisory basis, 2018 executive compensation	FOR	53
3		Approve an amendment to the Hexcel Corporation 2013 Incentive Stock Plan	FOR	55
4		Ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for 2019	FOR	65

HEXCEL CORPORATION  |  2019 Proxy Statement

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2019 PROXY STATEMENT SUMMARY

Company Highlights

Fiscal 2018 Performance

n	Our sales were a record $2.189 billion in 2018, an increase of 11% compared to 2017.
n	Our diluted net income per common share was $3.11 for 2018, compared to $3.09 in 2017.
n	Our adjusted diluted earnings per share was $3.05 for 2018, as compared to $2.68 in 2017. Adjusted diluted earnings per share is a non-GAAP financial measure. See Annex A to this proxy statement for a reconciliation of adjusted diluted earnings per share to GAAP diluted earnings per share.
n	Our net cash provided by operating activities was $421.4 million in 2018, compared to $428.7 million in 2017. Our free cash flow, a non-GAAP financial measure, was a record $237.3 million in 2018, compared to $150.6 million in 2017. Free cash flow equals our net cash provided by operating activities minus capital expenditures ($184.1 million in 2018; $278.1 million in 2017).

Corporate Governance Practices

We believe that our corporate governance practices generally reflect best practices consistent with Hexcel’s and our stockholders’ interests.

ü	Eight of nine director nominees are independent
ü	Average age of director nominees is 60
ü	Gender diversity reflected in the composition of the board
ü	Diversity of director experience, including in business background, technological acumen and tenure, reflected in the composition of the board
ü	Mandatory retirement age of 70 for directors
ü	Annual elections for all directors
ü	Independent lead director empowered with broad responsibilities and governance duties
ü	Majority voting in uncontested elections of directors
ü	One class of stock with equal voting rights
ü	Comprehensive enterprise risk, succession and business strategy oversight

ü	Regular executive sessions of the independent directors
ü	Annual board and board committee self-evaluations, and peer review of individual directors every other year
ü	Policies prohibiting hedging and pledging Hexcel stock by directors
ü	Robust stock ownership guidelines for directors

Executive Compensation

Our compensation philosophy is to deliver pay for performance, and we follow a number of compensation practices designed to provide a level of performance that creates sustainable value for our stockholders.

ü	Annual say-on-pay stockholder vote
ü	Emphasis on performance-based compensation
ü	81% of target CEO pay in 2018 was variable and at risk
ü	Non-guaranteed performance-based annual cash bonuses
ü	Challenging performance targets under annual cash bonus plan and long-term stock-based compensation plan based on return on invested capital and, since 2017, relative earnings per share growth targets
ü	Multi-year vesting periods for annual stock awards
ü	Limit on maximum incentive payouts
ü	No excise tax gross-up under severance agreements (subsequent to 2013) or under our Executive Severance Policy
ü	No repricing of any stock options without stockholder approval
ü	Clawback policy that applies to executive officer incentive-based compensation
ü	Policies prohibiting hedging and pledging Hexcel stock by executive officers
ü	Robust stock ownership guidelines for executive officers

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HEXCEL CORPORATION  |  2019 Proxy Statement

 

Questions and Answers

Who is entitled to vote at the Annual Meeting?

You will be eligible to vote your shares of common stock at the Annual Meeting if you were a stockholderholder of recordour common stock at the close of business on March 9, 2017. As of that date, 90,772,110 shares of common stock were issued and outstanding and such shares were held by 653 holders of record. The holders of 45,386,056 shares will constitute a quorum at13, 2019, the meeting.

record date. Each share of common stock that you hold will entitle you to cast one vote with respect to each matter that will be voted on at the Annual Meeting. All

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

If your shares are registered directly in your name with our transfer agent, American Stock Transfer and Trust Company LLC, you are considered the stockholder of record or a “record holder” with respect to those shares, and you may submit a proxy card and vote those shares in the manner described in this proxy statement.

Most of our stockholders hold their shares as a beneficial owner through a broker, bank or other nominee rather than directly in their own name. If your shares are held through a broker, bank or other nominee, you are considered the “beneficial owner” of the shares. As the beneficial owner, you generally have the right to direct your broker, bank or other nominee on how to vote your shares. Your broker, bank or other nominee is responsible for providing you with a voting instruction form that you use to give instructions as to how your shares are represented by effective proxies that we receive in time to be voted shall be voted at the Annual Meeting. voted.

How do I vote?

Voting by proxy

If you direct how your votes shall be cast, shares will be voted in accordance with your directions. Ifwere a record holder on the record date, you returncan vote by returning a signed proxy and do not otherwise instructcard that provides your instructions as to how to vote on the proposals, then the shares represented by your proxy will be voted:

for each of the director candidates nominated by the board,

for approval of the company’s 2016 executive compensation,

in favor of our recommendation on the frequency of conducting an annual advisory vote on executive compensation,

in favor of the ratification of the appointment of Ernst & Young LLP as independent registered public accounting firm for 2017, and

in the discretion of the proxy holders on any other matters that may come before the Annual Meeting.

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If you return a signed proxy with abstentions, your shares will be included in determining if a quorum is present.

A brokernon-vote occurs when a stockholder who holds his or her shares through a bank or brokerage firm does not instruct that bank or brokerage firm how to vote the shares and, as a result, the broker is prevented from voting the shares held in the stockholder’s account on certain proposals. Under applicable NYSE rules, if you hold your shares through a bank or brokerage firm and your broker delivers the Notice of Internet Availability or the printed proxy materials to you, the broker has discretion to vote on “routine” matters only. Of the matters to be voted on as described in this proxy statement, only the ratification of the selection of our independent registered public accounting firm is considered “routine” and therefore eligible to be voted on by your bank or brokerage firm without instructions from you. If you sign and return a voting instruction card to your broker, your shares will be voted as you instruct on the proposals described in this proxy statement and any other matters on which the proxy holder may properly vote. Shares subject to a brokernon-vote will be included in determining if a quorum is present.

We will pay all costs of preparing, assembling, printing and distributing the proxy materials. We have retained Morrow Sodali LLC, 470 West Avenue, Stamford, Connecticut, 06902, to assist in soliciting proxies for a fee of approximately $9,500, plus reasonableout-of-pocket expenses. Our employees may solicit proxies on behalf of our board through the mail, in person, and by telecommunications. We will request that brokers and nominees who hold shares of common stock in their names furnish proxy solicitation materials to beneficial owners of the shares, and we will reimburse the brokers and nominees for reasonable expenses they incur to do this.

Revoking a Proxy

If you give a proxy, you may revoke it at any time prior to the Annual Meeting by:voted.

 

mailing a revocation to Ms. Gail E. Lehman, the Secretary of the company, at the above address with a later date than any proxy you previously provided so long as it is received prior to the Annual Meeting;

submitting another properly completed proxy dated later than any proxy you previously provided so long as it is received by Ms. Lehman prior to the Annual Meeting;

by filing a written revocation at the Annual Meeting with Ms. Lehman; or

by casting a ballot at the meeting.

If you are an employee stockholder who holds shares through one of our benefit plans, you may revoke voting instructions given to the trustee for the applicable plan by following the instructions under “How to Vote Your Shares—Employee Stockholders” in this proxy statement.

Matters of Business, Votes Needed and Recommendations of the Board of Directors

Proposal 1—Election of Directors

Each outstanding share of our stock is entitled to one vote for as many separate nominees as there are directors to be elected. There are ten directors to be elected. The board has nominated Nick L. Stanage, Joel S. Beckman, Lynn Brubaker, Jeffrey C. Campbell, Cynthia M. Egnotovich, W. Kim Foster, Thomas A. Gendron, Jeffrey A. Graves, Guy C. Hachey and David L. Pugh for election to the board. Each of these ten nominees is currently a director of the company. Once a quorum is present, a majority of the votes cast in person or represented by proxy at the Annual Meeting and entitled to vote is required to elect each of the nominees for director. This means that each nominee must receive more votes “for” than “against” to be elected. Brokernon-votes and abstentions will be disregarded and will have no effect on the outcome of the vote.The board of directors recommends that you vote FOR the election of each of the board’s nominees for director.

Proposal 2—Advisory Vote to Approve Executive Compensation

Approval of the company’s 2016 executive compensation requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting once a quorum is present. In determining whether the proposal to approve 2016 executive compensation receives the required number of affirmative votes, abstentions will be counted and will have the same effect as a vote against the proposal. Brokernon-votes will be disregarded and will have no effect on the outcome of the vote. The vote is advisory andnon-binding; however, the compensation committee will consider the voting results among other factors when making future decisions regarding executive compensation.The board of directors recommends that you vote FOR the resolution approving the company’s 2016 executive compensation.

Proposal 3—Advisory Vote Regarding Frequency of Conducting an Advisory Vote on Executive Compensation

You may elect to have the vote on the frequency of conducting an advisory vote on executive compensation held annually, every two years or every three years, or you may abstain. You are not voting to approve or disapprove the board’s recommendation. Brokernon-votes will be disregarded and will have no effect on the outcome of the vote. The vote is advisory andnon-binding. The compensation committee will consider the outcome in recommending a voting frequency to the board of directors, but will not be bound either by its own recommendation or by the outcome of the vote, and may choose to conduct the vote more or less frequently in the future based on other factors, such as feedback from shareholder outreach programs, the adoption or revision of compensation policies, or the outcome of “Say on Pay” votes.The board of directors recommends that you vote FOR an ANNUAL shareholder advisory vote about compensation awarded to the company’s named executive officers.

Proposal 4—Ratification of Independent Registered Public Accounting Firm

Ratification of the appointment of Ernst & Young LLP to audit the company’s financial statements for 2017 requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting once a quorum is present. Abstentions will be counted and will have the same effect as a vote against the proposal. The audit committee is responsible for appointing the company’s independent registered public accounting firm. The audit committee is not bound by the outcome of this vote but, if the appointment of Ernst & Young LLP is not ratified by stockholders, the audit committee will reconsider the appointment.The board of directors recommends that you vote FOR the ratification of the selection of Ernst & Young LLP as the company’s independent registered public accounting firm for 2017.

How to Vote Your Shares

Voting shares you hold through a broker, bank or other nominee

If you holdwere a beneficial owner of shares through someone else, such as a stockbroker,at the close of business on the record date, you may vote your shares by giving voting instructions to your broker, bank or

other nominee. Your broker, bank or other nominee you will receive material fromshould provide a voting instruction form that firm asking you for instructions onexplains how you want them tomay vote your shares. You canshould complete that firm’s voting instruction form and return it as requested by the firm. If the firm offers Internetinternet or telephone voting is offered, the voting instruction form willshould contain instructions on how to vote using those methods.

If you plan to attend the meeting

Please note that attendance will be limited to stockholders as of the record date. Admission will be on a first-come, first-served basis. If you attend the Annual Meeting, you will need to present valid picture identification, such as a driver’s license or passport. If you hold your shares through someone else, such as a stockbroker, bank or other nominee, you will need to show a brokerage statement or account statement reflecting your stock ownership as of the record date. Cameras, recording devices and other electronic devices will not be

permitted at the Annual Meeting. You may contact Morrow Sodali LLC at(800) 607-0088 to obtain directions to the site of the Annual Meeting. The doors to the meeting will open at 10:00 a.m. local time and the meeting will begin at 10:30 a.m. local time.

Voting in person

If you are a registered stockholder,record holder, you may vote your shares in person by ballot at the Annual Meeting. You should indicate that you plan to attend the Annual Meeting when submitting your proxy card by checking the box under the caption “Meeting Attendance” on the proxy card. Even if you plan to attend the meeting, we urge you to submit a proxy card so that your vote will be recorded in the event that you are unable to attend.

If you hold your shares inare a stock brokerage account or through a bank or other nominee,beneficial owner, you will notneed an admission ticket or proof of ownership to be ableadmitted to vote in person at the Annual Meeting unless you have previously requested and obtained a “legal proxy”Meeting. A recent brokerage statement or letter from your broker, bank or other nominee and present itare examples of proof of ownership. If you want to vote the shares you hold as a beneficial owner in person at the Annual Meeting, along withyou must bring a properly completed ballot.signed proxy from your broker, bank or other nominee giving you the right to vote the shares.

Employee stockholders

If you hold shares through our Employee Stock Purchase Plan or ourtax-deferred 401(k) savings plan, you will receive a separate voting instruction form to instruct the custodian or trustee for the applicable plan as to how to vote your shares. With respect to the 401(k) savings plan, all shares of common stock for which the trustee has not received timely instructions shallwill be voted by the trustee in the same proportion as the shares of common stock for which the trustee received timely instructions, except if that would beunless inconsistent with the provisions of Title I of ERISA.applicable law. With respect to our Employee Stock Purchase Plan, we consider all shares of common stock for which the custodian has not received timely instructions not present for quorum purposes, and those shares will not be voted by the custodian.

HEXCEL CORPORATION  |  2019 Proxy Statement

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Inspectors2019 PROXY STATEMENT SUMMARY

What does it mean if I receive more than one proxy card or voting instruction form?

If your shares are held in more than one account, you will receive a proxy card or voting instruction form for each account. To ensure that all of Electionyour shares are voted, please follow the instructions you receive for each account to submit a proxy card or voting instruction form.

What is required in order to attend the Annual Meeting?

In accordance with our security procedures, admission to the Annual Meeting is restricted to record holders and beneficial owners of Hexcel stock as of the record date, March 13, 2019. If you are a record holder, indicate that you plan to attend the Annual Meeting when submitting your proxy card by checking the box under the caption “Meeting Attendance” on the proxy card. If you are not a record holder, or if you are a record holder and have not submitted your proxy card or did not indicate on your submitted proxy card that you plan to attend the Annual Meeting, please contact the office of the Corporate Secretary at Hexcel Corporation, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, Connecticut 06901; facsimile number (203) 358-3972 to request an admission ticket. If you do not have an admission ticket, you must present proof of ownership in order to be admitted to the Annual Meeting. All stockholders attending the Annual Meeting must also present a valid government-issued photo identification, such as a driver’s license or passport, to gain entry to the Annual Meeting. Cameras, recording devices and other electronic devices are not permitted at the Annual Meeting. You may contact Morrow Sodali LLC at (800) 607-0088 to obtain directions to the site of the Annual Meeting. The doors to the meeting will open at 10:00 a.m. local time and the meeting will begin at 10:30 a.m. local time.

How does the board of directors recommend that I vote?

The board recommends that you vote:

n	FORthe election of the nine director nominees;
n	FORthe approval, on an advisory basis, of the company’s 2018 executive compensation;
n	FORthe approval of an amendment to the Hexcel Corporation 2013 Incentive Stock Plan; and
n	FORthe ratification of Ernst & Young LLP as our independent registered public accounting firm for 2019.

What if I return my proxy card but do not vote for all of the proposals?

All shares that are represented by a properly completed proxy card that we receive in time to be voted will be voted at the Annual Meeting. The persons designated on the proxy card as “proxies” (the “proxy holders”) will vote all shares covered by the proxy card in accordance with your instructions on the proxy card. If no instructions are given, the proxy holders will vote the shares in accordance with the board’s recommendations.

If any other matter properly comes before the Annual Meeting, the proxy holders will vote the shares in their discretion. If any director nominee becomes unavailable for election for any reason prior to the vote at the Annual Meeting, the board may reduce the number of directors to be elected or substitute another person as nominee, in which case the proxy holders will vote for the substitute nominee.

What is a “broker non-vote”?

A broker non-vote occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner. Under New York Stock Exchange (“NYSE”) rules, brokers are not permitted to vote on the election of directors, the advisory vote on the compensation of our named executive officers or the amendment to the Hexcel Corporation 2013 Incentive Stock Plan; therefore, if your shares are held by a broker, you must provide voting instructions if you want your broker to vote on these matters.

Can I vote by telephone or over the internet?

If you are a record holder, you can vote by returning a signed proxy card, providing instructions as to how your shares will be voted, or vote by ballot at the Annual Meeting. Telephone and internet voting is not available for record holders. If you are a beneficial owner, you should receive material from your broker, bank or other nominee asking you for instructions on how you want them to vote your shares. If the firm offers internet or telephone voting, the voting instruction form should contain instructions on how to vote using one of those methods.

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HEXCEL CORPORATION  |  2019 Proxy Statement

2019 PROXY STATEMENT SUMMARY

How do I revoke a proxy?

If you are a record holder and have provided a proxy, you may revoke it at any time prior to the Annual Meeting by:

n	mailing a revocation to our Corporate Secretary at Hexcel Corporation, Attention: Corporate Secretary, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, Connecticut 06901, with a later date than the date of any proxy you previously provided, so long as the revocation is received by our Corporate Secretary prior to the Annual Meeting;
n	submitting another properly completed proxy dated later than the date of any proxy you previously provided, so long as it is received by our Corporate Secretary prior to the Annual Meeting;
n	filing a written revocation at the Annual Meeting with our Corporate Secretary; or
n	casting a ballot at the Annual Meeting.

If you are a beneficial owner, you should contact your broker, bank, or other nominee for instructions on how to revoke your proxy or change your vote. If you are an employee stockholder who holds shares through one of our benefit plans, you should contact the trustee or custodian for instructions on how to revoke your proxy or change your vote.

What are the quorum and vote requirements?

A quorum of stockholders is necessary to hold a valid Annual Meeting. A quorum will exist if a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting are present in person or by proxy at the Annual Meeting. As of the record date, March 13, 2019, 84,868,544 shares of common stock were issued and outstanding. The holders of 42,434,273 shares will constitute a quorum at the meeting.

The following table indicates the vote required for approval of each matter to be presented to the stockholders at the Annual Meeting and the effect of abstentions and broker non-votes.

		Required Vote		Effect of Votes, Abstentions and Broker Non-Votes
Proposal 1 — Elect nine directors		Number of votes cast “for” the nominee must exceed the number of votes cast “against” that nominee.		Abstentions and broker non-votes will have noeffect on the voting for this matter.
Proposal 2 — Approve, on an advisorybasis, 2018 executivecompensation		Affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to vote.		Abstentions will have the effect of a vote“against.” Broker non-votes will have no effecton the voting for this matter.
Proposal 3 — Approve an amendmentto the Hexcel Corporation2013 Incentive Stock Plan		Affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to vote.		Abstentions will have the effect of a vote“against.” Broker non-votes will have no effecton the voting for this matter.
Proposal 4 — Ratify the appointment ofErnst & Young LLP as independent registered public accounting firm for 2019		Affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to vote.		Abstentions will have the effect of a vote“against.” There should be no broker non-votessince brokers are permitted to vote on thisproposal, even if they have not received votinginstructions from the beneficial owners.

How may the company solicit my proxy?

We will pay all costs of preparing, assembling, printing and distributing the proxy materials. We have retained Morrow Sodali LLC, 470 West Avenue, Stamford, Connecticut 06902, to assist in soliciting proxies for a fee of approximately $10,000, plus reasonable out-of-pocket expenses. Our employees may solicit proxies on behalf of our board through the mail, in person, by telephone or by other forms of electronic communication, without additional compensation. We will reimburse brokers, banks and other nominees who hold shares of

common stock in their names for the expenses of furnishing proxy materials to beneficial owners of the shares.

How will the votes at the Annual Meeting be tabulated?

At the Annual Meeting, Morrow Sodali will count the votes.tabulate all votes cast in person or by proxy. Its officers or employees will serve as inspectors of election.

PROPOSAL 1—ELECTION OF DIRECTORS

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2019 PROXY STATEMENT SUMMARY

Where will I find the voting results on the proposals presented at the Annual Meeting?

We intend to announce the preliminary voting results at the Annual Meeting. We will publish the final voting results in a Current Report on Form 8-K that we will file with the U.S. Securities and Exchange Commission (“SEC”), generally within four business days following the Annual Meeting.

Several stockholders live at my address. Why did we receive only one set of proxy materials?

We typically deliver only one annual report and one proxy statement to multiple stockholders at the same address, unless we have received contrary instructions from one or more of the stockholders. We will, upon written or oral request, promptly deliver a separate copy of the annual report or proxy statement to a stockholder at a shared address to which a single copy of the annual report or proxy statement was delivered. Record holders who wish to receive a separate annual report or proxy statement in the future, or record holders sharing an address who wish to receive a single copy of the annual report or proxy statement in the future, should notify our company’s Corporate Secretary at Hexcel Corporation, Attention: Corporate Secretary, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, Connecticut 06901. Beneficial owners who have the same address and wish to receive a separate copy of the annual report or proxy statement in the future should contact their broker, bank, or other nominee.

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HEXCEL CORPORATION  |  2019 Proxy Statement

At the 2017 annual meeting, tenAnnual Meeting, nine directors will be elected to hold office until the 2018 annual meeting2020 Annual Meeting of Stockholders and until their successors are duly elected and qualified. All nominees identified in this proxy statement for election to the board are currently serving as directors of the company.

Shares represented by an executed and returned proxy card will be voted for the election of each of the ten nominees recommended by the board, unless the proxy is marked against any nominee. If any nominee for any reason is unable to serve, the shares of common stock represented by the proxy card may, at the board’s discretion, be voted for an alternate person that the board nominates. We are not aware of any nominee who will be unable to or will not serve as a director. Each of the nominees has consented to being named in this proxy statement and to serve if elected.

Majority Voting Standard for Election of Directors

Our Amended and Restated Bylaws provide for a majority voting standard for the election of directors in uncontested elections. Under this standard, which will apply to the election of directors at the Annual Meeting, a director nominee will be elected only if the number of votes cast “for” that nominee exceeds the number of votes cast “against” that nominee. Brokernon-votes and abstentions will be disregarded and will have no effect on the outcome of the vote. EachIf a nominee who currently is serving as a director is not re-elected, Delaware law provides that the director will continue to serve on the board. However, each incumbent director nominee standing for re-election must submit an irrevocable resignation in advance of the stockholder vote regarding the election of directors. This addresses the situation in which there is a “holdover” director who has not received the required number of votes forre-election, but who, in accordance with Delaware law, remains on the board until his or her successor is elected

and qualified. The resignation is contingent upon both the nomineedirector not receiving the required vote forre-election and the board’s acceptance of the resignation, which the board, in its discretion, may reject if it deems such rejection to be in the best interest of the company.

Prior to the board’s determination to accept or reject the resignation, the nominating and corporate governance committee, composed entirely of independent directors, will make a recommendation to the board with respect to the tendered resignation. In its review, the committee will consider those factors deemed relevant to the determination, and whether the director’s resignation from the board would be in the best interest of the company and our stockholders.

The board must take action on the committee’s recommendation within 90 days following the meeting at which the election of directors occurred. An incumbent director whose resignation is the subject of the board’s determination is not permitted to participate in the deliberations or recommendationvotes of the committee or the board regarding the acceptance of the resignation.

In the case of contested elections (a situation in which the number of nominees exceeds the number of directors to be elected)elected, which is not the case with respect to the election of directors at the Annual Meeting), a plurality voting standard will apply.

HEXCEL CORPORATION  |  2019 Proxy Statement

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PROPOSAL 1—Election of Directors

Information Regarding the Directors

All but one of our current directors have been nominated forre-election to the board. Dr. David HillL. Pugh has not been nominated forre-election because he has reached the age of 70 and, as stated in our corporate governance guidelines, it is no longer eligible to serve onour general policy that a director who has attained the board. Asage of 70 will not be nominated for re-election. Effective as of the date of the Annual Meeting, the number of directors will be reduced to ten.nine. The nominating and corporate governance committee considered the following attributes to concludein connection with its determination that our current directors other than Mr. Hill should continue to serve on our board: extensive familiarity with large-scale operations; industry expertise and professional relationships; the ability to utilize extensive past experience in management, finance, technology, and operations, and other areas to address issues we face on a recurring basis; collegiality and the ability to work together as a group; outstanding integrity and business judgment; and the ability to ask probing questions during board discussions and to carefully scrutinize significant business, financing and other proposals suggested by management. In addition to these factors, the committee also considered the respective attributes below:with respect to each nominee that are listed below that nominee’s biographical information:

2

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PROPOSAL 1—Election of our finance committee and has made him a key contributor to refinancing and capital structure discussions since joining the board.Directors

HEXCEL CORPORATION  |  2019 Proxy Statement

3

PROPOSAL 1—Election of Directors

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HEXCEL CORPORATION  |  2019 Proxy Statement

PROPOSAL 1—Election of Woodward, a NASDAQ-listed company, includes extensive operations and marketing experience in the aerospace and wind power industries. Woodward’s global aircraft and wind turbine controls business enables Mr. Gendron to provide the board with insight as to the aerospace and wind power industries, and offer guidance on the development of marketing strategies. In addition, Mr. Gendron’s significant manufacturing management experience makes him well-suited to advise our operations team. His experience evaluating compensation programs as a CEO led to his appointment as chair of the compensation committee in 2016.Directors

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PROPOSAL 1—Election of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.

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PROPOSAL 1—Election of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR

ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR

Independence of Directors

We currently have ten independent directors out of eleven directors.

Our board affirmatively determined that each director nominee, other than our Chief Executive Officer and President, Mr. Stanage, meetsis independent within the NYSE director independence requirements.meaning of the listing standards of the NYSE. In making these determinations ouraddition, the board considered whether a director has a “material relationship” with us as contemplated bydetermined that the members of the audit committee, compensation committee and nominating and corporate governance committee are independent within the meaning of the NYSE listing standards. Onenon-employee director has a relationship with us other than as a directorstandards, and that members of Hexcel.the audit and compensation committees meet the additional independence requirements of the NYSE applicable to audit committee and compensation committee members. In making its independence determinations, the board considered the following: Ms. Brubaker is a non-employee director of a private aerospace company that is our customer. In determining thatcustomer; Ms. Brubaker did not haveand Dr. Graves are both non-employee directors of a material relationship with us,company that is our supplier; Mr. Campbell is a non-employee director of a company that provides consulting services to us; and thus was independent, our board considered,Mr. Hachey is a non-employee director of a company that is both a customer and a supplier of ours. After considering, among other things, theour sales to this private aerospaceeach company that is a customer as a percentage of our total sales, our purchases of goods or services from each company that is a supplier or service provider as well asa percentage of such company’s total sales (or projected sales for 2018), and the fact that Ms. Brubaker, isMr. Campbell, Dr. Graves and Mr. Hachey are not an employeeemployed by the companies referenced above, the board concluded that our relationships with these companies do not impair Ms. Brubaker’s, Dr. Graves’, Mr. Campbell’s or Mr. Hachey’s independence. In making the independence determination with respect to Dr. Graves and Ms. Suever, the board considered that they are executive officers of this private aerospace company and doescompanies that are our suppliers. After considering, among other things, thede minimisamount of purchases we made from these companies as a percentage of their respective total sales, the board concluded that our relationships with these companies do not have any significant directimpair Dr. Graves’ or indirect pecuniary interest in the business relationship between us and this private aerospace company.Ms. Suever’s independence.

Meetings and Standing Committees of the Board of Directors

General

During 20162018, there were fivenine meetings of the board, and 2118 meetings and six actions by written consent in the aggregate of the four standing committees of the board. Each of the incumbent directors who served on the board and its committees during 20162018 attended or participated in at least 75% of the aggregate number of board meetings and applicable committee meetings held during 2016.2018. A director is expected to regularly attend and participate in meetings of the board and of committees on which the director serves, and to attend the annual meeting of stockholders. Each of the incumbent directors other than Mr. Foster attended the last annual meeting of stockholders.

The board has established the following standing committees: audit committee; compensation committee; finance committee; and nominating and corporate governance committee. The board may establish other special or standing committees from time to time. Members of committees serve at the discretion of the board. Each of our four standing committees operates under a charter adopted by the board. The charter for each committee except the finance committee requires that all members be independent as required by NYSE listing standards. The charter of the finance committee prohibits the committee from taking any action that is required by NYSE rules to be taken by a committee composed entirely of independent directors, unless the finance committee is composed entirely of independent directors. The finance committee is currently composed entirely of independent directors. Our board has also adopted a set of corporate governance guidelines. All committee charters and the corporate governance guidelines can be viewed onare available through the investor relations sectionInvestor Relations page of our website,www.hexcel.com,, under “Corporate Governance.” You may obtain a copy of any of these documents, free of charge, by directing your request to Hexcel Corporation, Attention: Vice President, Investor Relations, Manager, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, CT 06901, telephone(203) 352-6826.

Connecticut 06901; or via email at InvestorRelations@Hexcel.com.

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PROPOSAL 1—Election of Directors

The table below provides information regarding the current membership of each standing board committee and meetingthe number of meetings held during fiscal year 2016:2018:

 

Name

Audit

Compensation

Nominating and Corporate Governance

Finance

Audit

Compensation

Nominating and Corporate Governance

Finance

Joel S. Beckman

Ö

Chair

n

Chair

Lynn Brubaker

Ö

Chair

n

Chair

Jeffrey C. Campbell

Chair

Chair

n

Cynthia M. Egnotovich

Ö

n

W. Kim Foster

Ö

Ö

Thomas A. Gendron

Chair

Ö

Chair

n

Jeffrey A. Graves

Ö

Ö

n

n

Guy C. Hachey

Ö

n

David C. Hill

Ö

Ö

David L. Pugh

Ö

Ö

n

Catherine A. Suever

n

Number of Meetings

8

6

4

3

8

6

2

Actions by Written Consent

1

—

1

4

—

2

3

4

Audit Committee

The audit committee assists with the board’sboard in its oversight of the integrity of our financial statements, our exposure to risk and mitigation of those risks, our compliance with legal and regulatory requirements, our independent registered public accounting firm’s qualifications, independence and performance, and our internal audit function. Additional information regarding the audit committee, including additional detail about the functions performed by the audit committee, is set forth in the Audit Committee Report included on page 6364 of this proxy statement.

All members of our audit committee meet the financial literacy requirements of the NYSE and at least one member has accounting or related financial management expertise as required by the NYSE. In addition, our board has determined that Jeffrey C. Campbell isand Catherine A. Suever are each an audit“audit committee financial expertexpert” under SEC rules.

The audit committee has adopted procedures for the receipt, retention and handling of concernscomplaints regarding accounting, internal accounting controls and auditing matters by employees, stockholders or other persons. Any person with such a concerncomplaint should report it to the board as set forth under “Contacting the Board” on page 15.11. The audit committee has also adopted procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

The audit committee has established policies and procedures for thepre-approval of all services provided by our independent registered public accounting firm. These policies and procedures are described on page 65 of this proxy statement.

Finance Committee

The finance committee provides guidance to the board and management on significant financialfinance matters, including the company’s capital structure, credit facilities, equity and debt issuances, acquisitions, divestitures, liquidity, dividends and share repurchases, and insurance coverage.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee regularly seeks input from the board regarding the skills and attributes it believes new nominees should possess in order to strengthen the board; identifies and recommends to the board individuals qualified to serve as directors and on committees of the board; advises the

board with respect to board and committee procedures; develops and recommends to the board, and reviews periodically, our corporate governance principles; and oversees the evaluation of the board, the committees of the board and management. The nominating and corporate governance committee evaluates the board’s and each committee’s performance at least annually. In addition, eachthe nominating and corporate governance committee, in collaboration with the lead director, conducts an annual self-evaluation and we also conduct a peer review of individual directors every other year. The nominating and corporate governance committee has independent authority to select and retain anya search firm to assist it in identifying qualified candidates for board membership, and has the sole authority to approve the search firm’s fees and terms of engagement.

The

Under the charter of the nominating and corporate governance committee believes that each nomineeand our corporate governance guidelines, the nominating and corporate governance committee is responsible for assessing the appropriate balance of criteria required of board members and, in considering potential director should demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution tocandidates, will consider, among other things, the board’s supervisionbackground and oversightqualifications of our business and affairs. The committee also considers the following when selecting candidates for recommendation to the board: broad businesspotential director candidate, including knowledge,

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PROPOSAL 1—Election of Directors

experience, professional relationships, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, potential conflicts of interest and such other factors that the nominating and corporate governance committee considers appropriate in the context of the needs or stated requirements of the board.

We do not have a formal policy with regard to consideration of diversity in identifying director nominees. However, both the charter of the nominating and corporate governance committee and our corporate governance guidelines list diversity as one of many attributes and criteria that the committee will consider when identifying and recruiting candidates to fill positions on the board. Our corporate governance guidelines also state that our board should generally have no fewer than ten directors to permit diversity of experience. The committee considers a broad range of diversity, including diversity with respect to experience, skill set, areas of expertise and professional background, as well as race, gender and national origin. Our informal policy regarding consideration of diversity is implemented through discussions among the committee members, and by the committee with our outside search firm and with senior management. The committee assesses the effectiveness of this policy through its annual self-evaluation, a report of which is delivered to the board. Every board candidate search undertaken by us includes diversity as a desired attribute for the candidate.

The nominating and corporate governance committee will consider director candidates recommended by stockholders, as well as by other sources including ournon-management directors, our chief executive officer, and other executive officers. In considering candidates submitted by stockholders, the committee will take into consideration the needs of the board and the qualifications of the candidate. The company’s policy oncandidate, according to the consideration of all director candidates, regardless of source, iscriteria set forth in the charter of the nominating and corporate governance committee.above. To have a candidate considered by the committee, a stockholder must submit the recommendation in writing to our corporate secretarythe Corporate Secretary at the address listed below under “Contacting the Board” so that it is received at least 120 days prior to the anniversary date of our prior year’s annual meeting of stockholders. The stockholder must supply the following information with his or her recommendation:

 

The name and record address of the stockholder and evidence of the stockholder’s ownership of Hexcel stock, including the class and number of shares owned of record or beneficially by the stockholder or any of its affiliates or associates (and any other direct or indirect pecuniary or economic interest in Hexcel stock, such as any derivative instrument, swap, option, warrant, short interest, hedge or profit sharing arrangement) and the length of time the interest in the shares have been held

n	The name and record address of the stockholder and evidence of the stockholder’s ownership of Hexcel stock; and
n	The name, age, business address and residence address of the candidate, a listing of the candidate’s qualifications to be a director, and the candidate’s consent to be named as a director if selected by the committee and nominated by the board.

In connection with its evaluation, the nominating and corporate governance committee may request additional information from the candidate a listing ofor the candidate’s qualifications to be a director, and the person’s consent to be named as a director if selected by the committee and nominated by the board

An advance irrevocable resignation letter providing for the contingent resignation of the candidate in the event that the candidate is elected to the board and subsequently becomes a holdover director

The candidate’s written representation and agreement that the candidate (1) would be in compliance, if elected as a director of Hexcel, and will comply with, all applicable publicly disclosed confidentiality, corporate governance, conflict of interest, Regulation FD, code of conduct and ethics, and stock ownership and trading policies and guidelines of Hexcel, (2) is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how the candidate, if elected as a director of Hexcel, will act or vote on any issue or question that has not been disclosed to Hexcel in the representation and agreement, and (3) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than Hexcel with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director of Hexcel without disclosing to Hexcel such agreement, arrangement or understanding

Any information about the stockholder and the candidate which would be required to be disclosed in a proxy statement or other filing relating to the election of directors

A representation that the stockholder intends to appear in person at the annual meeting to nominate the candidate

Any material interest of the stockholder or any of its affiliates or associates relating to the nomination of the candidate, including a description of all arrangements or understandings between the stockholder and the candidate

Whether any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares) has been made by or on behalf of the stockholder or any of its affiliates or associates, the effect or intent of which is to mitigate loss to, or manage risk or benefit of share price changes for, the stockholder or any of its affiliates or associates or to increase or decrease the voting power or pecuniary or economic interest of the stockholder or any of its affiliates or associates with respect to Hexcel’s capital stock

A description of all arrangements or understandings between the stockholder or any of its affiliates or associates and any other person, naming such other person, relating to the recommendation of such candidate

recommending stockholder. The committee’s evaluation process does not vary based on whether or not a candidate is recommended by a stockholder, although the board may take into consideration the number of shares held by a recommending stockholder and the length of time that such shares have been held. No stockholder recommendations were made for this Annual Meeting.stockholder.

Compensation Committee

The compensation committee defines the goals ofarticulates our compensation policy and principles, reviews and approves our compensation programs, including director compensation, and oversees our benefit plans. In this capacity,regard, the compensation committee oversees the administration of our incentive plans and may make grants, for example, ofnon-qualified stock options (“NQOs”), restricted stock units (“RSUs”) and performance-based share awards (“PSAs”) to executive officers, other key employees, directors and consultants.consultants; any such grants to Mr. Stanage are subject to the approval of our independent directors.

Additional information regarding the compensation committee, including additional detail about the objectives, policies processes and procedures of theprinciples regarding our compensation committee,program, and information with regard toconcerning the compensation consultant retained by the compensation committee (including a description of services provided by the consultant), is set forth in Compensationunder “Compensation Discussion and AnalysisAnalysis” beginning on page 2217 of this proxy statement.

Board Leadership Structure

As stated in our Corporate Governance Guidelines,corporate governance guidelines, we do not require separation of the offices of the Chairman of the Board and Chief Executive Officer. The board believes that it is appropriate for Mr. Stanage to hold both offices because the combined role enables decisive leadership and clear accountability and enhances our ability to communicate our strategy clearly and consistently to stockholders and other key constituencies, such as our employees and key customers and suppliers. We also believe we have in place sound counter-balancing mechanisms to ensureadditional board structure and oversight attributes that we maintain the highest standardsfacilitate our maintenance of a high standard of corporate governance and effective accountability of the CEO to the board, including the following:

 

n	Each of the other directors on the board is independent;
n	The board has named a lead director, whose responsibilities are described below;

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9

EachPROPOSAL 1—Election of the other directors on the board is independentDirectors

 

The board has named a lead director, whose responsibilities are described in detail below

n	Mr. Stanage’s performance and compensation is reviewed, and his compensation is recommended, by the compensation committee, subject to approval by the independent directors as a group;
n	The independent directors meet regularly in executive sessions without management; and
n	The board regularly reviews performance, management development and succession plans for executive positions.

 

Mr. Stanage’s performance and compensation is reviewed, and Mr. Stanage’s compensation is set, by the compensation committee, with formal oversight by the independent directors as a group

The independent directors meet regularly in executive sessions without management

The board regularly reviews performance, management development and succession plans for executive positions.

Our bylawsBylaws dictate that if the chairmanChairman of the board is independent, then the chairman will be the lead director or, if the chairmanBoard is not independent, as is the case with Mr. Stanage, then the independent directors are required to designate an independent board member to serve as lead director. The independent directors have designated Mr. FosterCampbell to serve as lead director. Mr. Foster has theIn addition to his authority to call a meeting of the independent directors, in addition toMr. Campbell has the responsibilities listed below:

 

Oversees the flow of information to the board

n	Oversees the flow of information to the board;
n	Determines the annual master agenda for board meetings with input from management and other directors;
n	Collaborates with the CEO to ensure that information and materials that are important to the board’s understanding of agenda items are sufficient in scope;
n	Oversees the board’s performance evaluations of the CEO and provides feedback directly to the CEO;
n	Collaborates with the nominating and corporate governance committee to conduct peer reviews of individual directors as part of the board’s evaluation process;
n	Chairs executive sessions of the board and meets with the CEO to discuss matters of board concern; and
n	Collaborates with the nominating and corporate governance committee in monitoring the composition and structure of the board.

 

Determines the annual master agenda for board meetings with input from management and other directors

Collaborates with the CEO to assure that information and materials that are important to the board’s understanding of agenda items are sufficient in scope

Oversees the board’s performance evaluations of the CEO and provides feedback directly to the CEO

Conducts peer reviews of individual directors as part of the board’s evaluation process

Chairs executive sessions of the board and meets with the CEO to discuss matters of board concern

Collaborates with the nominating and corporate governance committee in monitoring the composition and structure of the board

Under our corporate governance guidelines, the independent directors are required to meet as a board in executive session, without management, a minimum ofat each regularly scheduled, in person board meeting, but no less than two times a year, but normally do so at every regular board meeting.

year.

Risk Oversight

The board is responsible foractively involved in overseeing our risk management. Twice annually,The board, and each committee, regularly consider potential risks. In addition, we have an active enterprise risk management program, which is designed to measure, manage and aggregate risks on an enterprise-wide basis, and provides a systematic approach to risk assessment and mitigation. Under the enterprise risk management program, management identifies various risks facing the company and assesses such risks, taking into account the likelihood of occurrence and potential impact. Management is responsible for developing an action plan to eliminate, mitigate or monitor such risks. Management makes regular presentations to the board, no fewer than two times per year (and more frequently if circumstances warrant), regarding material risks facing the company, including internal risks related to our operations, strategy, financial condition, and employees, and external risks related to our markets, geographic locations, cybersecurity, regulatory environment, and macroeconomic outlook. At these meetings, the board discusses enterprise riskand reviews these risks, helps management definingdefine key risk and business continuity indicators, and stepsdetermines what, if any, additional actions should be taken to reduce identified risks, including risks related to manufacturing, technology and IT security.mitigate these risks. In addition, specificeach board committees arecommittee is responsible for overseeing specific types of risk. OurThe audit committee periodically reviews our currency exchange and hedging policies, tax exposures and our processes to ensure compliance with laws and regulations, and also reviews reports from our anonymous hotline that employees and third parties can use to report suspected violations of our Code of Business Conduct. The audit committee also regularly meets in executive sessionssession without management present with our outsourced internal audit firm and our independent registered public accounting firm to discuss areas of concern of which the board should be aware.concern. The finance committee addresses significant financing matters such as our capital structure, credit facilities, equity and debt issuances, acquisitions, divestitures, liquidity, dividends and share repurchases, and insurance programs.coverage. Our compensation committee establishes compensation policies and programs that do not incentivizeare designed to prevent incentivizing executives and employees to take on an inappropriate level of risk, as discussed under “The Process for Setting Compensation—Compensation Risk Oversight” on page 28 of this proxy statement.risk. The nominating and corporate governance committee is responsible for making recommendations to the board regarding succession planning for senior leadership positions. Each of our board committees delivers a report to the board, no later than the next scheduled board meeting, regarding matters considered at committee meetings that have taken place since the lastprevious board meeting.

Our senior management meets periodically with our functional leadership teams to discuss and review the risks that exist in connection with our business. Management makes regular presentations to the board, no fewer than two times per year (and more frequently if circumstances warrant), regarding all types

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HEXCEL CORPORATION  |  2019 Proxy Statement

PROPOSAL 1—Election of material risks facing the company. At these meetings the board discusses and reviews these risks and determines what, if any, new actions should be taken to mitigate these risks.Directors

Succession Planning

At least annually, the board engages in a review of management developmentaldevelopment and succession planning to assess leadership development programsorganizational and organizationalleadership effectiveness, and conductsin-depth discussions regarding specific succession and contingency planning for all key senior leadership positions.

Contacting the Board

Stockholders and other interested parties may contact thenon-management members of the board or the lead director by sending their concerns to: Board of Directors, c/o Corporate Secretary, Hexcel Corporation, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, CTConnecticut 06901; facsimile number(203) 358-3972. The corporate secretaryCorporate Secretary will review all communications and forward them to the lead director. The corporate secretaryCorporate Secretary may, however, filter out communications that do not relate to our business activities, operations or our public disclosures, but will maintain a record of these communications and make them available to the lead director. Any communications received by the lead director regarding concerns relating to accounting, internal accounting controls or auditing matters will promptly be immediately brought to the attention of the audit committee and will be handled in accordance with the procedures established by the audit committee to address these matters.

Code of Business Conduct

It is our policy that all of our directors, officers directors and employees worldwide conduct our business in an honest and ethical manner and in compliance with all applicable laws and regulations. Our board has adopted the Hexcel Code of Business Conduct, in order to clarify, disseminate and enforce this policy. The Codewhich applies to all of our directors, officers directors and employees worldwide, includingand addresses in detail our chief executive officer, chief financial officer and controller.expectations with regard to conduct that fulfills our policy. The Code can be viewed on the investor relationsInvestor Relations section of our website,www.hexcel.com,, under “Corporate Governance.” In addition, you may obtain a free copy of the Code by directing your request to

Hexcel Corporation, Attention: Vice President, Investor Relations, Manager, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, CT 06901, telephone(203) 352-6826.Connecticut 06901; or via email at InvestorRelations@Hexcel.com. Any amendment to the Code of Business Conduct (other than technical, administrative ornon-substantive amendments), or any waiver of a provision of the Code that applies to our directors or executive officers, will be promptly disclosed on the investor relationsInvestor Relations section of our website under “Corporate Governance.”

Director Compensation in 20162018

Ournon-employee director compensation program is comprised of a mix of cash and stock-based compensation designed to attract and retain qualified candidates to serve on our board. In May 2016,2018, the compensation committee performed its annual review of the director compensation program compared with survey data from the National Association of Corporate Directors. The review indicated that our director compensation remaineddirectors were compensated at competitive with compensationlevels for other similarly sized firms. The compensation committee therefore recommended no changes in 2016 to the annual director compensation.companies of our size.

Annualnon-employee director cash compensation consists of a retainer of $58,000$73,000 plus:

 

$25,000 for the lead director

$12,500 for the audit committee chair

$7,500 for the compensation committee chair

n	$25,000 for the lead director
n	$10,000 for each member of the audit committee
n	$7,500 for each member of the compensation committee
n	$5,000 for each member of the nominating and corporate governance committee and the finance committee

Each of the nominating and corporate governance committee and the finance committee chairs receives the following additional annual compensation:

 

n	$12,500 for the audit committee chair
n	$7,500 for the compensation committee chair
n	$5,000 for each of the nominating and corporate governance committee and the finance committee chairs

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11

$10,000 forPROPOSAL 1—Election of Directors

Under our non-employee director compensation program, each membernon-employee director is permitted to elect to receive RSUs in lieu of the audit committee (including the chair of the committee)

$7,500 for each member of the compensation committee (including the chair of the committee)

$5,000 for each member of the nominating and corporate governance committee and the finance committee (including the chairs of the committees)

Upontheir annual cash retainer to which they are entitled. In addition, upon initial election to the board and on eachre-election thereafter, eachnon-employee director receives a grant of RSUs in an amount determined by the compensation committee as guided byfollowing its receipt of the advice of its independent compensation consultant and its consideration of other relevant factors. The target grant date value of RSUs issued to directors in 20162018 was $105,000. TheNon-employee director RSUs vest daily over the twelve months following the date of grant and convert into an equalequivalent number of shares of our common stock on the first anniversary of grant unless the director elects to defer conversion and delivery of the shares underlying the RSUs until termination of service as a director.

In addition to the annual compensation described above, if a special committee is designated by the board, eachnon-employee director of thatwho serves on the special committee receives $1,000 for attendance at anyeach meeting of that committee.attended.

Our stock ownership guidelines, which are described on page 39,33, apply tonon-employee directors, as well as executive officers. All of ournon-employee directors, except Ms. Suever, who was elected as a director in May 2018, are in full compliance with the policy, except for Mr. Hachey and Ms. Egnotovich who were elected to the board in October 2014 and January 2015, respectively.

guidelines.

The table below summarizes the compensation paid by the company tonon-employee directors for the fiscal year ended December 31, 2016.2018.

 

Name		Fees Earned or       Paid in Cash ($)				Stock Awards           ($)(1)(2)				Total       ($)
Joel S. Beckman			73,000				104,999				177,999
Lynn Brubaker			78,000				104,999				182,999
Jeffrey C. Campbell			80,500				104,999				185,499
Cynthia M. Egnotovich			68,000				104,999				172,999
W. Kim Foster			95,500				104,999				200,499
Thomas A. Gendron			75,421				104,999				180,420
Jeffrey A. Graves			68,000				104,999				172,999
Guy C. Hachey			65,500				104,999				170,499
David C. Hill			73,000				104,999				177,999
David. L. Pugh			71,360				104,999				176,359

Name	Fees Earned or Paid in Cash ($)(1)	Stock Awards ($)(2)(3)	Total ($)
Joel S. Beckman	88,000	104,983	192,983
Lynn Brubaker	93,000	104,983	197,983
Jeffrey C. Campbell	107,644	104,983	212,627
Cynthia M. Egnotovich	83,000	104,983	187,983
W. Kim Foster(4)	84,685	104,983	189,668
Thomas A. Gendron	93,000	104,983	197,983
Jeffrey A. Graves	85,421	104,983	190,404
Guy C. Hachey	80,493	104,983	185,476
David. L. Pugh(5)	85,500	104,983	190,483
Catherine A. Suever	54,917	104,983	159,900

(1)

The amounts in this column represent the fees that were earned or paid in cash plus the grant date fair value of each RSURSUs granted to directors on MayMr. Foster and Dr. Graves, who each elected to receive RSUs in lieu of their annual cash retainer for 2018. On January 5, 20162018, April 13, 2018, and July 6, 2018, Mr. Foster and Dr. Graves were each issued 289, 282 and 272 RSUs in lieu of their quarterly annual retainer payment, respectively, having a grant date fair value of $63.02, $64.68 and $67.03, respectively. On October 12, 2018, Dr. Graves was $44.08,issued 299 RSUs in lieu of his quarterly annual retainer payment having a grant date fair value of $60.99. The foregoing grant date fair values were computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation – Stock Compensation” (“FASB ASC Topic 718. This amount does718”). The amounts do not correspond to the actual value that will be realized by a director. For additional information regarding the assumptions made in calculating these amounts, see Note 10,12, “Stock-Based Compensation,” to the consolidated financial statements included in our Annual Report on Form10-K for the year ended December 31, 2016.

(2)	As of December 31, 2016, ournon-employee directors had RSUs outstanding as follows:

				2018.
Number(2)	The grant date fair value of       Outstanding       RSUs(a)(b) each RSU granted to directors on May 3, 2018 was $65.82, computed in accordance with FASB ASC Topic 718.
Joel S. Beckman (3)			33,908.48(c)
Lynn Brubaker			2,393.46
Jeffrey C. Campbell			35,411.48
Cynthia M. Egnotovich			7,181.09
W. Kim Foster			25,515.46
Thomas A. Gendron			20,823.48
Jeffrey A. Graves			30,147.48
Guy C. Hachey			7,384.75
David C. Hill			16,369.46
David L. Pugh			33,659.48

(a)	As of December 31, 2018, each of our non-employee directors held 1,605.23 RSUs that were not yet eligible for conversion, excluding RSUs that a director elected to receive in lieu of the director’s annual cash retainer as disclosed in footnote 1 above, and RSUs for which a director has elected to defer conversion and delivery until termination of his or her service with the board. These RSUs include RSUs provided as dividend equivalents that are accrued with respect to outstanding RSUs when we pay cash or stock dividends to our stockholders, and convert into shares of our common stock when the underlying RSUs to which they relate are converted (excluding fractional RSUs, which are cancelled). All RSUs granted prior to the 20162018 annual meeting have either been converted into common stock or are vested. Vested RSUs remain outstanding if thesubject to a director has electedelection to defer their conversion into shares of Hexcel common stock until such time as the director ceases to be a member of the board.conversion. Each director (other than Ms. Brubaker, Mr. Foster and Dr. Hill)Ms. Suever) elected to defer conversion and delivery of common stock underlying the conversionRSUs granted in 2018 until termination of his or her RSUs granted in 2016.service as a director.
(4)	Mr. Foster retired as a member of the board of directors, effective July 26, 2018.
(5)	Mr. Pugh is not standing for re-election at the Annual Meeting.

 

(b)

Includes dividend equivalents accrued on outstanding RSUs during 2016. Earned dividends are accrued as additional units on the underlying RSUs and are distributed when the underlying award is distributed. Only awards made in 2014 or later are entitled to be credited with dividend equivalents.12

HEXCEL CORPORATION  |  2019 Proxy Statement

 

(c)	Includes 1,590 RSUs held for the benefit of Greenbriar Equity Group LLC. Mr. Beckman disclaims beneficial ownership of these RSUs.Executive Officers

EXECUTIVE OFFICERS

Set forth below is certain information concerning each of our executive officers in 2016.officers. For additional information concerning Mr. Stanage, see “PROPOSAL 1—ELECTION OF DIRECTORS—Information Regarding the Directors” on page 5.

In 2016, we evaluated our leadership team in light of the significant increase in the size and scope of our operations, and determined that the duties and responsibilities of certain positions had increased over time. To reflect this, we appointed Messrs. Canario, Merlot and Swords as executive officers.2.

 

														Executive
														Officer
Name		Age on March 17, 2017				Executive Officer Since				Position(s) With Hexcel		Age		Since		Position(s) With Hexcel
Nick L. Stanage			58				2009			Chairman of the Board; Chief Executive Officer; President; Director		60		2009		Chairman of the Board; Chief Executive Officer; President; Director
Wayne C. Pensky			61				2007			Executive Vice President; Chief Financial Officer
Gail E. Lehman*			57				2017			Executive Vice President; General Counsel; Secretary
Ira J. Krakower**			76				1996			Special Counsel to the Chief Executive Officer
Patrick J. Winterlich												49		2017		Executive Vice President; Chief Financial Officer
Gail E. Lehman												59		2017		Executive Vice President; General Counsel; Secretary
Robert G. Hennemuth			61				2006			Executive Vice President, Human Resources		63		2006		Executive Vice President; Human Resources and Communications
Thierry Merlot			57				2016			President – Aerospace Europe, Middle East, Asia and Asia Pacific		58		2016		President – Aerospace, Europe, Middle East, Africa and Asia Pacific
Michael Canario			49				2016			President – Aerospace Americas
Colleen Pritchett												45		2018		President – Aerospace, Americas
Brett Schneider												46		2018		President – Global Fibers
Timothy Swords			54				2016			President – Industrial		56		2016		President – Industrial

 

*	Ms. Lehman joined Hexcel as Executive Vice President; General Counsel and Secretary on January 3, 2017, replacing Ira J. Krakower.

**	Mr. Krakower was the Executive Vice President; General Counsel and Secretary of Hexcel throughout 2016 until Ms. Lehman’s appointment, at which point he ceased to be an executive officer.

WAYNE C. PENSKY has served asPATRICK J. WINTERLICHwas appointed our Executive Vice President and Chief Financial Officer since May 2016. From April 2007 to May 2016,in September 2017. Mr. Pensky wasWinterlich joined Hexcel in 1998 and has served in roles of increasing responsibility in Operations, Finance and Information Technology, serving most recently as Senior Vice PresidentPresident—Tax, Systems and Chief Financial Officer. PriorEnterprise Reporting from March 2016 to serving in this role, Mr. Pensky served as Vice President, Finance and Controller of our Composites global business unit since 1998. From 1993 to 1998 Mr. Pensky was our Corporate Controller and Chief Accounting Officer.August 2017. Prior to joining Hexcel, Mr. Winterlich served in 1993, Mr. Pensky wasseveral financial capacities at Courtaulds plc, a partner at Arthur Andersen & Co., where he had been employed since 1979.U.K. international chemicals group. He has a degree in accounting and financial analysis from Warwick University and is a member of the Chartered Institute of Management Accountants.

GAIL E. LEHMANwas appointed our Executive Vice President, General Counsel and Secretary in January 2017. Prior to joining Hexcel, she worked at Noranda Aluminum Holding Corporation where she served aswas Chief Administrative Officer, General Counsel & Corporate Secretary. PriorSecretary at Noranda Aluminum Holding Corporation from March 2012 to December 2016; its Vice President of Human Resources, General Counsel and Corporate Secretary from February 2011 to March 2012; and its Vice President, General Counsel and Secretary from January 2010 to February 2011. On February 8, 2016, Noranda filed for bankruptcy protection under the U.S. Bankruptcy Code. Ms. Lehman was Vice President, General Counsel &and Corporate Secretary at both Hawker Beechcraft Corporation (July 2007-August 2009) and Covalence Specialty Materials Corporation. Earlier in her career,Corporation (April 2006-May 2007). From November 2001 through April 2006, she was Assistant General Counsel, Treasury and Finance, and Assistant Secretary of Honeywell International Inc. From 1993 to November 2001, Ms. Lehman held numerous roles as Assistant General Counsel and General Counsel at Honeywell International, supporting Treasury and Finance, Honeywell Fluorine Products, Engineered Plastics and Specialty Films, and environmental litigation and regulatory compliance.various position of increasing responsibility in the Law Department of Honeywell.

IRA J. KRAKOWER served as our Executive Vice President, General Counsel and Secretary from May 2016 until January 2017, when he became Special Counsel to the Chief Executive Officer. From September 1996 to May 2016, Mr. Krakower was Senior Vice President, General Counsel and Secretary. Prior to joining Hexcel, Mr. Krakower served as Vice President and General Counsel to Uniroyal Chemical Corporation from 1986 to August 1996 and served on the board and as Secretary of Uniroyal Chemical Company, Inc. from 1989 to 1996.

ROBERT G. HENNEMUTH has servedwas appointed as our Executive Vice President, Human Resources and Communications sincein May 2016. Mr. Hennemuth joined Hexcel in March 2006 as Senior Vice President, Human Resources. Prior to joining Hexcel, Mr. Hennemuth served as Vice President—Human Resources of Jacuzzi Brands, Inc. from July 2003 to September 2005. Previously, he was employed by Honeywell

International Inc., (formerly known as and, prior to the acquisition of Honeywell by AlliedSignal Inc.), in 1999, by AlliedSignal where he served as Vice President of Human Resources & Communications for various businesses from December 1996 to June 2003, including the Honeywell Consumer Products Group.

THIERRY MERLOTbecame our President, Aerospace, – EMEA/APEurope, Middle East, Africa and Asia Pacific in May 2016. From 2010 to May 2016, he was Vice President and General Manager—Aerospace, EMEA/AP.Europe, Middle East, Africa and Asia Pacific. Mr. Merlot joined Ciba-Geigy in 1988, and became an employee of Hexcel upon the merger between Hexcel and Ciba-GeigyCiba’s Composites business in 1996. Over the years, he has held several sales and marketing positions in Europe and Asia Pacific for the company. Mr. Merlot began his career in 1983 with Dassault Aviation as an R&D process engineer and Quality Manager for composite materials.

MICHAEL CANARIO

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EXECUTIVE OFFICERS

COLLEEN PRITCHETTbecame our President, Aerospace, – Americas in November 2018. Prior to joining Hexcel, Ms. Pritchett served in a number of capacities for E.I. du Pont de Nemours and Company from June 1996 until November 2018, including most recently as Global Business Director and President of the Electronics & Imaging Advanced Printing business from January 2016 until November 2018; Global Business Director and President of the Electronics & Communications Microcircuit Materials business in Taiwan from May 2016.2015 until December 2015; and Asia Pacific Director of the Performance Polymers business in Shanghai, China from July 2013 until May 2015. Prior to that, Ms. Pritchett held various positions of increasing responsibility at du Pont, such as Global Business Director of the Performance Polymers Kalrez^®and Vespel^®business; Strategic Planning Manager for the DuPont Company; Strategic Planning Manager for the Performance Coatings business; Americas Business Manager; North America Sales and Distribution Manager; and National Accounts Team Sales Manager, as well as roles in Engineering, Finance and Sales.

BRETT SCHNEIDERbecame our President, Global Fibers in January 2018. From 2010May 2016 through 2017, Mr. Schneider was our Senior Vice President, Business Development, and from October 2012 to May 2016, he wasMr. Schneider served as our Vice President, and General Manager, Aerospace – Americas.Business Development. Mr. CanarioSchneider joined Hexcel with the Ciba-Geigy merger in 1996 when he was Manager—International Business Development. He2001 and has held several other positions withinwith Hexcel, including Vice President—Americas SalesShared Services Manager and Marketing, Director—Financial PlanningGlobal Project Manager at our Duxford, UK plant, Plant Manager for our Salt Lake City fiber operations, Site Manager at our Salt Lake City plant and Analysis, Manager—eCommerce and Supply Chain, Finance Manager—Asian Joint Ventures, and Manager—Global Operations Coordination.Director of Advanced Manufacturing. Prior to Ciba-Geigy,joining Hexcel, Mr. Canario worked at BP ChemicalsSchneider served as BusinessOperations & Process Development Manager Project Engineer,at Meridian Automotive Systems, Plant Manager at Cambridge Industries and Operations Manager. Mr. Canario also workedAutomation Development Manager at Leading Systems.US Marine.

TIMOTHY SWORDSbecame our President, Industrial in May 2016, after serving from October 2012 to May 2016 as Vice President and General Manager—Industrial. He joined Hexcel in 2011 as Vice President, Business Development. Previously, he was General Manager of Commercial Engines Marketing, and Director of Strategic & Regional Marketing at GE Aviation. In addition, Tim spent several years with Honeywell Aerospace, wherePrior to his tenure at GE Aviation, he served in several positions for Honeywell Aviation, including Vice President of Technical Sales for Air Transport & Regional and Vice President of Sales, Marketing & Business Development for Engine Systems and Accessories. EarlyEarlier in his career, TimMr. Swords was Communications Systems Engineera communications systems engineer with AG Communications Systems and with the Johns Hopkins University Applied Physics Lab.

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HEXCEL CORPORATION  |  2019 Proxy Statement

Security Ownership of Certain Beneficial Owners and Management

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Stock Beneficially Owned by Principal Stockholders

The following table sets forth certain information as of February 28, 2017December 31, 2018 with respect to the ownership by any person (including any “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”)) known to us to be the beneficial owner of more than five percent of the issued and outstanding shares of Hexcel common stock:stock (the number of shares held by each listed stockholder may have changed subsequent to December 31, 2018):

HEXCEL CORPORATION  |  2019 Proxy Statement

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Stock Beneficially Owned by Directors and Officers

The following table contains information regarding the beneficial ownership of shares of Hexcel common stock as of February 28, 20172019 by our current directors and the executive officers listed in the Summary Compensation Table and by all directors and current executive officers as a group. The information appearing under the heading “Number of Shares of Common Stock” was supplied to us by the persons listedExcept as otherwise indicated in the table.footnotes to the table, we have been informed that each person listed had sole voting power and sole investment power over the shares of common stock shown opposite his or her name.

(6)

Includes 3,500 shares held by The David Hill Trust. Mr. Hill has investment and voting control over such shares16

HEXCEL CORPORATION  |  2019 Proxy Statement

In this Compensation Discussion and analyzesAnalysis, we address the material elements of 2016 compensation for ourpaid or awarded to the following executive officers identifiedof the company, who are listed in the Summary Compensation Table on page 43. Wethat follows this discussion, and whom we refer to as our “named executive officers” or “NEOs.”

Executive Summary

Our Operating Performance in 2018

Our operating performance in 2018 was strong, as we delivered record sales, earnings and free cash flow, reflecting continued focus on innovation and execution, and stronger positions in the markets we serve:

We achieved these individualsresults while continuing to make significant investments in capacity expansions and manufacturing process innovations to accommodate our customers’ anticipated growth, and in research and technology, both internally and through acquisitions and collaborations.

Our Compensation Philosophy and Principles

Our compensation philosophy is based upon pay for performance to create sustainable value for our stockholders. To further our compensation philosophy, our compensation committee has articulated several compensation principles relating to, among other things, structuring performance-based compensation, discouraging excessive risk taking and preventing and remedying executive misconduct. See “Executive Compensation Overview – Our Compensation Philosophy and Principles,” below.

Structure of Our Compensation

Our pay for performance philosophy is demonstrated by the way we have structured the elements of our compensation, which provide a significant level of variability depending on our performance. These elements consist of salary, annual cash incentive awards under our Management Incentive Compensation Plan (“MICP”) and long-term equity awards in the form of non-qualified stock options (“NQOs”), performance-based share awards (“PSAs”) and, for all executives other than Mr. Stanage, restricted stock units (“RSUs”). As demonstrated by the

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COMPENSATION DISCUSSION AND ANALYSIS

chart below, a significant amount of compensation for our named executive officers constitutes variable compensation tied to our financial performance. This is particularly the case for Mr. Stanage, as he does not receive RSUs, but rather a greater percentage of PSAs.

In addition to health and welfare and retirement plans made available to our U.S.-based employees, we provide our U.S.-based named executive officers with some or all of the following benefits: a non-qualified deferred compensation plan, supplemental retirement benefits and severance arrangements with respect to specified termination of employment events. See “Ongoing and Post-Employment Arrangements,” below for additional information. We do not provide personal benefits to our U.S.-based named executive officers (including Mr. Stanage) hired or appointed during the past several years, and only limited personal benefits to other named executive officers, as described below under “2018 Compensation – Personal Benefits.”

NEO Target Pay Mix

2018 Compensation

Salaries

MICP– Achievement with regard to the three equally-weighted financial measures under our MICP:

18

HEXCEL CORPORATION  |  2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

Averaging the results with respect to these financial measures, the total award payable to each named executive officer was equal to 104.18% of the executive’s target award opportunity (the target award opportunity for the named executive officers or “NEOs.” The compensation committeeranged from 55% to 100% of the boardnamed executive officers’ salaries).

For further information, including how we calculated the financial measures, see “2018 Compensation – Management Incentive Compensation Plan,” below.

Equity Awards– In 2018, we provided three types of directors is responsibleequity awards for determiningeach named executive officer other than Mr. Stanage, having an aggregate value equal to the compensation and benefitsnamed executive officer’s target award opportunity (which ranged from 95% to 145% of the NEOs. named executive officers’ salaries), as follows:

To further increase the pay for performance focus of Mr. Stanage’s compensation, we provided equity awards having the following percentages of his target award opportunity (which was 330% of his salary):

The committee’s determinationnumber of shares that ultimately will be provided under the PSAs will be based upon our performance with respect to the following two financial measures:

Relative EPS Growth is computed based on our performance relative to the companies in the Standard & Poor’s (“S&P”) MidCap 400 Index.

See “2018 Compensation – Equity Awards” for additional information.

Performance Share Payout for 2016-2018 Period

Messrs. Stanage, Winterlich, Hennemuth, and Merlot received equity awards in 2016, including PSAs providing for awards of our common stock based on our performance during the 2016-2018 period with regard to the following financial measures:

Achievement with regard to these financial measures under our MICP for the 2016-2018 performance period was as follows:

Based on our performance with regard to these financial measures during the 2016-2018 period, we provided a number of shares of our common stock equal to 108.3% of each named executive officer’s target PSA award opportunity.

See “2018 Compensation – Vesting of PSAs Granted in 2016” for further information.

Stockholder Advisory Vote on Executive Compensation

At our 2018 Annual Meeting of Stockholders, our stockholders approved, on an advisory basis, the compensation of our CEOnamed executive officers. The stockholder vote in favor of named executive officer compensation totaled approximately 92% of the votes cast, including abstentions. After consideration of the results of the advisory vote, we determined that no revisions to our executive compensation program were necessary in response to the vote.

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COMPENSATION DISCUSSION AND ANALYSIS

Our Compensation Best Practices

We follow a number of compensation practices consistent with our stockholder interests and best practices:

Executive Compensation Overview

Our Compensation Philosophy and Principles

Our philosophy is to deliver pay for performance. We seek to provide a level of performance that creates sustainable value for our stockholders by generating short-term results while also making investments designed to increase profitability over the long-term.

Our compensation principles, as articulated by the compensation committee, are to:

We believe that the structure of our compensation program, which is explained in detail below, is consistent with these principles.

Role of Compensation Committee, Compensation Consultant, Human Resources Department and Chief Executive Officer

Role of the Compensation Committee– The compensation committee is responsible for oversight of our compensation and benefit plans and programs. The compensation committee approves the compensation of our executive officers other than Mr. Stanage, and determines Mr. Stanage’s compensation, including goals and target award opportunities, subject to ratification by our independent directors.

Executive Summary

In setting NEO compensation for 2016, the committee focused on the alignment of pay and performance with short-term and long-term goals designed to incentivize improvements in key financial metrics. Our 2016 sales, operating income, net income and earnings per share again increased over prior years, continuing our record of strong performance.

We had double-digit adjusted EPS growth of 11.2%¹ as we generated $401 million of cash from operating activities. This funded our investments and capital expenditures for capacity expansions in order to support our organic growth. Our total sales increased 7.7%, resulting in an 8.3% increase in operating income, equal to 18.0% of sales. These strong results enabled us to continue to focus on innovation and operational excellence as we drive manufacturing throughput, capacity expansion and technology advances to support our customers’ growth and next generation products.

Our long-termafter-tax return on invested capital, or ROIC, remained robust at 14.8% for 2014-2016, demonstrating our continued success at executing our capacity growth plans in a timely and efficient manner and deriving profitable results from our investments. See “Pay for Performance—MICP Annual Cash Incentive” on page 25 and “—Performance Based Share Awards” on page 26 for a description of these metrics as they relate to our incentive awards.

The stockholder advisory votes on our executive compensation held at our 2015 and 2016 annual meetings resulted in approval votes of over 95% in each year. The committee considered these results as general approval of the Company’s approach to executive compensation, and as one factor among many when it made its decision to maintain the principles underlying our existing compensation strategy for 2016. It also considered these results as it set compensation for 2017.

Pay for Performance

We recognize that our stockholders invest in the company with the expectation that we will deliver a level of performance that creates value. We seek to deliver sustainable value, meaning that our actions to generate short-term results should be balanced with the need for investments in technologies, capabilities, products, markets and employees to provide increased profitability over the long-term.

When evaluating the appropriateness of our executive compensation for 2016 relative to our performance, the following considerations are relevant:

As explained below, we believe the answer to these questions is “yes.”

Total Stockholder Return

TSR is one way stockholders may evaluate company performance. The long-term compensation of our CEO is designed to correlate with our TSR because over 50% of his target compensation consists of equity awards, and our stock ownership guidelines require a significant holding of equity. However, TSR can be affected by external forces beyond the company’s control which may not reflect the organic operating performance and profitability of the company over the incentive measurement period. Therefore, we also incorporate the metrics into our compensation program that are described below in the discussion of the individual components of our compensation program.

The year over year improvement in our financial results for each of the last five years has not been consistently reflected in the company’s annual TSR for such years, which has fluctuated from a high of 65.8% in 2013, to a low of-7.2% in 2014, rebounding to 12.9% for 2015 and 11.9% for 2016. In contrast, our ROIC for the three-year period ending December 31, 2016 was 14.8%. This reinforces our belief that it is more appropriate to tie our CEO’s compensation to the achievement of short-term and long-term company performance goals that are selected to drive sustained growth in TSR over time, rather than tying it directly to TSR. The chart below shows our cumulative TSR for the five-year period ending December 31, 2016 compared with our CEO’s total direct compensation (“TDC”) for 2012 through 2016, which demonstrates a positive correlation between TSR and TDC and is a clear indicator of how our compensation program effectively aligns our executives’ interests with those of our stockholders. TDC includes the following components: salary, actual cash incentive award, grant date value of annual equity awards and all other compensation, as derived from the Summary Compensation Table.

paid. These changes in value are not necessarily reflective of compensation actually realized by the NEOs for a particular year, compensation decisions made for a particular year, or a direct reflection of performance by the NEO. We believe that TDC, which does not include changes in the value of accumulated pension benefits and the amount of nonqualified deferred compensation earnings, provides a more meaningful measurement for assessment. 20

HEXCEL CORPORATION  |  2019 Proxy Statement

Compensation Components

Target compensation in 2016 for our NEOs included salary, annual cash incentive awards granted under our Management Incentive Compensation Plan (“MICP”), and equity awards in the form of restricted stock units (“RSUs”),non-qualified stock options (“NQOs”) and performance-based share awards (“PSAs”). A significant portion of NEO compensation, ranging from 33% to 59% of total target compensation in 2016, was in the form of long-term equity incentives. We believe that the long tenure of our NEOs and their demonstrated commitment to the long-term performance of the company reinforces the effectiveness of our compensation strategy.COMPENSATION DISCUSSION AND ANALYSIS

Actual NEO compensation in 2016 included the following elements:

MICP Annual Cash Incentive

We designed our performance metrics for 2016 MICP awards to incentivize our leaders to achieve improvements in three areas: Adjusted EBIT, Cash from Operating Activities and Adjusted Diluted Earnings per Share. Each metric was equally weighted. In January 2017,addition, the compensation committee certified the degree of attainment of the 2016 financial metrics, which resulted in a payout percentage of 146.5% of the aggregated target awards for all participants in the MICP. The committee continued to believe that these metrics appropriately align pay with performance and motivate management to strive for continuously improving performance. Targets for 2016 were set in excess of 2015 actual results for each of the MICP metrics, which challenged the management team to continue to improve profitability and cash flow despite anticipated increases in depreciation, cash taxes and interest expense, as well as increasing customer demands for productivity and cost competitiveness. The management team achieved above-target performance on the Cash from Operating Activities and Adjusted Diluted EPS metrics, and was slightly under target on the Adjusted EBIT metric, which nevertheless represented an 8% increase over the prior year. See “2016 Executive Compensation Decisions – MICP Awards” on page 32.

The following GAAP andnon-GAAP financial measures were used to measure performance for our 2016 annual cash incentive awards granted under the MICP:

“Cash from Operating Activities” means cash provided by operating activities of continuing operations from the consolidated statement of cash flows, measured from September 30, 2015 to December 31, 2016.

“Adjusted EBIT” means operating income plus the sum of business consolidation and restructuring expense and other expenses (income) and eligible severance payments.

“Adjusted Diluted Earnings per Share” means the quotient of Adjusted EBIT minus interest expense minus income taxes plus equity in earnings from affiliated companies, as adjusted, divided by the weighted average number of diluted shares of common stock outstanding.

Performance-Based Share Awards

The PSAs awarded in 2014 used Return on Invested Capital, or “ROIC,” for the purpose of assessing our performance for the three-year performance period ending December 31, 2016. ROIC was selected for the PSAs because it measures both earnings growth and the efficient management of the assets of the company. ROIC for these PSAs was defined as the average return for 2014, 2015 and 2016 divided by the average invested capital as of December 31, 2013, 2014, 2015 and 2016, where:

In January 2017, the compensation committee certified that for the 2014-2016 performance cycle we achieved ROIC of 14.8%, which resulted in an award of 123.2% of the target established for the performance cycle. This result demonstrates that our performance continued to be strong in the long-term as well as in the short-term, as our investments generated a return that greatly exceeded our cost of capital, while we continued to make substantial investments in capacity to support customer demand.

We pay incentive compensation only after the committee has certified our performance results and corresponding MICP and PSA awards for the applicable performance periods. In certifying the results, the committee performs a review of our financial performance against goals following verification of the calculations by our independent auditors.

The Process for Setting Compensation

Compensation Philosophy

The company’s compensation philosophy, as articulated by the compensation committee, is:

The process used by the company to implement this philosophy is described below.

The Compensation Committee

The compensation committee operates under a written charter approved by the board and reviewed by the committee annually. The charter provides that the committee is accountable for defining the goals of our compensation policy, reviewing and approving our compensation programs, and overseeing our benefit programs. The committee reviews and approves the compensation of the NEOs on an annual basis, including salary, cash incentives, equity grants and benefits. The committee’s approval of the compensation of our CEO is subject to ratification by our independent directors. The committee also reviews annually the benefit plans applicable to all of our employees, including the NEOs. In addition, the committee periodically reviews our retirement benefits for NEOs.

Compensation Consultant

The committee retains an independent compensation consultant, Semler Brossy Consulting Group, LLC (“Semler Brossy” or “the consultant”), to assist it in establishing and reviewing executive compensation. The consultant reports directly to the compensation committee and the committee has the sole authority to approve the consultant’s fees and the other terms of engagement. In accordance with NYSE listing standards, the committee assessed the independence of Semler Brossy. The committee determined that Semler Brossy is independent based on those standards and that its work for the committee has not raised any conflicts of interest. Specifically, the consultant has not performed, and does not currently perform, consulting work for management. If management requests any work from the consultant, the consultant must first obtain the approval of the chair of the committee.

The committee has engaged the consultant to provide advice to the committee with the objective of creating long-term value for stockholders through our compensation programs. In providing this advice, the committee asks the consultant to inform the committee periodically of compensation-related developments that may influence the committee’s decision-making processes, including changes to regulations. The consultant is expected to communicate regularly with management to understand the company’s business environment, talent needs, and compensation considerations (from the perspective of both the committee and management). In addition, prior to committee meetings, the consultant confers with the committee chair regarding the matters to be discussed at the meeting, and confers with management on management presentations to the committee. In the event the consultant may differ with management after conferring, the consultant will review any differences independently with the committee, or together with management and the committee, as the committee determines to be appropriate.

With the recommendation and consent of the committee, our CEO confers with the consultant when developing compensation recommendations for the other NEOs. On behalf of the committee, senior management periodically confers with the consultant on our executive compensation programs and may request the consultant’s views regarding the modification of existing programs, the adoption of new programs, or preparing offers of employment to senior executives.

Compensation Risk Oversight

In response to a committee request, in 2016 management completed a comprehensive review and analysis of our control environment to determine whether current compensation policies, practices and programs to determine whether they could result in financial, operational, regulatory, compliancelegal or reputational risk to our company. As a result of its most recent review, the company. The results of the review were presented to the committee, which considered risk-mitigation features such as maximum award levels, the use of multiple financial metrics, multi-year vesting and stock retention requirements, and our clawback policy. Thecompensation committee concluded that we have incentive compensation programs that properly align pay and performance without encouraging excessive financial risk-taking. We believe that risks arising from our compensation policies, practices and practicesprograms are not reasonably likely to have a material adverse effect on our company. Management will continue to conduct annual risk assessments and adviseIn reaching its conclusion, the compensation committee of any findings and recommendations to effectively manage compensation risk.