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 ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
QUAKER CHEMICAL 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):
☒ | No fee required. |
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
☐ | Fee paid previously with preliminary materials. |
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
MEETING DATE
May 13, 202012, 2021
QUAKER HOUGHTON
901 E. Hector Street
Conshohocken, Pennsylvania 19428
Important Notice of Availability of Proxy Materials for Quaker Houghton’s 20202021 Annual Meeting of Shareholders to be held on May 13, 2020.12, 2021. The Notice of Meeting, Proxy Statement and 20192020 Annual Report to Shareholders are available at www.proxyvote.com.
Notice of Virtual Annual Meeting of Shareholders
TIME: | 8: | |
PLACE: |
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ITEMS OF BUSINESS: | (1) To elect (2)
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WHO MAY VOTE: | You can vote at the meeting and any adjournment(s) of the meeting if you were a shareholder of | |
ANNUAL REPORT: | A copy of our Annual Report, which includes our Annual Report onForm 10-K for the year ended December 31, |
It is important that your shares be represented at the meeting. You are cordially invitedRegardless of whether you plan to attendparticipate in the virtual shareholders’ meeting, in person. Whether or not you expect to attend in person, you are urged to complete, sign, date and return the enclosed proxy in the envelope we have enclosed for your convenience; no postage is required if mailed in the United States.
Please note that we are continuing If you plan to monitorparticipate in the public health and safety concerns related tovirtual shareholders’ meeting, please see the coronavirus disease 2019 (COVID-19) and the various measures being implemented to reduce its spread. If we determine it is advisable not to hold the Annual Meeting in person, we may decide to change the date, time or locationinstructions on page 1 of the meeting, including to hold it “virtually.” Our Board of Directors has authorized our Chairman, Michael F. Barry, to take any such action, including postponing the meeting if he determines it to be appropriate under the circumstances. If we do make such a change, we will promptly provide public notice in a manner compliant with applicable SEC guidance and the Pennsylvania Business Corporation Law.Proxy Statement.
By Order of the Board of Directors,
Robert T. Traub
Senior Vice President, General Counsel
and Corporate Secretary
Conshohocken, Pennsylvania
March 31, 20202021
Important Notice of Availability of Proxy Materials
for Quaker Houghton’s 20202021 Annual Meeting of Shareholders to be held on May 13, 2020.12, 2021.
The Notice of Meeting, Proxy Statement and 20192020 Annual Report to Shareholders
are available at www.proxyvote.com.
| TABLE OF CONTENTS | |
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Governance Committee Procedures for Selecting Director Nominees | ||||
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ii | | Quaker Houghton |
PROXY STATEMENT | ||||
This proxy statement is being furnished to our shareholders in connection with the solicitation of proxies on behalf of our Board of Directors for use at our 20202021 Annual Meeting of Shareholders, and at any and all adjournments of the meeting, for the purpose of considering and acting upon the matters referred to in the accompanying Notice of Annual Meeting of Shareholders and which are discussed below. The Annual Meeting of Shareholders will be held live via the Internet at our headquarters, located at 901 E. Hector Street, Conshohocken, Pennsylvania 19428,www.virtualshareholdermeeting.com/KWR2021, at 8:3000 A.M., local time, on May 13, 2020. 12, 2021. You will not be able to attend the annual meeting in person.
We believe that a virtual meeting provides expanded shareholder access and participation and improved communications, while affording shareholders the same rights as if the meeting were held in person, including the ability to vote shares electronically during the meeting and ask questions in accordance with the rules of conduct for the meeting.
The terms “we,” “our,” “us,” the “Company,” “Quaker” and “Quaker Houghton,” as used in this proxy statement, refer to Quaker Chemical Corporation doing business as Quaker Houghton.
This proxy statement, the accompanying form of proxy and a copy of our Annual Report, which includes our Annual Report on Form10-K for the year ended December 31, 20192020 are first being mailed to our shareholders on or about April 3, 2020.2, 2021.
Information Concerning the Annual Meeting
What matters will be voted on at the meeting?
At the meeting, shareholders will vote on threetwo proposals and any other business properly brought before the meeting:
Election of threefour nominees to serve on our Board of Directors (or the “Board”);
Advisory vote on the compensation of our named executive officers as described in this proxy statement; and
Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2020.2021.
How does the Board recommend I vote on the proposals?
The Board recommends that you vote:
FOR each of the threefour nominees named in this proxy statement;
FOR approval, on anon-binding basis, of the Company’s compensation of our named executive officers as described in this proxy statement; and
FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2020.2021.
Who is entitled to vote?can attend the Annual Meeting?
ShareholdersThis year’s annual meeting will be a virtual meeting of the shareholders conducted via live webcast. The meeting will be followed by a question and answer session. All shareholders of record as of the close of business on March 4, 2020,2021 are invited to participate in the record date formeeting. We have structured our virtual meeting to provide shareholders the same rights as if the meeting are entitled to notice of andwere held in person, including the ability to vote atshares electronically during the meeting and any adjournmentsask questions in accordance with the rules of conduct for the meeting.
How do I cast my vote if I am a shareholder of record?
You can cast your vote:
in person, by attendingTo attend the Annual Meeting of Shareholders;
via the Internet, by visiting www.proxyvote.com and following the instructions provided;
by telephone, using the toll-free number listed on the proxy card; or
by mail, if you mark, sign and date the proxy card enclosed with this proxy statement, and return itmeeting please visit www.virtualshareholdermeeting.com/KWR2021. To participate in the postage-paid envelope provided.annual meeting, you will need the 16-digit control number included on your notice or on your proxy card.
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PROXY STATEMENT | ||
Beneficial shareholders who do not have a control number may gain access to the meeting by logging into their broker, brokerage firm, bank or other nominee’s website and selecting the shareholder communications mailbox to link through to the annual meeting; instructions should also be provided on the voting instruction card provided by your broker, bank or other nominee.
Only shareholders with a valid control number will be allowed to ask questions. Questions relevant to meeting matters will be taken and answered during the meeting as time allows, to emulate an in-person question and answer session. Additional information regarding the rules and procedures for participating in the virtual annual meeting will be provided in our meeting rules of conduct, which shareholders can view during the meeting at the meeting website.
What if during the check-in time or during the meeting I have technical difficulties or trouble accessing the virtual meeting website?
If you have any technical difficulties or any questions regarding the virtual meeting website, we are ready to assist you. Please call 844-986-0822 (toll-free) or 303-562-9302 (toll and international line). If there are any technical issues in convening or hosting the meeting, we will promptly post information to our website, https://investors.quakerhoughton.com/event-calendar, including information on when the meeting will be reconvened.
How do I submit a question at the Annual Meeting?
The virtual meeting affords shareholders the same rights as if the meeting were held in person, including the ability to vote shares electronically during the meeting and ask questions in accordance with the rules of conduct for the meeting.
If you wish to submit a question, you may do so during the meeting by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/KWR2021 and typing your question into the “Ask a Question” field, and clicking “Submit.” You will need the 16-digit control number that appears on your proxy card.
Beneficial shareholders who do not have a control number should receive instructions from your broker, bank, or other nominee on how to submit questions at the annual meeting.
Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
If your shares are registered directly in your name with the Company’s transfer agent, American Stock Transfer & Trust Company, LLC, you are considered, with respect to those shares, the “shareholder of record.” The printed copies of the proxy materials have been sent directly to you by the Company, unless you previously consented to receive all proxy materials electronically via e-mail or the Internet.
If your shares are held in a stock brokerage account, or by a bank or other nominee, you are considered the “beneficial owner” of shares held in “street name,” and the “shareholder of record” of your shares is your broker, bank or other nominee. The printed copies of the proxy materials have been forwarded to you by your broker, bank or other nominee, unless you previously consented to receive all proxy materials electronically via e-mail or the Internet. As the beneficial owner, you have the right to direct your broker, bank or other nominee to vote your shares. The Company urges you to instruct your broker, bank or other nominee on how to vote your shares. Please understand that, if you are a beneficial owner, the Company does not know that you are a shareholder or how many shares you own.
2 | 2021 Proxy Statement | Quaker Houghton |
PROXY STATEMENT | ||
How do I cast my vote if I am a shareholder of record?
You can cast your vote as follows:
Before the meeting:
- | via the Internet by visiting www.proxyvote.com and following the instructions provided so long as you vote by 11:59 P.M. Eastern Time on May 11, 2021 for shares held directly and by 11:59 P.M. Eastern Time on May 10, 2021 for shares held in a Plan (each, a “Cutoff Time”); |
- | by telephone using the toll-free number listed on the proxy card so long as you vote by the applicable Cutoff Time; or |
- | by mail, if you mark, sign and date the proxy card enclosed with this proxy statement, and return it in the postage paid envelope provided and the Company receives it no later than the applicable Cutoff Time. |
During the meeting:
- | by visiting www.virtualshareholdermeeting.com/KWR2021. You will need the 16-digit control number that appears on your proxy card. |
How do I cast my vote if I am a beneficial owner of shares held in street name?
You can castAs the beneficial owner of shares held in street name, you have the right to direct your vote:broker, bank or other nominee how to vote your shares and it is required to vote your shares in accordance with your instructions. As explained below, under “How will my proxy be voted?”, your bank, broker or other nominee may, under certain circumstances, vote your shares on “routine” matters.
We recommend that you follow the voting instructions in person, by first obtaining a voting instruction form issued in your namethe materials you receive from your broker, and bringing that voting instruction formbank or other nominee to the meeting, together with a copy of a brokerage statement reflecting your stock ownership as of the record date and valid identification;
vote via the Internet, by visiting www.proxyvote.com and following the instructions provided;
by telephone by using the toll-free number found on the voting instruction form; or
by mail if you mark, sign and dateby the voting instruction form and return it in the postage-paid envelope provided by your broker.applicable Cutoff Time.
If I have given a proxy, can I revoke that proxy?
Your presence at the meeting will not in itself revoke any proxy you may have given. If your shares are held in your own name (i.e., you are the shareholder of record), you may revoke your proxy at any time (to the extent it has not already been voted at the meeting), but a revocation will not be effective until it is received. Your proxy will be revoked (to the extent it has not already been voted at the meeting) if you:
give written notice of the revocation to Quaker Houghton’s Corporate Secretary, Robert T. Traub, 901 E. Hector Street, Conshohocken, Pennsylvania 19428, or give electronic notice to Mr. Traub at Robert.Traub@quakerhoughton.com;
submit a properly signed proxy with a later date;date and the Company receives it no later than the applicable Cutoff Time;
voting online before the applicable Cutoff Time as described above; or
vote in personattending and voting at the virtual meeting as described above.
If your shares are held in street name through a broker, bank or other nominee for your benefit, you should contact the record holder to obtain instructions if you wish to revoke your vote before the meeting.
![]() | 2021 Proxy Statement | 3 |
PROXY STATEMENT | ||
How will my proxy be voted?
If you are a registered holder and your proxy is properly executed, returned and received before the meeting and is not revoked, it will be voted in accordance with your instructions. If you return your signed proxy but do not mark the boxes to show how you wish to vote on a proposal, the shares for which you have given your proxy will, in the absence of your instructions to the contrary, be voted as follows:
Proposal 1: “FOR” the election of each of the threefour nominees named in this proxy statement to serve on our Board of Directors;
Proposal 2: “FOR” the approval, on anon-binding basis, of the Company’s compensation of our named executive officers as described in this proxy statement;
Proposal 3: “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2020;2021; and
In the discretion of the proxies on other matters properly brought before the meeting.
If your shares are held in street name through a broker, bank or other nominee for your benefit and your voting instruction form is properly executed, returned and received before the meeting and is not revoked, it will be voted in accordance with your instructions. If you have not furnished voting instructions within a specified period before the meeting, under current New York Stock Exchange (“NYSE”) rules, brokerage firms and nominees that are members of the NYSE may vote their customers’ unvoted shares on “routine” matters but not onnon-routine matters. Under the NYSE rules, routine matters include the ratification of the appointment of our independent registered public accounting firm but do not include the other proposalsproposal on the ballot.
The voting instruction form also grants the proxy holders discretionary authority to vote on any other business that may properly come before the meeting as well as any procedural matters. As of the date of this proxy statement, we do not know of any other matters that will be presented at the meeting.
What does it mean if I get more than one proxy card?
If you hold your shares in more than one account or with more than one broker and/or our transfer agent, you will receive more than one proxy card. Please complete and return each of the proxy cards you receive to ensure that all of your shares are voted.
4 | 2021 Proxy Statement | Quaker Houghton |
PROXY STATEMENT | ||
How many votes are required to approve each proposal, and what are the effects of abstentions and brokernon-votes?
The following table summarizes the vote required for approval of each proposal and the effect on the outcome of the vote of abstentions, uninstructed shares held by brokers (which result in brokernon-votes when a beneficial owner of shares held in street name does not provide voting instructions and, as a result, under the NYSE rules, the institution that holds the shares may not vote those shares on certain proposals) and signed but unmarked proxy cards.
Proposal | Votes Required for Approval | Effect of Abstentions(1) | Uninstructed Shares/ Effect of Broker Non- votes(1) | Signed but Unmarked Proxy Cards(2) | ||||||
Proposal 1 | Election of directors | Majority of votes cast | No effect(3) | Not voted/No effect(3) | Voted “For” | |||||
Proposal 2 | ||||||||||
| Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm | Majority of votes cast | No effect(3) | Discretionary vote by broker | Voted “For” |
(1) | Abstentions and brokernon-votes are included in determining whether a quorum is present. |
(2) | If you are the shareholder of record and complete your proxy card properly, but do not provide instructions on your proxy card as to how to vote your shares, your shares will be voted as shown in this column and in accordance with the judgment of the individuals named as proxies on the proxy card as to any other matter properly brought before the annual meeting. |
(3) | Under the Pennsylvania Business Corporation Law of 1988, abstentions and brokernon-votes are not counted as “votes cast.” The “majority of votes cast” standard for approval requires that the number of votes cast “for” the proposal exceed the number of votes cast “against” the proposal. |
Our Amended and Restated Articles of Incorporation (the “Articles”) provide that, in an uncontested election, a nominee must receive a majority of the votes cast to be elected. A majority of the votes cast means that the number of votes cast “for” a nominee must exceed the number of votes cast “against” that nominee. Under our Articles, if an incumbent director who is a candidate forre-election is not elected, the director will be deemed to have tendered his or her resignation to the Board of Directors. The Governance Committee will make a recommendation to the Board of Directors on whether to accept or reject the resignation, or whether other action should be taken, and the Board of Directors will be required to act on the Governance Committee’s recommendation and disclose its decision and the rationale for the decision. If a nominee fails to receive a majority of the votes cast and the Board of Directors accepts the director’s resignation or the
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director retires, there would be a vacancy created on the Board of Directors. Our Board of Directors would then have the option under ourBy-Laws either to appoint someone to fill the vacancy or to reduce the size of the Board of Directors.
This year’s election of directors is an uncontested election of directors. If there were a contested election, then plurality voting, by which directors receiving the highest number of votes, up to the number of directors to be elected in such election, would be elected.
What if a director nominee is unwilling or unable to serve?
We do not expect that to occur. If it does, proxies will be voted for a substitute director nominee designated by our Board of Directors.
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PROXY STATEMENT | ||
Are dissenters’ rights applicable to any of the matters to be voted on at the meeting?
No. Dissenters’ rights do not apply to any of the matters to be voted on at the meeting.
Who will count the vote?
The Judge of Election appointed at the meeting, together with a representative of Broadridge Financial Solutions, Inc., will serve as the inspector of election.
How many shares can be voted at the meeting and what is the total number of votes that can be cast?
As of March 4, 2020,2021, the record date for the meeting, 17,732,81817,853,947 shares of Quaker Houghton common stock were issued and outstanding. Every holder of Quaker Houghton common stock is entitled to one vote for each share held of record on the record date; therefore, at the annual meeting, a maximum of 17,732,81817,853,947 votes can be cast.
How many votes may I cast at the meeting?
You will be entitled to cast one vote for each share of common stock you held on March 4, 2020,2021, the record date for the meeting.
What is a “quorum”?
The presence of shareholders entitled to cast at least a majority of the votes entitled to be cast on a particular matter will constitute a “quorum” for the purpose of considering that matter. For purposes of determining the presence of a quorum, the votes of a shareholder will be counted if the shareholder is present in person or by proxy. Shares that are the subject of abstentions or brokernon-votes will be counted for purposes of determining a quorum.
Who can attend the Annual Meeting? How do I attend?
All shareholders of Quaker Houghton who owned shares of record on March 4, 2020 may attend the meeting. If you want to vote in person and you hold Quaker Houghton common stock in street name (i.e., your shares are held in the name of a brokerage firm, bank or other nominee), you must obtain a proxy card issued in your name from your broker and bring that proxy card to the meeting, together with a copy of a brokerage statement reflecting your stock ownership as of the record date and valid identification. If you hold stock in street name and want to attend the meeting but not vote in person at the meeting, you must bring a copy of a brokerage statement reflecting your stock ownership as of the record date and valid identification.
We currently plan to hold the Annual Meeting at our headquarters, located at 901 E. Hector Street, Conshohocken, Pennsylvania 19428, at 8.30 A.M., local time, on May 13, 2020. We are, however, continuing to monitor the public health and safety concerns related to the coronavirus disease 2019 (COVID-19) and the various measures being implemented to reduce its spread. If we determine it is advisable not to hold the Annual Meeting in person, we may decide to change the date, time or location of the meeting, including to hold it “virtually.” Our Board of Directors has authorized our Chairman, Michael F. Barry, to take any such action, including postponing the meeting if he determines it to be appropriate under the circumstances. If we do make such a change, we will promptly provide public notice in a manner compliant with applicable SEC guidance and the Pennsylvania Business Corporation Law.
How will voting on any other business be conducted?
We do not know of any business to be considered at the meeting other than the proposals described in this proxy statement. However, if any other business is properly presented at the meeting, the proxy being solicited by the Board of Directors will give authority to Michael F. Barry and Robert T. Traub to vote on such matters at their discretion and they intend to do so in accordance with their best judgment.
Who will pay the cost of this proxy solicitation and how will the solicitation be conducted?
We will pay the expenses of soliciting proxies in the form included with this proxy statement, including the cost of preparing, assembling and mailing material in connection with the solicitation. In addition to the use of the mail, our directors, executive officers and employees may, without additional compensation, solicit proxies by telephone, facsimile, electronic mail and personal contact. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonableout-of-pocket expenses for forwarding proxy materials and Quaker Houghton’s annual report, including its Annual Report on Form10-K, to any beneficial holder of Quaker Houghton common stock.
6 | 2021 Proxy Statement | Quaker Houghton |
PROXY STATEMENT | ||
Does the Company utilize “householding” for mailing of its proxy materials?
The Securities and Exchange Commission (the “SEC”) permits companies and intermediaries (such as brokers and banks) to satisfy delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivery of a single proxy statement and annual report to those shareholders. This process, which is commonly referred to as “householding,” is intended to reduce the volume of duplicate information shareholders receive and also reduce expenses for companies. Quaker Houghton has instituted householding for its registered shareholders; some intermediaries may also be householding Quaker Houghton’s proxy materials and annual report. Once you have received notice from the Company, your broker or another intermediary that they will be householding materials to your address, householding will continue until you are notified otherwise or until you or another shareholder who shares your address provides contrary instructions.
If at any time you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report, you should contact Victoria K. Gehris, Assistant Secretary, at1-610-832-4246, or inform her in writing at Quaker Houghton, Shareholder Services, 901 E. Hector Street, Conshohocken, Pennsylvania 19428. If you hold shares through an intermediary and no longer wish to participate in householding, you should contact your bank, broker or other nominee record holder.
Shareholders who share an address and are receiving multiple copies of annual reports or proxy statements but would like to receive a single copy can contact Victoria K. Gehris at the telephone number or address noted above.
We undertake to deliver promptly to any shareholder at a shared address, upon written or oral request, a copy of Quaker Houghton’s proxy statement and annual report. You may request these documents by calling the telephone number or writing to the address noted above.
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PROPOSAL 1 | ||||
Proposal 1 – Election of Directors and Nominee Biographies
What is the makeup of the Board of Directors?
The Articles divide our Board of Directors into three classes, each consisting, as nearly as possible, ofone-third of the directors. The shareholders elect the members of one class each year to serve for a term of three years. Directors elected to fill vacancies and newly created directorships serve for the balance of the term of the class to which they are elected. Currently, there are eleven directors, three directors in Class I and four directors in each of Class II and Class III. The current terms of the Class III directors expire at the 20202021 annual meeting of shareholders. At the 20202021 annual meeting, threefour Class III directors are to be elected with each member to serve a three-year term expiring in 20232024 and until his or her successor is duly elected and qualified. The Board of Directors has decided that with Mr. Robert E. Chappell not sitting for reelection this year, at that time the sizecurrent terms of the Board will be reduced by one member. The Board is seeking to realign its classes as required by such Articles so that the classes stay as nearly even as possible. Accordingly, Mr. Donald R. Caldwell, who is currently serving as a Class II director, has been nominated as a Class I director to fill the vacancythree directors in Class I along withexpire at the other incumbent2023 annual meeting and the current terms of the four directors in Class I directors who are eligible for election, Messrs. Robert H. Rock and Ramaswami Seshasayee. If elected, Mr. Caldwell will serve as a Class I director going forward. If Mr. Caldwell is not elected to serve as a Class I director, he will continue to serve as a Class II director.III expire at the 2022 annual meeting.
Are there any members of the class of directors to be elected at the meeting who are not standing for reelection?
Yes. Mr. Robert E. Chappell will not be a nominee for reelection this year. Mr. Chappell reached the normal director retirement age of 72, as outlined in the Company’s Corporate Governance Guidelines, in September 2017.No.
Who are the Board’s nominees this year?
Messrs. Donald R. Caldwell, Robert H. RockMichael F. Barry, Jeffry D. Frisby, Michael J. Shannon and Ramaswami SeshasayeeMs. Charlotte C. Decker are the nominees for election to the Board of Directors as Class III members. Each nominee, if elected, would hold office until our 20232024 annual meeting of shareholders and until his or her successor is duly elected and qualified. Mr. Donald R. Caldwell reached the normal director retirement age in June 2019Barry has previously announced his plans to retire as President and typically would not stand for reelectionChief Executive Officer effective at the 2020 annual meetingend of shareholders. However,2021. Mr. Barry is expected to serve his three-year term as a director and will retain the role of Chairman of the Board of Directors has made an exception to the Board’s normal retirement policy and has asked Mr. Caldwell to switch Classes and stand for reelection for an additional term. The Board of Directors has made this exception for Mr. Caldwell in order to retainfollowing his knowledge and experience in financial reporting, risk assessment, strategic planning and corporate development and given his excellent work as the Lead Director and Chairperson of the Board’s Executive Committee and his active engagement with Board of Director matters. Mr. Caldwell has agreed to stand for election for an additional term.retirement.
Quaker Houghton |
| PROPOSAL 1 | |
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Below is information about our nominees for election to the Board as Class III members, including descriptions of their qualifications and their business experience and directorships over the past five years:
Donald R. Caldwell, 73
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DIRECTOR QUALIFICATION HIGHLIGHTS
Mr. Caldwell, an experienced and successful investor, co-founded Cross Atlantic Capital Partners, Inc., a venture capital management company, and has served as its Chairman and Chief Executive Officer since 1999. He was Chief Executive Officer of InsPro Technologies Corporation, a company that focuses on providing a policy administration software solution in the insurance industry, one of Cross Atlantic Capital Partners’ portfolio companies from January 2015 to October 2017. Previously, he was President and Chief Operating Officer of Safeguard Scientifics, Inc., a holding company with investments in the growth-stage technology and life sciences businesses, from February 1996 to February 1999. He has been our Lead Director since 2016. He is a director and Chairman of the Board of InsPro Technologies Corporation and a director of Lightning Gaming, Inc., both of which are Cross Atlantic Capital Partners’ portfolio companies. In addition, he is currently a director of Haverford Trust Company and a director and Chairman of the Board of Simplicity Esports and Gaming Company (formerly known as I-AM Capital Acquisition Company). He served as a director of Fox Chase Bancorp. Inc. from October 2014 to July 2016. He also served as a director of Rubicon Technology, Inc. from February 2001 to November 2017, and as a director of Amber Road Inc., from March 2005 to December 2016, both of which are Cross Atlantic Capital Partners’ portfolio companies.
Robert H. Rock, 69
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DIRECTOR QUALIFICATION HIGHLIGHTS
Mr. Rock has been Chairman and Chief Executive Officer of MLR Holdings, LLC, an investment company operating in the publishing and information industry, since January 2015, having also served as President of MLR Holdings, LLC (and its predecessor, MLR Publishing Company) since 1989. Previously, he was Chairman of The Hay Group, a management consulting firm, from 1984 to 1987. He currently is a trustee of The Penn Mutual Life Insurance Company.
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Ramaswami Seshasayee, 71
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DIRECTOR QUALIFICATION HIGHLIGHTS
Mr. Ramaswami Seshasayee was the Managing Director and Chief Executive Officer at Ashok Leyland Limited, India, a company known for being the second largest manufacturer of commercial vehicles in India, the fourth largest manufacturer of buses in the world and the twelfth largest manufacturer of trucks, from April 1998 to March 2011; its Executive Vice Chairman from April 2011 until March 2013; and itsNon-Executive Vice Chairman from April 2013 until July 2016. Mr. Seshasayee currently serves as a member of the board of directors of Asian Paints, Ltd. Mr. Seshasayee served as Chairman of IndusInd Bank Ltd. India from June 2007 until August 8, 2019. Prior to the combination with Quaker Chemical Corporation, he also served as a member of the board of directors of Houghton International Inc. from April 2013 until July 31, 2019.
The Board believes that, in addition to the information presented above regarding each director nominee’s specific experience, qualifications, attributes and skills, each director nominee has significant leadership experience derived from his professional experience and has a reputation for integrity and honesty and adheres to high ethical standards. These attributes have led the Board to conclude that each of the nominees should continue to serve as a director of Quaker Houghton. The process undertaken by the Company’s Governance Committee in recommending these nominees is described below under the heading “Governance Committee Procedures for Selecting Director Nominees.”
The Board recommends that you vote “FOR” the election of Donald R. Caldwell, Robert H. Rock and Ramaswami Seshasayee as directors of Quaker Houghton.
Biographies of Continuing Directors
Mr. Caldwell is being nominated to fill a vacancy created in Class I. If Mr. Caldwell is not elected to serve as a Class I director, he will continue to serve as a Class II director. Information regarding Mr. Caldwell is presented above with the other Class I nominees. Below is information about our incumbent directors who were elected as Class II members of the Board in 2018 and whose terms expire in 2021, including descriptions of their qualifications and business experience and directorships over the past five years:
Michael F. Barry, 6162
![]() | Director Since: 2008
Chairman of the Board
Chief Executive Officer and President |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | Extensive and valuable experience acquired through his |
• | Extensive knowledge of accounting/finance, financial reporting, risk assessment, industrial marketing and services, organizational development, global organizations, governance, strategic planning, corporate development, research and development and manufacturing |
• | Complementary experience and continuing education in corporate governance through his service |
Mr. Barry has been our Chief Executive Officer and President since October 2008 and our Chairman of the Board since May 2009. He has held leadership and executive positions of increasing responsibility since joining the Company in 1998, including Senior Vice President and Managing Director–North America from January 2006 to October 2008; Senior Vice President and Global Industry Leader–Metalworking and Coatings from July to December 2005; Vice President and Global Industry Leader–Industrial Metalworking and Coatings from January 2004 to June 2005; and Vice President and Chief Financial Officer from 1998 to August 2004. As previously announced, on February 24, 2021, Mr. Barry currently servesinformed the Board that he plans to retire as our Chief Executive Officer and President on December 31, 2021. Since 2018, Mr. Barry has also served as a director of Livent Corporation and from 2010 to 2020, he served as a director at Rogers Corporation, but will not stand for re-electionCorporation.
Charlotte C. Decker, 56
![]() | Director Since: 2020 Audit Committee Chief Information Technology Officer of UAW Retiree Medical Benefits Trust |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | 25+ years of information technology experience across several major industries |
• | Extensive experience in cybersecurity and information technology |
• | Experience in financial reporting, risk assessment, organizational development, global organizations, governance, strategic planning, mergers and acquisitions, technology and science, and manufacturing |
• | Complementary experience and continuing education in corporate governance through her service on the board of another public company |
Ms. Decker has been the Chief Information Technology Officer of the UAW Retiree Medical Benefits Trust, the largest non-governmental purchaser of retiree health care in the United States, covering over 632,300 members, since December 2014. Prior to joining UAW, Ms. Decker served as an IT Management Consultant at Data Consulting Group (DCG), a privately held, minority-owned corporation offering a wide range of management consulting, staff augmentation and outsourcing services, from August 2014 until December 2015. Prior to joining DCG, Ms. Decker served as Vice President and Chief Technology Officer of Auto Club Group, a not-for-profit organization, which provides more than 59 million members with automotive, travel, insurance and financial services through its federation of 34 motor clubs and nearly 1,100 branch offices across North America, from September 2008 through June 2014. Ms. Decker has over 25 years of information technology experience through various leadership positions, including 18 years at Ford and General Motors. Both Ford and General Motors are multinational corporations that design, manufacture, market and distribute vehicles worldwide. Ms. Decker also currently serves as a director of Rogers Corporation at the company’s annual meetingFederal Home Loan Bank of shareholders in May 2020.Indianapolis where she is Chair of the Information Technology Committee.
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PROPOSAL 1 | ||
Jeffry D. Frisby, 6465
![]() | Director Since: 2006
Audit Committee
President and Chief Executive Officer of PCX Aerostructures, LLC |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | Experience in manufacturing, particularly in the aerospace industry |
• | Experience in accounting/finance, financial reporting, industrial marketing, organizational development, global organizations, strategic planning and corporate development |
• | Complementary experience and continuing education in corporate governance through his service on the boards of both public and private companies |
Mr. Frisby has been President and Chief Executive Officer of PCX Aerostructures, LLC since April 2017. PCX Aerostructures, LLC is a leading supplier of highly engineered, precision, flight critical and structural assemblies for rotorcraft and fixed wing aerospace platforms. He previously was Chief Executive Officer of Triumph Group, Inc., a public company that manufactures aerospace structures, systems and components, from July 2012 to April 2015, and its President from July 2009 to April 2015. He was also Triumph’s Chief Operating Officer from July 2009 to July 2012. Prior to that position, he was Group President of Triumph Aerospace Systems Group, a group of companies that design, engineer and manufacture a wide range of proprietary and build-to-print components, assemblies and systems for global aerospace original equipment manufacturers, from April 2003 to July 2009. He also held a variety of other positions within the Triumph Group as well as a predecessor group company, Frisby Aerospace, Inc. Mr. Frisby served as a director of Triumph Group, Inc. from July 2012 to April 2015. He currently serves as a director of Astronics Corporation and PCX Aerostructures, LLC.
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Michael J. Shannon, 5960
![]() | Director Since: 2019
Audit Committee Sustainability Committee
Former Chief Executive Officer of Houghton International Inc. |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | Extensive and valuable experience acquired through his leadership roles in global chemical businesses |
• | Experience in accounting/finance, financial reporting, risk assessment, industrial marketing and services, organizational development, global organizations, governance, strategic planning, research and development, and manufacturing |
• | Complementary experience and continuing education in corporate governance through his service on the boards of both public and private companies |
Mr. Shannon was the Chief Executive Officer of Houghton International Inc., a global leader in delivering advanced metalworking fluids and services for the automotive, aerospace, metals, mining, machinery, offshore and beverage industries, from December 2015 until July 31, 2019. Previously, he was Houghton’s Chief Operating Officer from April 2014 until November 2015. Mr. Shannon joined Houghton in 2009 as Senior Vice President Global Operations, Supply Chain, Information Technologies (IT) and Environmental, Health and Safety (EH&S) before assuming additional commercial responsibilities prior to becoming Chief Operating Officer. Prior to joining Houghton, he spent 24 years at Ashland Inc. in various senior-level positions including Corporate Officer and President of Global Supply Chain. Mr. Shannon served as a member of the board of directors of Houghton International Inc. from December 2015 until its combination with Quaker Chemical Corporation. He also served as a director of Reichhold Chemical from June 2016 to July 2017. He currently serves as a member of the board of directors of Hexion Inc.
10 | | Quaker Houghton |
PROPOSAL 1 | ||
The Board believes that, in addition to the information presented above regarding each director nominee’s specific experience, qualifications, attributes and skills, each director nominee has significant leadership experience derived from his or her professional experience and has a reputation for integrity and honesty and adheres to high ethical standards. These attributes have led the Board to conclude that each of the nominees should continue to serve as a director of Quaker Houghton. The process undertaken by the Company’s Governance Committee in recommending these nominees is described below under the heading “Governance Committee Procedures for Selecting Director Nominees.”
The Board recommends that you vote “FOR” the election of Michael F. Barry, Charlotte C. Decker, Jeffry D. Frisby and Michael J. Shannon as directors of Quaker Houghton.
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CONTINUING DIRECTORS | ||||
Biographies of Continuing Directors
Below is information about our other incumbent directors who were elected as Class III members of the Board in 2019 and whose terms expire in 2022, including descriptions of their qualifications and business experience and directorships over the past five years:
Mark A. Douglas, 5758
![]() | Director Since: 2013
President and Chief |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | Management experience of a global chemical business |
• | Experience in |
• | Complementary experience and continuing education through his service on the boards of both public and private companies |
Mr. Douglas has been President and Chief OperatingExecutive Officer of FMC Corporation since June 2018. He also became President and CEO-elect on December 18, 2019.1, 2020. FMC is an agricultural sciences company that advances farming through innovative and sustainable crop protection technologies. He previously served as President and Chief Operating Officer of FMC from June 2018 until May 31, 2020. Prior to that role, he was President, FMC Agricultural Solutions from October 2012 through May 2018, President, FMC’s Industrial Chemicals Group from January 2011 to September 2012 and Vice President, Global Operations and International Development in 2010. Before joining FMC, Mr. Douglas held various senior management positions with Dow Chemical, a leader in specialty chemicals delivering products and solutions to sectors such as electronics, water, energy and coatings. He was Vice President, President–Asia, Dow Advanced Materials from April to December 2009. Prior to that, he was based in Shanghai, China as Corporate Vice President, President–Asia of Rohm and Haas Company, a chemical manufacturing company, from March 2007 to April 2009. Mr. Douglas currently serves as a director of FMC Corporation and Crop Life International andInternational. He also serves on the board of trustees of the Pennsylvania Academy of Fine Arts.
Sanjay Hinduja, 5556
![]() | Director Since: 2019
Governance Committee
Chairman of Gulf Oil International Limited |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | Experience in accounting/finance, financial reporting, risk assessment, organizational development, global organizations, governance, strategic planning and mergers and acquisitions |
• | Complementary experience and continuing education through his service on the board of private companies |
Mr. Hinduja has been Chairman of Gulf Oil International Limited, which is part of the privately controlled multibillion Hinduja Group of Companies, since February 2001. He has been employed by the Hinduja Group of Companies since January 19981988 and has been responsible for leading Gulf Oil’s global strategy and expansion. He was the Non-Executive Chairman of Gulf Oil Corporation Limited from August 2005 until September 2014. He currently serves as a member of the board of directors of Gulf Oil International Middle East Limited, Gulf Oil Middle East Limited, Gulf Oil Philippines Inc., Sangam Limited, Gulf Oil Marine Limited, and also serves as the Chairman of Gulf Oil Lubricants India Limited. Mr. Hinduja served as Chairman of Houghton International Inc. from January 2013 until its combination with Quaker Chemical Corporation. Mr. Hinduja currently serves as a trustee of the Hinduja Foundation UK, which is responsible for the Hinduja Family philanthropic activities in the UK.
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CONTINUING DIRECTORS | ||
William H. Osborne, 6061
![]() | Director Since: 2016
Compensation and Human Resources Committee
Senior Vice President of Operations and Total Quality, |
DIRECTOR QUALIFICATION HIGHLIGHTS
• |
• | Seasoned executive with significant experience in accounting/finance, financial reporting, engineering, global manufacturing and quality, industrial sales and marketing, organizational development, global organizations, governance, strategic planning, mergers and acquisitions, divestitures and corporate development |
Mr. Osborne has been Senior Vice President of Operations and Total Quality Enterprise Performancefor Boeing Defense, Space & Security (BDS), one of The Boeing CompanyCompany’s three business units, since May 2018.1, 2020. The Boeing Company is the world’s largest aerospace company and a leading manufacturer of commercial jetliners and defense, space and security systems. He also maintains oversight for Environment, Health & Safety at BDS. In addition to his current role, Mr. Osborne was named to a two-year assignment leading Boeing’s Manufacturing Council, during which he also will serve on the Boeing Executive Council. Previously, he was Boeing’s Senior Vice President, Enterprise Operations from May 2018 until April 30, 2020. Before joining Boeing, he was Senior Vice President of Global Manufacturing and Quality at Navistar International Corporation, a holding company whose subsidiaries and affiliates produce International® brand commercial and military trucks, from August 2013 to April 2018. He was also Senior Vice President of Custom Products at Navistar from May 2011 to August 2013. Before joining Navistar, he served as President and Chief Executive Officer of Federal Signal Corporation, a designer and manufacturer of a suite of products and integrated solutions for municipal, governmental, industrial and airport customers, from September 2008 to October 2010.
Fay West, 5152
![]() | Director Since: 2016
Audit Committee (Chair) Governance Committee
Senior Vice President and Chief Financial Officer of SunCoke Energy, Inc. |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | Extensive experience in accounting/finance, financial reporting, risk assessment, mergers and acquisitions, divestitures and business restructuring, organizational development, global organizations, strategic planning, governance and corporate development |
• | Complementary experience and education in corporate governance through her service |
Ms. West has, since October 2014, been Senior Vice President and Chief Financial Officer of SunCoke Energy, Inc., the largest independent producer of coke in the Americas, with 50 years of experience supplying coke to the integrated steel industry. She also served as Senior Vice President and Chief Financial Officer of SunCoke Energy Partners, L.P., a publicly traded master limited partnership that manufactures coke used in the blast furnace production of steel and provides coal handling services to the coke, steel and power industries, from October 2014 until its merger with SunCoke Energy Partners GP LLC on January 1, 2020. Previously, she was SunCoke Energy’s Vice President and Controller from February 2011 to October 2014 and Vice President and Controller of SunCoke Energy Partners GP LLC, the general partner of SunCoke Energy Partners, L.P. from July 2012 to October 2014. Prior to joining SunCoke Energy, Ms. West was Assistant Controller at United Continental Holdings, Inc., an airline holding company, from April 2010 to January 2011. She served as a director of SunCoke Energy Partners, L.P. from October 2014 until June 28, 2019.
![]() | 2021 Proxy Statement |
CONTINUING DIRECTORS | ||
Below is information about our other incumbent directors who were elected as Class I members of the Board in 2020 and whose terms expire in 2023, including descriptions of their qualifications and business experience and directorships over the past five years:
Donald R. Caldwell, 74
![]() | Director Since: 1997 Lead Director Audit Committee Compensation and Human Resources Committee Chairman and Chief Executive Officer of Cross Atlantic Capital Partners, Inc. |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | Deep financial, entrepreneurial and business expertise perspective, especially on strategic and financial matters |
• | Experience in financial reporting, risk assessment, strategic planning and corporate development |
• | Complementary experience and continuing education in corporate governance, finance and strategy as a member of the boards and board committees of other public companies |
Mr. Caldwell, an experienced and successful investor, co-founded Cross Atlantic Capital Partners, Inc., a venture capital management company, and has served as its Chairman and Chief Executive Officer since 1999. He was Chief Executive Officer of InsPro Technologies Corporation, a company that focuses on providing a policy administration software solution in the insurance industry, one of Cross Atlantic Capital Partners’ portfolio companies from January 2015 to October 2017. Previously, he was President and Chief Operating Officer of Safeguard Scientifics, Inc., a holding company with investments in the growth-stage technology and life sciences businesses, from February 1996 to February 1999. He has been our Lead Director since 2016. He is a director of Lightning Gaming, Inc., a Cross Atlantic Capital Partners’ portfolio company. In addition, he is currently a director of Haverford Trust Company and a director and Chairman of the Board of Simplicity Esports and Gaming Company (formerly known as I-AM Capital Acquisition Company). He served as a director of Fox Chase Bancorp. Inc. from October 2014 to July 2016. He also served as a director and Chairman of InsPro Technologies Corporation from 2008 to 2020, a director of Rubicon Technology, Inc. from February 2001 to November 2017, and as a director of Amber Road Inc., from March 2005 to December 2016.
Robert H. Rock, 70
![]() | Director Since: 1996 Compensation and Human Resources Committee (Chair) Governance Committee Chairman and Chief Executive Officer of MLR Holdings, LLC |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | Experience in organizational development, global organizations, governance, strategic planning and corporate development |
• | Complementary experience and continuing education through his service on the boards of both public and private companies |
Mr. Rock has been Chairman and Chief Executive Officer of MLR Holdings, LLC, an investment company operating in the publishing and information industry, since January 2015, having also served as President of MLR Holdings, LLC (and its predecessor, MLR Publishing Company) since 1989. Previously, he was Chairman of The Hay Group, a management consulting firm, from 1984 to 1987. He currently is a trustee of The Penn Mutual Life Insurance Company.
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�� | CONTINUING DIRECTORS | |
Ramaswami Seshasayee, 72
![]() | Director Since: 2019 Compensation and Human Resources Committee Former Managing Director and Chief Executive Officer of Ashok Leyland Limited India |
DIRECTOR QUALIFICATION HIGHLIGHTS
• | Experience in accounting/finance, financial reporting, risk assessment, industrial marketing, organizational development, global organizations, governance, strategic planning, mergers and acquisitions, technology and science, and manufacturing |
• | Extensive experience in the transportation industry |
• | Complementary experience and continuing education in corporate governance through his service on the boards of both public and private companies |
Mr. Seshasayee was the Managing Director and Chief Executive Officer at Ashok Leyland Limited, India, a company known for being the second largest manufacturer of commercial vehicles in India, the fourth largest manufacturer of buses in the world and the twelfth largest manufacturer of trucks, from April 1998 to March 2011; its Executive Vice Chairman from April 2011 until March 2013; and its Non-Executive Vice Chairman from April 2013 until July 2016. Mr. Seshasayee currently serves as a member of the board of directors of Asian Paints, Ltd. Mr. Seshasayee served as Chairman of IndusInd Bank Ltd. India from June 2007 until August 2019. Prior to the combination with Quaker Chemical Corporation, he also served as a member of the board of directors of Houghton International Inc. from April 2013 until 2019.
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CORPORATE GOVERNANCE | ||||
Quaker Houghton’s business is conducted by its officers, managers and employees under the direction of the Chief Executive Officer (“CEO”) and with oversight by the Board of Directors. The Company’s CEO ishas historically also been the Chairman of the Board of Directors. The Board has long held that,because, given Quaker Houghton’s size and management structure prior to the Combination, the Board had concluded that this combination of roles was more effective. However, in light of the significant growth in the size and complexity of the Company and Mr. Barry’s decision to retire at the end of this year, the Board has concluded that it is bestappropriate, after Mr. Barry’s retirement, to combineseparate the roles of CEO and Chairman of the Board and CEO.Board. The Board believes having one leader servinghas commenced a comprehensive search for his successor that will include both internal and external candidates. To facilitate an effective and orderly transition of the CEO position, the Board intends to enter into an agreement with Mr. Barry for him to provide consulting services and strategic advice for a period after his retirement. Assuming Mr. Barry is re-elected as botha director at the annual meeting, the Board also intends that he remain as Chairman following his retirement in light of his substantial knowledge of the Company through his longstanding service and leadership as President and CEO provides decisive and effective leadership.as a director as well as his wealth of organizational, operational and risk management expertise.
The Board of Directors has also appointed an independent Lead Director. The Lead Director rotates on a biennial basis unless the Board determines that the reappointment of the Lead Director at the end of atwo-year term is in the best interests of the Company. The Lead Director serves as the liaison between the Chairman/CEO and the Board of Directors.Directors and will continue to do so after the roles of Chairman and CEO have been separated beginning in 2022. The Lead Director also ensures that the respective responsibilities of the directors and the Chairman/CEOChairman are understood; collaborates with the Chairman/Chairman and CEO to ensure the appropriate flow of information to the Board; works with the Chairman/CEOChairman to develop the agendas for Board meetings; coordinates and develops the agenda for and presides over sessions of the Board’s independent directors; ensures appropriate minutes are kept of such meetings and, as appropriate, communicates to the Chairman/Chairman and CEO the substance of such discussions. Mr. Donald R. Caldwell is currently thehas served as our Lead Director having beensince 2016 and was reappointed to the position for atwo-year term in May 2018.2020.
In accordance with NYSE rules, the Board affirmatively determines the independence of each director and nominee for election as a director in accordance with guidelines it has adopted which include all elements of independence set forth in the NYSE listing standards. The Company’s director independence standards are described in the Company’s Corporate Governance Guidelines.
On an annual basis, each director and executive officer is obligated to disclose, among other things, any transactions with the Company in which the director (or any organization of which the director is a partner, shareholder or officer) or executive officer, or any member of his or her immediate family, have a direct or indirect material interest. Based on the Company’s adopted independence standards and the information provided by the directors, the Board determined at its meeting held on February 26, 2020,24, 2021, that allnon-employee directors who served in fiscal 2019,2020, as well as each nominee for director and thosenon-employee directors who will continue to serve after our 20202021 annual meeting of shareholders, are independent within our guidelines and have no material relationship with the Company as defined by our guidelines. The Company’s independentnon-employee directors are Donald R. Caldwell, Robert E. Chappell,Charlotte C. Decker, Mark A. Douglas, Jeffry D. Frisby, Sanjay Hinduja, William H. Osborne, Robert H. Rock, Ramaswami Seshasayee, Michael J. Shannon and Fay West. With respect to Mr. Osborne, the Board
16 | 2021 Proxy Statement | Quaker Houghton |
CORPORATE GOVERNANCE | ||
considered the scope and nature of the business Quaker Houghton transacts with The Boeing Company, a company at which Mr. Osborne is currently serving as Senior Vice President of Operations and Total Quality Enterprise Performance,for Boeing Defense, Space & Security (BDS), one of The Boeing Company’s three business units, as further discussed under “Certain Relationships and Related Party Transactions,” and determined per the Company’s Corporate Governance Guidelines that the transactions are not material to him and do not impair his independence or present a conflict of interest on his part in connection with his service on the Board.
Based on the Company’s independence standards, the Board has affirmatively determined that Michael F. Barry is not independent because he currently serves as an executive officer of the Company. There are no family relationships between any of the Quaker Houghton directors, executive officers or nominees for election as directors.
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Governance Committee Procedures for Selecting Director Nominees
The Governance Committee’s goal is to assemble a Board that brings to Quaker Houghton a variety of perspectives and skills derived from high quality business and professional experience. The current composition of the Board includes directors (including those nominated for reelection this year) with complementary skills, expertise and experience such that the Board, on the whole, has competence and experience in a wide range of relevant areas.
Quaker Houghton’s Board includes eleven directors who are or have served as chief executive officers or in other senior management roles, nine directors with specialized accounting and finance knowledge, fivesix directors with experience in the chemical industry or other technology or science areas, eightnine directors who have served on the boards of other public companies, eleven directors with international business experience and seveneight directors with experience in industries served by Quaker Houghton. The Governance Committee will continue to evaluate the needs of Quaker Houghton and its shareholders to ensure that the competency of the Board, as a whole, is relevant and robust.
In evaluating director nominees, the Governance Committee considers the appropriate size of Quaker Houghton’s Board of Directors and the needs of Quaker Houghton and its shareholders with respect to the particular talents, experience and capacities of its directors, including: experience in industries similar to Quaker Houghton’s; managerial and other leadership experience; business acumen and other particular expertise; business development experience; strategic capability; independence of judgment; familiarity with corporate governance and the responsibilities of directors and the ability to fulfill those responsibilities; standing and reputation as a person of integrity; the potential contribution of each individual to the diversity of backgrounds, experience and competencies that the Governance Committee desires to have represented; and ability to work constructively with the CEO and the Board. In considering nominees for the Board of Directors, the Governance Committee considers the entirety of each candidate’s credentials and the anticipated contributions of the individual as a member of the Board.
Under Quaker Houghton’s Corporate Governance Guidelines, directors who also serve as CEOs or in equivalent positions should not serve concurrently on more than three other boards of public companies in addition to the Quaker Houghton Board, and directors who do not serve as CEOs or in equivalent positions should not serve concurrently on more than four other boards of public companies in addition to the Quaker Houghton Board. Under the listing standards of the NYSE, without specific approval from the Board, no member of the Audit Committee may serve on more than twothree public company audit committees in addition to Quaker Houghton’s Audit Committee. The Board has determined that Mr. Caldwell’s simultaneous service on the audit committees of more than two public companies in addition to Quaker Houghton’s does not impair his ability to effectively serve on Quaker Houghton’s Audit Committee.
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CORPORATE GOVERNANCE | ||
When identifying and evaluating nominees for director, the Governance Committee first examines whether current members of the Board are willing to continue their service. Current members of the Board with skills and experience that are relevant and who are willing to continue to serve are considered for renomination, balancing the value of continuity of service with that of obtaining a new perspective. If a current member does not choose to stand for reelection, the Governance Committee will not recommend that director for reelection. If the Governance Committee recommends an increase in the membership of the Board, it will identify the experience and personal capacities desired and will seek suggestions as to nominees from the current Board membership. In addition, and as has been done in the past, the Governance Committee may engage third parties to assist in the identification or evaluation of potential director nominees.
Summary of Director Core Competencies
The following chart summarizes the core competencies currently represented on our Board.
SKILLS | DIRECTORS WITH EXPERIENCE | |
Senior Leadership | 11 | |
Accounting / Financial Experience | 9 | |
Technology / Science / Chemical Industry | | |
Other Public Company Board Experience | | |
International Business Experience | 11 | |
Industry Knowledge | |
Although we do not have a formal policy regarding diversity and do not have constituent or representative directors, diversity is one important factor, among many, in our nomination process. The Governance Committee considers a variety of factors, including age, gender, race, executive and professional experience, and perspectives of the candidate and how the candidate’s qualifications will enhance the composition of the Board of Directors as a whole. Since 2020, fifty-five percent (55%) of our Board has been comprised of directors who self-identify as minorities or persons of color, and women.
18 | 2021 Proxy Statement | Quaker Houghton |
CORPORATE GOVERNANCE | ||
All but one of our continuing directors are independent and our Board has a mix of relatively newer and longer-tenured directors. The charts below show board makeup by various characteristics:
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Shareholder Nominations and Recommendations
The Company’s RestatedBy-Laws(“By-Laws (“By-Laws”) describe how shareholders may nominate candidates for election to our Board of Directors. For our 20212022 annual meeting of shareholders, shareholders may nominate a candidate for election to our Board only by sending written notice to our Corporate Secretary at our principal office at 901 E. Hector Street, Conshohocken, Pennsylvania 19428. This notice must be received on or before February 12, 2021,2022, but no earlier than January 13, 20212022 (except that if the date of the 20212022 annual meeting of shareholders is more than 30 days before or more than 60 days after the anniversary date of the 20202021 annual meeting, this notice must be received no earlier than the close of business on the 120th day before the date of the 20212022 annual meeting and not later than the close of business on the later of the 90th day before the date of the 20212022 annual meeting or, if the first public announcement of the date of the 20212022 annual meeting is less than 100 days before the date of the meeting, by the 10th day after the public announcement).
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The notice to our Corporate Secretary must contain or be accompanied by the information required by Sections 3.15 and 2.13 of ourBy-Laws, including, among other things: (i) the name, age, principal occupation and business and residence address of each person nominated; (ii) the class and number of shares of our stock which are directly or indirectly owned beneficially and/or of record by each person nominated; (iii) the name and record address of the shareholder making the nomination and the beneficial owner, if any, on whose behalf the nomination is made; (iv) the class and number of shares of our stock which are directly or indirectly owned beneficially and/or of record by the shareholder making the nomination and the beneficial owner, if any, on whose behalf the nomination is made; (v) a description of any direct and indirect compensation and other monetary agreements, arrangements and understandings, and any other material relationships (including any familial relationships) between the shareholder giving notice (and the beneficial owner) and the nominee and any respective affiliates, associates or others with whom any of them are acting; and (vi) a description of any hedging or other transaction that has been entered into by or on behalf of, or any other agreement or understanding (including, without limitation, any put, short position or any borrowing or lending of shares) that has been made, the effect or intent of which is to mitigate loss to or manage risk of share price changes for, or to increase or decrease the voting power of, the shareholder or any shareholder associated person (as defined in theBy-Laws) with respect to any share of our stock, as well as certain other information. This list of required information is not exhaustive. A copy of the full text of the relevantBy-Law provisions, which includes the complete list of all information that must be submitted to nominate a director, may be obtained upon written request directed to our Corporate Secretary at our principal office. A copy of ourBy-Laws is also posted on the Investors/Corporate Governance section of our website athttps://www.quakerhoughton.com.
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CORPORATE GOVERNANCE | ||
In addition to a shareholder’s ability to nominate candidates to serve on our Board as described above, shareholders also may recommend to the Governance Committee a prospective nominee for its consideration. The Governance Committee will consider timely recommendations received from shareholders regarding director nominee candidates and accompanied by sufficient information to enable the Governance Committee to assess the candidate’s qualifications, along with confirmation of the candidate’s consent to serve as a director if elected. Such recommendations should be sent to our Corporate Secretary at our principal office. Any recommendation received from a shareholder after January 1 of any year is not assured of being considered for nomination in that year. The Governance Committee applies the same criteria in evaluating candidates nominated by shareholders as it does in evaluating candidates identified by Company sources. No shareholder or group of shareholders recommended a director nominee for election at Quaker Houghton’s 2020 annual meeting of shareholders.2021 Annual Meeting.
WhileThe Board is responsible for the Board hasoverall oversight of the ultimate oversight responsibility forCompany’s risk management consistentpractices. The Board regularly reviews the material risks associated with the Company’s business plans and operations as part of its oversight of the Company’s strategic direction and ongoing activities. Systemic risk oversight is a function of the full Board, with the full Board retaining primary oversight of certain key risks, including those associated with our strategic plan, capital structure and development activities and those associated with significant external events. Consistent with the Company’s By-Laws, the Board has delegated muchoversight of the Company’s management of material risks within committees’ areas of responsibility for risk management to the standing Committees ofAudit Committee, the Board. Compensation and Human Resources Committee, and the Sustainability Committee as applicable.
The Audit Committee has oversight over financial risks, such as financial reporting and internal controls; compliance risks, including oversight of the compliance program and disposition of certain complaints and/or violations of the Code of Conduct and Financial Code of Ethics; and operational risk, such as loss of property, cyber-security, business interruption and other exposures traditionally mitigated through insurance products.
In addition, the Compensation/Management DevelopmentThe Compensation and Human Resources Committee is responsible for developing a balanced compensation system for all employees, including appropriate long-term and short-term incentive compensation targets that encourage a level of risk-taking behavior consistent with the overall financial/strategic goals of the Company, as well as oversight of the management, development and succession processes.
processes. Finally, from time to time, Quaker Houghton faces other risks material to its business and, in those circumstances,At meetings of the Board (or at times,and its committees, Company management routinely presents on the Executive Committee) is regularly informed and provides input and advice on actions being considered to mitigate exposures associated with those risks. As appropriate, the Board considers specific risk topics, including risks associated with our strategic plan, our capital structure and our development activities. Further, the Board is routinely informed of developments at and affecting the Company that could affect ourthe Company’s existing risks or risk profile, or other aspects of our business through reports from our business unitsproviding the directors with an opportunity to discuss these risks and otherwise. Thisthe Company’s risk mitigation practices and promoting a coordinated approach to risk oversight. Further, this oversight by the Board is designed to maintain an appropriate level of risk and to address new risks as they arise.
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Throughout 2020, the Board exercised continuous oversight of the Company’s strategy and response to the COVID-19 pandemic, particularly with respect to the social, IT environment/information security and financial challenges presented, receiving frequent updates from management not only in regular meetings but also through the receipt of periodic information throughout the year. This regular dialogue and access to information provided the Board with tools to effectively exercise its oversight function and provide leadership and support to management during unprecedented times.
Communications with the Board of Directors; Corporate Governance Guidelines
Shareholders or other interested parties may communicate with any of our directors, includingnon-management directors, by writing to them c/o Robert T. Traub, Senior Vice President, General Counsel and Corporate Secretary, at the address set forth below. All communications received will be forwarded to the Governance Committee and the addressee. The Board believes it is management’s role to speak for Quaker Houghton and, accordingly, any such communication received will be shared with the Chief Executive Officer and other executive officers, as appropriate. The Company has adopted Corporate Governance Guidelines and other governance materials. Our Code of Conduct, Financial Code of Ethics for Senior Financial Officers, Corporate Governance Guidelines and Audit, Compensation/Management DevelopmentCompensation and Human Resources, Governance and Sustainability Committee Charters have been posted on and are available free of charge by accessing the Investors/Corporate Governance section of our website athttps://www.quakerhoughton.com or by written request addressed to Quaker Houghton, 901 E. Hector Street, Conshohocken, Pennsylvania 19428, Attention: Victoria K. Gehris, Assistant Secretary. The references to our website contained in this proxy statement are for informational purposes, and the content of the website is not incorporated by such references in this proxy statement.
The Company has a compliance program, the governing documents of which include a Code of Conduct (which is applicable to all of the Company’s directors, executive officers and employees) and a Financial Code of Ethics for Senior Financial Officers (which is applicable to the Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Global Controller, Senior Treasury Analyst, each Controller at majority-owned affiliates, Assistant Controller, and other individuals performing similar functions designated by the Board). The Company’s compliance program embodies the Company’s global principles and practices relating to the ethical conduct of the Company’s business and its longstanding commitment to fairness, honesty, integrity and full Company compliance with all laws affecting the Company’s business.
The Company’s compliance program includes a means for employees, customers, suppliers, shareholders and other interested parties to submit confidential and anonymous reports of suspected or actual violations of the Company’s Code of Conduct or the Financial Code of Ethics for Senior Financial Officers relating, among other things, to:
accounting practices, internal accounting controls, or auditing matters and procedures;
theft or fraud of any amount;
insider trading;
performance and execution of contracts;
conflicts of interest;
violations of securities and antitrust laws; and
violations of the Foreign Corrupt Practices Act.
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CORPORATE GOVERNANCE | ||
Any employee, shareholder or other interested party can call the Quaker Houghton Hotline at1-800-869-9414 or1-503-747-1970 from outside the United States. The Quaker Houghton Hotline is a toll-free telephone line dedicated solely to receiving questions and concerns and directing them to the appropriate authority for action. All calls are answered by an independent third-party service available 24 hours a day, seven days a week. Alternatively, any employee, shareholder or other interested party may report such activity or issues viahttps://quakerhoughton.ethicspoint.com, an independent third-party provider. At that website, an interested party will be provided with a case number, which will allow the individual to request afollow-up. To further track the case, one may also request a login and password, which will allow the individual tofollow-up on the case as necessary.
The Audit Committee oversees the administration of the Company’s compliance program and is directly responsible for the disposition of all reported violations of the Financial Code of Ethics for Senior Financial Officers and complaints received regarding accounting, internal accounting controls or audit matters. In addition, the Audit Committee is responsible for the disposition of all violations of (and approves any requested waivers to) the Code of Conduct for directors and executive officers and for the disposition of other serious violations of the Code of Conduct. No such waivers were requested in 2019.2020. We maintain a current copy of our Financial Code of Ethics for Senior Financial Officers and will promptly post any amendments to or waivers of our Financial Code of Ethics for Senior Financial Officers on our website athttps://www.quakerhoughton.com under the heading Investors/Corporate Governance.
Employee, Officer and Director Hedging
As described in the Company’s Policy Relating to Confidentiality of Information and Insider Trading in Securities, all directors, officers and employees of Quaker Houghton and its subsidiaries, may not participate in hedging type activities in Quaker Houghton stock, including trading in puts, calls or similar options on Quaker Houghton stock or selling Quaker Houghton stock “short.” Such individuals may, however, receive and exercise stock options granted to them by Quaker Houghton.
On August 1, 2019, Quaker Chemical Corporation completed its combination (the “Combination”) with Houghton International Inc. (“Houghton”). Quaker Houghton is now thea global leader in industrial process fluids. With a presence around the world, including operations in over 25 countries, our customers include thousands of the world’s most advanced and specialized steel, aluminum, automotive, aerospace, offshore, can, mining, and metalworking companies. Our high-performing, innovative and sustainable solutions are backed bybest-in-class technology, deep process knowledge, and customized services. With over 4,000approximately 4,200 employees, including chemists, engineers and industry experts, and robust research and development, we seek to help our customers optimize processes, reduce costs, advance safety and sustainability, and advance progress.
During the year ended December 31, 2019,2020, Quaker Houghton achieved net sales of $1.1 billion,$1,417.7 million, net income of $31.6$39.7 million and gross margin of 34.6%, which reflects five months of inclusion of the operations of Houghton since the Combination.36.2%. These results reflect significant combination and other acquisition-related expenses as well as challenging market conditions and foreign exchange headwinds,primarily resulting from the COVID-19 pandemic, but operating margins remained strong and improved year-over-year and the Company made goodcontinued to make excellent progress on its integration and cost synergies initiatives. Our management believes that the recently completed combination provides Quaker Houghton with greater opportunity to deliver innovative solutions and to help its customers’ operations run more effectively, efficiently and sustainably.
Quaker Houghton |
CORPORATE GOVERNANCE | ||
We, at Quaker Houghton, understand that we have a great responsibility to act sustainably towards our environment, communities, colleagues and customers. At its core, sustainability focuses attention on meeting the needs of the present while managing environmental, social and economic concerns in a responsible and ethical manner so that future generations can thrive.are healthy and successful.
In 2020, we dedicated additional resources towards our Sustainability Program and have established a Board Sustainability Committee, consisting entirely of independent directors, all of whom have substantial relevant industry experience as well as expertise in sustainability matters, and an executive Sustainability Steering Committee that includes, among others, our Chief Strategy Officer and Corporate Manager of Sustainability, to drive further progress. Both Committees met multiple times throughout the year to provide oversight on strategy, disclosure alignment and governance.
The Company achieved significant progress on increasing our reporting transparency in 2020. In addition to substantially increasing relevant data, our 2020 Sustainability Report (available on our website at: https://www.quakerhoughton.com/sustainability) aligns to Sustainability Accounting Standards Board (SASB) Chemical Industry Standards and references standards from the Global Reporting Initiative (GRI). We have also issued a statement of support for the Task Force on Climate-related Financial Disclosure (TCFD) and will continue building its core elements into our strategy, governance and disclosure. We performed a broad-based materiality study and assessment and we expect to further enhance our sustainability reporting in 2021 by preparing a full report in accordance with the GRI framework. Our materiality study (which involved various stakeholders, such as investors, customers, and colleagues) helped us determine areas of strategic focus and new initiatives to implement, as well as how to build them into an integrated management approach.
Our vision for sustainability is “Social, Environmental, Economic Progress. Through uniting our people, expertise and resources we will deliver contributions that result in a better, safer world and make a positive difference in the lives and organizations we touch.”
We will continue to collaborate with our Board and executive committees to finalize our refreshed strategy and initiatives, and anticipate that we will announce our comprehensive program, initiatives, and corresponding goals in 2021. In anticipation of our comprehensive program launch, we are committing to the following climate-related targets: By 2030, we will be carbon neutral in our global operations. Neutrality will be achieved through actions such as enacting energy efficiency and conservation measures, purchasing green power and Energy Attribute Certificates (e.g., Renewable Energy Certificates), as well as neutralizing residual emissions through the use of high-quality carbon offsets. We are also committed to setting science-based targets by 2030, to support the achievement of net zero emissions across our value chain by 2050.
Our approach to sustainability is built on four key pillars, outlined below, that support our vision and align to our core values: (i) live safe; (ii) act with integrity; (iii) drive results; (iv) exceed customer expectations; (v) embrace diversity; and (vi) do great things together. By fostering a culture that exemplifies our core values, which have three drivers: principles, performancewe gain, as a company, unique perspectives, backgrounds and people:varying experiences to ensure its continued long-term success.
PrinciplesInnovating Together for a Better Tomorrow
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In 2020, we have dedicated more resources towards our sustainability program and have established a board Sustainability Committee and also an executive Sustainability Steering Committee to drive further progress.
We are proud to report that in 2019 we achieved significant progress on our sustainability initiatives, including publishing our 2019 Sustainability Report (available on our website at: www.quakerhoughton.com/sustainability).
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Protecting Our Planet
• | Reducing our direct emissions |
• | Managing our water responsibly |
• | Minimizing our waste |
Empowering Our Colleagues and Communities
• | Embracing diversity and inclusion |
• | Investing in our people’s growth and development |
• | Supporting our local communities’ development |
• | Empowering our colleagues to live safe |
Sourcing Our Materials Responsibly
• | Confirming sustainable sourcing of renewable raw materials |
• | Ensuring everyone in the supply chain is treated with dignity and respect |
Quaker Houghton considers its employees as its greatest strength in differentiating our business and strengthening our market positions. We have established core values that are inclusive of embracing diversity and creating a culture where we learn from and are inspired by the many cultures, backgrounds and knowledge of our team members. The Company’s goal is to have an organization that is inclusive of all of its people and is representative of the communities in which we operate. The Company’s core values as listed above embody who we are as a company, guide our decisions and inspire us. Our commitment to these values, in words and actions, builds a stronger Quaker Houghton, and these values guide the Company’s internal conduct and its relationship with the outside world. The Company respects and values all of its employees and believes belonging, inclusion, diversity and equality are essential to drive the Company’s success.
The Company is committed to maintaining a strong safety culture and to emphasizing the importance of its employees’ role in identifying, mitigating and communicating safety risks. The Company maintains policies and operational practices that communicate a culture where all levels of employees are responsible for safety. We believe that the achievement of superior safety performance is both an important short-term and long-term strategic goal in managing our operations. The Company emphasizes ten “lifesaving rules” which make a significant difference in preventing serious injuries and fatalities. The Company also requires all employees to regularly complete safety trainings. Additionally, our senior management team is closely involved in our safety programs, incident reviews, and conducts regular reviews of safety performance metrics and reviews the Company’s safety performance during Company-wide meetings.
Talent Management and Retention
Maintaining a robust pipeline of talent is crucial to the Company’s continued success and is a key aspect of succession planning efforts across the organization. The Company’s leadership and human resources teams are responsible for attracting and retaining top talent by facilitating an environment where employees want to show up to work and do great things together. To achieve sustained high performance, Management invests in the development, safety and wellbeing of its employees. Additionally, the Company regularly evaluates its compensation and benefits package, including health and wellness benefits, paid-time off
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policies, monetary compensation and educational reimbursements, to ensure that the Company’s total compensation and benefits packages are aligned with our business strategy, organizational culture, and diversity and inclusion philosophy while ensuring we remain competitive in the markets we serve while following local and statutory wage and benefits laws and guidelines.
Forward-Looking Statements
This proxy statement contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified because they do not relate strictly to historical or current facts, and include statements as to our intents or beliefs, among other things. We caution you not to place undue reliance on our forward-looking statements. Our forward-looking statements are subject to risks, uncertainties and assumptions about the Company and its operations that are subject to change based on various important factors, many of which are beyond our control. A major risk is that demand for the Company’s products and services is largely derived from the demand for its customers’ products, which subjects the Company to uncertainties related to their businesses, including our customers’ willingness to participate in our sustainability initiatives and our ability to devote adequate resources to such initiatives. Other major risks and uncertainties include, but are not limited to, significant increases in raw material costs, worldwide economic and political conditions, and other factors related to the Combination, other acquisitions and integration efforts.
For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 1A of our Annual Report on Form10-K for the year ended December 31, 2019,2020, as amended, and in our quarterly and other reports filed from time to time with the SEC. We do not intend to update or revise any forward-looking statements to reflect new information or future events or for any other reason.
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COMMITTEES | ||||
Meetings and Committees of the Board
Our Board of Directors has fivefour standing committees, the Audit, Compensation/Management Development, Executive,Compensation and Human Resources, Governance, and Sustainability Committees. Each member of the Audit, Compensation/Management DevelopmentCompensation and Human Resources, Governance Committeeand Sustainability Committees is independent as defined for members of the respective committee in the listing standards of the NYSE and Quaker Houghton’s Corporate Governance Guidelines. The Audit Committee is established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “1934 Act”). The Board has affirmatively determined that four of theall five members of the Audit Committee, including its current Chair, Fay West, meet the criteria for an “audit committee financial expert” as defined by the SEC and that William H. Osborne, although not currently a member of the Audit Committee, also meets this financial expert criteria. The Board of Directors has adopted a charter for each of these committees other than the Executive Committee and the newly established Sustainability Committee whose charter is expected to be adopted soon.committees. Each committee reports its actions to the full Board at the Board’s next regular meeting. A summary of the principal duties of each committee follows the table below.
Committee Membership and Meetings Held in 2019 | ||||||||||||||||
Committee Membership and Meetings Held in 2020 | Committee Membership and Meetings Held in 2020 | |||||||||||||||
Name | Audit | Compensation/ Management Development | Executive | Governance | Audit | Compensation and Human Resources | Governance | Sustainability | ||||||||
Michael F. Barry | X | |||||||||||||||
Donald R. Caldwell | X | X | CHAIR | X | X | |||||||||||
Robert E. Chappell | X | CHAIR | CHAIR(1) | |||||||||||||
Charlotte C. Decker(2) | X | |||||||||||||||
Mark A. Douglas | X | X | * | CHAIR(3) | X | |||||||||||
Sanjay Hinduja | X(1) | X | ||||||||||||||
Jeffry D. Frisby | X | X | X | * | CHAIR | |||||||||||
William H. Osborne | X | X | X | * | X | |||||||||||
Robert H. Rock | CHAIR | X | CHAIR | X | ||||||||||||
Ramaswami Seshasayee | X(1) | X | ||||||||||||||
Michael J. Shannon | X(1) | X | X | |||||||||||||
Fay West | CHAIR | X | CHAIR | X | ||||||||||||
Number of Meetings in 2019(2) | 7 | 4 | 0 | 4 | ||||||||||||
Number of Meetings in 2020(4) | 8 | 4 | 5 | 3 |
X | Member. |
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(2) | Ms. Decker was elected as |
Chair since May 13, 2020. |
(4) | The Board of Directors held five regular meetings and one special meeting in |
* | Until May 13, 2020, at which time the Board populated the Sustainability Committee, Mr. Douglas served as a member of the Audit Committee, Mr. Frisby served as a member of the Compensation and Human Resources Committee, and Mr. Osborne served as a member of the Governance Committee. |
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Time is regularly scheduled at each regular meeting for the independent directors to meet as a separate group. The Lead Director acts as chairperson during these sessions.
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Quaker Houghton does not have a formal policy regarding attendance by members of the Board at its annual meeting of shareholders, but all directors are encouraged to attend. In 2019, all then sittingAll of the directors attended the annual meetingvirtual 2020 Annual Meeting of shareholders held on May 8, 2019.Shareholders except Ramaswami Seshasayee, Michael J. Shannon and Charlotte C. Decker. Ms. Decker joined the Board effective as of the date of the 2020 Annual Meeting of Shareholders.
Engages the independent registered public accounting firm and approves all audit andnon-audit fees.
Reviews and discusses with management and the independent registered public accounting firm the annual and quarterly financial statements, including disclosures in the Company’s SEC Reports under Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Discusses with management and the independent registered public accounting firm any audit concerns or difficulties and management’s response.
Reviews the internal audit plan and discusses with the internal auditor and the independent registered public accounting firm their assessment of the effectiveness of Quaker Houghton’s internal controls.
Oversees the handling of matters relating to compliance with law and ethics, including adherence to the standards of business conduct and ethics required by Quaker Houghton’s policies.
Provides oversight to the Chief Financial Officer and Risk Manager on matters relating to risk management generally.
Provides oversight of IT and cybersecurity activities and programs.
Compensation/Management DevelopmentCompensation and Human Resources Committee:
Reviews management’s compensation philosophiesthe Company’s Compensation, Benefit and policies.People Management programs to ensure alignment with business strategy, Company culture and diversity and inclusion philosophy. Provides recommendations to the Board as required by the plan.
ApprovesCollaborates to align strategic initiatives with all Board appointed committees.
Reviews and approves matters affecting CEO and Executives including annual, short-term and long-term incentive programs, performance objectives for the CEO, evaluates the CEO’s performancetargets and achievements against objectives, and makes a recommendationto make recommendations to the Board regarding the CEO’s base salary.
Reviews performance evaluations and approves annual salaries for all executive officers, other than the CEO.
Approves annual incentive and long-term incentive award opportunities for all executive officers, including the CEO.
Administers Quaker Houghton’s Annual Incentive Plan and Long-Term Performance Incentive Plan.compensation.
Reviews and evaluates management developmentapproves the design and succession planningstructure of incentive-based compensation plans and oversees these processes.equity-based plans.
Reviews and recommends to the Board for approval performance criteria for annual and long-term incentive plans.
Regarding any severance arrangements, change-in-control agreements, equity awards, or special or supplemental benefits in relation to an employment agreement, to make recommendations to the Board for the CEO and to approve, as recommended by the CEO, for all other officers.
Reviews and discusses with management disclosures under the Compensation Discussion and Analysis section of this proxy statement and makes recommendations to the Board for inclusion of the Compensation Discussion and Analysis section in this proxy statement and the Company’s Annual Report on Form10-K.
Acts forIn consultation with Management, oversee regulatory compliance with respect to executive compensation matters, including overseeing the Board in situations requiring prompt actionCompany’s policies on structuring compensation programs to pursue tax deductibility, and, as and when a meetingrequired, establish performance goals and certify the attainment of the full Board is not feasible.such goals.
Makes recommendations toTo assure an annual management succession review by Management with the Board about external corporate development programs.Board.
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Establishes guidelines regarding Quaker Houghton’s capital structure and deployment of capital resources.
Evaluates the size and composition of the Board and recommends changes as appropriate.
Reviews and recommends nominees for election as directors.
Reviews the Board’s committee structure and recommends directors to serve as members of each committee.
Reviews and makes recommendations to the Board with respect to the compensation of the Company’s directors.
Develops and reviews annually Quaker Houghton’s Corporate Governance Guidelines.
Conducts an annual performance evaluation of the Board and ensures each Board committee conducts its own annual self-evaluation.
Reviews and approves related party transactions and similar transactions and establishes policies and procedures for such transactions.
Evaluates and advises the Board and the Company on the Company’s safety, environmental and sustainability programs.
Reviews these programs (objectives, plans, and performance) and recommends actions, as necessary, to ensure continuous performance improvement and alignment with internal and external expectations.expectations and business strategy.
Monitors program goals in light of environmental and social trends and expectations.
Evaluates employee occupational safety and health, process safety and monitors environmental responsibility programs.
Monitors the Company’s sustainability program, including program development and advancement, goals and objectives, and progress toward achieving those objectives.
Reviews and advises on the Company’s policies and procedures relating to sustainability and social responsibility activities, including those pertaining to: energy consumption, water usage, climate change, greenhouse gases and other emissions, waste disposal, recycling, and global social matters.
The Audit Committee, the Compensation/Management DevelopmentCompensation and Human Resources Committee, the Governance Committee and the GovernanceSustainability Committee each operates under a charter. These charters can be found on the Company’s website athttps://www.quakerhoughton.com under the heading Investors/Corporate Governance.
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INTERLOCKS AND INSIDER PARTICIPATION | ||||
Compensation Committee Interlocks and Insider Participation
The individuals who served as members of the Compensation/Management DevelopmentCompensation and Human Resources Committee during the year ended December 31, 20192020 are Robert H. Rock (Chair), Donald R. Caldwell, Jeffry D. Frisby, William H. Osborne and Ramaswami Seshasayee, each of whom is an “independent” director. No member of the Compensation/Management DevelopmentCompensation and Human Resources Committee was, during 2019,2020, or had previously been, an officer or employee of Quaker Houghton or its subsidiaries nor had any material interest in a transaction with Quaker Houghton or a business relationship with, or any indebtedness to, Quaker Houghton, in each case that would require disclosure under applicable rules of the SEC. During 2019,2020, no executive officer of Quaker Houghton served as a director or a member of the compensation committee of another company, one of whose executive officers served as a member of Quaker Houghton’s Board of Directors or Compensation/Management DevelopmentCompensation and Human Resources Committee.
Proposal 2 – Advisory Vote on the Compensation of our Named Executive Officers
As required pursuant to Section 14A of the 1934 Act, our shareholders are being given the opportunity to vote to approve, on an advisory,non-binding basis, the compensation of our Named Executive Officers. This proposal, commonly known as a“say-on-pay” proposal, gives our shareholders the opportunity to express their views on our Named Executive Officers’ compensation. This vote is not intended to address any specific item of compensation, but rather provide shareholder reaction to our overall executive compensation programs. At the 2017 annual meeting of shareholders, our shareholders voted on an advisory basis in favor of holding advisory votes on the Company’s executive compensation every three years. Following that vote, the Board determined that the advisory vote on the Company’s executive compensation should be held every three years, which most recently occurred at the 2017 annual meeting. Accordingly, the Company asks that you indicate your support of the compensation of our Named Executive Officers as described in the Compensation Discussion and Analysis section and the accompanying compensation tables and other narrative disclosures contained in this proxy statement. Because your vote is advisory, it will not be binding on the Board or the Company. However, the Board will review the voting results and take these results into consideration when making future decisions regarding executive compensation for Quaker Houghton’s management team.
The Company has in the past sought and received approval from its shareholders regarding the incentive plans that are used to attract, motivate, retain, and reward our executives. Those incentive plans, including the Annual Incentive Plan (formerly the “Global Annual Incentive Plan”) and the Long-Term Performance Incentive Plan (the “LTIP”), are a significant part of the compensation that the Company provides to its executives. Both the AIP and LTIP have been approved by the Company’s shareholders at previous annual shareholder meetings.
Quaker Houghton compensates its executive officers through a total compensation program consisting of base salary, an annual cash incentive bonus, long-term incentives of both equity awards and cash payments, and a competitive benefits package as explained in this proxy statement. In 2011, 2014 and 2017, our shareholders overwhelmingly approved, on anon-binding basis, the compensation of our Named Executive Officers. Since those approvals, the Company’s executive team has continued to successfully manage the Company through a very challenging business and global economic environment, and, through itson-going efforts, Quaker Houghton has outperformed the market, had record shareholder returns for several years in a row and has more than doubled the size of the Company with its Combination with Houghton. Quaker Houghton is poised to capitalize on new growth opportunities in its base businesses and adjacent markets with its larger global scale and to invest in emerging markets around the globe to expand its reach and to create greater profitability.
We believe that our executive compensation programs are structured to support our Company and our business objectives. Our compensation strategy provides opportunities for highly competitive levels of total compensation when merited by performance; creates incentives to perform over a multiple year-period; and aligns interests of the management team with those of our shareholders. Our Compensation/Management Development Committee works closely with members of management in developing the compensation programs for the Company and reviews studies and analyses provided by outside consultants on compensation trends and issues prior to taking or recommending actions on compensation matters.
We invite you to consider the details of our executive compensation programs by reviewing the Compensation Discussion and Analysis section of this proxy statement, as well as the accompanying compensation tables and narrative disclosures.
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The Board has approved a frequency period of every three years (a triennial vote) fornon-binding shareholder votes on compensation of our Named Executive Officers. As a result, unless the Board determines otherwise the next such vote will be held at the Company’s 2023 annual meeting.
The Board of Directors recommends that you vote “FOR” approval, on anon-binding basis, of the Company’s compensation of our Named Executive Officers as described in this proxy statement.
EXECUTIVE COMPENSATION | ||||
Compensation Discussion and Analysis
The purpose of this Compensation Discussion and Analysis section is to explain to shareholders how and why compensation decisions are made for the executive officers listed in the Summary Compensation Table below. When we use the term “executive officers,” we mean the Named Executive Officers for fiscal 2019,2020, who are Michael F. Barry, Joseph A. Berquist, Jeewat Bijlani, Mary Dean Hall, and Wilbert Platzer, and Robert T. Traub, as well as the Company’s other senior officers.
The Company is engaged in highly specialized businesses with a broad global footprint, requiring a management team with unique skills and knowledge. Quaker Houghton’s Compensation/Management DevelopmentCompensation and Human Resources Committee (the “Committee”) believes that our compensation programs must be competitive in order to attract and retain high-performing executives with the requisite skill set and performance orientation and has implemented executive compensation programs designed to incentivize high performance.
In 2019, Quaker’s2020, Quaker Houghton’s executive team successfully managed the Company in a very toughduring the global manufacturing environment to continueCOVID-19 pandemic and its myriad effects while continuing to outperform the market and exceed synergy targets related to complete its combination on August 1, 2019 with Houghton, a global leader in delivering advanced metalworking fluids and services for the automotive, aerospace, metals, mining, machinery, offshore and beverage industries. 2019Combination. 2020 results include:
Net sales of $1,133.5$1,417.7 million, a 31%25% increase compared to the prior year, primarily reflecting additional net sales of approximately $319.4 million attributable tofrom the Combination, andas well as the October 1, 2019 acquisition of the operating divisions of Norman Hay’s operating divisions.Hay plc (“Norman Hay”).
Continued gross margin advancement to 36.2% for 2020 from 34.6% in 2019.
Cash flow from operating activities of $178.4 million in 2020 compared to $82.4 million in 2019, compared to $78.8 million in 2018.a 117% increase year-over-year.
Our average stock priceA shareholder return for the year of 55% which was in 2019 was $181.71 per share compared to $168.20 per share in 2018 (a $14 increase) and $142.29 per share in 2017 (a $26 increase)the top quartile of its peer group (as further defined below).
In connection with the Combination, effective August 1, 2019,For 2020 compensation decisions, Quaker Houghton updatedrefined the performance metrics under Quaker’s Globalour Annual Incentive Plan (as updated, the Annual Incentive Plan or the(the “AIP”). The AIP also replaced the legacy Houghton bonus plan – the Houghton Management Incentive Plan (the “Houghton Legacy Plan”). The AIP provides eligible employees with the opportunity to earn an annual incentive award based upon business performance. All employees in 2019 who were eligible for the Global Annual Incentive Plan or the Houghton Legacy Plan in 2019 were eligible to participate in the AIP for the remainder of fiscal 2019. The AIP includes net income as a key financial performance objective, but effective August 1, 2019, it also employsnow incorporates other financial and Combination integration measures, as further described below.
Except for this transition to updatedthe revised performance metrics for the AIP reflecting the Combination which started in August of 2019 and continued for 2020, as well as the changes explained below, Quaker Houghton’s overall compensation strategy and specific programs have not changed over the past several years. We have generally strived to maintain a consistent year-over-year approach to ensure that our compensation remains predictable and competitive to the market, as well as fair and reasonable. In particular, we have continued to:
use benchmarks for total direct compensation and long-term compensation designed to mitigate the possibility of inappropriate risk taking on the part of executives;
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align senior level compensation with the long-term success of the Company by ensuring that the higher the position within management the more an executive’s compensation isincentive-pay dependent and the more his or her incentive pay is long-term oriented; and
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reward long-term performance with cash compensation measured by total shareholder return andas well as stock-based compensation in order to align the interests of management directly with our shareholders.
Consistent with this approach, we have sought and have received approval from our shareholders for incentive plans that we use to attract, motivate, retain and reward our executives.
The Committee continually reviews our executive compensation programs to ensure they achieve the desired goals of aligning our compensation practices to performance and pay practices in the Company’s industry and prudent risk taking to achieve sustainable shareholder value creation. The Committee has again determined that the Company’s current compensation programs are not likely to encourage excessive risk taking becausetaking. In reaching that conclusion, the metrics in the Company’sCommittee considered key design elements of our compensation plans are linkedprograms, including that they (i) employ a balanced mix of components of salary and annual and long-term incentives not overly-weighted to corporateshort-term incentives, (ii) use multiple performance as it relates to set budgetary targets and because the plansfactors preventing an overemphasis on any one metric, (iii) are measured against identified peer comparison groups.peers to ensure that they are competitive and reasonable; and (iv) incentive awards are capped at 200% of target.
In addition, at the Company’s 20172020 annual meeting of shareholders, the shareholders overwhelmingly voted, on an advisory basis, to approve the Company’s compensation of our Named Executive Officers. At the same 2017 annual meeting of shareholders, the shareholders also voted to recommend an advisory shareholder vote on the Company’s compensation once every three years and the Company has followed this recommendation. Accordingly, the Company has included such proposal, commonly known as the“say-on-pay” proposal, in this year’s proxy statement. Given the significant level of support received in the 2017recent 2020 advisory vote, the Board of Directors and Committee have not made any material changes to our executive compensation policies since that time.
In this Compensation Discussion and Analysis, we refer to adjusted net income, which is a non-GAAP financial measure. A full discussion of our use of non-GAAP adjusted net income to enhance a reader’s understanding of the financial performance of the Company, and a reconciliation of these measures to net income, respectively, can be found on pages 45 to 49 in “Non-GAAP Measures” of Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, provided with this proxy statement.
In making decisions about fiscal 20192020 salaries and performance targets, the Committee also considered fiscal 20182019 corporate performance. Factors affecting the key components of our executive compensation programs for fiscal 20192020 were:
Adjusted Net Income. Adjusted net income is a key financial metric for the Company’s annual cash incentive awards (the adjustments to net income for purposes of setting these targets are explained in greater detail below). Performance with respect to this metric for fiscal 20192020 was below target level for the AIP.AIP given the target was established before COVID-19’s impact was fully appreciated and due to the drop in sales which resulted from the COVID-19 pandemic.
Integration and Operational Metrics. Beginning August 1, 2019 and continuing for 2020, global safety performance, customer retention, integration success and organization specific measures arewere key performance measures under the AIP for the Company’s annual cash incentive awards.awards and our results met or exceeded the parameters in these areas.
Quaker Houghton’sHoughton’s Stock Performance. Long-term incentives make up a significant portion of each of the Named Executive Officer’s compensation. In order to align the Named Executive Officers’ incentives with our shareholder returns, the value to be earned on a portion of our long-term awards is directly linked to the performance of our stock. The portion of the equity component of these incentives is tied to stock performance and the amount payable on our cash awards is based on our total shareholder return (which we define as the year-over-year stock price increase or decrease plus dividends paid) as compared to a specific peer group. For the cash component of our long-term incentive program, Quaker Houghton’s three-year total shareholder return of 27%65% resulted in a Peer Group Ranking (defined further below) ranking at the 84th98th percentile. This three-year total shareholder return resulted in a cash payout of 98.6%100% of the maximum amount provided for the three-year period endedending in 2019.2020.
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Benchmarking. Based on our review of competitive benchmarking for compensation and our results of operations, in 2018, we rewarded our Named Executive Officers with salary and/or incentive compensation increases in 20192020 as described further below.
Quaker Houghton, like many companies of similar size, relies on a small group of managers who have the requisite skills and knowledge to enable us to achieve our business strategies, operate as a globally integrated whole and deliver value to our shareholders.
To attract and retain talented senior level managers, we have adopted a compensation approach that:
provides opportunities for highly competitive levels of total compensation when merited by performance;
creates incentives to perform over a multiple-year period; and
aligns interests of the management team with those of our shareholders.
Quaker Houghton compensates its executive leadership team (including our executive officers) through a total compensation package. ThisFor 2020, this package consistsconsisted of a mix of base salary, an annual cash incentive bonus, long-term incentives comprising both equity awards and cash payments and a competitive benefits package comprising medical, life, disability and retirement using both qualified andnon-qualified programs, where appropriate.
The Committee is responsible for overseeing and developing the compensation and management development programs for the Company. Consistent with its charter, the Committee is composed solely of “independent” members of our Board under our Corporate Governance Guidelines and the listing standards of the NYSE. FiveFour members of our Board, Donald R. Caldwell, Jeffry D. Frisby, William H. Osborne, Robert H. Rock (Chair) and Ramaswami Seshasayee currently sit on the Committee. The Committee’s responsibilities include the evaluation of, approval of, and recommendation to Quaker Houghton’s Board with respect to the plans, policies and programs related to the compensation of the Company’s executive officers and, in the Committee’s discretion, the engagement of an outside compensation consultant. In fulfilling its duties, the Committee considers the recommendations of the CEO as it relates to the annual salaries of the other executive officers and works closely with members of management, including the CEO who provide the necessary information and coordinate with the Committee’s outside consultant(s), when appropriate, to ensure that the Committee is sufficiently informed when taking or recommending action on compensation matters. As discussed below, the Committee considers benchmarking data before making such decisions. The Committee’s charter describes in full the Committee’s authority, responsibilities and specific powers and can be accessed on the Company’s website athttps://www.quakerhoughton.com under the heading Investors/Corporate Governance.
Section 162(m) of the Internal Revenue Code, as amended (the “Code”) precludes Quaker Houghton from taking a Federal income tax deduction for compensation paid in excess of $1 million to certain of our executive officers. While the Committee generally structures the compensation paid to executive officers so that it is fully deductible for Federal income tax purposes, the Committee believes that the primary purpose of our compensation is to support Quaker Houghton’s business strategy and the long-term interests of Quaker Houghton’s shareholders. Accordingly, the Committee may choose to provide compensation that is not deductible in order to retain or to secure the services of key executives when it determines that it is in Quaker Houghton’s best interests to do so. Thus, all compensation to certain of our executive officers over
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the $1 million limit is now nondeductible (subject to exceptions for certain grandfathered arrangements). Compensation paid to certain executive officers exceeded the Section 162(m) limitation and a portion of this compensation is not deductible by Quaker Houghton.
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The Committee has the authority to engage independent advisors to assist it in carrying out its responsibilities. To assist Quaker Houghton in establishing a total direct compensation package comprising base salary, an annual cash incentive bonus and long-term incentives, the Committee has engaged Willis Towers Watson (“WLTW”) since 2015, a leading global professional services company with specific expertise in the areas of benefits, talent management, rewards, and risk and capital management, as an independent consultant on compensation issues. In addition, WLTW has, from time to time, provided the Committee with executive compensation studies and analyses, as well as benchmarking data and counsel on compensation issues as needed or desired.
WLTW provided no services to the Company in 20192020 other than advising the Committee on various executive compensation matters. Management had no role in selecting the Committee’s compensation consultant. The Committee has assessed the independence of WLTW pursuant to SEC rules and concluded that WLTW’s work for the Committee does not raise any conflict of interest.
Due to our size and diversity of our businesses around the world, we have not identified one specific peer group that is appropriate to use in defining market total direct compensation for our executive officers. Our primary benchmarks for 20192020 total direct compensation for our executive officers were derived from compensation information provided by WLTW that is a blend of Peer Group (as defined below) compensation data and broader group data comprising a composite of credible, published executive compensation surveys. The Peer Group data reflects a peer group developed by a previous compensation consultant as well as WLTW. This Peer Group includes data for 13 publicly traded firms in the chemicals industry, similar in size (as measured by revenue and market capitalization) to Quaker Houghton. The Peer Group companies are: Aceto Corporation, American Vanguard Corporation, Buckeye Technologies Inc., Cabot Microelectronics Corporation, Calgon Carbon Corporation, Hawkins, Inc., Innophos Holdings, Inc., Innospec Inc., Landec Corporation, LSB Industries, Inc., OM Group, Inc., OMNOVA Solutions Inc. and Rogers Corporation (collectively, the “Peer Group”). Mr. Barry is currently a member of the Rogers Corporation’s board of directors, but will not stand forre-election this year. In addition, in light of the Combination and the increased size of the Company, the Peer Group was updated late in 2019 to include companies in the chemicals industry of similar size (as measured by revenue and will bemarket capitalization) and was used by the Committee in making total direct compensation decisions for 2020. The new peer group includes the following 15 companies: Albemarle Corporation, Ferro Corporation, GCP Applied Technologies, Inc., H.B. Fuller Company, Ingevity Corporation, Innospec Inc., Kraton Corporation, Minerals Technologies Inc., NewMarket Corporation, OMNOVA Solutions Inc., Rayonier Inc., Sensient Technologies Corporation, Stepan Company, Venator Materials PLC, and W. R. Grace & Co. (collectively, the “Peer Group”). We generally aim to benchmark total direct compensation to the market 50th percentiles. We believe the philosophy of targeting total direct compensation to the market 50th percentiles reduces the possibility of excessive risk taking on the part of executives in order to achieve performance targets at the maximum levels. This approach is the starting point of the analysis as other factors are taken into consideration, including experience, breadth of responsibilities, tenure in the position, whether the position held is for succession planning purposes, overall individual performance and internal equity. We do not assign a particular weight to any of these factors but exercise discretion in this regard.
In determining 20192020 compensation for the Named Executive Officers, the Committee used the benchmarking data WLTW had previously provided and various other factors, as described above. Ms. Hall’s, and Messrs. Berquist’s and Traub’sBijlani’s targeted total direct compensation for 20192020 was between the 25th and 50th percentiles of WLTW’s comparative data. Messrs. Barry’s and Platzer’s targeted total direct compensation for 20192020 was at or near the 50th percentile of benchmark levels based on U.S. data. ThoughAlthough the Committee closely analyzes the data provided by WLTW, it exercises its discretion in the weight it assigns to this data in making individual compensation decisions.
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COMPENSATION DISCUSSION AND ANALYSIS | ||||
Total compensation earned in 20192020 for each Named Executive Officer is reflected in the Summary Compensation Table below.
Allocating Between Current and Long-Term Compensation
The Committee, in seeking to ensure the appropriate focus on performance and risk, has developed, in consultation with WLTW, guidelines for executive officers for allocating the desired total direct compensation package among base salary, an annual cash incentive bonus and long-term incentives. As a general philosophy, these guidelines provide that the higher the position within management the more the executive’s total compensation is dependent on incentive pay and the more his or her incentive pay is long-term oriented. This is donedesign aims to better align senior level compensation with the long-term success of the Company. These guidelines are reviewed regularly to ensure their marketplace competitiveness.
The charts below illustrate our guidelines for the general allocation of the compensation components for Mr. Barry and our other executive officers for 2019:2020:
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COMPENSATION DISCUSSION AND ANALYSIS | ||||
Each year, the Committee reviews the base salaries of our executive officers. The Committee’s final determination of salary increases is based on a number of factors, including market data reported by WLTW, specific position responsibilities and scope, experience and tenure, current job performance and Quaker Houghton’s overall financial results. A Named Executive Officer’s performance and achievement of individual goals established by the Committee are taken into consideration for salary determinations. In the case of some of our foreign-based executive officers, salary increases may be a result of legal mandates of a particular country or region which influence the final determinations of the Committee even when similar increases were not granted to officers of comparable positions residing in the United States. Based on its analysis of all of the factors referenced above, in 2019,2020, the Committee recommended, and the Board approved salary increases for each of the Named Executive Officers, effective March 11, 2019,April 1, 2020, except for Mr. Platzer whose salary increase was effective March 1, 2019. For and as a result of2020. Notwithstanding the Combination, the Committee recommended, and the Board approved additional salary increases, for each of the Named Executive Officers (other than Mr. Barry, discussed next) and the remaining executives took temporary pay reductions of 10% effective August 1, 2019.in April of 2020 into September of 2020 to assist in the Company’s managing through the global COVID-19 pandemic. Further, Mr. Barry agreed to a 20% pay reduction for such time period. These reductions were terminated and salaries were restored to levels consistent with the original raises effective in September of 2020. Mr. Barry’s salary increases areincrease is described below under the heading “Chief Executive Officer Compensation.” The other Named Executive Officers’ base salary increases and total base salary received for 20192020 are described in the table below:
Named Executive Officer
| Initial Base Salary Rate ($)
| Base Salary Rate ($)
| Houghton Combination
| Base Salary Received ($)
| Initial 2020 ($) | New 2020 Base Salary Rate ($) | 2020 Year-End ($) | ||||||||||||||||||||||||||||
Mary Dean Hall
| 385,000
| 404,400
| 404,400
| 397,439
| 404,400 | 420,420 | 397,136 | ||||||||||||||||||||||||||||
Wilbert Platzer(1)
| 308,824
| 313,420
| 313,420
| 311,654
| 343,233 | 356,962 | 337,722 | ||||||||||||||||||||||||||||
Joseph A. Berquist
| 347,000
| 364,350
| 404,250
| 377,434
| 404,250 | 420,420 | 398,628 | ||||||||||||||||||||||||||||
Robert T. Traub
| 302,000
| 314,080
| 348,400
| 325,881
| |||||||||||||||||||||||||||||||
Jeewat Bijlani | 404,250 | 420,420 | 398,628 |
(1) | Mr. Platzer’s compensation is paid in E.U. Euros. All foreign currency amounts reflected in this table were converted to U.S. Dollars at the spot rate in effect on December 31, |
The second component of the total direct compensation package is the annual cash incentive bonus. As noted earlier in this Compensation Discussion and Analysis section, on August 1, 2019, the Company updated the performance metrics under its Global Annual Incentive Plan (as updated, thebonus plan (the Annual Incentive Plan or the “AIP”). The updates to performance metrics are described further below. All AIP bonuses are subject to the discretion of the Committee.
The AIP is intended to provide employees of Quaker Houghton or its subsidiaries with an opportunity to receive incentive bonuses based on the achievement ofpre-established goals. The AIP is designed to:
align rewards with our newthe business strategy and new culture of Quaker Houghton, putting emphasis on individual, team, and company contributions;
increase the transparency of how rewards are calculated; and
allow flexibility for Company functions and business units to align.
Overview of Performance Metrics
The AIP is comprised of financial metrics both before and after the Combination and integration and operational metrics postrelated primarily to the Combination. Target incentive opportunities are based on a percentage of an employee’s annual base salary with component bonus opportunity ranging from 0% up to a maximum of 200% based on business performance.
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COMPENSATION DISCUSSION AND ANALYSIS | ||
Financial Metrics
Financial goals are determined based on the budget for the coming year with the target bonus for the global corporate component set at or around budgeted consolidated net income. For the regional and Global Specialty Business corporate components, the goals were set using a metric of profit before tax (“PBT”).
For 2020, the Company had one global corporate financial goal of net income, which applied to all AIP participants, and was established at three levels: (1) threshold (set at 90% of the target, the level at which the bonus pool began to accumulate); (2) target; and (3) maximum. Achievement at or below the threshold level of net income will typically result in no payout for this global component of the corporate financial goals. The Committee selected a target net income level of $130.3 million, which was approved by the Board, because of its correlation to the 2020 budgeted net income (which had been established before COVID-19’s impact was fully understood and appreciated). The Committee determined in its discretion that although the Company did not achieve the threshold level of net income due to impacts of COVID-19 on the consolidated business, under the circumstances an award of 25% of the target award opportunity should be paid for this component. The Committee recognized the following work of the Company in making this determination:
The Company’s ability to service and supply all of its customers despite the challenging conditions related to COVID-19;
The Company’s taking of cash saving measures and its generation of record cash flow which enabled the Company to pay down 12% of its debt;
The Company’s continued taking of market share which helped lessen the impact of COVID-19;
The Company, while in the heart of its Combination integration activities, successfully achieved and then greatly exceeded its synergy targets; and
The Company provided our shareholders with a 55% shareholder return which was in the top quartile of its peer group (as further defined below).
Regional financial goals for the Company’s three regions (Americas, EMEA, and the APAC region) were based on a target PBT calculation and were measured against the regional budget for the respective region. This regional component of the AIP’s corporate financial goals applies to all AIP participants in the region in which they are located. As with the global financial component, there are three levels of payout for regional financial performance, except that the threshold is set at 80% of the target. The Committee determined that an award of 130.3% of the target award opportunity was earned for the APAC region based on actual PBT performance of $55.4 million versus a target PBT of $52.2 million.
However, in both the Americas and EMEA regions, the Committee, in its discretion, determined an award of 25% of the target award opportunity, as neither region achieved their target levels of PBT (the Americas achieved 50.1% of its $68.9 million target PBT and EMEA achieved 47.9% of its $34.9 million target PBT). In determining the awards for each of these regions, the Committee considered the impacts of COVID-19 and the efforts of employees throughout 2020.
Our Global Specialty Businesses financial component of the AIP applies to all AIP participants in any of the Global Specialty Businesses (Grease, Coatings, Mining, Off-Shore, Metal Finishing and Cans) regardless of geographic location. This component is based on the global financial results for the business in which each AIP participant resides and is based on a budgeted PBT calculation for each particular specialty business and measured against such budget for the year. This component has the same levels as the regional component discussed directly above: (1) threshold (set at 80% of the target, the level at which the bonus pool began to accumulate); (2) target; and (3) maximum.
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FinancialIntegration and Operational Metrics
Corporate financial goals are typically determined based on the budget for the coming year with the target bonus for the corporate component set at or around budgeted consolidated net income. The corporate financial goals for the AIP bonuses included the Company’s consolidated net income. For 2019, in light of the Combination on August 1, 2019, the Company had two corporate financial goals, one for the first seven (7) months before the Combination and one for the last five (5) months post-Combination. For the seven (7) months ended July 31, 2019, they were set at $44.3 million of net income at threshold (the level at which the bonus pool began to accumulate), $49.2 million of net income at target and $54.2 million of net income at maximum. The Committee selected these net income levels, which were approved by the Board, because of their correlation to thepre-Combination 2019 budgeted net income of $49.2 million and the difficulty of achieving these targets in a very challenging business environment. For the five (5) months ended December 31, 2019, they were set at $38.9 million of net income at threshold (the level at which the bonus pool began to accumulate), $43.3 million of net income at target and $47.6 million of net income at maximum. These were set by the Committee based on the internal forecast for the last five (5) months of the year. The Committee determined based on actual performance of the Company for the first seven (7) months of 2019 that an award of 80% of target was earned for this metric. The Committee determined based on actual performance of the Company for the last five (5) months of 2019 that a 50% of target amount was earned for this metric mainly due to the deterioration of the global automotive and industrial markets.
Integration Metrics
The integration metrics took effect on August 1, 2019 and2020, the targets and performances of the integration metrics were respectively set and measured beginning on that date through December 31, 2019.2020. Under the AIP, annual cash incentive bonuses werehad historically been determined based on achievement of both corporate financial and individual objectives. However, in place of individual goals, the integration metrics employed were selected for their relationship to driving our new culture and to allow flexibility for the combined businesses and functions to align. The Company set the following target goals for its integration metrics for the last five months of 2019,2020, each of which was exceeded.
Global Safety Performance:
The Company targeted having ansafety goals apply to all AIP participants. Target level is achieved when the total recordable incident rate (“TRIR”) is below target, which was set at the most recently available American Chemistry Council median occupational illnesses and injuries (“OII”) rate, of 0.85 and achieved a 0.75 OII rate.the Company targets are shown in the table below. OII is defined as the number of employees per 100 full-time employees thatwho have been involved in a recordable illness or injury. Target level is
The Company targeted having an overall global OII rate of 0.70 and achieved at the latest American Chemistry Council medianan excellent 0.52 OII rate. TheFor purposes of a regional role, the Americas, EMEA, and APAC each had a specific OII goal and met or exceeded its respective target applied acrossgoal. Achievement of an OII rate equal to the Company,target will result in an award of 100% of the target award opportunity whereas achievement of an OII rate of less than the target will result in an award of up to alla maximum of 200% of the AIP participants.target award.
Target OII/TRIR | Achieved OII/TRIR | Payout | ||||
Global | £.70 | 0.52 | 200% of target payout | |||
Regional – EMEA | £.74 | 0.78 | 100% of target payout | |||
Regional – APAC | £.47 | 0.45 | 100% of target payout | |||
Regional – Americas | £.81 | 0.41 | 200% of target payout |
Regional/GlobalGlobal/Regional Customer Retention:
The Company targeted having a percentage of lost customers of less than 1.25% due to the Combination. Less than 0.5%We experienced no loss of customers were lost.in 2020 attributable to the Combination, resulting in a payout of 200% of target for this AIP component.
Organization Integration Success:
The Company targeted having all integration initiative action items completed on time, within budget and with good quality. This target applied to all the AIP participants. The primary measurement was regional value capture, including cost synergies, and the target value capture was set at $5$50.2 million. Considerations for achievement above and below the target depended on completion time, quality and alignment to budget. The Company exceeded its goal as it had a total value capture of approximately $7$58 million andwith all aspectsregions exceeding their targets. The Committee therefore determined that the Company achieved an award of 200% of the integration have gone extremely well.
Payout for 2019
In 2019, the Company underperformed in the financial metrics listed above for both pre and post-closing of the Combination time periods, but the Company overperformed in the integration metrics listed above. As a result, overall the Company earned and was awarded a below target payout of 84% of target of the AIP bonus. Historically, the Committee differentiated between individual payouts from overall payouts based onaward.
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COMPENSATION DISCUSSION AND ANALYSIS | ||
individual and/or regional goals. In lightWeighting Matrix
Financial Metrics | Integration and Operational Metrics | |||||||||||||
Role | Global Financial (Net Income) | Regional/GSB (PBT) | Safety | Global/Regional Customer Retention | Organization Integration Success | |||||||||
Global Role | 60% | – | 10% | 10% | 20% | |||||||||
Regional Role | 30% | 30% | 10% | 10% | 20% | |||||||||
Global Specialty Business | 30% | 40% | 10% | – | 20% |
The above chart indicates the weighting for each AIP participant of the enormous complexity relatedfinancial and integration metrics based on the Company’s performance.
Payout for 2020
As discussed above, except for the APAC region exceeding its regional PBT target, in 2020, the Company underperformed in each of the financial metrics listed above due primarily to the Combinationglobal COVID-19 pandemic. However, the Company met or exceeded each of the integration and the tremendous amountoperational metrics listed above. As a result, AIP plan participants with an APAC regional role achieved 118% of integration work performed in 2019, the Committee determined that it was more important to paytheir target award opportunity. Participants with an Americas and EMEA regional role achieved 95% and 85% of their target award opportunity, respectively. Participants with Global roles achieved 95% of their target opportunity. Mr. Berquist has a commonmix of Global and Global Specialty Business responsibilities and achieved 94% of his total target award amount across the globe and not differentiate for individual or regional goals or to differentiate among legacy companies. opportunity.
Bonuses under the AIP may be paid in cash or in shares of Quaker Houghton common stock, although we generally pay the bonus in cash, absent unusual circumstances. All payouts for 20192020 were made in cash. Mr. Barry had a target and maximum incentive opportunity respectively equal to 100% and 200%, respectively, of his current 2019year-end 2020 base salary. His total bonus awarded and paid for 20192020 (at 84%95% of target) was $768,600.$897,750. Ms. Hall had a target and maximum incentive opportunity equal to 65% and 130%, respectively, of her year-end 2020 base salary. Her total bonus awarded and paid for 2020 (at 95% of target) was $259,609. The remaining Named Executive Officers had a target and maximum incentive opportunity respectively equal to 55% and 110%, respectively, of their respective current 2019year-end 2020 base salaries. Ms. Hall and Messrs. Berquist, PlatzerBijlani and TraubPlatzer each respectively were awarded and paid $184,985,$217,357, $219,669 and $186,764 $144,800 and $160,961 in 2019.2020.
Our shareholders approved the 2016 Long-Term Performance Incentive Plan (“LTIP”) at our 2016 annual meeting of shareholders and the long-term incentive awards discussed in this Compensation Discussion and Analysis section of this proxy statement were awarded under the LTIP.
Under the LTIP, in 2017,2018, Mr. Barry and the other Named Executive Officers were awarded options, time-based restricted stock and a target cash award for the 2017-20192018-2020 performance period. Payment of the cash award portion of the 2018-2020 grant was dependent upon achieving apre-determined targeted performance over the three-year period based on the Company’s relative total shareholder return (“TSR”) as compared to the TSR of the S&P SmallCapSmall Cap 600 Index (Materials Group). The threshold for the TSR target was relative performance at the 30thpercentile of the comparison group, target was at the 50thpercentile and maximum was at the 85th percentile. For this period, Quaker Houghton’s TSR of 127%65% equated to a peer group ranking in the 8498th percentile of the comparison group warranting a payout at 98.6%100% of the maximum.
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For these purposes, TSR is calculated by using theone-month average stock price at the end of the performance period, divided by theone-month average stock price at the beginning of the performance period, plus any dividends paid over that period.
In 2019,2020, the Committee again reviewed current trends in long-term compensation practices with WLTW. The most recent review confirmed that Quaker Houghton’s practices were generally consistent with those of other public companies and are as follows:
Provide for three types of awards (cash,(performance-dependent stock awards (“PSUs”), restricted stock and options) to senior executives, including the Named Executive Officers, but limit awards for lower level executives and senior management to cashPSU’s and restricted stock.
The cashPSU portion of the Company’s LTIP is performance-based. The performance criteria for the cash paymentPSU is a single metric, relative TSR over the applicable period as compared to the S&P SmallCap 600MidCap 400 Index (Materials Group). By tying the cashthis award to shareholder value, it allows a market metric to be used as a performance measure without accounting complications.
Restricted stock is time based and vests at the end of three years assuming continued employment of the grantee. These restricted shares are eligible for dividends payable, prior to and after vesting, at the time dividends are paid generally.
Options are time based and vest in three approximately equal installments over a three-year period commencing with the anniversary of the date of grant.
The relative value of each of the three categories of awards is roughly equal at the time of grant assuming target performance for the cashPSU portion. The starting point for determining the Named Executive Officers’ LTIP award is to first determine the percentage of base pay for each position at the 50th percentile of market comparables.
Similar to the other components of total direct compensation, other factors in determining the actual percentage of base salary are taken into consideration such as experience, breadth of responsibilities, tenure in the position, whether the position held is for succession planning purposes, overall individual performance and internal equity. Based on recommendations from the Committee’s outside compensation consultants as to typical plan design, in recent years (including 2019) the Committee has divided the total LTIP award into three components, allocated equally (based on fair value) to stock options, restricted stock and a target cash award.
Under the LTIP, stock options, restricted stock, long-term cash payments, and other types of awards can be made to participants. This planIn March 2020, the Company included performance-dependent stock unit awards (“PSUs”) as a component of its LTIP. These awards will be settled in common shares subject to the achievement of market-based and time-based vesting conditions. The number of fully vested shares that may ultimately be issued as settlement for each award may range from 0% up to 200% of the target award, subject to the achievement of the Company’s TSR relative to the performance of the Company’s peer group, the S&P MidCap 400 Materials Group, over the three-year period from January 2020 to December 2022. The LTIP is intended to assist us in attracting, retaining and motivating employees,non-employee directors and consultants through the use of compensation that rewards long-term performance. The use of stock-based compensation in our long-term incentive plan balances the cash-based annual incentive bonus and cash portion of our long-term performance plan. The Committee believes that stock ownership by management and equity-based performance compensation arrangements are useful tools to align the interests of management with those of our shareholders. Under the LTIP, a three-year performance period is used. Generally, employees selected as award recipients hold key positions impacting the long-term success of Quaker Houghton and its subsidiaries. These awards are based on overlapping three-year performance periods, so a new program starts each year and a payment is made each year, if earned.
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In the thirdfirst quarter of 2019,2020, the Committee selected participants for the 2019-20212020-2022 performance period, including all of the Named Executive Officers. The specific amount of each award was determined based on market data provided by WLTW, as well as the relative position and role of each executive officer within the Quaker Houghton organizational structure, influence on long-term results, past practice, performance factors independent of the terms and amounts of awards previously granted and policy targets for the mix of compensation between base salary, annual and long-term incentives. The Committee determined that the use of a percentage of base salary as the basis for LTIP awards has at times caused internal inequity issues. To mitigate this dynamic, the Committee has begun to use market data related to base salary with application of an absolute value in making awards determination for similarly valued positions of Senior Vice President, Chief Financial Officer and Treasurer; Senior Vice President, Global Specialty Businesses and Chief Strategy Officer; Senior Vice President – Managing Director, Americas; and Senior Vice President – Global Operations, EHS and Procurement; and Senior Vice President, General Counsel and Corporate Secretary.Procurement. The comparative data indicated that the CEO’s LTIP target awards percentage should be higher than the other Named Executive Officers because his leadership role in the global organization and level of responsibility and experience warrants the greater percentage opportunity. The Committee agreed with the proposed recommendations for total LTIP valuation of each executive. The target award for Mr. Barry was 220%245% of base salary while for the other Named Executive Officers the range was 59%62% to 65%71% of base salary.
Under the LTIP, with respect to the 2019-20212020-2022 performance period, Mr. Barry received a long-term incentive grant consisting of a target cash awardPSU opportunity of $671,000, 4,3315,647 units, 5,647 shares of restricted stock and 21,19324,638 options. Ms. Hall received a target cash awardPSU opportunity of $86,667, 559731 units, 731 shares of restricted stock and 2,7373,193 options. Messrs. Berquist, Bijlani and Platzer each received a target cash awardPSU opportunity of $80,000, 516634 units, 634 shares of restricted stock and 2,5262,767 options. Mr. Traub received a target cash award opportunity of $70,000, 451 shares of restricted stock and 2,210 options.
On August 15, 2019, in recognition of the their extraordinary efforts to consummate the Combination, Ms. Hall and Messrs. Berquist, Platzer and Traub were grantedone-time, time-based restricted stock awards, which vest on August 1, 2022, and are further detailed in the “Grants of Plan-Based Awards” table included in this proxy statement.
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The exercise price of options awarded under the LTIP is not less than 100% of the “fair market value” of a share of Quaker Houghton common stock on the date the option was granted, which is defined as the last sale price for a share of common stock as quoted on the NYSE for that date or, if not reported on the NYSE for that date, as quoted on the principal exchange on which the common stock is listed or traded, and if no such sales are made on that date, then on the next preceding date on which there are such sales.
Comparative Stock Price Performance Graph
The following graph compares the cumulative total return (assuming reinvestment of dividends) from December 31, 2014 to December 31, 2019 for (i) Quaker Houghton’s common stock, (ii) the S&P SmallCap 600 Index (the “SmallCap Index”), (iii) the S&P MidCap 400 Index (the “MidCap Index”), and (iv) the S&P 600 Materials Group Index (the “Materials Group Index”). The graph assumes the investment of $100 on December 31, 2014 in each of Quaker Houghton’s common stock and the stocks comprising the SmallCap Index, the MidCap Index and the Materials Group Index, respectively. The comparison to the MidCap Index was added in 2019 as a result of the Company’s increased size post-closing of the Combination.
12/31/2014
| 12/31/2015
| 12/31/2016
| 12/31/2017
| 12/31/2018
| 12/31/2019
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Quaker Chemical Corporation
| $
| 100
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| $
| 85.19
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| $
| 143.24
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| $
| 170.49
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| $
| 202.72
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| $
| 189.23
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S&P SmallCap 600 Index
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| 100
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| 98.03
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| 124.06
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| 140.48
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| 128.56
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| 157.85
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S&P MidCap 400 Index
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| 100
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| 97.82
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| 118.11
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| 137.30
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| 122.08
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| 154.07
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S&P 600 Materials Group Index
|
| 100
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| 74.36
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| 115.03
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| 126.44
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| 98.30
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| 118.52
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Quaker Houghton |
COMPENSATION DISCUSSION AND ANALYSIS | ||
Comparative Stock Price Performance Graph
The following graph compares the cumulative total return (assuming reinvestment of dividends) from December 31, 2015 to December 31, 2020 for (i) Quaker Houghton’s common stock, (ii) the S&P MidCap 400 Index (the “MidCap Index”), (iii) the S&P 400 Materials Group Index (the “Materials 400 Group Index”), and (iv) the S&P 600 Materials Group Index (the “Materials 600 Group Index”). The graph assumes the investment of $100 on December 31, 2015 in each of Quaker Houghton’s common stock, the stocks comprising the MidCap Index and the Materials Group Index, respectively. The comparison of the Materials 400 Group Index was added in 2020 to provide a closer comparison to the MidCap Index comparison.
12/31/2015
| 12/31/2016
| 12/31/2017
| 12/31/2018
| 12/31/2019
| 12/31/2020
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Quaker Chemical Corporation
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| $100
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| $168.15
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| $200.14
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| $237.98
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| $222.13
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| $345.21
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S&P MidCap 400 Index
|
| 100
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| 120.74
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| 140.35
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| 124.80
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| 157.49
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| 179.00
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S&P 400 Materials Group Index
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| 100
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| 137.25
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| 166.82
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| 132.84
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| 160.57
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| 177.66
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S&P 600 Materials Group Index
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| 100
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| 154.70
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| 170.04
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| 132.20
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| 159.40
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| 195.55
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Chief Executive Officer Compensation
The Committee generally uses the same factors in determining the compensation of the CEO as it does for the other executive officers. The Committee considers CEO compensation in the Peer Group and the benchmarking data provided by WLTW as a starting point for determining competitive compensation. The Committee then, in consultation with the CEO, develops Company performance objectives for the CEO and periodically assesses the performance of the CEO. The Committee also evaluates how much the CEO should be compensated in relation to the other Company executives, but the Committee has not adopted any formula linking the level of CEO compensation to that of other executives. Based on Mr. Barry’s level of responsibility, experience, market data and the Company’s good performance, the Committee determined that Mr. Barry’s pay was in an appropriate range in absolute terms and as compared to the other executive
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COMPENSATION DISCUSSION AND ANALYSIS | ||
officers. Mr. Barry’s base salary at the start of 20192020 was $850,000$915,000 and, based on Mr. Barry’s level of responsibility, experience, market data and the Company’s performance, he received a raise, effective March 11, 2019,April 1, 2020 to $880,000.$945,000. Additionally, given Mr. Barry’s tenure as CEO and in recognition of the consummationcompany’s overall performance and its management of and navigation through the Combination which doubled the size of the Company andglobal COVID-19 pandemic, as well as the significant shareholder value created over the same time period, including a Company-recordCompany record average stock price in 2019, he received2020, the Board, based on the recommendation of Committee, has awarded him an increase in his base salary, a raise, effective on AugustApril 1, 20192021 to $915,000.$975,000. The total base salary Mr. Barry received for 20192020 was $888,635. Lastly, in recognition of$858,035 reflecting his agreement to take a 20% pay reduction for over five months to help the shareholder value created overCompany navigate through the past years and the integration and customer retention successes related to the Combination since the closing, Mr. Barry received a raise effective April 1 of 2020 to $945,000.COVID-19 pandemic crisis.
The Committee determined this increase to be appropriate given the overall Company performance and that it and the awards discussed in the next paragraph keep Mr. Barry’s total direct compensation generally within comparable market data. For more information on the terms of Mr. Barry’s employment and compensation, please refer to the section titled “Mr. Barry’s Employment Agreement.”
In 2019,2020, Mr. Barry’s total bonus potential under the AIP was 100% of his base salary at target and 200% of his base salary at maximum. For 2020,2021, Mr. Barry’s total bonus potential under the AIP will remain at 100% of his base salary at target and 200% of his base salary at maximum. For the 2019-2021 performance period, Mr. Barry received a long-term incentive grant opportunity of $1,936,000 at target which equates to 220% of his base salary prior to August 1, 2019. In addition, the Committee determined that these increases in Mr. Barry’s incentive compensation were warranted due to his increased experience and tenure in the position, and also due to the Company’s continued strong financial and overall performance and the consistently large increase in shareholder value over the past several years. Upon the consummation of the Combination, Mr. Barry received an additional long-term incentive grant opportunity of $77,000 to maintain his overall grant opportunity at 220% of his new base salary. Lastly, for the 2019-20212020-2022 performance period, Mr. Barry received a long-term incentive grant opportunity of $2,315,000 at target, which equates to 245% of his base salary. Lastly, for the 2021-2023 performance period, Mr. Barry received a long-term incentive grant opportunity of $2,437,500 at target which equates to 250% of his base salary. The Committee determined that these increases in Mr. Barry’s incentive compensation opportunity were warranted due to his increased experience and tenure in the position, and due to the Company’s continued strong financial and overall performance, and due to the value capture obtained since the close of the Combination, the solid customer retention and the smooth integration since close.close and the Company’s navigation during the global COVID-19 pandemic. The Committee determined these increases to be particularly appropriate because they keep Mr. Barry’s total direct compensation generally within comparable market data.
To align the interests of executive officers with the interests of our shareholders, each of the Named Executive Officers must maintain a minimum ownership in Quaker Houghton stock. For the CEO, the minimum is five times his base salary and for our other Named Executive Officers the minimum is one and
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one-half times the executive’s base salary. The ownership levels must be attained by the end of five years after the later of the appointment of the person as an executive officer (including the Named Executive Officers) or the date the policy was modified. All of the Named Executive Officers were in compliance with the stock ownership policy as of June 30, 20192020 when last reviewed by the Committee. The Committee reviews the ownership levels once per year typically in themid-year time frame. The Company has a hedging policy, which is described under “Employee, Officer and Director Hedging” earlier in this proxy statement.
U.S. Qualified Defined Benefit Plan
Before 2006, most of Quaker’s U.S. employees were covered by anon-contributory qualified defined benefit retirement plan. The plan, when originally adopted, had a traditional final pay formula for calculating a participant’s benefit which had been modified over the years. In 2001, an accrual-based formula was adopted providing for annual credits of 3% to 7% of an employee’s salary depending on age and service,
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with interest on the balance accruing based on the average rate of interest on30-year treasury bonds (or 3.79%, if more). The pension benefit is currently calculated based on the benefit accrued under the old formula as of December 31, 2000, and then under the accrual-based formula commencing January 1, 2001. In 2005, the pension plan benefits were frozen for allnon-union participants, including all U.S. based executive officers, resulting in no further increase in pension benefits for compensation or service after such date. In 2013, the pension plan benefits were frozen for union participants. In November 2018, the Board resolved to terminate the plan. The Company has takentook various actions to effect the complete termination of the pension plan including the receipt from the Internal Revenue Service for a favorable determination letter on the termination, providing plan communications to participants and selecting an annuity provider and/or an insurance company for any amounts for which annuities need to be purchased. The Company currently expects to completecompleted the termination process in 2020.
Foreign Plans
Mr. Platzer’s retirement benefits are provided under a defined benefit pension plan maintained by the Company’s Netherlands operating subsidiary.
The salary ceiling for the calculation of Mr. Platzer’s retirement benefits remains at E.U. Euros 250,000. Since 2004, the Netherlands plan has had a career average pay formula that provides for a target retirement benefit of 80% of career average salary assuming employment of 40 years. In 2004, the formula was modified freezing salary levels at then current levels for pension purposes, with annual increases aligned with the wage index. To the extent the increase in inflation exceeds 3%, half of the excess will be added to the assumed rate of annual increases with a maximum of 4%. Prior to 2004, the plan was a final salary plan and provided 70% of final salary assuming employment of 40 years. For pension purposes, pensionable salary is defined as 14.02 times monthly salary. Pension liabilities under this plan are funded through an insurance policy.
Nonqualified Supplemental Retirement Income Program
We have also providedpreviously offered supplemental retirement income to certain of our U.S. based executive officers. Executive officers arewere designated by the Committee to participate in the Supplemental Retirement Income Program (“SRIP”). Currently, the SRIP is no longer available for new participants.
At this time, Mr. Barry is the only active executive officer participating in the SRIP. It provides an annual benefit of 50% of the participant’spre-tax “average annual compensation,” reduced by three offsets and further reduced if the participant completes fewer than 30 years of service. This benefit is generally payable over the participant’s lifetime, starting within seven months after the participant’s retirement (on account of disability or after attaining age 62), or starting after the participant’s 65th birthday (if the participant’s employment terminates after five years of participation but before retirement). Other benefit forms are 36 monthly installments (if payments start after the participant attains age 65) or monthly payments over the lifetime of the participant with a lump sum payable to his surviving beneficiary. However, benefits are payable in a lump sum if the present value of the participant’s benefit does not exceed a Code limit ($18,50019,500 for distributions in 2019)2020) or if the participant dies or a change in control occurs.
Average annual compensation is defined for this program as the average of the participant’s annual base compensation and annual bonuses paid in the three calendar years (of the last ten) in which such amounts were the highest. The offsets are the participant’s annual Social Security benefit (based on certain assumptions), the annual benefit payable to the participant over his lifetime under the qualified defined
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COMPENSATION DISCUSSION AND ANALYSIS | ||
benefit retirement plan discussed above, and the aggregate amount of the qualifiednon-elective contributions made on the participant’s behalf under the Company’s Retirement Savings Plan (plus assumed earnings) expressed as an annual benefit payable over the participant’s lifetime. The service reduction is equal to 3.333% for each year (or partial year) of service fewer than 30 completed by the participant.
For the remaining active participant in the SRIP (Mr. Barry), his accrued benefit is the greatest of:
1. | the benefit payable under the formula set forth in the SRIP as in effect prior to January 1, 2005, based on the participant’s salary plus bonus and years of employment when he attained age 55; or |
2. | the sum of the benefit the participant would have accrued as of December 31, 2006, under the formula set forth in the SRIP as in effect prior to January 1, 2005, based on the participant’s salary plus bonus and years of employment at December 31, 2006, plus the benefit the participant accrues under the new formula, described above, but disregarding service completed before 2007; or |
3. | the amount determined under the new formula described above. |
It is anticipated that from December 2019 onwards the new formula will yield the highest benefit.
Mr. Barry is entitled to receive additional service and age credit (18 months, in the case of termination other than on account of death, “disability” or by us for “cause” or a “covered termination,” as the latter term is defined in his Change in Control Agreement and 24 months in the event of a “covered termination,” as such term is defined in his Change in Control Agreement) for all purposes under the SRIP, including for purposes of determining Mr. Barry’s eligibility for the “age 55” formula described in 1, above.
Severance and Change in Control Benefits
The Committee believes that appropriate severance and change in control benefits are an important part of the total compensation benefits package because they enhance our ability to compete for talent and foster stability in our management. Quaker Houghton has entered into employment agreements with each of our Named Executive Officers, pursuant to which severance benefits are payable to each of them and has also entered into change in control agreements with each of them pursuant to which the executive officers will receive certain benefits if they are terminated within a specified period following (or with respect to Mr. Platzer, a specified period before) a change in control of Quaker Houghton. In determining amounts
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payable, the Committee seeks to provide severance benefits sufficient to allow our executives time to find a comparable position elsewhere and change in control benefits sufficient to induce our executives to support a change in control transaction fully and remain with us despite any risk of termination after the transaction.
Mr. Barry’s Employment Agreement
Mr. Barry is employed pursuant to an employment agreement that automatically renews forone-year terms unless either Quaker Houghton or Mr. Barry gives 90 days’ prior notice ofnon-renewal. In accordance with the terms of the employment agreement, the CommitteeBoard reviews and adjusts Mr. Barry’s annual base salary each year. Mr. Barry is eligible to participate in our AIP and LTIP, as well as certain other benefit programs as discussed earlier in this proxy statement.
Mr. Barry’s employment agreement provides that upon the termination of his employment for any reason except for death or “disability,” orother than (i) by us for “cause,” (ii) his death or “disability,” (iii) a “covered termination,” as this latter term is defined in his Change in Control Agreement, or (iv) Mr. Barry’s voluntary retirement or resignation,
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COMPENSATION DISCUSSION AND ANALYSIS | ||
Quaker Houghton will pay him 18 monthly severance payments that, in the aggregate, are equal to 150% of his base salary at the time of termination plus a bonus equal to the average annual bonus paid to him under Quaker Houghton’s annual incentive compensation in the applicable three-year period, excluding from the average any year in which no amounts were paid. In general, this three-year period would be expected to be the year of termination and the two preceding years (if Mr. Barry received a bonus in the year of his termination), or otherwise, the three calendar years prior to his termination of employment.
In addition to the payments described above, Mr. Barry is entitled to 18 months of medical and dental coverage at a level equal to the coverage provided before his date of termination of employment and the severance allowance will be taken into account in determining his retirement benefit under the SRIP. In addition, anAn additional 18 months of service and age will be credited in determining this retirement benefit. See the discussion under the caption “Potential Payments Upon Termination or Change in Control” in this proxy statement. Mr. Barry’s severance payments are contingent upon signing a form of release satisfactory to Quaker Houghton.
“Cause” is defined under Mr. Barry’s employment agreement as willful and material breach of the terms of his employment agreement (after having received notice thereof and a reasonable opportunity to cure or correct) or dishonesty, fraud, willful malfeasance, gross negligence or other gross misconduct, in each case relating to the performance of Mr. Barry’s duties to Quaker Houghton that is materially injurious to the Company, or a conviction of or guilty plea to a felony. A “covered termination” is termination of Mr. Barry’s employment within two years following a change in control by the Company without cause or by Mr. Barry for “good reason” (as defined in the change of control agreement between the Company and Mr. Barry).
In the case of termination of employment because of disability, Mr. Barry will be entitled to at least 50% of applicable pay during the period that benefits are payable under our long-term disability plan. In the case of termination of employment because of death, Mr. Barry’s beneficiary would receive in a lump sum the higher of two times his annual base salary for the year in which his death occurred or the death benefit (as a multiple of base salary) to which any other executive officer would be entitled. The Company currently has a program in which all Namedexecutive officers in the Company’s Executive OfficersLeadership Team participate, entitlingwhich entitle each to a death benefit equal to 100% of base salary in the year of death and 50% of base salary in each of the four years thereafter. Mr. Barry would be entitled to this death benefit as it provides a greater benefit than that provided under his employment agreement. See the discussion under the caption “Potential Payments Upon Termination or Change in Control” in this proxy statement.
In addition, if Mr. Barry voluntarily retires or resigns, as is expected at the end of this calendar year as previously announced, his employment agreement provides that the Company will not be obligated to make any further payments to him other than for amounts accrued as of the date of his retirement.
In the case of a termination (other than for death, disability, by us for “cause,” or by Mr. Barry other than for “good reason”) within two years following a change in control, Mr. Barry would, instead of the payments described above, be entitled to payment equal to two times the sum of his highest annualized base salary during his employment plus an amount equal to the greater of (i) the average of the annual amounts paid to him under all applicable annual incentive plans during the applicable three calendar-year period described in Mr. Barry’s change in control agreement, excluding from the average any year in which no amounts were paid, or (ii) the target bonus which would have otherwise been payable to Mr. Barry for the calendar year in which the change in control transaction occurred. In general, this three-year period would be expected to be the year of termination and the prior two years (if Mr. Barry received a bonus in the year of his termination) or, otherwise, the three calendar years prior to his termination of employment.
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COMPENSATION DISCUSSION AND ANALYSIS | ||
In addition, Mr. Barry would be entitled to receive (i) his earned but unpaid base salary through the date of termination at the current rate, or if higher, at the rate in effect at any time during the90-day period preceding the change in control; (ii) any unpaid bonus or annual incentive payable to him in respect of the calendar year ending prior to termination; (iii) the pro rata portion of any and all unpaid bonuses and annual incentive awards for the calendar year in which the termination occurs which would have been payable had the target level of performance been achieved for the calendar year; and (iv) the pro rata portion of any and all awards under the LTIP for the performance period(s) in which the termination occurs, which would have been payable had the target level of performance been achieved for the performance period. In addition, Mr. Barry’s severance allowance will be taken into account in determining his retirement benefit under the SRIP and an additional 24 months of service and age will be credited in determining this retirement benefit. Mr. Barry is also entitled toone-year outplacement services and participation in our medical, dental and life insurance programs as if still employed for a period of two years. To the extent the severance allowance, together with any other payments contingent upon a change in control, exceed the limits under Code section 280G (generally, three times Mr. Barry’s average annual compensation for the prior five years), the severance allowance will be reduced to the extent necessary to avoid the disallowance of a deduction under Code section 280G or imposition of the excise tax under Code section 4999 (assuming reduction of the severance allowance is the least economically detrimental to him). The Committee believes that providing benefits for Mr. Barry’s termination within two years following a change in control is fair because he has the broadest responsibility and accountability in ensuring the success of our business and would be crucial to retain in any change in control. This is consistent with our philosophy of tying compensation to level of responsibility and influence over the Company’s results and performance. See the discussion under the caption “Potential Payments Upon Termination or Change in Control” in this proxy statement. These benefits will be paid or provided only if Mr. Barry signs a general release of claims unless prohibited by local law.
Mr. Barry’s employment agreement contains a confidentiality and an18-monthnon-competition18-month non-competition and non-solicitation provision, in the event of termination for any reason. In addition, Mr. Barry’s change in control agreement contains a confidentiality and a24-monthnon-competition24-month non-competition and non-solicitation provision, in the event of termination for any reason. If a court were to determine that he breached these provisions, the Company’s obligations to make payments under the agreements would terminate.
Other Named Executive Officers
Messrs. Berquist, PlatzerBijlani and TraubPlatzer and Ms. Hall are each entitled to severance under their respective employment agreements if the Company terminates their employment (other than in the case of termination for “cause” (for those agreements where “cause” is defined), disability, death or retirement) equal to 12 months base salary at their then current rate of salary. In addition, Mr. Platzer is entitled to severance prescribed by law in certain foreign jurisdictions which, if greater, would be in lieu of any severance due
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under any agreements with Quaker Houghton. “Cause” is defined in Mr. Platzer’s employment agreement as: (i) willful and continued failure (following written notice) of the executive to perform his duties under the employment agreement; or (ii) the willful engaging by the executive in a continued course of misconduct which is materially injurious to Quaker Houghton, monetarily or otherwise. In the case of Messrs. Berquist and TraubBijlani and Ms. Hall, “cause” generally means: (i) willful and material breach of their memorandum of employment; (ii) dishonesty, fraud, willful malfeasance, gross negligence or other gross misconduct, in each case relating to the performance of duties which is materially injurious to Quaker Houghton; or (iii) conviction of or plea of guilty or nolo contendere to a felony. Messrs. Berquist, PlatzerBijlani and TraubPlatzer and Ms. Hall are also entitled to reasonable outplacement assistance under their respective employment agreements. Messrs. Berquist’s, Platzer’sBijlani’s and Traub’sPlatzer’s and Ms. Hall’s severance payments are contingent upon signing a form of release satisfactory to Quaker Houghton. None of the Named Executive Officers are entitled to
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COMPENSATION DISCUSSION AND ANALYSIS | ||
severance under their employment agreements if they terminate their employment voluntarily, even if for good reason. Under their respective employment agreements, Messrs. Berquist and TraubBijlani and Ms. Hall would receive any severance payments in semi-monthly installments and Mr. Platzer would receive any severance payments in a lump sum. See also the discussion under the caption “Termination Other than for Cause, Disability, Death or Retirement” in this proxy statement.
Quaker Houghton has entered into change in control agreements with each of its Named Executive Officers. Under these agreements (Mr. Barry’s is described above), the officers, other than Mr. Barry, are entitled, if terminated (other than for disability, death, by us for “cause,” or by the executive officer other than for “good reason”) within two years following (or also within six months before, with respect to Mr. Platzer) a change in control, to severance in an amount equal to 1.5 times the sum of highest annualized base salary plus an amount equal to the average of the total annual amounts paid to the executive under all applicable annual incentive compensation plans during the applicable three calendar-year period described in the change in control agreements, excluding from the average any year in which no amounts were paid. In general, this three-year period would be expected to be the year of termination and the prior two years (for Messrs. Berquist and TraubBijlani and Ms. Hall, if the executive received a bonus in the year of the executive’s termination of employment) or, otherwise, the three calendar years prior to the year of his or her termination of employment. See the discussion under the caption “Potential Payments Upon Termination or Change in Control” in this proxy statement. In addition, these executive officers are entitled to receive (i) earned but unpaid base salary through the termination at the rate in effect on the date of termination or, if higher, at the rate in effect at any time during the90-day period preceding the change in control; (ii) any unpaid bonus or annual incentive payable to the executive in respect of the calendar year ending prior to the termination; (iii) the pro rata portion of any and all unpaid bonuses and annual incentive awards for the calendar year in which the termination occurs based on target performance for Messrs. Berquist, PlatzerBijlani and TraubPlatzer and for Ms. Hall; and (iv) the pro rata portion of any and all awards under the Company’s LTIP for the performance period(s) in which the termination occurs, which would have been payable had the target level performance been achieved for the performance period.
In addition to the amounts described above, our other Named Executive Officers are also entitled toone-year outplacement services and participation in our medical, dental and life insurance programs as if still employed for a period of 18 months. Mr. Platzer is also entitled to receive additional payments as prescribed by the law in the foreign jurisdiction in which he is located. These benefits will be paid or provided only if the executive officer signs a general release of claims unless prohibited by local law. In addition, the benefits and payments will be discontinued if the executive officer violates the confidentiality provisions of his or her respective change in control agreement (at any time) or thenon-compete provisions of the change in control agreement (during employment or theone-year period thereafter). To the extent the severance allowance, together with any other payments contingent upon a change in control, exceed the limits under
Code section 280G (generally, three times the individual’s average annual compensation for the prior five years), the severance allowance will be reduced to the extent necessary to avoid the disallowance of a deduction under Code section 280G or imposition of the excise tax under Code section 4999 (assuming reduction of the severance allowance is the least economically detrimental to the executive).
In the change in control agreements “cause” generally means: (i) the willful and material breach of the employment agreement between the executive and Quaker Houghton (after having received notice and the reasonable opportunity to correct); (ii) dishonesty, fraud, willful malfeasance, gross negligence or other gross misconduct, in each case relating to the performance of the executive’s employment with Quaker Houghton which is materially injurious to Quaker Houghton; or (iii) conviction of or plea of guilty to a felony. “Good reason” includes, other than by reason of executive’s death or disability: (i) any reduction in
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COMPENSATION DISCUSSION AND ANALYSIS | ||
the executive’s base salary from that provided immediately before the “covered termination” or, if higher, immediately before a change in control; (ii) any reduction in the executive’s bonus opportunity (including cash or noncash incentives) or increase in the goals or standards required to accrue that opportunity, as compared to the opportunity and goals or standards in effect immediately before the change in control; (iii) a material adverse change in the nature or scope of the executive’s authorities, powers, functions or duties from those in effect immediately before the change in control; (iv) a reduction in the executive’s benefits from those provided immediately before the change in control, disregarding any reduction under a plan or program covering employees generally that applies to all employees covered by the plan or program; or (v) the executive being required to accept a primary employment location which is more than 25 miles from the location at which he or she was primarily employed during the90-day period prior to a change in control.
In addition to the payments and benefits discussed above, the executive officers are entitled to the payments and benefits that are available to all employees on termination of employment, including vested benefits under the Company’s qualified defined benefit retirement plan and 401(k) plan, short-term and long-term disability benefits (in the event of disability) and life insurance benefits (in the case of death).
Perquisites and Other Benefits
As a general matter, the Company does not provide perquisites to its executive officers, other than an allowance for financial planning services. In Asia and Europe, consistent with regional compensation practices, cars are provided to mid and upper level managers. For more details on these perquisites, please refer to footnote 4 to the Summary Compensation Table.
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COMPENSATION COMMITTEE REPORT | ||||
The Compensation/Management DevelopmentCompensation and Human Resources Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis section included above with management and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and in Quaker Houghton’s Annual Report on Form10-K for the fiscal year ended December 31, 20192020 for filing with the SEC.
Compensation/Management DevelopmentCompensation and Human Resources Committee
Robert H. Rock, Chair
Donald R. Caldwell
Jeffry D. Frisby
William H. Osborne
Ramaswami Seshasayee
![]() | 2021 Proxy Statement | |
COMPENSATION TABLES | ||||
The table below summarizes the total compensation awarded to, paid to, or earned by each of our executive officers who are named in the table. In this proxy statement, we sometimes refer to this group of individuals as our “Named Executive Officers.”
Name and Principal Position (a) | Year (b) | Salary ($)(c) | Bonus ($)(d) | Stock Awards(1) ($)(e) | Option Awards(1) ($)(f) | Non-Equity Incentive Plan Compensation(2) ($)(g) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings(3) ($)(h) | All Other Compensation(4) ($)(i) | Total ($)(j) | Year (b) | Salary ($)(c) | Bonus ($)(d) | Stock Awards(1) ($)(e) | Option Awards(1) ($)(f) | Non-Equity Incentive Plan Compensation(2) ($)(g) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings(3) ($)(h) | All Other Compensation(4) ($)(i) | Total ($)(j) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael F. Barry Chairman of the Board, Chief Executive Officer and President |
|
2019 2018 2017 |
|
|
888,635 845,192 820,192 |
|
|
0 0 0 |
|
|
670,959 623,237 549,976 |
|
|
670,970 623,367 549,994 |
|
|
1,853,475 2,190,000 1,735,965 |
|
|
3,047,000 517,000 1,153,000 |
|
|
61,043 49,385 57,227 |
| | 7,192,082 4,848,181 4,866,354 |
|
|
2020 |
|
|
858,035 |
|
|
0 0 0 |
|
|
1,796,299 |
|
|
771,662 |
|
|
2,239,750 |
|
|
1,333,337 |
|
|
46,331 |
| | 7,045,414 7,192,082 4,848,181 | ||||||||||||||||||||||||||||
Mary Dean Hall |
|
2019 2018 2017 |
|
|
397,439 382,116 367,164 |
|
|
0 0 75,000 |
|
|
236,563 76,634 63,262 |
|
|
86,653 76,647 63,308 |
|
|
309,910 365,316 191,845 |
|
|
0 0 0 |
|
|
19,475 23,486 22,940 |
|
|
1,050,040 924,199 783,519 |
|
|
2020 |
|
|
397,136 |
|
|
0 0 0 |
|
|
232,530 |
|
|
100,005 |
|
|
412,942 |
|
|
0 0 0 |
|
|
22,353 |
|
|
1,164,966 |
| |||||||||||||||||||||||||||
Joseph A. Berquist Senior Vice President, Global Specialty Businesses and Chief Strategy Officer |
|
2019 2018 2017 |
|
|
377,434 343,939 328,049 |
|
|
0 0 75,000 |
|
|
379,864 76,634 56,667 |
|
|
79,973 76,647 56,654 |
|
|
298,539 350,480 269,572 |
|
|
13,000 0 6,000 |
|
|
20,018 21,193 23,026 |
|
|
1,168,828 868,893 814,968 |
|
|
2020 |
|
|
398,628 |
| | 0 0 0 |
|
201,674 |
|
|
86,662 |
|
|
370,690 |
|
|
0 13,000 0 |
|
|
24,029 |
|
|
1,081,683 |
| ||||||||||||||||||||||||||||
Jeewat Bijlani Senior Vice President – Managing Director, Americas |
|
2020 |
|
|
398,628 |
|
|
0 |
|
|
201,674 |
|
|
86,662 |
|
|
373,002 |
|
|
0 |
|
|
20,909 |
|
|
1,080,875 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wilbert Platzer |
|
2019 2018 2017 |
|
|
344,506 338,253 333,845 |
(5)
|
|
0 0 0 |
|
|
229,902 56,603 56,667 |
|
|
79,973 56,670 56,654 |
|
|
256,575 313,130 271,375 |
|
|
512,119 2,795 304,985 |
|
|
48,172 35,843 26,950 |
|
|
1,471,247 803,294 1,050,476 |
|
|
2020 |
|
|
374,739 344,506 |
(5) |
|
0 0 0 |
|
|
201,674 |
|
|
86,662 |
|
|
325,965 |
|
|
622,948 |
|
|
40,390 |
|
|
1,652,378 |
| |||||||||||||||||||||||||||
Robert T. Traub |
|
2019 |
|
|
325,881 |
|
|
0 |
|
|
219,832 |
|
|
69,969 |
|
|
272,736 |
|
|
4,000 |
|
|
19,388 |
|
|
911,806 |
|
(1) | The amounts in columns (e) and (f) reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for outstanding equity awards under the Company’s |
(2) | The amounts in column (g) are incentive cash bonuses earned in |
50 | 2021 Proxy Statement | Quaker Houghton |
COMPENSATION TABLES | ||
(3) | The amounts shown in column (h) reflect the actuarial increase or decrease in the present value of the Named Executive Officer’s benefits under all pension plans established by the Company determined by using the interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. See Note 21 of Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form10-K for the year ended December 31, |
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decreased by |
(4) | Includes employer contributions during 2020 by the Company to the U.S. based Named Executive Officers pursuant to the Company’s Retirement Savings Plan: |
Includes the costs associated with the use of a Company-provided automobile consistent with the regional compensation practices in Europe for Mr. Platzer in the amount of |
Includes dividends paid in 2020 on time-based restricted stock awards: |
Includes life insurance credit |
Includes the costs associated with financial planning |
|
(5) | Salary includes a representation fee and a holiday allowance: |
![]() | 2021 Proxy Statement | |
COMPENSATION TABLES | ||
Provided below is information on grants made in 20192020 to the Named Executive Officers under the Company’s LTIP. In August 2019,March 2020, awards for the 2019-20212020-2022 period were made to the Named Executive Officers consisting of options vesting in three approximately equal installments over the three-year period, time-based restricted stock vesting after the three-year period and a cash bonusPSU opportunity. In addition, special grants were made to each of the Named Executive Officers in recognition of their extraordinary efforts in connection with the Combination. See discussion under the heading “Long-Term Incentives” under the Compensation Discussion and Analysis section in this proxy statement.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)
| Estimated Future Payouts Under Equity Incentive Plan Awards
| All Other Stock Awards: Number of Shares of | All Other Option Awards: Number of Securities | Exercise or Base Price | Grant Date Fair Value of Stock and | Estimated Future Payouts Under Non-Equity Incentive Plan Awards
| Estimated Future Payouts Under Equity Incentive Plan Awards(1)
| All Other Stock Awards: Number of Shares of | All Other Option Awards: Number of Securities | Exercise or Base Price | Grant Date Fair Value of Stock and | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a)
| Grant Date (b)
| Threshold ($)(c)
| Target ($)(d)
| Maximum ($)(e)
| Threshold (#)(f)
| Target (#)(g)
| Maximum (#)(h)
| Stock or Units(2) (#)(i)
| Underlying Options(3) (#)(j)
| of Option Awards(4) ($/Sh)(k)
| Option Awards(5) ($)(l)
| Grant Date (b)
| Threshold ($)(c)
| Target ($)(d)
| Maximum ($)(e)
| Threshold (#)(f)
| Target (#)(g)
| Maximum (#)(h)
| Stock or Units(2) (#)(i)
| Underlying Options(3) (#)(j)
| of Option Awards(4) ($/Sh)(k)
| Option Awards(5) ($)(l)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael F. Barry
| 8/15/19 | 268,400 | 671,000 | 1,342,000 |
|
0
|
|
|
0
|
|
|
0
|
|
|
4,331
|
|
|
21,193
|
|
|
154.92
|
|
|
1,341,929
|
| 3/30/20 | 0 | 0 | 0 |
|
2,259 |
|
|
5,647 |
|
|
11,294 |
|
|
5,647 |
|
|
24,638 |
|
|
136.64 |
|
|
2,567,961 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
Mary Dean Hall
| 8/15/19 | 34,667 | 86,667 | 173,334 |
|
0
|
|
|
0
|
|
|
0
|
|
|
559 968
|
|
|
2,737 0
|
|
|
154.92 154.92
|
|
|
173,254 149,963
|
| 3/30/20 | 0 | 0 | 0 |
|
292 |
|
|
731 |
|
|
1,462 |
|
|
731 |
|
|
3,193 |
|
|
136.64 |
|
|
332,534 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
Joseph A. Berquist
| 8/15/19 | 32,000 | 80,000 | 160,000 |
|
0
|
|
|
0
|
|
|
0
|
|
|
516 1,936 |
|
|
2,526 0 |
|
|
154.92 154.92 |
|
|
159,912 299,925 |
| 3/30/20 | 0 | 0 | 0 |
|
254 |
|
|
634 |
|
|
1,268 |
|
|
634 |
|
|
2,767 |
|
|
136.64 |
|
|
288,337 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
Jeewat Bijlani | 3/30/20 | 0 | 0 | 0 |
|
254 |
|
|
634 |
|
|
1,268 |
|
|
634 |
|
|
2,767 |
|
|
136.64 |
|
|
288,337 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wilbert Platzer
| 8/15/19 | 32,000 | 80,000 | 160,000 |
|
0
|
|
|
0
|
|
|
0
|
|
|
516 968 |
|
|
2,526 0 |
|
|
154.92 154.92 |
|
|
159,912 149,963 |
| 3/30/20 | 0 | 0 | 0 |
|
254
|
|
|
634
|
|
|
1,268
|
|
|
634
|
|
|
2,767
|
|
|
136.64
|
|
|
288,337
|
| |||||||||||||||||||||||||||||||||||||||||||||||||
Robert T. Traub
| 8/15/19 | 28,000 | 70,000 | 140,000 |
|
0
|
|
|
0
|
|
|
0
|
|
|
451 968
|
|
|
2,210 0
|
|
|
154.92 154.92
|
|
|
139,838 149,963
|
|
(1) | The amounts shown in column |
(2) | The amounts shown in column (i) for awards granted on |
(3) | The amounts shown in column (j) reflect the combination of incentive andnon-qualified options which were issued under the LTIP. These options vestone-third in three consecutive annual installments, commencing on |
(4) | With respect to the awards granted on |
(5) | The amounts included in column (l) represent the full grant date fair value of the awards computed in accordance with FASB ASC Topic |
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COMPENSATION TABLES | ||||
Outstanding Equity Awards at FiscalYear-End