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QualityIntegrityPerformanceLeadershipInnovationIndependenceThe Individual
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Dear Fellow I hope you will join Corning Incorporated’s Board of Directors, senior leadership, and other stakeholders This meeting is your opportunity to hear about Corning’s 2020 performance, accomplishments, and innovations as well as our expectations for 2021. It’s also a perfect opportunity to participate in our corporate governance process. Shareholders will vote on the annual election of directors, the advisory approval of the
The following pages contain the formal notice of meeting and the proxy statement. I encourage you to sign and return your proxy card or vote by telephone or Internet prior to We are pleased to have delivered solid financial results during an extremely challenging year. As the impact of the pandemic unfolded, we took decisive action to reduce our operating costs, production levels, and capital expenditures while driving free cash flow generation. These actions created significant cost savings in the second half of the year. As the economy strengthened, we effectively adjusted operations, keeping pace as demand began to recover in many of the markets we serve. As a result of our adjusted plan, we delivered a strong second half and improved our financial strength. We are committed to making the world a better place, not only with our innovations, but also with our actions. In 2020, we used our capabilities to help combat COVID-19, keep people safe, and address challenges presented by the pandemic. Through funding from the U.S. government, we expanded the manufacturing capacity of Valor® Glass to help accelerate the delivery of COVID-19 vaccines. We prioritized the health and safety of our employees by implementing new screening measures, cleaning procedures, and workplace protocols. And we contributed to vital human services in our communities around the world, distributing food, donating medical supplies, and dispensing personal protective equipment in partnership with local businesses, medical professionals, and food banks. Furthermore, we created the Office of Racial Equality and Social Unity (ORESU). By leading the company’s continued efforts in diversity and inclusion, this office champions and influences change within Corning and the communities in which we live and work. ORESU leaders are focused on actions at the company, local, state, and national level and are evaluating effective ways to drive sustainable progress within our communities. In 2021, we will build on our actions and initiatives from the past year in support of all stakeholders. We are well-positioned to keep our company strong by supporting our people, communities, customers, and shareholders. I look forward to sharing more details at the Annual Meeting. Thank you for your investment in Corning and for your participation in our governance process. Sincerely, Wendell P. Weeks Chairman of the Board and Chief Executive Officer |
CORNING 2021 PROXY STATEMENT |
Notice of 2021 Annual | ![]() |
Thursday, April 29, 2021 12 noon Eastern Time To be held virtually at: virtualshareholdermeeting.com/ GLW2021
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Important Information Regarding Our Virtual Annual Meeting:
Due to the ongoing COVID-19 pandemic, our Board of Directors has determined to hold the Annual Meeting in a virtual-only format. You will not be able to attend the Annual Meeting physically.
You are entitled to participate in the Annual Meeting if you were a shareholder as of the close of business on March 1, 2021. The live audio webcast of the meeting will begin promptly at 12 noon Eastern Time. Online access to the meeting will open 30 minutes prior to its start. We encourage you to access the meeting in advance of the designated start time.
To attend and vote your shares during the virtual Annual Meeting, you will need to log in to virtualshareholdermeeting.com/ GLW2021 using, (i) for record holders, the control number found on your proxy card, voting instruction form or the notice you previously received, or (ii) for holders who own shares in street name through brokers, the control number issued to you by your brokerage firm. You may vote during the virtual Annual Meeting by following the instructions available on the website during the meeting. If you do not have a control number, you may log in as a Guest, although you will not be able to vote during the meeting.
We urge you to vote and submit your proxy in advance of the meeting using one of the methods described in the proxy materials whether or not you plan to attend the Annual Meeting. You may vote your shares in advance at proxyvote.com.
ITEMS OF BUSINESS
1. | Election of 14 directors to our Board of Directors for the coming year; |
2. | Advisory approval of our executive compensation (Say on Pay); |
3. | Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting |
4. | Approval of |
5. | Any other business or action which may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting. |
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WHO CAN VOTE
You may vote at our 20192021 Annual Meeting if you were a shareholder of record at the close of business on March 4, 2019.1, 2021.
Your vote is important to us. Please exercise your right to vote.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 2, 2019:April 29, 2021: our proxy statement, 20182020 Annual Report on Form 10-K and other materials are available on our website atcorning.com/2019-proxy2021-proxy.
Sincerely,
Linda E. Jolly
Vice President and Corporate Secretary
March 22, 201918, 2021
VOTE RIGHT AWAY
Your vote is very important. Even if you plan to attend the Annual Meeting, pleasePlease promptly submit your proxy or voting instructions by Internet, telephone or mail to ensure the presence of a quorum. You may also vote during our virtual Annual Meeting (subject to the circumstances described in personthe box at our Annual Meeting. left). If you are a shareholder of record, your admission ticket is attachedyou may vote during the meeting using the control number on the proxy card provided to your proxy card.you. If your shares are held in the name of a broker, nominee or other intermediary, you must bring proof of ownership with yousuch party can provide the control number to you. Shareholders without a control number may still attend the meeting.meeting as guests.
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By telephone Dial toll-free 24/7 1-800-690-6903 | By mail Cast your ballot, sign the proxy card and send by mail | By Internet Visit 24/7 proxyvote.com |
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Proposal 1 Election of Directors | ||
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Board of Directors’ Qualifications and Experience | ||
Corning’s Director Nominees |
CORNING | 3 |
4 | CORNING |
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This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. As used in this proxy statement, “Corning,” the “Company” and “we” may refer to Corning Incorporated itself, one or more of its subsidiaries, or Corning Incorporated and its consolidated subsidiaries.
Annual Meeting of Shareholders Date and Time April 29, 2021, 12 noon Eastern Time To be held virtually at: virtualshareholdermeeting.com/ GLW2021 Record Date March 1, 2021 Admission See the instructions contained in “Frequently Asked Questions about the Meeting and Voting” on page 93. On March 18, 2021, we posted this proxy statement and our 2020 Annual Report on Form 10-K on our website at corning.com/2021-proxy and began mailing them to shareholders who requested paper copies. | ||
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Proposals That Require Your Vote
Proposal | Board Vote Recommendation | More Information | |||
1 | Election of 14 directors | For Each Nominee | page | ||
2 | Advisory approval of | For | page | ||
3 | Ratification of appointment of independent registered public accounting firm | For | page | ||
4 | Approval of | For | page |
Business Information – Who We Are
Corning is one of the world’s leading innovators in materials science. For more than 167170 years, Corning has applied its unparalleled expertise in specialty glass, ceramics and optical physics to develop products that have created new industries, transformed people’s lives and unleashed significant new capabilities. Our innovation approach delivers long-term value for Corning and its shareholders.
Our reportable segments are as follows:
Reportable Segments* | Net Sales % | Segments Description | ||
Display | ![]() ![]() | manufactures glass substrates for | ||
Optical | ![]() ![]() | manufactures carrier and enterprise network solutions for the telecom and data center industries | ||
Specialty | ![]() ![]() | manufactures products that provide more than 150 material formulations for glass, glass ceramics and fluoride crystals to meet demand for | ||
Environmental | ![]() ![]() | manufactures ceramic substrates and filters for automotive and diesel | ||
Life Sciences | ![]() ![]() | manufactures glass and plastic labware, equipment, media and reagents to provide workflow solutions for |
*All other segments that do not meet the quantitative threshold for separate reporting are grouped as “All Other”.Other.” This group is primarily comprised of the pharmaceutical technologies business andauto glass, new product lines and development projects, as well as other businesses and certain corporate investments. The Company obtained a controlling interest in Hemlock Semiconductor Group (“HSG”) during the third quarter of 2020 and has consolidated results in “All Other” as of September 9, 2020. All Other represented 2%4% of Corning’s core net sales in 2018.2020.
CORNING | 5 |
Proxy Statement Summary
Guiding our Company and our People through a Challenging Year: Our 2018 Performance HighlightsResponse to COVID-19 focused on our People, our Communities and Relief Efforts around the World
During 2020, Corning’s Values were evident in our actions as we faced and overcame numerous challenges as a result of the COVID-19 pandemic. We leveraged our portfolio capabilities to combat the pandemic by supplying technologies that help customers develop novel treatments and vaccines, provide mass testing, and accelerate vaccine production, all while prioritizing the health and safety of our employees and contributing to vital human services in our communities and around the world. We remained focused on keeping the Company strong to support our people, communities, customers, and shareholders, and our commitment to being a dedicated global citizen has never been stronger.
We prioritized the safety of our employees, workplaces, and communities while delivering for customers and contributing to public-health and economic-relief efforts |
Protect & Retain Employees | Supporting Relief Efforts | |
• Our primary concern amidst the global COVID-19 pandemic has been the health and safety of our employees • Many of Corning’s manufacturing facilities were deemed essential, and recognizing the challenges our employees faced, we provided additionalcompensation for front-line employees who continuedto work onsite in our production facilities • We further ensured safety in our facilities by enhancingcleaning procedures at all locations and implementing new measures for site visitations and entry screenings • We implemented work from home and employee furloughs for employees who could take advantage of such initiatives in order to protect and retain talent • We enacted the Shared Sacrifice, Shared Opportunity program as part of a multi-faceted set of actions designed to help preserve cash, retain talent and align the interests of employees with those of shareholders | • Corning is playing a vital role in supporting COVID-19 relief efforts • The Company has donated thousands of 384-well microplates, used to screen drug compounds, to expedite the discovery of drugs that might be effective in treating COVID-19, and donated PPE to front-line medical workers in our local communities • The Company was awarded $204 million in funding to expand Valor® Glass manufacturing capacity to support vaccine packaging • We have entered several long-term agreements withmajor customers for COVID-19 molecular diagnostic testing and antibody detection kits • We established our UNITY Campaign to support vitalhuman services and emergency relief in communities around the world. |
“We plan to build on the global relevance of our portfolio and emerge stronger from the present uncertain environment” - Wendell Weeks, Chairman and CEO |
6 | CORNING 2021 PROXY STATEMENT |
Proxy Statement Summary
2020 Performance Highlights: Overcoming Current Challenges and Driving Second-Half Growth
In 2020, we responded effectively to a challenging year. Our decisive action and operational execution resulted in our continued leadership in the capabilities that make Corning distinctive. Our response was focused on bolstering our financial strength—reducing production levels and operating costs, carefully managing inventory, reducing capital expenditures, and pausing share buybacks. While we took steps to adjust production, we didn’t reduce capacity, and as a result, we remained positioned to meet increasing demand as the economy improved. We continued to make strategic investments, and advanced major innovations with our customers, to capture growth across our market-access platforms. Most importantly, we developed multi-faceted programs to keep our employees safe, retain our talent, protect our financial health, and preserve the trust of Corning stakeholders.
Our first-half actions generated significant cost savings in the second half of the year. And as the economy improved, we effectively adjusted operations, keeping pace as demand began to recover in many of the markets we serve.
Our results tell the story. Core net sales were down 12% in the first half as most economies were impacted by pandemic-related lockdowns. But in the second half, we improved core net sales 24% over the first half while expanding core operating margin 122%, returning to year-over-year growth, and generating strong free cash flow. For the year, we generated almost a billion dollars of free cash flow, and our balance sheet remains strong. |
In 2020:
• | We protected our financial health by cutting costs and driving free cash flow generation |
• | In our Life Sciences segment, Corning stepped forward to support three leading vaccine distributors and continues to see strong demand for consumable products used in COVID-19 applications including molecular diagnostic testing, clinical trials, and vaccine testing |
• | In Specialty Materials, innovation adoption drove core net sales up 18% year over year despite a declining smartphone market |
• | Environmental Technologies’ recovery pace was faster than the market, driven by more Corning content across both the automotive and diesel businesses and highlighted by year-over-year growth in gas particulate filter sales as adoption continues in China and Europe |
• | Optical Communications returned to growth as customers increase spending to support growing bandwidth requirements |
• | Display began the ramp of its new Gen 10.5 plants in China in both Wuhan and Guangzhou, positioning the Company well to capture the fast-growing demand for large televisions |
• | The Company gained a majority share of Hemlock Semiconductor Group (“HSG”), enabling the consolidation of its stable financials with no net cash outlay by Corning |
2020 QUARTER-OVER-QUARTER CORE NET SALES AND CORE EPS
CORNING 2021 PROXY STATEMENT | 7 |
Proxy Statement Summary
COVID-19 Impact on Compensation
In 2020 as the pandemic began, our focus shifted to navigating significant economic uncertainty while protecting our employees and our communities. Our primary objectives were to preserve the cash needed to ensure the financial health and stability of the Company and retain the talent we would need as we returned to growth.
Starting in February we implemented an adjusted operating plan focused on cash preservation. After initial discussions in April, our Compensation Committee approved the Shared Sacrifice, Shared Opportunity (SSSO) program in May, which we implemented effective June 1, 2020 with approximately 10,000 salaried employees participating globally. By exchanging a portion of salaried employees’ (and non-employee directors’) cash compensation for share-based compensation, we were able to preserve cash in the short-term, while aligning a large number of employees’ interests directly with those of shareholders by enabling them to be shareholders themselves, many for the first time. The SSSO’s three-year vesting schedule for equity awards encourages talent retention, and as Corning succeeds those employees who sacrificed a portion of their salaries and cash bonuses will be rewarded as well.
Under the SSSO we also cancelled our 2020 annual salary review cycle for salaried employees, ordinarily effective in July, suspended the company match in our U.S. Investment (401(k)) and Supplemental Investment Plans for U.S. salaried employees, and refocused unit-specific GoalSharing plans on the most important priorities for the second half of 2020 in light of the challenges of the pandemic.
More details about the SSSO program and other compensation actions we took in 2020 can be found in “Impact of COVID-19 on Compensation and Benefits” on page 55.
Our 2020 Results
Net Sales | Earnings per Share | Net Cash Provided By Operating Activities | |
$ | $ | $ | |
$ | $ | $ |
*GAAP and Core Results include the impact of the HSG consolidation; however, the Compensation Committee exercised its discretion to exclude the impact of the HSG consolidation in measuring 2020 performance for compensation purposes.
CORE PERFORMANCE MEASURES
In managing the Company and assessing our financial performance, we adjust certain measures provided byin our consolidated financial statements withto arrive at measures that are not calculated in accordance with GAAPGenerally Accepted Accounting Principles (“GAAP”) and exclude specific items that are non-recurring, related to arrive atforeign exchange volatility, or unrelated to continuing operations. These measures are our Core Performance Measures. Our management uses Core Performance Measures, along with financial measures in accordance with GAAP, to make financial and operational decisions. We believe that sharing our Core Performance Measures with investors provides greater visibility into how we make business decisions. Accordingly, these measures also form the basis for our compensation program metrics.
Non-GAAPTable of Contents
Proxy Statement Summary
Items that are excluded from certain Core Performance calculations include: gains and losses on our translated earnings contracts, acquisition-related costs, certain discrete tax items and other tax-related adjustments, restructuring, impairment losses and other charges or credits, certain litigation-related expenses, pension mark-to-market adjustments and other items which do not reflect on going operating results of the Company. More information on these items can be found in Appendix A.
Corning utilizes constant-currency reporting for our Display Technologies and Specialty Materials segments for the Japanese yen, South Korean won, Chinese yuan and new Taiwan dollar, and uses euro, Japanese yen and Chinese yuan constant currency reporting for our Environmental Technologies and Life Sciences segments. The Company believes that the use of constant-currency reporting allows investors to understand our results without the volatility of currency fluctuations and reflects the underlying economics of the translated earnings contracts used to mitigate the impact of changes in currency exchange rates on our earnings and cash flows.
These non-GAAP measures are not an alternative to, or a replacement for, financial results determined in accordance with generally accepted accounting principles.GAAP. Please see Appendix A to this proxy statement for a reconciliation of the non-GAAP measures we use in this proxy statement to the most directly comparable GAAP financial measures.
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Proxy Statement Summary
Update on Our Leadership Priorities
STRATEGY & GROWTH FRAMEWORK
In 2019, we successfully completed our 2016-2019 Strategy and Capital Allocation Framework
In October 2015, Corning announced a Strategy and Capital Allocation Framework (the Framework) that reflects the Company’s financial and operational strengths, as well as its ongoing commitment to increasing shareholder value. The Framework outlines our leadership priorities, and articulates the opportunities we see across our businesses. We designedFramework. Under the Framework, to create significant value for shareholders by focusing our portfoliowe outlined and leveraging our financial strength. Under our Framework we target generating $26 to $30 billion of cash through 2019, returning more than $12.5 billion to shareholders through 2019 and investing $10 billion through 2019 to sustain our leadership positions and deliver growth.
* Target Debt to Target EBITDA, see Appendix A for definitions
Focusing Our Portfolio:Ourdemonstrated how Corning’s probability of success increases as we invest in our world-class capabilities. Corning is concentratingWe concentrate approximately 80% of itsour research, development and engineering investment andalong with capital spending on a cohesive set of three core technologies, four manufacturing and engineering platforms, and five market-access platforms. Our cost of innovation declines as we reapplyMarket-Access Platforms. This strategy allows us to quickly apply our talents and repurpose our assets. By combining capabilitiesassets across the company, as needed, to capture high-return opportunities.
Building on the success of the 2016-2019 Framework, we create higherannounced our 2020-2023 Strategy & Growth Framework, highlighting significant opportunities to sell more Corning content through each of our Market-Access Platforms. Under this new Framework, our leadership priorities and more sustainable advantages,our fundamental approach to capital allocation remain the same. We continue to focus our portfolio and ultimately, delighted customers.utilize our financial strength. We expect to generate strong operating cash flow as we move forward. We will continue to use our cash to grow, extend our leadership, and reward shareholders.
ANNUAL DIVIDENDS PER COMMON SHARE AND INCREASE OVER PRIOR YEAR
CORNING 2021 PROXY STATEMENT | 9 |
Proxy Statement Summary
Utilizing Our Financial Strength:
Environmental, Social and Governance Matters at Corning
In accordance with Corning’s Values, we believe that a commitment to positive environmental, social and governance-related business practices strengthens our company and our community, increases our connection with our shareholders, and helps us better serve our customers and the communities in which our employees live and we operate. We expect to generatealso see in these commitments new ways of creating value for our shareholders, our employees, our customers, and deploy $26 to $30 billion through 2019. Wethe wider world.
In 2021, we plan to invest $10 billionpublish our inaugural Sustainability Report prepared in accordance with the Global Reporting Initiative Standards (GRI): Core Option with disclosures against the Sustainability Accounting Standards Board (SASB) Hardware Sustainability Accounting Standard. In the near term, information about our sustainability philosophy and program can be found at corning.com/sustainability.
Our Board and each of that amountits committees oversees matters related to growCorning’s ESG practices, performance and maintain our market leadership positions. We also plan to distribute more than $12.5 billion to our shareholders through share repurchases and our quarterly dividend.disclosures. For example:
The Corporate Responsibility and Sustainability Committee maintains general oversight of environmental and social risk, with particular responsibility for employee welfare and labor relations, social justice, supply chain integrity, human rights, political activity, community responsibility, and environmental matters. It annually reviews the Company’s sustainability plan and philosophy. | |
Performance against the Strategy and Capital Allocation Framework:For the last three years, we have invested for growth through our Strategy and Capital Allocation Framework. The significant benefits of these investments are evident in our financial performance. In 2018, we built new capacity, launched new products, grew sales by more than $1 billion dollars, and extended our leadership position in all businesses. We exited the year with strong execution, expanded margins, and great momentum.
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• | The Compensation Committee reviews matters related to talent and |
• | The Information Technology committee monitors risks related to |
• | The Nominating and Governance Committee oversees our ethics and governance policies. |
• | The Finance Committee reviews our fiscal policies integral to maintaining enterprise sustainability. |
• | A majority of Board members serve on working groups with management to address issues identified by |
Our Director of Sustainability coordinates our Sustainability Working and Steering Committees, comprised of cross-functional management and senior leaders, respectively, which identify ongoing material ESG issues, coordinate the company’s short-and long-term sustainability goals and objectives, and monitor performance.
In 2020, Corning adopted 12 sustainability goals addressing 10 of our most material issues to drive progress toward those areas where we can achieve the greatest impact. Corning’s goals were adopted after a materiality assessment identified issues most important to the company and its stakeholders. The goals align with the Sustainable Development Goals (SDGs) below adopted by the United Nations in 2015 as a “blueprint to achieve a better and more sustainable future for all.”
CORNING |
Proxy Statement Summary
A Tradition of Delivering Value to Shareholders
Corning’s progress on its StrategyOur Environmental, Social, and Capital Allocation Framework is part of a longer-term objective of delivering value to shareholders. While we have returned $11.8 billion of the $12.5 billion promised as part of the Framework that began in October 2015, over the past five years, Corning has delivered $17.4 billion to shareholders.Governance Goals
Environmental | Social | Governance | ||
Energy Management – By 2030, Corning will increase its use of renewable energy by 400% from a 2018 baseline. Water Conservation – Corning will enhance its water strategies across Corning sites, prioritizing manufacturing plants and communities in high-risk water-scarce regions, by 2025. Waste Management – Corning will enhance its waste strategies across Corning sites, prioritizing manufacturing plants, by 2025. | Sustainable Supply Chain – 100% of Corning’s risk suppliers and contract manufacturers will be certified as socially responsible by 2025. Occupational Health and Safety – Corning will continue to maintain our safety metrics in the top quartile of our industry benchmark values. Community Involvement andPartnerships – Corning will encourage increased volunteerism efforts year over year by supporting, rewarding, and recognizing employees’ efforts in the community. | Board Diversity – Corning will maintain a diverse board. Board Oversight of ESG Matters – The Corporate Responsibility and Sustainability Committee will review the sustainability program annually. Risk Management – Environmental, Social, and Governance issues will be integrated into Corning’s Enterprise Risk Management Processes. Ethical Business Practices – All employees will understand Corning’s Code of Conduct, including how to report allegations of ethical or legal misconduct. Transparency and Reporting – Corning will issue a sustainability report in 2021 and every year thereafter. Environmental and Social Advocacy – Corning will continue its advocacy for environmental and social issues. |
CORNING 2021 PROXY STATEMENT | 11 |
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On February 6, 2019, Corning’s Board declared an 11.1% increase in the Company’s dividend, from $0.18 to $0.20 per share quarterly, beginning with the dividend paid in the first quarter of 2019. This marks the eighth dividend increase since October 2011.
Proxy Statement Summary
Our Commitment to Environmental, Social and Governance Issues
Corning demonstrates its commitment to environmental, social, governance and human capital matters, and its Values, in many ways that can be explored on our Sustainability website at corning.com/sustainability. Specifically:
• | Corning’s formal commitment to diversity and inclusion began more than 50 years ago. Together with our Values, our diversity and inclusion initiatives unite us as “one Corning” worldwide and form the foundation of our shared workplace culture in which all employees have the opportunity to thrive. More information about Corning’s commitments to diversity and inclusion can be found in its Global Diversity, Equity & Inclusion Annual Report at https://www.corning.com/media/worldwide/global/documents/DEI_2020AnnualReport.pdf. | ||
• | In 2020, Corning formed its Office of Racial Equality and Social Unity (ORESU) to champion change at the company, in our communities, and in the nation. ORESU has already taken concrete steps toward some of its initial goals, including engagement in police reform efforts in Central New York, acknowledging Martin Luther King Jr. Day as a paid holiday for U.S. employees, and banning the Confederate flag from public display on all Corning properties worldwide. The Board of Directors has discussed social justice matters and the work of ORESU at each meeting since ORESU’s founding, a majority of directors volunteer on our social justice working teams, and the Board intends to continue to monitor the Company’s progress on social justice matters at each meeting. | ||
• | In 2020, Corning established its UNITY Campaign to support vital human services and emergency relief in communities around the world. | ||
• | Corning is a global employer with approximately 50,100 employees across the U.S., Asia, Latin America and Europe. Corning’s global salaried employee retention rate is 95%. | ||
• | We achieved or maintained 100% pay equity for men and women in the U.S., China, Germany, Mexico and Taiwan, comprising more than 90% of our global salaried workforce, with the goal of having all of our salaried workforce included in our annual analysis by 2021. | ||
• | For the fifth consecutive year, Corning was named to the “Best-of-the-Best” Corporations for Inclusion list by the National Gay & Lesbian Chamber of Commerce, distinguishing Corning as one of the “Best Places to Work for LGBT Equality” and earned a score of 100 on the Disability Equality Index and recognition as a “Best Place to Work” by the American Association of People with Disabilities and Disability:IN. | ||
• | Corning has scored a 90 or above on the Human Rights Campaign Corporate Equality Index for fifteen years. | ||
• | Corning received recognition as a Top Supporter of Historically Black Colleges and Universities (HBCUs) for the sixteenth consecutive year by the Council of Engineering Deans of HBCUs. In January 2021, Corning donated $5.5 million to North Carolina Agricultural and Technical State University, the nation’s largest historically Black university, to prepare students for careers in science, technology, engineering and mathematics (STEM) and education. | ||
• | Corning’s focus on creating the most positive workplace experience for our employees has led to us being recognized by Forbes as one of the World’s Best Employers for 2020. | ||
• | Corning is committed to protecting the environment through the continuous improvement of our processes, products, and services. For example: | ||
• | Corning is a leader in developing products that prevent air pollution. Corning’s ceramic substrates and particulate filters have prevented more than 4 billion tons of hydrocarbons, 4 billion tons of nitrogen oxide and 40 billion tons of carbon monoxide from entering the atmosphere since 1970. | ||
• | The U.S. Environmental Protection Agency has awarded Corning the ENERGY STAR® Partner of the Year for the last 7 years, with Sustained Excellence designation the last 5 years. In 2020, eight of our global manufacturing facilities exceeded energy efficiency goals set by the U.S. Environmental Protection Agency’s ENERGY STAR® Challenge for Industry. To date, Corning has 37 Challenge for Industry achievers. | ||
• | The Solar Energy Industry Association ranked Corning 18th in the United States and 2nd within the manufacturing sector for corporate solar energy usage, reflecting Corning’s broad support of renewable energy through on- and off-site solar installations, solar power purchases, and international solar investments. |
12 | CORNING 2021 PROXY STATEMENT |
Proxy Statement Summary
• | Corning sees employee well-being at the heart of its long-term sustainability. Corning supported its employees during the COVID-19 pandemic through | ||
• | Additional compensation for factory workers in facilities classified as essential; | ||
• | Preservation of jobs and the enterprise through the Shared Sacrifice, Shared Opportunity program, work-from-home, employee furloughs and other protective actions; and | ||
• | Guidance and support for both remote work employees as well as those who continued to report to our manufacturing facilities, including consistent delivery of critical information on health precautions, travel protocols, workplace modifications and regional restrictions; provision of personal protective equipment; screening and testing; and support for parents of school-age children, among other benefits. | ||
• | Corning supports healthy communities by pivoting our portfolio and capabilities to address immediate worldwide health needs, including | ||
• | Helping to accelerate delivery of COVID-19 vaccines by expanding manufacturing of Valor® Glass packaging at the request of the U.S. Departments of Defense and Health and Human Services; | ||
• | Providing steady access to lab supply needs for COVID-19 applications and test kit preparation through our Life Sciences division research and bioprocessing products; and | ||
• | Developing Nippon Paint’s Antivirus Kids Paint with Corning Guardiant™ antimicrobial particles, and donating supplies to hospitals in China. | ||
• | Implementing a plan, organized by Corning scientists, to 3D print and assemble thousands of protective face shields for Corning-area hospitals to support local demand for personal protective equipment, and leveraging our supply chain to source and donate the surgical masks needed to keep frontline medical workers safe in many of the communities in which we operate. | ||
• | All Corning suppliers are expected to demonstrate social and environmental responsibility as outlined in our Human Rights Policy and Supplier Code of Conduct. We use these foundational policies to ensure ethical procurement and labor practices. Our Supplier Code of Conduct embraces the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work. It also requires that suppliers comply with environmental regulations and reduce their negative impacts on the environment. |
Supporting Sustainable Communities
Throughout its history, Corning has routinely made contributions to civic, educational, charitable, cultural and other institutions that improve the quality of life and increase the resources of the communities in which it operates, making Corning more attractive to employees.
The Company undertakes its philanthropic activities both directly and indirectly through The Corning Incorporated Foundation (the Foundation), a separate 501(c)3 organization. We believe in being an active corporate citizen and the Foundation directs its grant-making toward the communities where Corning operates and its employees live, enabling initiatives in four areas: education, culture, human services and volunteerism. In 2020, Corning donated $3.8 million to the Foundation, and the Foundation disbursed approximately $5 million, including grants made under the Foundation’s Employee Programs (Employee Matching Gifts, Dollars for Doers, Vibrant Community Grants and Excellence in Volunteerism Awards). Additional information about the Foundation can be found at corningfoundation.org.
Corning’s direct giving includes annual contributions to both local and international cultural and educational institutions. In particular, Corning is proud to support The Corning Museum of Glass (CMoG) – the world’s leading glass museum. Beyond just a key cultural and community hub, CMOG also provides Corning with a unique innovation crucible where our glass scientists and experts collaborate with glass artists and designers to creatively explore the novel properties of glass and innovate new uses in an environment uninhibited by traditional commercial boundaries. In a small community, our employees, including executives and their families, inevitably have relationships with the non-profit organizations that receive such contributions from the Company. Wendell P. Weeks (chairman and CEO), Jeffrey W. Evenson (executive vice president and chief strategy officer), Edward A. Schlesinger (senior vice president and corporate controller) and David L. Morse (executive vice president and chief technology officer) serve on the CMoG board of trustees. In 2020, Corning provided cash and non-cash contributions of services to CMoG of approximately $35.8 million.
CORNING 2021 PROXY STATEMENT | 13 |
Proxy Statement Summary
Corning provides financial support to the Alternative School for Math and Science (ASMS), a private middle school located in Corning, New York, with an advanced curriculum focused on science and math. Currently, children of Corning employees represent approximately 54% of its enrollment. In 2020, non-cash contributions totaled approximately $1.6 million and cash contributions totaled $210,000. Kim Frock Weeks (spouse of Wendell P. Weeks, our chairman and CEO) serves on the ASMS board of trustees and also serves as executive head of school, but receives no salary or benefits in this role.
2020 Executive Compensation Program
As shown below, in 2020 approximately 89% of our CEO’s target total compensation (excluding employee benefits and perquisites), and 81% of the other Named Executive Officers’ (NEOs) target total compensation (excluding employee benefits and perquisites), was variable and dependent on Corning’s operating performance or stock price.
2020 Compensation Components
CEO | ALL OTHER NEOs | |
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RSUs – Restricted Stock Units
PSUs – Performance Stock Units
CPUs – Cash Performance Units
14 | CORNING 2021 PROXY STATEMENT |
Proxy Statement Summary
2020 Pay Components
Pay Component | Tenor and Term | Role | Determination Factors | |||
Base Salary | Reviewed annually; Paid biweekly | • Fixed portion of annual cash income | • Value of role in competitive marketplace • Value of role to the Company • Skills and performance • Internal equity • From June 1, 2020 through December 27, 2020 base salaries for the NEOs were reduced by 30% (40% for the CEO) and exchanged for options and restricted share units. See “Impact of COVID-19 on Compensation and Benefits” on page 55. | |||
Short-Term Incentives • Cash - GoalSharing Plan • Cash - PerformanceIncentive Plan (PIP) | Variable; earned amounts paid annually in February (GoalSharing) and March (PIP) | • Variable portion of annual cash income • Focus executives on annual objectives that support the delivery of the short-term business plan | • GoalSharing awards are available to all employees, generally targeted at 5% of base salary based on annual corporate performanceand business unit objectives • PIP target awards are set individually based on the competitive marketplace and level of experience • In 2020 cash PIP was cancelled and replaced with PIP-PSUs for NEOs based on corporate performance measures, capped at 100%. See “Impact of COVID-19 on Compensation and Benefits” on page 55. | |||
Long-Term Incentives (LTI) • Cash Performance Units • Performance Stock Units • Restricted Stock Units | Variable; measured and paid (in the case of earned CPUs), or vested (in the case of earned PSUs and RSUs), after 3 years | • Reinforce need for long-term sustained performance • Focus executives on annual objectives that support the long-term strategy and creation of value • Align the long-term interests of executives and shareholders • Balance cash pay with equity ownership • Encourage retention | • Target awards are based on competitive marketplace, level of executive, skills and performance • Actual value earned relative to target is based oncorporate performance against pre-set goals andstock price performance over the period • ROIC performance over the three-year performance period may increase or decrease CPUs and PSUs earned by up to 10% | |||
All Other: • Benefits • Perquisites • Severance Protection | Ongoing or Event-Driven | • Support the health and security of our executives, and their ability to plan for retirement • Enhance executive productivity | • Competitive marketplace • Limited offerings beyond what is offered to all employees • Level of executive • Standards of good governance |
Our Metrics and Why We Use Them Core Earnings per Share (Core EPS): Core EPS is our key measure of profitability. Corning generally budgets for share repurchases in establishing its target Core EPS measures. Share repurchases were largely paused in 2020 and our Core EPS metric took into account this pause. Core Net Sales: Retaining and growing core net sales - both organic through innovation and through acquisitions, remains critical to our short- and long-term success. | Adjusted Free Cash Flow: Strong positive cash generation enables us to remain financially strong during periods of uncertainty and invest in future growth, sustain leadership and provide returns to shareholders. It also requires us to carefully manage our capital investments. Return on Invested Capital (ROIC): We focus on ROIC because it reflects our ability to generate returns from the capital we have deployed in our operations. The Cash Performance Units (CPUs) payout and Performance Stock Units (PSUs) earned are increased or decreased up to 10% based on Corning’s ROIC over the three-year performance period. |
CORNING 2021 PROXY STATEMENT | 15 |
Proxy Statement Summary
2020 Compensation Plan Payout Percentages
The following table reflects our 2020 compensation plan’s payout percentages based on our 2020 financial performance:
Short Term Incentives | ||||
SSSO PIP-PSUs FOR NEOs 100% CORPORATE FINANCIAL PERFORMANCE | ||||
Components | Weighting | % of target earned | ||
Core EPS | 75% | >100% | ||
Core Net Sales | 25% | >100% | ||
2020 earned PIP-PSUs* | Capped at | 100% |
* | earned PIP-PSUs are subject to further vesting - 1/3 per year in May 2021, 2022 and 2023 |
GOALSHARING – 25% CORPORATE PERFORMANCE, 75% BUSINESS UNIT PERFORMANCE | ||||
Components | % of base salary earned | |||
Corporate financial performance — 1.25% target × 125% performance | 25% | 1.56% | ||
Average Business Unit Performance | 75% | 5.28% | ||
2020 payout (vs. 5% target) | 6.84% |
Long Term Incentives | ||||
CASH PERFORMANCE UNITS AND PERFORMANCE STOCK UNITS (70% OF LTI TARGET — OTHER 30% ARE RSUs) | ||||
Components | Weighting | % of target earned, 2020 performance year | ||
Adj Free Cash Flow | 70% | 191% | ||
Core Net Sales | 30% | 157% | ||
2020 blended performance result | 181% |
2018-2020 CPU PERFORMANCE RESULTS | ||||
Components | % of target earned, 2018-2020 performance | |||
2018 performance result | 128% | |||
2019 performance result | 62% | |||
2020 performance result | 181% | |||
2018-2020 average performance | 124% |
ROIC MODIFIER | -10% | |||
2018-2020 average performance | × | ROIC Modifier of -10% | = | Final % payout of 2018 target CPUs |
124% × 0.9% = 112% |
In 2020, the 181% score in the LTI plan was driven by significant outperformance of the free cash flow goal. The Compensation Committee exercised negative discretion to reduce the raw score from 189% to 181% by excluding the impact of the HSG consolidation from the final 2020 results. In the early months of the pandemic, Corning took decisive actions, including actions under the SSSO program described elsewhere in this proxy, to reduce spending and preserve cash. As a result, in 2020 we generated $948 million of free cash flow. The final LTI award payout earned in 2020 is based on the simple average of three performance years (2018 at 128% of target, 2019 at 62% of target and 2020 at 181% of target) equal to 124% of target. This payout was reduced to 112% of target, as the application of the 3-year ROIC modifier reduced the 3-year average payout by -10%. |
16 | CORNING 2021 PROXY STATEMENT |
Proxy Statement Summary
Our Director Nominees
All director nominees are independent with the exception of Mr. Weeks.
Name and Primary Occupation | Age | Director since | Committee Memberships* | Other Public Company Boards | ||||
Donald W. Blair Retired Executive Vice President and Chief Financial Officer, NIKE, Inc. | 60 | 2014 | ●Audit ●Finance | 1 | ||||
Leslie A. Brun Chairman and Chief Executive Officer Sarr Group, LLC | 66 | 2018 | ●Audit ●Compensation | 3 | ||||
Stephanie A. Burns Retired Chairman and Chief Executive Officer, Dow Corning Corporation | 64 | 2012 | ●Audit ●Corporate Relations (Chair) | 2 | ||||
John A. Canning, Jr. Chairman, Madison Dearborn Partners, LLC | 74 | 2010 | ●Executive ●Finance ●Governance | 0 | ||||
Richard T. Clark, Lead Independent Director Retired Chairman, Chief Executive Officer and President, Merck & Co., Inc. | 72 | 2011 | ●Compensation ●Executive ●Governance | 1 | ||||
Robert F. Cummings, Jr. Retired Vice Chairman of Investment Banking, JPMorgan Chase & Co. | 69 | 2006 | ●Executive ●Finance (Chair) ●Governance | 1 | ||||
Deborah A. Henretta Retired Group President of Global E-Business, Procter & Gamble Company | 57 | 2013 | ●Audit ●Corporate Relations | 3 | ||||
Daniel P. Huttenlocher Dean and Vice Provost, Cornell Tech | 60 | 2015 | ●Audit ●Finance | 1 | ||||
Kurt M. Landgraf President, Washington College | 72 | 2007 | ●Audit (Chair) ●Compensation ●Executive | 1 | ||||
Kevin J. Martin Vice President, Mobile and Global Access Policy, Facebook, Inc. | 52 | 2013 | ●Corporate Relations ●Governance | 0 | ||||
Deborah D. Rieman Retired Executive Chairman, MetaMarkets Group | 69 | 1999 | ●Audit ●Compensation (Chair) | 0 | ||||
Hansel E. Tookes II Retired Chairman and Chief Executive Officer, Raytheon Aircraft Company | 71 | 2001 | ●Compensation ●Executive ●Governance (Chair) | 3 | ||||
Wendell P. Weeks Chairman, Chief Executive Officer and President, Corning Incorporated | 59 | 2000 | ●Executive (Chair) | 2 | ||||
Mark S. Wrighton Chancellor and Professor of Chemistry, Washington University in St. Louis | 69 | 2009 | ●Audit ●Finance | 2 |
Name and Primary Occupation | Age | Director since | Committee Memberships* | Other Public Company Boards | ||||
Donald W. Blair Retired Executive Vice President and Chief Financial Officer, NIKE, Inc. | 62 | 2014 | • Audit • Finance | 1 | ||||
Leslie A. Brun Chairman and Chief Executive Officer, Sarr Group, LLC | 68 | 2018 | • Audit • Compensation | 3 | ||||
Stephanie A. Burns Retired Chairman and Chief Executive Officer, Dow Corning Corporation | 66 | 2012 | • Audit • Corporate Responsibility (Chair) | 2 | ||||
Richard T. Clark, Lead Independent Director Retired Chairman, Chief Executive Officer and President, Merck & Co., Inc. | 75 | 2011 | • Compensation • Executive • Governance | 1 | ||||
Robert F. Cummings, Jr. Retired Vice Chairman of Investment Banking, JPMorgan Chase & Co. | 71 | 2006 | • Executive • Finance (Chair) • Governance | 1 | ||||
Roger W. Ferguson, Jr. President and Chief Executive Officer, TIAA | 69 | 2021 | • Compensation • Governance | 3 | ||||
Deborah A. Henretta Retired Group President of Global E-Business, Procter & Gamble Company | 59 | 2013 | • Corporate Responsibility • Information Technology | 3 | ||||
Daniel P. Huttenlocher Dean, MIT Stephen A. Schwarzman College of Computing | 62 | 2015 | • Finance • Information Technology | 1 | ||||
Kurt M. Landgraf Retired President, Washington College | 74 | 2007 | • Audit (Chair) • Compensation • Executive | 1 | ||||
Kevin J. Martin Vice President, US Public Policy, Facebook, Inc. | 54 | 2013 | • Corporate Responsibility • Governance | 0 | ||||
Deborah D. Rieman Retired Executive Chairman, MetaMarkets Group | 71 | 1999 | • Compensation (Chair) • Information Technology | 0 | ||||
Hansel E. Tookes II Retired Chairman and Chief Executive Officer, Raytheon Aircraft Company | 73 | 2001 | • Compensation • Executive • Governance (Chair) | 1 | ||||
Wendell P. Weeks Chairman and Chief Executive Officer, Corning Incorporated | 61 | 2000 | • Executive (Chair) | 1 | ||||
Mark S. Wrighton Professor and Chancellor Emeritus, Washington University in St. Louis | 71 | 2009 | • Finance • Information Technology (Chair) | 1 |
*Audit = Audit Committee; Compensation = Compensation Committee; Corporate Responsibility = Corporate Responsibility and Sustainability Committee; Executive = Executive Committee; Finance = Finance Committee; Governance = Nominating and Corporate Governance Committee; Information Technology = Information Technology Committee
Proxy Statement Summary
Governance Highlights
Corning is committed to maintaining strong corporate governance as a critical component of driving sustained shareholder value. The Board of Directors continually monitors emerging best practices in governance to best serve the interests of the Company’s stakeholders.
• Qualifying shareholders are permitted to include director nominees in the proxy statement (“proxy access”); • | |
We contacted holders of • | |
We ensure alignment of our corporate governance practices with the Investor Stewardship Group’s corporate governance Principles for U.S. Listed Companies (see page • | |
Our Board through its committees provides direct oversight of environmental, social and governance risks and issues (see page 29); and • We adopted the principles embodied in the Shareholder-Director Exchange (SDX) | |
✓Annual election of all directors ✓Majority vote standard for the election of directors in uncontested elections ✓Active shareholder engagement, including by directors, to directly gather investor perspectives ✓Active, engaged and experienced Lead Independent Director ✓Independent board committees, with all committees (except the Executive Committee) consisting entirely of independent directors | ✓Regular executive sessions of independent directors ✓Market competitive director compensation program designed to support and reinforce our governance principles ✓Robust stock ownership guidelines for directors and ✓Prohibition on pledging, hedging or trading in derivatives of the Company’s stock for directors and employees ✓Clawback policy for executive incentive compensation in the event of certain financial restatements |
Shareholder Communication
Communicating with shareholders, particularly about our Strategy and Capital Allocation Framework,strategic priorities, is critically important to Corning. We communicate with our shareholders through a number of channels, including quarterly earnings calls, U.S. Securities and Exchange Commission (SEC) filings, Investor Days, investor conferences, our website atcorning.com and other electronic communications. Our executives and Board members also routinely engage with investors through in-person meetings and calls.
In addition to regular discussions regarding our Strategy and Capital Allocation Framework,strategic priorities, we also conduct outreach to the governance teams at our largest investors.shareholders. We value feedback from our shareholders and take it seriously.
In 2018,2020, as part of our shareholder outreach:
we met with | |
we discussed a variety of topics including our Board composition and experience; and | |
our investors expressed satisfaction with our |
More information on our shareholder outreachengagement can be found on page 49.58.
18 | CORNING 2021 PROXY STATEMENT |
Proxy Statement Summary
Environmental, Social and Governance Matters and Human Capital Management
In accordance with Corning’s Values, we believe that a commitment to positive environmental, social and governance-related business practices strengthens our company and our community, increases our connection with our shareholders, and helps us better serve our customers and the communities in which our employees live and we operate. We also see in these commitments additional ways of creating value for our shareholders, our employees, our customers, and the wider world. As part of our corporate risk management process, the Board and our management monitor long-term risks that may be impacted by environmental, social and governance issues.
Proxy Statement Summary
Supporting Sustainable Communities through Charitable Outreach
Corning is headquartered in a small community in upstate New York and strives to establish itself as the employer of choice for the workers on whom it depends. Throughout its history, the Company has routinely made contributions to civic, educational, charitable, cultural and other institutions that improve the quality of life and increase the resources of the surrounding community, making it more attractive to employees. In a small community, our employees, including executives and their families, inevitably have relationships with the non-profit organizations that receive such contributions from the Company.
The Company undertakes its philanthropic activities both directly and indirectly through The Corning Incorporated Foundation (the Foundation), a separate 501(c)3 organization. We believe in being an active corporate citizen and the Foundation directs its grant-making toward the communities where Corning operates and its employees live, enabling initiatives in four areas: education, culture, human services and volunteerism. In 2018, Corning donated $3.0 million to the Foundation, and the Foundation disbursed approximately $4.6 million, of which approximately 32% was directed toward initiatives supporting education, including grants made under the Corning Incorporated Foundation Matching Gifts and Dollars for Doers programs. Additional information about the Foundation can be found atcorningfoundation.org.
Corning’s direct giving includes annual contributions to both local and international cultural and educational institutions. Locally, the Corning Museum of Glass (CMoG) – the world’s leading glass museum – is the largest recipient of the Company’s support. In addition to being a key cultural and community hub, CMOG also provides Corning with a unique innovation crucible where our glass scientists and experts collaborate with glass artists and designers to creatively explore the novel properties of glass and innovate new uses in an environment unconstrained by commercial considerations. Wendell P. Weeks (chairman, CEO and president), David Morse (executive vice president and chief technology officer) and Jeffrey W. Evenson (executive vice president and chief strategy officer) serve on the CMoG board of trustees. In 2018, Corning provided cash and non-cash contributions of services to CMoG of approximately $44 million.
Corning provides financial support to the Alternative School for Math and Science (ASMS), a private middle school located in Corning, New York, with an advanced curriculum focusing on science and math. Currently, children of Corning employees represent approximately 53% of its enrollment. In 2018, non-cash contributions totaled approximately $1.5 million and cash contributions totaled $300,000. Christine M. Pambianchi, (executive vice president, People and Digital) and Kim Frock Weeks (spouse of Wendell P. Weeks, our chairman, CEO and president) serve on the ASMS board of trustees. Ms. Frock Weeks also serves as administrative head of school at ASMS, but receives no salary or benefits in this role.
Proxy Statement Summary
Executive Compensation Highlights
As shown below, in 2018 approximately 89% of our CEO’s target total compensation (excluding employee benefits and perquisites) and 80% of the other Named Executive Officers’ (NEOs) target total compensation (excluding employee benefits and perquisites) was variable and depended on Corning’s operating performance or stock price.
2018 Pay Components
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Target Total Compensation
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Proxy Statement Summary
Our Incentive Compensation Performance Metrics
Our goals for annual and long-term incentives focus on the key drivers for executing our Strategy and Capital Allocation Framework and creating and sustaining long-term shareholder value: profitability, cash generation and revenue growth.
|
Short Term Incentives
PERFORMANCE INCENTIVE PLAN (PIP) – 100% CORPORATE FINANCIAL PERFORMANCE | ||||
Components | Weighting | % of target earned | ||
Core EPS | 75% | 116% | ||
Core Net Sales | 25% | 155% | ||
2018 performance result | 126% | |||
GOALSHARING – 25% CORPORATE PERFORMANCE, 75% BUSINESS UNIT PERFORMANCE | ||||
Components | % of base salary earned | |||
Corporate financial performance — 1.25% target × 126% PIP performance | 25% | 1.58% | ||
Average Business Unit Performance | 75% | 4.83% | ||
2018 performance result | 6.41% |
Long Term Incentives (LTI)
CASH (CASH PERFORMANCE UNITS – 60% OF LTI AWARD TARGET) | ||||
Components | Weighting | % of target earned, 2018 performance year | ||
Operating Cash Flow less CapEx | 70% | 128% | ||
Core Net Sales | 30% | 127% | ||
2018 performance result | 128% | |||
2016-2018 CPU PERFORMANCE RESULTS | ||||
Components | % of target earned, 2016-2018 Performance | |||
2016 performance result | 88% | |||
2017 performance result | 120% | |||
2018 performance result (above) | 128% | |||
2016-2018 average performance | 112% |
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Our Board of Directors employs practices that foster effective Board oversight of critical matters such as strategy, management succession planning, financial and other controls, risk management and compliance. The Board reviews our major governance policies, practices and processes regularly in the context of current corporate governance trends, investor feedback, regulatory changes and recognized best practices. Corning also chooses to alignaligns its corporate governance practices with the Investor Stewardship Group’s (ISG) Corporate Governance Framework for U.S. Listed Companies.
The following sections provide an overview of our corporate governance structure and processes, including key aspects of our Board operations, and how they align with the ISG Principles for U.S. Listed Companies.Principles.
Practice | Description | |
ISG Principle 1: Boards are accountable to shareholders | ||
Annual election of directors | All directors are elected annually, which reinforces our Board’s accountability to shareholders. | |
Majority voting standard fordirector elections | Our by-laws mandate that directors be elected under a “majority voting” standard in uncontested elections. Each director nominee must receive more votes “For” his or her election than votes “Against” in order to be elected. | |
Proxy access | Eligible shareholders may include their director nominees in our proxy materials. | |
No poison pill | Corning does not have a poison pill. | |
ISG Principle 2: Shareholders should be entitled to voting rights in proportion to their economic interest | ||
One-share, One-vote | ||
ISG Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives | ||
Shareholder | Our investor relations team maintains an ongoing dialogue with investors and portfolio managers year-round on matters of business performance and results. Investors owning approximately 40% of shares outstanding, or 60% of Corning’s 50 largest shareholders, spoke with us during 2020. Management and | |
ISG Principle 4: Boards should have a strong, independent leadership structure | ||
Lead Independent Director | Our Corporate Governance Guidelines require a Lead Independent Director with specific responsibilities to ensure independent oversight of management whenever our CEO is also the Chair of the Board. As former Chairman, Chief Executive Officer and President of Merck & Co., Inc., our Lead Independent Director Richard T. Clark brings deep leadership experience to the role. See page | |
Annual Evaluation ofLeadership Structure | The Board considers the appropriateness of its leadership structure annually and discloses in the proxy statement why it believes the current structure is appropriate. See page |
CORNING | 19 |
Corporate Governance and the Board of Directors
Practice | Description | |
ISG Principle 5: Board should adopt structures and practices that enhance their effectiveness | ||
Independence | Our Corporate Governance Guidelines require a substantial majority of our directors to be independent. Currently, all directors but one (or 93%) are independent. Except for our Executive Committee, each of our Board committees consists entirely of independent directors. See page | |
Skills and qualifications | Our Board is composed of accomplished professionals with | |
Commitment to Diversity | The | |
Director tenure | The current average tenure of members of our Board, excluding our CEO Mr. Weeks, is | |
Director overboarding | Corning values director participation on other public company boards as a means of adding | |
Board and committeeevaluations | The Board and each committee conducts an annual review of its effectiveness. The Chair of the Nominating and Corporate Governance Committee, as part of the Board evaluation, annually interviews each director and solicits his or her | |
Meeting attendance | The Board met eight times in 2020. Directors attended 99% of combined total Board and applicable committee meetings in | |
ISG Principle 6: Boards should develop management incentive structures that are aligned with the long-term strategy of the company | ||
Robust stock ownershipguidelines | We require robust stock ownership for directors (5x annual cash retainer), CEO (6x base salary), and other NEOs | |
Shareholder support forexecutive compensation | Corning’s executive compensation program received | |
Compensation Committeeoversight of executivecompensation | The Compensation Committee annually reviews and approves incentive program design, goals and objectives for alignment with compensation and business strategies. The Committee has implemented metrics which continue to support growth despite the challenges of the COVID-19 pandemic. See page 54. | |
Long- and short-termgoals drive executivecompensation | Annual and long-term incentive programs are designed to reward financial and operational performance in support of Corning’s | |
Clear communicationof economic drivers ofexecutive compensation | The proxy statement clearly communicates the link between management incentive compensation plans and the Company’s |
20 | CORNING 2021 PROXY STATEMENT |
Corporate Governance and the Board of Directors
The Board regularly considers the issue of board leadership in committee meetings and executive sessions of the independent directors. As the Board reviews its leadership structure, it considers a variety of factors, with a particular focus on those described on page 29. If35. The Company’s Corporate Governance Guidelines provide that the Board must annually review whether the role of Chairman should be a non-executive position or combined with that of the CEO. In February 2021, the Board determined that, at the present time, our combined Chairman and CEO, supported by our strong Lead Independent Director, continues to provide appropriate leadership and oversight and ensures effective functioning of management and the Company.
When the Chair and CEO roles are combined, as it is currently, our Corporate Governance Guidelines require that the independent directors annually appoint an independent director to serve as Lead Independent Director. The Lead Independent Director has significant authority and responsibilities with respect to the operation of the Board, as described below under the heading “Lead Independent Director.” The Company believes that a Lead Independent Director effectively promotesenhances strong Board governance and oversight.
The Company’s Corporate Governance Guidelines provide that the Board must annually review whether the role of Chairman should be a non-executive position or combined with that of the CEO. Early in 2019, the Board determined that, at the present time, a combined Chairman and CEO supplemented by a strong Lead Independent Director continues to provide appropriate leadership and oversight and ensures effective functioning of management and the Company.
Richard T. Clark was re-appointed effective February 6, 2019, to the role of Lead Independent Director of the Board by the independent directors.directors effective February 3, 2021.
CORNING | 21 |
Corporate Governance and the Board of Directors
As of April 1, 2021, the effective date of this proxy statement,Roger Ferguson’s Board membership, the Board haswill have 14 directors and the following sixseven committees: (1) Audit Committee; (2) Compensation Committee; (3) Corporate RelationsResponsibility and Sustainability Committee; (4) Executive Committee; (5) Finance Committee; (6) Information Technology Committee; and (6)(7) Nominating and Corporate Governance Committee. The Information Technology Committee was established in 2020 to assist the Board in its oversight of the Company’s information technology and digitization strategy and significant investments in support of such strategy, as well as risks related to information technology systems, data integrity and protection, business continuity, information security and cybersecurity. Each of the committees operates under a written charter adopted by the Board except the Executive Committee, which operates pursuant to Corning’s by-laws. The committee charters and the by-laws are available on our website at investor.corning.com/investor-relations/governance/overview/default.aspx.default.aspx. Each committee reviews and reassesses the adequacy of theirits charter annually, conducts annual evaluations of theirits performance with respect to theirits duties and responsibilities as laid out in the charter, and reports regularly to the Board with respect to the committee’s activities. Additionally, the Board and each of the committees has the authority to retain outside advisors as the Board and/or each committee deems necessary.
Director
Board committee membership on committees of Corning’s Board is set forth in the following table.below. “C” denotes Chair of the committee.
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | Daniel P. Huttenlocher | Kurt M. Landgraf | Kevin J. Martin | Deborah D. Rieman | Hansel E. Tookes II | Wendell P. Weeks | Mark S. Wrighton | ||||||||
Board Committees | ||||||||||||||||||||||||||||
Audit | ![]() | ![]() | ![]() | C | ||||||||||||||||||||||||
Compensation | ![]() | ![]() | ![]() | ![]() | C | ![]() | ||||||||||||||||||||||
Corporate | C | ![]() | ![]() | |||||||||||||||||||||||||
Executive | ![]() | ![]() | ![]() | ![]() | C | |||||||||||||||||||||||
Finance | ![]() | C | ![]() | ![]() | ||||||||||||||||||||||||
Information Technology | ![]() | ![]() | ![]() | C | ||||||||||||||||||||||||
Nominating and Corporate Governance | ![]() | ![]() | ![]() | ![]() | C |
The
22 | CORNING 2021 PROXY STATEMENT |
Corporate Governance and the Board of Directors
Corning’s Board of Directors met eight times in 2020. Its committees and their functions are as follows:
Committee | Primary Responsibilities | |
Number of Meetings | • Assists the Board of Directors in its oversight of (i) the integrity of Corning’s financial statements, (ii) the independent registered public accounting firm and (iii) Corning’s compliance with legal and regulatory requirements • Approves the appointment of Corning’s independent registered public accounting firm, oversees the firm’s qualifications, independence and performance, and determines the appropriateness of fees for the firm • Reviews the effectiveness of Corning’s internal control over financial reporting, including disclosure controls and procedures • Reviews the results of Corning’s annual audit and quarterly and annual financial statements • Regularly reviews our enterprise risk management program; monitors legal and regulatory risks by regular discussions with management; evaluates potential risks related to accounting, internal control over financial reporting and tax planning |
Corporate Governance and the Board of Directors
Number of Meetings | • Establishes Corning’s goals and objectives with respect to executive compensation • Evaluates the CEO’s performance in light of Corning’s goals and objectives • Recommends to the Board compensation for the CEO and other • Recommends to the Board the compensation arrangements for • Oversees Corning’s equity compensation plans and makes recommendations to the Board regarding incentive plans • Monitors potential risks related to the design and administration of compensation plans and policies, and benefits and perquisites plans and policies, including performance-based compensation programs, to promote appropriate incentives in line with shareholder interest that do not promote excessive risk-taking | |
Corporate Number of Meetings | • Assists the Board in fulfilling its oversight responsibility by reviewing Corning’s strategies and policies in, and overseeing risks related to, the areas of public relations and reputation, sustainability, employment policy and employee relations, political activities, public policy, and community - Corporate identity, investor relations, media relations (including social media), crisis communications, and product liability- Sustainability; environmental, energy and water management policies- Safety and health policies; code of conduct; values; diversity and inclusion, Company values, supply chain integrity, human rights and labor matters, and compliance - Political and lobbying activities, and relationships with significant governmental agencies in the countries in which the Company operates- | |
Number of Meetings |
CORNING 2021 PROXY STATEMENT | 23 |
Corporate Governance and the Board of Directors
Committee | Primary Responsibilities | |
Number of Meetings | • Reviews all potential material transactions, including mergers, acquisitions, divestitures and investments in third parties • Reviews capital expenditure plans and capital projects • Monitors Corning’s short- and long-term liquidity • Reviews Corning’s tax position and strategy • Reviews and recommends for approval by the Board declaration of dividends, stock repurchase programs, and short- and long-term financing transactions • Monitors strategic risks related to financial affairs, including capital structure and liquidity risk, transaction execution risk, credit and counterparty risk, market risk, |
Corporate Governance and the Board of Directors
(1) | The Board of Directors has determined that each member of the Audit Committee satisfies the applicable audit committee independence requirements of the New York Stock Exchange (NYSE) and the SEC. The Board also determined that each member of our Audit Committee is financially literate and Mr. Landgraf, Mr. Blair, Mr. Brun, |
(2) | The Board of Directors has determined that each member of the Compensation Committee satisfies the applicable compensation committee independence requirements of the NYSE and the SEC. |
(3) | The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee satisfies the applicable nominating committee independence requirements of the NYSE. |
24 | CORNING 2021 PROXY STATEMENT |
Corporate Governance and the Board of Directors
Our Board is responsible for the oversight and success of our Company. We seek to maintain a mix of directors who bring strong leadership, diverse perspectives, a broad range of skills relevant to Corning and depth of experience to their positions. Our board is high-functioning and engaged. A supermajority of independent directors ensures robust debate and challenged opinions in the boardroom, while diversity of gender, age, ethnicity and expertise contributes to a wide range of views. Our Board includes three women, three African-Americans, and four directors who hold science, technology or mathematics Ph.Ds. We also have two decades of age diversity among our directors, with their ages ranging between 54 and 75 years. We also value the broad corporate governance experience of directors who have served on the boards of other public companies, which adds additional rigor to our governance and risk oversight practices.
CHARACTERISTICS OF OUR BOARD AS OF APRIL 1, 2021 (EXCLUDING OUR CEO)
Board Nomination and Refreshment Process
When considering Board candidates, the Nominating and Corporate Governance Committee considers those factors most relevant to the Company’s needs, including relevant knowledge and experience, diversity of background, and expertise in areas including business, finance, accounting, science and technology, marketing, manufacturing, operations, international business, government and human capital management. The Committee assesses personal qualities of leadership, character, judgment, ethics and reputation; roles and contributions valuable to the business community and the ability to act on behalf of shareholders; whether the candidate is free of conflicts and has the time required for preparation, participation and meeting attendance. Pursuant to the Company’s Corporate Governance Guidelines, the Committee actively seeks out highly qualified women and minority candidates, as well as candidates with diverse backgrounds, skills and experiences, to include in the pool from which Board nominees are chosen. The Board conducts an annual self-evaluation which helps identify skills and experiences to seek in future candidates that would benefit the Company, its stakeholders and the Board.
In the case of incumbent directors, the Nominating and Corporate Governance Committee will review such directors’ overall service to the Company during their term, including the number of meetings attended, level of participation, quality of performance, and any transactions of such directors with the Company, if any, during their term. For those potential new director candidates who appear upon first consideration to meet the Board’s selection criteria, the Nominating and Corporate Governance Committee will conduct appropriate inquiries into their background, qualifications and skills relevant to Corning’s strategic priorities and, depending on the result of such inquiries, arrange for in-person meetings with the potential candidates.
CORNING 2021 PROXY STATEMENT | 25 |
Corporate Governance and the Board of Directors
The Nominating and Corporate Governance Committee uses multiple sources for identifying director candidates, including executive search firms, its members’ own contacts, and referrals from other directors, members of management and the Company’s advisors. To maintain a pipeline for new directors, the Nominating and Corporate Governance Committee has retained the executive search firm of Spencer Stuart to help identify director prospects, perform candidate outreach, assist in reference and background checks, and provide other related services on an ongoing basis. Director candidates recommended by shareholders in the manner described on page 97 will be considered in the same manner in which the Nominating and Corporate Governance Committee evaluates candidates recommended by other sources. In addition, our by-laws permit a group of up to 20 shareholders who have owned a minimum of 3% of our outstanding capital stock for at least three years to submit director nominees for up to the greater of two directors or 20% of the board for inclusion in our proxy statement. See “How Do I Submit A Shareholder Proposal For, Or Nominate a Director For Election At, Next Year’s Annual Meeting” on page 97 of this proxy statement.
Management Succession Planning
One of the Board’s primary responsibilities is ensuring that Corning has a high-performing management team in place. The Board oversees management succession planning, with our Lead Independent Director facilitating ongoing review and Board approval of succession and management development plans for the CEO and Senior Leadership Team. The goal of this ongoing process is to maximize the pool of internal candidates able to assume top management positions with minimal business interruption. The Board regularly discusses succession planning for the chief executive officer and other senior management positions in executive sessions. The Board has regular engagement with various levels of management at Board and Committee meetings which gives directors additional exposure to the management pipeline.
In 2020, the Board oversaw the reorganization of our operating structure to align management and business teams around our five Market-Access Platforms. The structure includes a new Senior Leadership Team of twenty senior executives, representing a wealth of skills and knowledge developed over many years of service to the Company, whose leadership will be key as Corning navigates the COVID-19 pandemic and prepares for future growth. We believe the strength of this new structure and team is evident in our 2020 performance.
Our Board is 93% independent and such independent oversight bolsters our success. Our Board has determined that each of our non-employee directors qualifies as “independent” in accordance with the listing requirements of the NYSE, applicable SEC rules and the Company’s director qualification standards. Mr. Weeks is not independent because he is an executive officer of Corning.
The NYSE listing requirements state that no director may be qualified as “independent” unless our Board affirmatively determines that the director has no material relationship with Corning. When making independence determinations, the Board considers all relevant facts and circumstances which might bar a director from being determined to be “independent”,“independent,” including the NYSE criteria.
Our Corporate Governance Guidelines require the Board to make an annual determination regarding the independence of each of our directors. In making its independence determinations, the Board considered transactions, if any, that occurred since the beginning of 20162018 between Corning and entities associated with our independent directors or members of their immediate family. The Board also reviewed and discussed information with regard to each director’s business and personal activities as they may relate to Corning and Corning’s management. It considered that each of Mr. Martin, Ms. Henretta and Drs. Huttenlocher and Wrighton isare or were, during the previous three years, an employee of a company or organization that had a business relationship with Corning at some time during those years. The Board also considered: that Corning’s business relationships with each such company or organization were ordinary course/arm’s length dealings; no Corning director had a personal interest in, or received a personal benefit from, such relationships; any payments or contributions to or from each of these entities constituted less than the greater of $1 million, or 2% of such entity’s consolidated gross revenues in each of those years; that such relationships arise only from such director’s position as an employee of the relevant company with which Corning does business; that such director has no input or direct or indirect material interest in any of the business relationships or transactions; that such director had no role or financial interest in any decisions about any of these relationships or transactions; and that such a relationship does not bar independence under the NYSE listing requirements, applicable SEC rules or Corning’s director qualification standards.
26 | CORNING 2021 PROXY STATEMENT |
Corporate Governance and the Board of Directors
Based on all of the relevant facts and circumstances, the Board concluded that none of the director relationships mentioned above constituted a material relationship with Corning that represents a potential conflict of interest, or otherwise interferes with the exercise by any of these directors of his or her independent judgment with respect to Corning.
Policy on Transactions with Related Persons
The Board of Directors has a policy requiring the full Board or a designated Board committee to approve or ratify any transaction involving Corning in which one of our directors, nominees for director, executive officers, or greater than 5% shareholders, or their immediate family members, have a direct or indirect material interest and where the amount involved exceeds $120,000 in any fiscal year. The Board has delegated to the Nominating and Corporate Governance Committee the responsibility for reviewing and approving any such transactions.
In determining whether to approve or ratify any such transaction, the Board or relevant committee must consider, in addition to other factors deemed appropriate, whether the transaction is on terms no less favorable to Corning than transactions involving unrelated parties. No director may participate in any review, approval or ratification of any transaction if he or she, or his or her immediate family member, has a direct or indirect material interest in the transaction.
We did not have any
There were no such transactions requiring review and approval in accordance with this policy during 2018.2020.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is now, or has ever been, an officer or employee of Corning. No member of the Compensation Committee had any relationship with Corning or any of its subsidiaries during 20182020 pursuant to which disclosure would be required under applicable rules of the SEC pertaining to the disclosure of transactions with related persons. No Corning executive officer currently serves or served during 20182020 on the board of directors or compensation committee of another company at any time during which an executive officer of such other company served on Corning’s Board or Compensation Committee.
Our Board is responsible for the oversight and success of our Company. Beyond a broad range of skills and experiences, we seek to maintain an optimal mix of newer directors, who bring fresh perspectives, and longer-tenured directors, who have contributed to developing our strategy – which takes a long-term approach to innovation – and have acquired an in-depth understanding of our global organization. The result is a high-functioning and engaged Board. A supermajority of independent directors ensures robust debate and challenged opinions in the boardroom, while diversity of gender, age, ethnicity and expertise contributes to a diverse range of views. Our 14 directors include a diverse range of individuals, including three women, two African-Americans, and four directors who hold science, technology or mathematics Ph.Ds. We also have two decades of age diversity among our directors, with their ages ranging between 52 and 74 years. We also value the broad corporate governance experience of directors who serve on the boards of other public companies, which adds additional rigor to our governance and risk oversight practices.
CORNING | 27 |
Corporate Governance and the Board of Directors
Board Nomination and Refreshment Process
When considering Board candidates, the Nominating and Corporate Governance Committee considers those factors most relevant to the Company’s needs, including related knowledge, diversity of background, and experience in areas including business, finance, accounting, science and technology, marketing, manufacturing, operations, international business, government and human capital management. The Committee assess personal qualities of leadership, character, judgment, ethics and reputation; roles and contributions valuable to the business community and the ability to act on behalf of shareholders; whether the candidate is free of conflicts and has the time required for preparation, participation and meeting attendance. In February 2019, the Committee formalized its diversity focus by approving new Corporate Governance Guidelines which state that it will actively seek out highly qualified women and minority candidates, as well as candidates with diverse backgrounds, skills and experiences, to include in the pool from which Board nominees are chosen.
In the case of incumbent directors, the Nominating and Corporate Governance Committee will review such directors’ overall service to the Company during their term, including the number of meetings attended, level of participation, quality of performance, and any transactions of such directors with the Company during their term. For those potential new director candidates who appear upon first consideration to meet the Board’s selection criteria, the Nominating and Corporate Governance Committee will conduct appropriate inquiries into their background, qualifications and skills relevant to Corning’s Strategy and Capital Allocation Framework and, depending on the result of such inquiries, arrange for in-person meetings with the potential candidates.
The Nominating and Corporate Governance Committee uses multiple sources for identifying director candidates, including executive search firms, its members’ own contacts, and referrals from other directors, members of management and the Company’s advisors. To maintain a pipeline for new directors, the Nominating and Corporate Governance Committee has retained the executive search firm of Spencer Stuart to help identify director prospects, perform candidate outreach, assist in reference and background checks, and provide other related services on an ongoing basis. Director candidates recommended by shareholders in the manner described on page 84 will be considered in the same manner in which the Nominating and Corporate Governance Committee evaluates candidates recommended by other sources. In addition, our by-laws permit a group of up to 20 shareholders who have owned a minimum of 3% of our outstanding capital stock for at least three years to submit director nominees for up to the greater of two directors or 20% of the board for inclusion in our proxy statement. See “How Do I Submit A Shareholder Proposal For, Or Nominate a Director For Election At, Next Year’s Annual Meeting” on page 84 of this proxy statement.
Corporate Governance and the Board of Directors
Management Succession Planning
One of the Board’s primary responsibilities is ensuring that Corning has a high-performing management team in place. The Company’s CEO is supported by a Management Committee of ten senior executives that oversee the full sphere of the Company’s business, of which four are also our Named Executive Officers. The Board oversees management succession planning, with our Lead Independent Director facilitating ongoing review and Board approval of succession and management development plans for the CEO and Management Committee. The goal of this ongoing process is to maximize the pool of internal candidates able to assume top management positions with minimal business interruption. To assist the Board, the CEO annually provides an assessment of senior managers and their potential as successor CEO, as well as individuals considered potential successors to certain other senior management positions. Each member of the Management Committee annually presents to fellow Management Committee members his or her own succession planning analysis.
Our Board recognizes the importance of effective risk oversight in running a successful global business and in fulfilling its fiduciary responsibilities to Corning and itsour shareholders. While the CEO and other members of our senior leadership team are responsible for the day-to-day management of risk, our Board is responsible for oversight of the Company’s risk management program. The Board exercises this oversight responsibility directly and through its committees.
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Audit Committee Reviews our enterprise risk management program; monitors legal and regulatory risks by regular discussions with management; oversees internal and external audit; evaluates potential risks related to accounting, internal control over financial reporting, and tax | Compensation Committee Monitors potential risks related to the design and administration of compensation plans and policies, and benefits and perquisites plans and policies, including performance-based compensation programs, to promote appropriate incentives in line with shareholder interest that do not promote excessive risk-taking. | Finance Committee Monitors strategic risks related to financial affairs, including (but not limited to) capital structure and liquidity risk, transaction execution risk, credit and counterparty risk, market risk and foreign exchange risk; reviews the policies and strategies related to tax, financial exposures and contingent liabilities. | ||||||||||||
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Information Technology Committee Monitors potential risk relating to information technology systems, data integrity and protection; information security and cybersecurity; and disaster recovery and business continuity plans. | Corporate Monitors risks relating to public relations, reputation, employment policy, | ![]() | Nominating and Corporate Monitors potential risks related to governance practices by reviewing Board succession plans and performance evaluations, | ![]() | |||||||||||||
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(Updates to Board or relevant Committees on risk exposures and mitigation efforts) | ![]() |
Corporate GovernanceRisks associated with current business status or strategic alternatives are subjected to analysis, discussion and deliberation by management and the Board of Directors
Management and the Board discuss risks associated with strategic alternatives being contemplated and the risk-reward associated with these alternatives.Board. Once such a strategy is in place, at each meeting, place—such as our COVID-19 response and our strategic priorities—the Board reviews it with the CEO at every Board meeting and discusses any newly-identified strategic risks.
Operationally, management reports periodically to the Board on the Company’s enterprise risk management (ERM) policies and procedures, and to the Audit, Information Technology, Finance, and Corporate RelationsResponsibility and Sustainability Committees on our top risks and compliance policies and practices. Management also provides a comprehensive annual report of top risks to the Board. Corning’s ERM program utilizes (1) a Risk Council chaired by the Executive Vice President and Chief Financial Officer and composed of Corning management and staff to aggregate, prioritize and assess risks, including strategic, financial, operational, business, reputational, governance and managerial risks; (2) an internal audit department; and (3) a Compliance Council, which reports directly to each of the Audit Committee and Corporate RelationsResponsibility and Sustainability Committee and reviews the Company’s compliance with laws and regulations of the countries in which we conduct business.
28 | CORNING 2021 PROXY STATEMENT |
Corporate Governance and the Board of Directors
The Board believes that the work undertaken by the committees of the Board, together with the work of the full board and the Company’s management, enables the Board to effectively oversee Corning’s management of risk.
Environmental, Social and Governance (ESG) Oversight
Rather than concentrating all ESG initiatives into a single Committee, the Board believes each Committee should maintain oversight over the particular ESG matters that fall within its scope. The appropriate Committees then report to the Board as appropriate. For example:
Using this approach, members of each Committee are able to leverage their specific subject-matter expertise to oversee and advise the Board on the ESG matters most relevant to their Committee’s area of responsibility. In some circumstances, such as our efforts related to our Office of Racial Equity and Social Unity, Board members participate directly in working groups with management. Operating as an integrated whole, our Board is best positioned to manage those ESG risks and issues most impactful to our enterprise and our communities.
Risk Management in Action: Board Response to COVID-19
The Board has a defined risk management process that was put to the test as the COVID-19 pandemic commenced. With operations in Wuhan, Corning was one of the first U.S. corporations to feel the impacts of the virus. Key to effective risk management during this challenging time was the clear allocation of responsibilities to the Board’s committees, as shown in the chart below. Each committee took on its assigned duties and worked with management to enable timely decision-making. The Corporation’s extensive business continuity processes and historical risk management efforts also provided help, as mitigation plans had been established for several situations. The Board held two extra meetings in 2020 to discuss the risks in real-time.
During the early part of the pandemic, we experienced uncertainty and delays in customer orders, while also facing the risk of supply chain challenges. The Board worked with management to act quickly, focusing on reducing costs where possible and preserving cash to protect the balance sheet and the Company. By acting swiftly, the Company established a position to manage the risks of the downturn, while also seeing numerous internal initiatives moved forward and come to fruition, including Valor® Glass entering supply agreements with three leading COVID-19 vaccine providers and an investment by the United States government from the Biomedical Advanced Research and Development Authority (BARDA) to expand domestic manufacturing of Valor® Glass vials to support vaccination and treatment of patients.
CORNING 2021 PROXY STATEMENT | 29 |
Corporate Governance and the Board of Directors
Many Corning manufacturing facilities were deemed essential, which led to significant Board discussions around how to provide a safe workplace, while supporting the employees that shifted to remote work. To address the significant uncertainty and potentially meaningful business risks, in February we implemented an adjusted operating plan focused on cash preservation. After initial discussions in April, our Compensation Committee approved the Shared Sacrifice, Shared Opportunity (SSSO) program for approximately 10,000 salaried employees in May, effective June 1, 2020. One aspect of the SSSO program included converting part of our salaried employees’ cash compensation into equity with a focus on preserving cash to protect the balance sheet and the Company’s long-term future. This program was enacted across the Company, with senior management taking the largest reductions in cash compensation. By implementing this program, we were able to retain talent throughout the organization while aligning employees’ interests with shareholders and the longer-term success of Corning.
The Board’s oversight and support of Corning’s responsible financial stewardship is a big part of why the Company has thrived for 170 years. As we manage through these unprecedented times, the Board has taken the same approach to preserve the enterprise.
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Board Committee Responsibilities in Overseeing Corning’s COVID-19 Response | ||||||
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Management/Risk Council (Updates to Board or relevant Committees on risk exposures and mitigation efforts) | ||||||
The Board’s well defined risk management process, with each Committee assigned clearly defined roles, enabled quick Board-level decision making at the onset of the pandemic |
30 | CORNING 2021 PROXY STATEMENT |
Corporate Governance and the Board of Directors
Directors are positioned
Although a number of the Board’s opportunities to assess company culture were paused or shifted to virtual formats in 2020 due to limitations on in-person meetings related to the COVID-19 pandemic, the Board nevertheless continues to maintain the ability to assess Company culture in a numberculture. Even when held virtually, members of ways. Thethe Company’s full Management Committee attendsSenior Leadership Team attend every Board meeting and numerous other members of management attend committee meetings. FormalMembers of the Board directly interacted with the working groups of the Office of Racial Equity and Social Justice throughout 2020. The Company’s Chief Compliance Officer attends meetings of the Audit Committee and annually reports to the full Board and the Corporate Responsibility and Sustainability Committee. When in-person meetings are permitted, formal dinners and informal lunches with meeting attendees at the meetings provide Directors insight to how our teams function. When presenting an issue relevant to the Board, full business and technology teams attend to answer the Directors’ questions and to join them at these dinners and lunches. Once a year the Board visits our research campus to meet with dozens of employees working on our key innovation initiatives. The Board also meets at different Corning locations – occasionally internationally – to see our manufacturing facilities, meet local managers and employees and explore the Company’s culture. At the Company’s annual meeting, all Company officers and their spouses are invited to attend the Board dinner and have opportunities for direct interaction. The Company looks forward to the return of hosting events in-person when circumstances permit.
Corning does not use compensation policies or practices that create risks that are likely to have a material adverse effect on the Company. |
In February 2019,2021, the Compensation Committee reviewed the conclusions of a risk assessment of our compensation policies and practices covering all employees. This type of assessment is conducted annually by a cross-functional team with representatives from Human Resources (Compensation and Benefits), Law and Finance. The Compensation Committee evaluated the levels of risk-taking that potentially could be encouraged by our compensation arrangements, considering the arrangements’ risk-mitigation features, to determine whether they are appropriate in the context of our strategic plan and annual budget, our overall compensation arrangements, our compensation objectives, and Corning’s overall risk profile. Identified risk-mitigation features included the following:
The Committee concluded that Corning’s executive compensation program is balanced and does not reward excessive financial risk-taking.
CORNING 2021 PROXY STATEMENT | 31 |
Corporate Governance and the Board of Directors
Board and Shareholder Meeting Attendance
The Board of Directors met in person fiveeight times during 2018.2020. Attendance at Board and committee meetings averaged 99% in 2018,2020, and each incumbent director attended no less than 90%95% of the meetings of the Board and committees on which the director served.
All of our directors attended our 2018 Annual Meeting of Shareholders except for Mr. Brun, who became a director in July 2018.
The Board has a policy requiring all directors to attend our Annual Meeting, absent extraordinary circumstances. All of our directors attended our 2020 Virtual Annual Meeting of Shareholders except for Mr. Ferguson, whose effective date of Board membership is April 1, 2021.
We are committed to conducting business lawfully and ethically. Our directors, NEOs, and all Corning employees, are required to act at all times with honesty and integrity. We have a comprehensive Code of Conduct that applies to all Corning directors and employees that covers areas of professional conduct, including conflicts of interest, the protection of corporate opportunities and assets, employment policies, non-discrimination policies, confidentiality, vendor standards, and intellectual property, and requires strict adherence to all laws and regulations applicable to our business. Our Board spends meaningful time with executive management at board meetings, and other members of management at other board events, where the relationships developed enable the Board to ensure that the Company maintains a culture of integrity, responsibility and accountability throughout the organization.
We also have a supplemental “Code of Conduct for Directors and Executive Officers” that includes policies calling for strict observance of all laws applicable to our business, that requires directors and executive officers to avoid any conflict between their personal interests and the interests of the company in dealing with suppliers, customers, and other third parties, and which imposes standards upon certain conduct in their personal affairs, including transactions in securities of the Company, any company affiliate, or any unaffiliated organization. Each director and executive officer is expected to be familiar with and to follow these policies to the extent applicable to them. Any employee can provide an anonymous report of an actual or apparent violation of our Codes of Conduct. We will disclose any future amendments to, or waivers from, any provision of our Codes of Conduct involving our directors, our principal executive officer, principal financial officer, principal accounting officer, controller or other persons performing similar functions on our website within four business days following the date of any such amendment or waiver. No such waivers were sought or granted in 2018.2020.
Lobbying and Political Contributions Policy
Corning encourages employees to participate in the political process on a personal basis. However, any use of Corning funds, property, resources or employee work time for U.S. political purposes — for example, to any U.S. political party, candidate or government official – is subject to Corning’s Lobbying and Political Contributions Policy and must be approved in advance by Corning’s Government Affairs office. Any contact with members of the U.S. Congress on behalf of Corning, or any Corning contribution to U.S. government officials or payment related to these officials, must be approved by and coordinated through Corning’s Government Affairs office. Our policy can be found atcorning.com/political-contributions.at investor.corning.com/investor-relations/governance/political-contributions/default.aspx.
Shareholders and interested parties may communicate concerns to any director, committee member or the Board by writing to the following address: Corning Incorporated Board of Directors, Corning Incorporated, One Riverfront Plaza, Corning, New York 14831, Attention: Corporate Secretary. Please specify to whom your correspondence should be directed. The Board has instructed our Corporate Secretary to review correspondence directed to the Board and, at the Corporate Secretary’s discretion, to forward items that are appropriate for the Board’s consideration.
CORNING |
Corporate Governance and the Board of Directors
Corporate Governance Materials Available on Corning’s Website
In addition to our Corporate Governance Guidelines and Director Qualification Standards, other information relating to Corning’s corporate governance is available on the Investor Relations – Governance – Downloads section of our website atinvestor.corning.com/investor-relations/governance/overview/default.aspxincluding:
Corning’s Human Rights Policy is available athttp://www.corning.com/corning.com/worldwide/en/sustainability/people/human-rights-policy.htmlhuman-rights-policy.html..
CORNING 2021 PROXY STATEMENT | 33 |
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Election of Directors
Board of Directors’ Qualifications and Experience
Our Board is composed ofcomprises accomplished professionals with diverse skills and areas of expertise. The broad range of skills, knowledge and opinions represented on our Board is one of its core strengths. Moreover, we believe our directors’ wide range of professional experiences, backgrounds and backgrounds, education and skills provides significant value to the Company, and we intend to continue leveraging this strength.
Upon the recommendation of the Nominating and Corporate Governance Committee,
Mr. Ferguson was appointed to the Board at its February 3, 2021 meeting, with an effective date of Directors granted Mr. Canning a one-time waiver ofApril 1, 2021. He is standing for election for the mandatory retirement age policy on February 6, 2019. The Board concluded that Mr. Canning’s experience and skill set, in particularfirst time following his broad financial experience and ongoing contributions in furtherance of the Strategy and Capital Allocation Framework, were exceptionally beneficial to the Company and that Mr. Canning’s continued service was in the best interest of the Company through the Framework’s conclusion.appointment.
The following table describes key competencies and skills of our directors.directors who are standing for re-election.
All directors other than Mr. Weeks are independent. Mr. Clark is the Lead Independent Director.
CORNING |
Proposal 1Election of Directors
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After considering the recommendations of the Nominating and Corporate Governance Committee, the Board has set the number of directors at fourteen and nominated the persons described below to stand for election. All of the nominees, except for Mr. Ferguson, whose effective date of Board membership is April 1, 2021, were elected by Corning’s shareholders at the 20182020 Annual Meeting, except for Mr. Brun who was appointed toMeeting. All of the Board in July 2018, andnominees have consented to being named in this proxy statement and to serve as director if elected or re-elected. The Board believes that each of these nominees is qualified to serve as a director of Corning in light of their respective skills and qualifications, as further described below. Equally important, the Board believes this combination of backgrounds, skills and experiences creates a Board that is well-equipped to exercise oversight responsibilities for Corning’s shareholders and other stakeholders.
If elected by our shareholders, the fourteen director nominees will serve for a one-year term expiring at our 20202022 Annual Meeting of Shareholders. Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier resignation or removal.
![]() ![]() | FOR | Our Board unanimously recommends that shareholders vote FOR all of our director nominees. |
CORNING 2021 PROXY STATEMENT | 35 |
Proposal 1Election of Directors
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| Donald W. Blair Retired Executive Vice President and Chief Financial Officer, NIKE, Inc. Mr. Blair was the executive vice president and chief financial officer of NIKE, Inc. from 1999 to October 2015. Prior to joining NIKE, he served Mr. Blair brings over Skills and Qualifications — Expertise in finance, audit and management— |
| Director Since 2014 | ||||
Committees
Current Public and Investment Company Directorships
Public and Investment Company Directorships Held During the Past 5 Years
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![]() | Leslie A. Brun Chairman and Chief Executive Officer, Sarr Group LLC; Co-Founder, Chairman and Chief Executive Officer, Ariel Alternatives, LLC Mr. Brun is chairman and chief executive officer of Sarr Group, LLC, co-founder, chairman and chief executive officer of Ariel Alternatives, LLC, vice chairman and senior advisor of G100 Companies and a member of the Council on Foreign Relations. He is also the founder and former chief executive officer and chairman of Hamilton Lane, where he served as chief executive officer and chairman from 1991 until 2005, a former director and chairman of the board of Automatic Data Processing, Inc., and a former director of Hewlett Packard Enterprise Company. In addition, Mr. Brun also served as a managing director and co-founder of the investment banking group of Fidelity Bank, and as a past vice president in the corporate finance division of E.F. Hutton & Co. Mr. Brun brings to the board significant financial expertise and operating and management experience, along with extensive public company directorship and committee experience. He also brings broad experience on governance issues facing large public companies. Skills and Qualifications — Expertise in finance, management, investment banking, financial advisory and management across highly regulated and audited industries— | |||||
Age 68 | Director Since 2018 | |||||
Committees • Audit • Compensation Current Public and Investment Company Directorships • Ariel Investments, LLC • Broadridge Financial Solutions, Inc. • CDK Global Inc. • Merck & Co., Inc. • Praesidium SGR Public and Investment Company Directorships Held During the Past 5 Years • Hewlett Packard Enterprise Company • NXT Capital Inc. |
CORNING |
Proposal 1Election of Directors
| Stephanie A. Burns Retired Chairman and Chief Executive Officer, Dow Corning Corporation Dr. Burns has Dr. Burns brings significant expertise in scientific research, issues management, science and technology leadership, and business management to the Board, as well as skills related to her Ph.D. in organic chemistry. She is the past honorary president of the Society of Chemical Industry and was appointed by President Obama to the President’s Export Council. Dr. Burns is a former chair of the American Chemistry Council. Skills and Qualifications — Global innovation, manufacturing and business leadership experience— Significant expertise in research and development, science and technology leadership, and audit and business management— Significant public company board experience |
| Director Since 2012 | ||||
Committees
Current Public and Investment Company Directorships
Public and Investment Company Directorships Held During the Past 5 Years
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Proposal 1Election of Directors
| Richard T. Clark Retired Chairman, Chief Executive Officer and President, Merck & Co., Inc. Lead Independent Director Mr. Clark retired from Merck in 2011. He joined Merck in 1972 and held a broad range of senior management positions. He became president and chief executive officer of Merck in May 2005 and chairman of the board in April 2007. He transitioned from the chief executive officer role in January 2011 and served as Merck board chairman through November 2011. He was president of the Merck Manufacturing Division (June 2003 to May 2005) of Merck Sharp & Dohme Corp. He is chairman of the board of Project Hope and a trustee of several charitable non-profit organizations. As the former chairman, president and chief executive officer of a Fortune 100 company, Mr. Clark brings broad managerial expertise, operational expertise, and deep business knowledge, as well as a track record of achievement. Skills and Qualifications — Broad and deep managerial expertise, operational expertise, and business knowledge— Extensive experience in the issues facing public companies and multinational businesses— Significant public company board experience, including as chairman and chief executive officer of an R&D-focused global corporation |
| Director Since 2011 | ||||
Committees
• Executive
Current Public and Investment Company Directorships
Public and Investment Company Directorships Held During the Past 5 Years • American Securities LLC |
CORNING 2021 PROXY STATEMENT | 37 |
Proposal 1 Election of Directors
| Robert F. Cummings, Jr. Retired Vice Chairman of Investment Banking, JPMorgan Chase & Co. Mr. Cummings retired as vice chairman of Investment Banking at JPMorgan Chase & Co. (JPM) in February 2016. He had served in that role since December 2010, advising on client opportunities across sectors and industry groups. Mr. Cummings began his business career in the investment banking division of Goldman, Sachs & Co. in 1973 and was a partner of that firm from 1986 until his retirement in 1998. He served as an advisory director at Goldman Sachs until 2002. Mr. Cummings’ Board qualifications include more than Skills and Qualifications — Extensive investment banking experience including finance, business development and strategy, and mergers and acquisitions— Knowledgeable in the areas of technology, telecommunications, private equity and real estate | |||||
Age 71 | Director Since 2006 | |||||
Committees • Executive • Finance (Chair) • Nominating and Corporate Governance Current Public and Investment Company Directorships • W. R. Grace & Co. Public and Investment Company Directorships Held During the Past 5 Years • None |
![]() | Roger W. Ferguson, Jr. President and Chief Executive Officer, TIAA* Mr. Ferguson has been a national leader in banking and financial services for over 20 years. He is President and Chief Executive Officer of TIAA, the leading provider of retirement services in the academic, research, medical, and cultural fields and a Fortune 100 financial services organization. He is also the former Vice Chairman of the Board of Governors of the U.S. Federal Reserve System, where he represented the Federal Reserve on several international policy groups and served on key Federal Reserve System committees, including Payment System Oversight, Reserve Bank Operations, and Supervision and Regulation. Prior to joining TIAA in April 2008, Mr. Ferguson was head of financial services for Swiss Re and Chairman of Swiss Re America Holding Corporation. From 1984 to 1997, he was an Associate and Partner at McKinsey & Company. He began his career as an attorney at the New York City office of Davis Polk & Wardwell. Mr. Ferguson is a member of the Smithsonian Institution’s Board of Regents, the New York State Insurance Advisory Board, and the American Academy of Arts & Sciences. He serves on the boards of Alphabet, Inc.; General Mills, Inc.; and International Flavors & Fragrances, Inc. He also serves on the boards of the American Council of Life Insurers, The Conference Board, the Institute for Advanced Study, and Memorial Sloan Kettering Cancer Center. He is a fellow of the American Philosophical Society and a member of the Economic Club of New York, the Council on Foreign Relations, the Group of Thirty, and the National Association for Business Economics. He brings extensive banking, financial and executive leadership expertise to Corning’s Board. *Mr. Ferguson has announced his intent to retire from his positions at TIAA effective March 31, 2021. Skills and Qualifications — Expertise in banking, financial and executive leadership — Experience in regulation, international policy, compliance, oversight and strategy | |||||
Age 69 | Director Since 2021 | |||||
Committees • Nominating and Governance • Compensation Current Public and Investment Company Directorships • Alphabet, Inc. • General Mills, Inc. • International Flavors & Fragrances, Inc. Public and Investment Company Directorships Held During the Past 5 Years • None |
38 | CORNING |
Proposal 1Election of Directors
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| Deborah A. Henretta Retired Group President of Global E-Business, Procter & Gamble Ms. Henretta has over Ms. Henretta was a member of Singapore’s Economic Development Board (EDB) from 2007 to 2013. She contributed to the growth strategies for Singapore and was selected to serve on the EDB’s Economic Strategies Committee between 2009 and 2011. In 2008, she received a U.S. State Department appointment to the Asia-Pacific Economic Cooperation’s Business Advisory Council. In 2011, she was appointed chair of this 21-economy council, becoming the first woman to hold the position. In that role, she advised top government officials, including former President Barack Obama and former Secretary of State Hillary Clinton. Ms. Henretta Skills and Qualifications — Significant experience in business leadership and global— — Significant knowledge of digital transformation and |
| Director Since 2013 | ||||
Committees
Current Public and Investment Company Directorships
• Meritage Homes Corporation • NiSource, Inc. Public and Investment Company Directorships Held During the Past 5 Years
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![]() | Daniel P. Huttenlocher Dean, Dr. Huttenlocher is the Dr. Huttenlocher holds a Ph.D. in computer science and a Master of Science degree in Electrical Engineering, both from the Massachusetts Institute of Technology. He is a renowned computer science researcher and educator, and a prolific inventor with two dozen U.S. patents. He brings to the board extensive experience in technology innovation and commercialization, and expertise in developing next-generation products and services. Skills and Qualifications — Extensive experience in technology innovation and commercialization— Expertise in information technology and computer— Experience with emerging technologies and customer experience | |||||
Age 62 | Director Since 2015 | |||||
Committees • Finance • Information Technology Current Public and Investment Company Directorships • Amazon.com, Inc. Public and Investment Company Directorships Held During the Past 5 Years • None |
CORNING 2021 PROXY STATEMENT | 39 |
Proposal 1Election of Directors
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| Kurt M. Landgraf Retired President, Washington College
From July 2017 to July 2020, Mr. Landgraf was Mr. Landgraf was selected for his wealth of executive management experience in public companies, non-profit entities, higher education, and government. He brings to the Board his financial expertise and operations skills and experience, represented by his positions at ETS and DuPont. Mr. Landgraf’s other areas of specialized knowledge include technology, transportation, education, finance, pharmaceuticals, health care, energy, materials, and mergers and acquisitions. Skills and Qualifications — Extensive executive management experience in public companies, non-profit entities, higher education and government— Financial and audit expertise— Operations experience— Specialized knowledge including technology, transportation, education, pharmaceuticals, health care, energy, materials, and mergers and acquisitions— Significant public company board experience |
| Director Since 2007 | ||||
Committees
Current Public and Investment Company Directorships
Public and Investment Company Directorships Held During the Past 5 Years
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![]() | Kevin J. Martin Vice President,
Mr. Martin Mr. Martin has two decades experience as a lawyer and policymaker in the telecommunications field. Before joining the FCC as a commissioner in 2001, Mr. Martin was a special assistant to the president for Economic Policy and served on the staff of the National Economic Council, focusing on commerce and technology policy issues. He served as the official U.S. government representative to the G-8’s Digital Opportunity Task Force. Mr. Martin brings deep experience to the board in the telecommunications, economics, governmental and legal arenas. Skills and Qualifications — Specialized knowledge of telecommunications, social media and information technology industries— Extensive knowledge of government policy and regulatory environment | |||||
Age 54 | Director Since 2013 | |||||
Committees • Corporate Responsibility and Sustainability • Nominating and Corporate Governance Current Public and Investment Company Directorships • Carmichael Investment Partners, LLC Public and Investment Company Directorships Held During the Past 5 Years • Xtera Communications, Inc. |
CORNING |
Proposal 1Election of Directors
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| Deborah D. Rieman Retired Executive Chairman, MetaMarkets Group Dr. Rieman has more than Dr. Rieman brings significant expertise in information technology, innovation and entrepreneurial endeavors to the Board and skills related to her Ph.D. in mathematics. She is also the former president and chief executive officer of a software company specializing in security and has experience in technology development, marketing, business development and support, investor relations and investing. Skills and Qualifications — Expertise in information technology and cyber security— Experience in technology development, marketing, business development and support, innovation, entrepreneurial endeavors and investing |
71 | Director Since 1999 | ||||
Committees
• Information Technology Current Public and Investment Company Directorships
Public and Investment Company Directorships Held During the Past 5 Years
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![]() | Hansel E. Tookes II Retired Chairman and Chief Executive Officer, Raytheon Aircraft Company Mr. Tookes retired from Raytheon Company in December 2002. He joined Raytheon in 1999 and served as president of Raytheon International, chairman and chief executive officer of Raytheon Aircraft, and executive vice president of Raytheon Company. From 1980 to 1999, Mr. Tookes served United Technologies Corporation as president of Pratt and Whitney’s Large Military Engines Group and in a variety of other leadership positions. Mr. Tookes provides extensive experience in operations, manufacturing, performance excellence, business development, technology-driven business environments, and military and government contracting. He also brings his science and engineering education, training and knowledge to the Board. Mr. Tookes’ industry expertise includes aviation, aerospace and defense, transportation, and technology. Skills and Qualifications — Extensive experience in global operations, manufacturing, performance excellence, business development, technology-driven business environments, and military and government contracting— Education, training and knowledge in science and engineering— Extensive public company board experience | |||||
Age 73 | Director Since 2001 | |||||
Committees • Compensation • Executive • Nominating and Corporate Governance (Chair) Current Public and Investment Company Directorships • Ryder Systems Inc. Public and Investment Company Directorships Held During the Past 5 Years • Harris Corporation • NextEra Energy, Inc. |
CORNING 2021 PROXY STATEMENT | 41 |
Proposal 1Election of Directors
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| Wendell P. Weeks Chairman and Chief Executive Officer,
Mr. Weeks has Mr. Weeks currently sits on the board of Amazon.com, Inc. and served on the board of Merck & Co., Inc. from February 2004 to May 2020. He is also on the board of trustees for the Corning Museum of Glass. Skills and Qualifications — Wide-ranging experience and knowledge of restructuring, financial and accounting matters; — — Unique understanding of Corning’s businesses and innovations |
| Director Since 2000 | ||||
Committees
Current Public and Investment Company Directorships
Public and Investment Company Directorships Held During the Past 5 Years
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![]() | Mark S. Wrighton Professor and Chancellor Dr. Wrighton has more than Dr. Wrighton is a professor, chemist and research scientist with expertise in materials and research interests in the areas of transition metal catalysis, molecular electronics and photoprocesses at electrodes. He also has expertise in areas of direct relevance to Corning, including materials chemistry, photochemistry, surface chemistry and life sciences. Under Dr. Wrighton’s executive and fiscal leadership, Washington University has grown significantly in academic stature, research enterprise, infrastructure, student quality, curriculum and international reputation. Dr. Wrighton brings to the Board his vast scientific knowledge and understanding of complex research and development issues. Skills and Qualifications — Deep knowledge in areas of direct relevance to Corning, including materials chemistry, photochemistry, surface chemistry and life sciences— Executive leadership experience, including finance and audit experience— | |||||
Age 71 | Director Since 2009 | |||||
Committees • Finance • Information Technology (Chair) Current Public and Investment Company Directorships • Brooks Automation, Inc. Public and Investment Company Directorships Held During the Past 5 Years • Cabot Corporation |
CORNING |
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The Compensation Committee strives to setsets director compensation at levels that ensure our directors are paid appropriately for their time commitment and responsibilities relative to directors at companies of comparable size, industry and scope of operations. The Committee believes that providing a competitive compensation package is important because it enables Corning to attract and retain highly qualified directors who are critical to the Company’s long-term success. Our objective is to pay non-employee directors competitively compared to the compensation peer group (listed on page 55)comparable companies and to awardfor a significant portion of director compensation in equity.to be stock-based. The Compensation Committee’s independent consultant, Frederic W. Cook & Co., Inc., conducts an annual review of the director compensation levels relative to external best practices as well as Corning’s compensation peer group and advises the Committee annually to ensure that compensation levels remain competitive.
The Company uses a combination of stock-based compensation and cash compensation for its directors. Corning believes it is desirable that a significant portion of director compensation should be linked to the Company’s performance andover time. Therefore, a portion of the Directors’ compensation is therefore paid as an annual equity grant of restricted share units, which are not settled in restricted unitsshares of common stock which are settled in shares followinguntil retirement or resignation from the Board. To continue to enable the company to attract and incent our Directors, it is important that shareholders approve Corning’s 2019 Equity Plan for Non-Employee Directors, Proposal 4 of this proxy statement.
Directors may electfurther defer receipt of the annual equity retainer restricted stock units by electing distribution in up to 10 annual installments and also may defer all or a portion of their cash compensation. AmountsCash amounts deferred may be allocated toto: an account earning interest, compounded quarterly, at the rate equal to the prime rate of Citibank, N.A. at the end of each calendar quarter,quarter; a restricted stock unit account,account; or a combination of such accounts. In 2018, six2020, seven directors elected to defer some or all of their cash compensation. A cap on director’s compensation of $700,000 per director per year will go into effect upon the approval of Corning’s 2019 Equity Plan for Non-Employee Directors, Proposal 4 of this proxy statement.
As an employee of the Company, Mr. Weeks is not compensated separately for service on the Board or any of its Committees.
20182020 Director Compensation
The following table outlines 20182020 director compensation:compensation. Note that as part of a series of actions to preserve cash in response to the COVID-19 pandemic, the non-employee directors received restricted stock units in lieu of 40% of cash fees payable for service on the board of directors and any committees for the period of June 1, 2020 through December 31, 2020.
Annual Equity Grants | Each non-employee director annually receives a form of long-term equity compensation approved by the Board. Annual equity grants for non-employee directors are generally approved at the February meeting of the Board. If, however, a director is appointed between the February meeting and December 31, then that director will receive a pro-rata grant shortly after joining the Board. In | |
Annual Cash | ||
Lead Independent Director | Our Lead Independent Director received | |
Committee ChairCompensation* | The Audit Committee Chair received additional cash compensation of $25,000. The Compensation Committee Chair received additional cash compensation of $20,000. Other Committee Chairs (excluding the Executive Committee Chair) receive additional cash compensation of $15,000. |
CORNING 2021 PROXY STATEMENT | 43 |
Director Compensation
Committee |
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Each Audit Committee member received |
* | Compensation shown is prior to the actions taken in response to the COVID-19 pandemic described above; however the reduction in cash fees and associated equity award is reflected in the 2020 Director Compensation Table on page 45. |
In 2018,2020, the directors below performed the followingspecified leadership roles:
Name | Leadership Role | |
Mr. Clark | Lead Independent Director | |
Mr. Landgraf | Audit Committee Chair | |
Dr. Rieman | Compensation Committee Chair | |
Dr. Burns | Corporate | |
Mr. Cummings | Finance Committee Chair | |
Mr. Tookes | Nominating and Corporate Governance Committee Chair | |
Dr. Wrighton | Information Technology Committee Chair |
Non-employee directors are reimbursed for expenses (including costs of travel, food, and lodging) incurred in attending Board, committee, and shareholder meetings. Directors are also reimbursed for reasonable expenses associated with participation in director education programs.
Directors’ Charitable Giving Programs
Although closed to directors joining the Board after October 5, 2016, Corning has a Directors’ Charitable Giving Program pursuant to which a director may direct the Company to make a charitable bequest to one or more qualified charitable organizations recommended by such director and approved by Corning in the amount of $1,000,000 (employee directors) or $1,250,000 (non-employee directors) following his or her death.
This program is eithercurrently funded directly by the Company orCompany; however, in the past the program included funding by purchasing insurance policies on the lives of the directors. However, we are under no obligation to use the proceeds of the insurance policies to fund a director’s bequest and can elect to retain any proceeds from the policies as assets of Corning and use another source of funds to pay the directors’ bequests. In 2018,2020, we paid a total of $82,982$76,342 in premiums and fees on such policies for our current directors. In December 2020, Corning surrendered its director life insurance policies for cash and will solely fund the program from its general assets from 2021.
Because the charitable deductions and cash surrender value of life insurance policies accrue solely to Corning, the directors derive no direct financial benefit from the program, and we do not include these amounts in the directors’ compensation. Generally, one must have been a director for five years to participate in the program. Directors who had not yet achieved five years’ tenure as of October 5, 2016 will be permitted to participate after five years of Board service. In 2018,2020, all directors except Messrs. Canning, Clark, Cummings, Landgraf, Martin, TookesBrun and Weeks, Ms. Henretta and Drs. Burns, Rieman and WrightonFerguson were eligible to participate in the program.
Directors are also eligible to participate in the Corning Incorporated Foundation Matching Gifts Program for eligible charitable organizations. This Program is available to all active Corning employees and directors. The maximum matching gift amount available from the Foundation on behalf of each participant in the Program is $7,500 per calendar year.
Corning also pays premiums on our directors’ and officers’ liability insurance policies covering directors.policies.
Changes to Director Compensation in 20192021
In February 2019,2021, the Board approveapproved certain changes to director compensation proposed by the Compensation Committee in consultation with the Committee’s independent consultant.consultant in order to remain competitive. Effective January 1, 2019,February, 2021, the non-employee directors’ annual equity grant will increaseincreased from $165,000$185,000 to $175,000.$195,000, the Lead Director annual retainer increased from $35,000 to $40,000 and the Compensation Committee member annual retainer increased from $12,000 to $15,000. As with the 20182020 director equity compensation, this amount will be payable in restricted stock units, which arewill not be available for transfer or sale until six months after the date of a director’s retirement or resignation. In addition,resignation from the Audit Committee Chair retainer will increase from $20,000 to $25,000 effective January 1, 2019.board.
CORNING |
Director Compensation
2018
2020 DIRECTOR COMPENSATION TABLE
Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | All Other Compensation(3) ($) | Total ($) | ||||||||
Donald W. Blair | $ | 138,000 | $ | 164,994 | $ | 5,244 | $ | 308,238 | ||||
Leslie A. Brun(4) | 70,000 | 82,504 | 0 | 152,504 | ||||||||
Stephanie A. Burns | 153,000 | 164,994 | 0 | 317,994 | ||||||||
John A. Canning, Jr. | 140,000 | 164,994 | 7,500 | 312,494 | ||||||||
Richard T. Clark | 177,000 | 164,994 | 7,500 | 349,494 | ||||||||
Robert F. Cummings, Jr. | 155,000 | 164,994 | 0 | 319,994 | ||||||||
Deborah A. Henretta | 138,000 | 164,994 | 0 | 302,994 | ||||||||
Daniel P. Huttenlocher | 138,000 | 164,994 | 0 | 302,994 | ||||||||
Kurt M. Landgraf | 170,000 | 164,994 | 7,500 | 342,494 | ||||||||
Kevin J. Martin | 130,000 | 164,994 | 7,000 | 301,994 | ||||||||
Deborah D. Rieman | 160,000 | 164,994 | 0 | 324,994 | ||||||||
Hansel E. Tookes II | 157,000 | 164,994 | 0 | 321,994 | ||||||||
Mark S. Wrighton | 138,000 | 164,994 | 0 | 302,994 |
Name | Fees Earned or Paid in Cash(1, 2) ($) | Stock Awards(2,3) ($) | All Other Compensation(4) ($) | Total ($) | ||||
Donald W. Blair | $105,800 | $217,195 | $ 7,500 | $330,495 | ||||
Leslie A. Brun | 107,333 | 217,666 | 324,999 | |||||
Stephanie A. Burns | 117,300 | 220,692 | 337,992 | |||||
John A. Canning, Jr.(5) | 46,666 | 61,644 | 108,310 | |||||
Richard T. Clark | 135,700 | 226,293 | 7,500 | 369,493 | ||||
Robert F. Cummings, Jr. | 118,834 | 221,164 | 1,500 | 341,498 | ||||
Deborah A. Henretta | 99,667 | 215,328 | 7,500 | 322,495 | ||||
Daniel P. Huttenlocher | 99,667 | 215,328 | 6,250 | 321,245 | ||||
Kurt M. Landgraf | 134,167 | 225,841 | 7,500 | 367,508 | ||||
Kevin J. Martin | 99,667 | 215,328 | 7500 | 322,495 | ||||
Deborah D. Rieman | 116,533 | 220,457 | 336,990 | |||||
Hansel E. Tookes II | 120,367 | 221,636 | 342,003 | |||||
Mark S. Wrighton | 111,167 | 218,826 | 7,500 | 337,493 |
(1) | Includes all fees |
(2) | As part of a series of actions to preserve cash in response to the COVID-19 pandemic, the directors received restricted stock units in lieu of 40% of cash fees payable for service on the board of directors and any committees thereof for the period of June 1, 2020 through December 31, 2020. |
(3) | The amounts in this column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of awards of restricted stock units granted pursuant to the |
(4) | The amounts in this column reflect charitable donation matches made by the Corning |
(5) | Mr. |
The following are the total number of award shares and restricted stock units (RSUs) and RSU deferrals outstanding for each Director haddirector as of December 31, 2018
Name | Award Shares/Units and RSU Deferrals Outstanding at December 31, 2018(1) | Options Outstanding at December 31, 2018(2) | ||
Donald W. Blair | 55,837 | 0 | ||
Leslie A. Brun | 2,812 | 0 | ||
Stephanie A. Burns | 63,634 | 0 | ||
John A. Canning, Jr. | 100,944 | 1,323 | ||
Richard T. Clark | 53,409 | 0 | ||
Robert F. Cummings, Jr. | 177,792 | 2,345 | ||
Deborah A. Henretta | 60,998 | 0 | ||
Daniel P. Huttenlocher | 25,357 | 0 | ||
Kurt M. Landgraf | 157,087 | 0 | ||
Kevin J. Martin | 42,953 | 0 | ||
Deborah D. Rieman | 111,060 | 2,345 | ||
Hansel E. Tookes II | 98,310 | 2,345 | ||
Mark S. Wrighton | 69,760 | 2,345 |
We believe in the importance of equity ownership by directors and executive management as In December 2020, we increased the stock ownership guidelines applicable to non-NEO executive senior leadership team members as a multiple of base salary from 1.5 to 3 in line with all NEOs other than the CEO whose multiple remains 6 times base salary. Recently-appointed senior leadership team members will have five years to comply with the new guidelines.
Our directors and executive management are also subject to our anti-hedging and anti-pledging policies. For further information, see “Anti-Hedging Policy” and “Anti-Pledging Policy” both on page
Stock Ownership Information
Our Board of Directors requests that shareholders approve the compensation of our Named Executive Officers (NEOs), pursuant to Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”), as disclosed in this proxy statement, which includes the Compensation Discussion and Analysis, the Summary Compensation Table and the supporting tabular and narrative disclosure on executive compensation.
While this vote is advisory and not binding on the Company, Our Board maintains a “pay for performance” philosophy that forms the foundation for all of the Compensation Committee’s decisions regarding executive compensation. In addition, our compensation programs are designed to facilitate strong corporate governance, foster collaboration and support our short- and long-term corporate The Compensation Discussion and Analysis portion of this proxy statement contains a detailed description of our executive compensation philosophy and programs, the compensation decisions the Compensation Committee has made under those programs and the factors considered in making those decisions, including For these reasons, the Board of Directors recommends that shareholders vote in favor of the resolution: RESOLVED, that
This Compensation Discussion & Analysis (CD&A) presents Corning’s executive compensation for OUR NEOs IN FISCAL YEAR 2020 WERE:
CD&A Table of Contents To assist
Compensation Discussion & Analysis Overview: How We Successfully Navigated a Challenging Year Our Response to the COVID-19 Pandemic: Prioritizing our People While Ensuring Financial Health 2020 was an incredibly difficult year as the world faced the COVID-19 pandemic, ongoing economic uncertainty, and social unrest. Throughout the year, management and the Board focused on keeping our employees safe and retaining our talent, protecting our financial health and preserving the trust of Corning stakeholders. The actions we took resulted in a stronger balance sheet, record fourth-quarter sales, and free cash flow generation of $948 million for the year, all while retaining and supporting the talent that drives future growth at Corning. Special Compensation Committee Actions in 2020 To address the pandemic’s significant economic impact, our Compensation Committee approved certain actions under our Shared Sacrifice, Shared Opportunity (SSSO) program. The actions were multi-faceted with the primary goals to ensure financial health and stability of the Company and retain the talent we would need as we returned to growth. The Compensation Committee approved the following actions under the SSSO program:
Additionally, the Committee used its discretion to exclude the impact of the incremental revenue from the Hemlock consolidation in our 2020 financial results for purposes of the Long-Term Incentive (LTI) Plan performance results, resulting in a lower 2020 performance score. We believe these and other decisive actions taken were key to our success in 2020. As part of our shareholder engagement process in late 2020, we discussed these innovative compensation actions taken to preserve cash and gathered feedback, which was very positive. For more information on these and other steps taken in response to the pandemic, refer to “Impact of COVID-19 on Compensation and Benefits” on page 55. Performance Goal Setting As we entered 2020, our international operations–particularly a new Display plant coming online in Wuhan, China–provided us with early visibility into the COVID-19 pandemic. We quickly realized that the impact would be significant and the length of the downturn would be uncertain. In the first half of 2020, the severe global economic crisis resulting from the pandemic impacted nearly all of our end markets and key customers, such as automakers, which in turn rapidly impacted our own operations. The Board and management quickly recognized that our growth plan for the year was at risk and approved goals to protect shareholder value. As a result, the Compensation Committee and the Board established primary goals of retaining the talent we would need as economies recovered and we returned to growth, ensuring financial strength, and maintaining stability of the company. The Committee established financial goals designed to drive second-half growth and our successful execution of these decisive actions is evidenced in our results. While first-half sales were down 7% year-over-year, second-half sales were up 9% year-over-year–and up 24% sequentially. Our flexibility and strong execution allowed us to meet the large and unpredictable swings in client demand. Importantly, in addition to growing sales in the second half of the year, we expanded margins and generated almost $1 billion of free cash flow, a key goal in the Long-Term Incentive Plan discussed below.
Compensation Discussion & Analysis For additional detail, refer to “2020 Performance Highlights: Overcoming Current Challenges and Driving Second-Half Growth” on page 7. Implementing Shareholder Feedback Notwithstanding the unique and challenging macro environment, Corning continued to implement positive changes in response to shareholder feedback. Based on feedback received in 2019, the Compensation Committee approved a redesign of our LTI Plan starting in 2020. As a result, we adjusted the LTI Plan to:
The LTI Plan is more fully explained under “Our Long-Term Incentives” on page 54. No Change in CEO Target Pay in 2020 There were no changes to the CEO’s target pay in 2020 as compared to 2019. However, the LTI Plan design changes noted above, implemented in response to shareholder feedback, make year-over-year pay comparisons in the Summary Compensation Table difficult. Our 2019 performance was significantly below-target (Performance Incentive Plan (PIP) at 24% and LTI CPUs at 62%) and resulted in below-target payouts in 2019. Performance greatly improved in 2020, with strong free cash flow supporting results and fortifying the Company’s balance sheet amidst continued business volatility. In 2020, the cash PIP was eliminated and PIP-PSUs were capped at 100% of target. However, the CPU and PSU percentage of target earned in 2020 was significantly above-target at 181% because the Company significantly exceeded the aggressive free cash flow goal. So while the total CEO pay target established by the Compensation Committee was the same for both 2019 and 2020, the significant improvement in 2020 performance versus below-target 2019 performance resulted in a significant increase in 2020 compensation. This is exactly how the Compensation Committee designed our variable compensation programs to work. Payouts under the LTI Plan are dependent on our average performance over the applicable 3-year performance period, as well as impacted by the 3-year ROIC modifier. Our 3-year performance periods and the 3-year ROIC modifier ensure the alignment of pay and performance over these periods. For example, above-target performance in 2018, significantly below-target performance in 2019 and significantly above-target performance in 2020, reduced by 10% upon the application of the 3-year ROIC modifier, resulted in the 2020 CPU award to be paid out at 112% of target, aligning pay with performance for the 2018-2020 period. For further explanation, refer to the notes at the top of the “Summary Compensation Table” on page 67.
Compensation Discussion & Analysis Corning’s TSR Performance Corning’s Total Shareholder Return (TSR), which consists of stock price appreciation and reinvestment of common dividends, is shown below for 1-, 3- and 5-year periods. Despite the financial challenges of 2019, and the challenges of the pandemic in 2020, Corning’s 1-, 3- and 5-year TSR results reflect the strong foundation built during the 2016-2019 Strategy and Capital Allocation Framework which supported the Company through the challenges of both 2019 and 2020, resulting in the Company outperforming the S&P 500 Index for both the 1-year and 5-year periods ending December 31, 2020.
Over the past 3 years, Corning has:
Compensation Discussion & Analysis Executive Compensation Philosophy Our compensation program is designed to attract and retain the most talented employees within our industry segments and to motivate them to perform at the highest level while executing on our 2020 Target Compensation Components
Our Short-Term Incentives
Compensation Discussion & Analysis
Our Long-Term Beginning in 2020 and in response to shareholder feedback, we realigned the equity and cash 2020 CPU and
Responding to Shareholder Feedback in Concrete Ways Corning takes our shareholders’ feedback seriously. The chart below shows actions we have taken in response to feedback received during our shareholder engagement.
Compensation Discussion & Analysis Impact of COVID-19 on Compensation and Benefits As the pandemic unfolded in the early part of 2020, it became clear that we had to take extraordinary steps to navigate the economic uncertainty, protect our financial health, and preserve the trust of Corning stakeholders, all while keeping employees safe and retaining our talent. To address these concerns, after initial discussions in April, our Compensation Committee approved certain actions under the Shared Sacrifice, Shared Opportunity (SSSO) program in May, effective June 1, 2020. Our actions were multi-faceted with the primary goals to ensure financial health and stability of the Company and retain the talent we would need as we returned to growth. These actions included the following:
2020 Compensation Metrics and Results In 2020, our key compensation metrics were established to focus and align leadership to key priorities in light of the COVID-19 pandemic and our adjusted operating priorities: to keep the Company strong and positioned to emerge stronger, take care of our employees and communities, mobilize our capabilities against the virus and focus on execution and flexibility. We determined that our key performance metrics – core net sales, profitability (as measured by Core EPS) and a cash flow measure (as measured by adjusted free cash flow in 2020) – were still the appropriate performance measures in 2020. The metrics for PIP-PSUs remained core net sales (25% weight), and profitability (as measured by Core EPS) (75% weight) with results capped at 100% since the plan was lower year-over-year. Our long-term metrics for CPUs and the new 2020 PSUs continue to be focused on core net sales (30% weight) and adjusted free cash flow (70% weight) with a 3-year +/- 10% ROIC modifier.
Compensation Discussion & Analysis 2020 GOALSETTING:
Given the uncertainty created by the pandemic, the Committee carefully monitored the rapidly evolving economic and business situation in the first and second quarters of 2020 and approved the following performance measures. The maximum earned PIP-PSUs was capped at 100% of target.
ROIC Modifier In 2016, based on investor feedback, the Compensation Committee added a three-year ROIC modifier to the CPUs in our LTI Plan. With this modifier, the CPU payout may be increased or decreased up to 10% based on ROIC performance over the three-year performance period. For the 2018-2020 performance period, the ROIC improvement target was established at 100 basis points, which the Committee believed was challenging but achievable through continued strong operating performance. The setting of this target reflected the multi-year operating plan for the Company and
We define ROIC as core net income before interest, divided by invested capital. Core net income before interest is calculated using constant exchange rates for Japanese yen, 2020 Performance and Compensation
In 2020, we responded effectively to a challenging year. Our response was focused on bolstering our financial strength—reducing production levels and operating costs, carefully managing inventory, reducing capital expenditures, and pausing share buybacks. While we took steps to adjust production, we didn’t reduce capacity, and as a result, we remained positioned to meet increasing demand as the
Compensation Discussion & Analysis
See page 7 for more performance highlights and accomplishments. The following table compares our 2020 actual results with our targeted goals for each performance measure compared with 2019 in which
Please see page 8 for more information about our Core Performance Measures and Appendix A for a reconciliation of the non-GAAP measures to the most directly comparable GAAP financial measures.
Compensation Discussion & Analysis Shareholder Engagement Strong Say on Pay Results.At our
We also communicate with shareholders through a number of routine forums, including quarterly earnings presentations, SEC filings, this Proxy Statement, our online Annual Report, Diversity and Inclusion Report, the annual shareholder meeting, investor meetings and conferences and web communications. We relay shareholder feedback and trends on corporate governance and sustainability developments to our Board and its Committees and work with them to both enhance our practices and improve our disclosures.
Compensation Discussion & Analysis 2020 Executive Compensation Program Details Our key compensation program principles are as follows:
As stated in “Impact of COVID-19 on Compensation and Benefits” on page 55 above, in 2020 we took certain compensation actions to retain cash while preserving talent during a period of great uncertainty. Despite these actions, our core compensation philosophy and program details remain the same. Base Salary Base salaries provide a form of fixed compensation and are reviewed annually by the Committee, which considers internal equity and individual performance, as well as competitive positioning, as discussed in the “Compensation Peer Group” section starting on page
Short-Term Incentives Short-term incentives are designed to reward NEOs for Corning’s consolidated annual financial performance supporting our PIP targets are GoalSharing is designed to motivate employees to work together to achieve the most critical goals in each business unit. All Corning employees are eligible for GoalSharing with a target generally equal to 5% of base salary. Earned GoalSharing may be 0% - 10% of base salary, and is weighted 25% on corporate financial performance and 75% on business unit performance. As a result of the pandemic, 2020 Business Unit plans (75% weight) were updated to align employees to the key priorities of the business unit in light of the pandemic. The corporate component (25% weight) was earned at 125% of target (1.56% of base salary) in recognition of the strong second-half performance. NEOs’ GoalSharing is based 25% on corporate financial performance and 75% on the average of the results of all business unit plans. Long-Term Incentives Beginning in
2020, Long-Term Incentives (LTI) We believe it is important to link LTI
Compensation Discussion & Analysis LTI targets are established by the Committee for each NEO annually in February. Mr. Weeks’
Compensation Discussion & Analysis 2020 Long-Term Incentives – Equity Components
CEO Over the past
In 2020, Mr. Weeks’ significant experience and tenure as a CEO was of In 2020 Mr. Weeks’ target
Eighty-nine percent of Mr. Weeks’ pay is directly tied to Corning’s operating performance 2020 PIP PSUs were earned at 100% of target, though the value ultimately realized by Mr. Weeks will continue to be impacted by changes in Corning stock price and will vest over 3 years. The 2020 performance factor for PSU and CPU awards attributable to 2020 performance was 181% of target, though the final payout factor for 2020 PSU and CPU awards is not yet known and remains subject to performance outcomes versus pre-defined goals during 2021 and 2022 and a three-year ROIC modifier. Mr. Weeks’ 2018 CPU award covering the 2018 to 2020 performance period was completed and paid at 112% of target.
Compensation Discussion & Analysis The target mix for Mr. Weeks’ 2020 LTI awards was: 45% PSUs, 25% CPUs and 30% RSUs. In contrast, the target mix for Mr. Weeks’ 2019 LTI awards was: 60% CPUs, 15% stock options and 25% RSUs. This reflected an 88% increase to the equity portion of target LTI awards (from 40% to 75% of target), a significant decrease in the cash portion of target LTI from 60% to 25%, and a 17% increase (from 60% to 70% of target) to the portion of LTI where payout is based on performance of financial goals over a 3-year period.
For example, for PSUs, the target grant date value is disclosed in the year of grant, but for CPUs no value is disclosed until the payout factor is known, at which time the actual payout amount is shown. Nonetheless pay was aligned with performance in both years with significant under-performance in 2019 and above-target performance in 2020. Employee Benefits and Perquisites Employee Benefits:Our NEOs are eligible to participate in the same employee benefits plans as all other eligible U.S. salaried employees. These plans include medical, dental, life insurance, disability, matching gifts, qualified defined benefit and defined contribution plans. We also maintain non-qualified defined benefit and defined contribution retirement and long-term disability plans with the same general features and benefits as our qualified plans for all U.S. salaried employees affected by tax law compensation, contribution or deduction limits. In addition to the standard benefits available to all eligible U.S. salaried employees, the NEOs are eligible for the benefits and perquisites described in this section. Executive Supplemental Pension Plan (ESPP):We maintain an ESPP to reward and retain long-serving individuals who are critical to executing Corning’s innovation strategy. Our non-qualified ESPP covers approximately While we seek to maintain well-funded qualified retirement plans, we do not fund our non-qualified retirement plans. For additional details of the ESPP benefits and plan features, please refer to the section entitled “Retirement Plans” on page Executive Physical and Wellness:All executives are eligible for an annual physical exam in addition to wellness programs sponsored by Corning for all employees. The cost of the physical is imputed income to the executive. Relocation and Expatriate-Related Expenses:As part of our global mobility program, our policies provide that employees who relocate to another country at our request are eligible for certain relocation and expatriate benefits to facilitate the transition and international assignment. These benefits include moving expenses, allowances for housing and goods and services, and tax assistance. These policies are intended to recognize and compensate employees for incremental costs incurred with moving or with living and working outside of the employee’s home country. The goal of these relocation and expatriate assistance programs is to ensure that employees are not financially advantaged or disadvantaged because of their relocation and/or international assignment, including related taxes. In July 2016, Mr. Clappin’s assignment in Tokyo ended and he relocated back to Corning, NY. Mr. Musser’s assignment to Shanghai, China ended in 2014 and he relocated back to Corning, NY. While
Compensation Discussion & Analysis Other Executive Perquisites:We provide the NEOs with an overall allowance that can be used for home security, modest personal aircraft usage, and limited financial counseling services. Each NEO is responsible for all taxes on any imputed income resulting from these perquisites. Given the limited commercial flight options available in the Corning, New York area, the Committee believes that a well-managed program of limited personal aircraft use provides an extremely important benefit at a reasonable cost to the Company. We closely monitor business and personal usage of our planes and limit personal usage to keep it at a low percentage of total usage. The Committee establishes annual personal aircraft usage caps under this program (both hours and absolute dollar value) for each NEO. The established cap for the CEO was 100 hours and $170,000; the cap for the other NEOs was approximately half this level or lower. Actual utilization Executive Severance:We have entered into severance agreements with each NEO. The severance agreements provide clarity for both Corning and the executive if the executive’s employment terminates. By having an agreement in place, we avoid the uncertainty, negotiations and potential litigation that may otherwise occur in the event of termination. The agreements are competitive with market practices at many other large companies and are helpful in retaining senior executives. Additional details can be found under “Arrangements with Named Executive Officers” on page Executive Change-in-Control Agreements:The Committee believes that it is in the best interests of shareholders, employees and the communities in which Corning operates to ensure an orderly process if a change in control were to occur. The Committee also believes it is important to prevent the loss of key management personnel (who would be difficult to replace) that may occur in connection with a potential or actual change in control. Therefore, we have provided each NEO with a change-in-control agreement (separate from the severance agreements described above). The change-in-control agreements provide that an executive’s employment must be terminated or effectively terminated in connection with a change in control in order to receive severance benefits. Additional details about the specific agreements can be found under “Arrangements with Named Executive Officers – Change-in-Control Agreements” on page
Corning is a diversified technology company with five reportable business segments. The majority of our businesses do not have U.S. public company peers. Most of our businesses compete with non-U.S. companies in Asia and Europe, or privately-held companies that do not provide comparable executive compensation disclosure. In attempting to identify peer companies for compensation purposes, Corning must look to globally diversified companies or innovation companies in other industries to find organizations of similar size and complexity (when viewed in terms of revenues, net income, market capitalization, assets and number of employees). For these reasons, our peer group for compensation purposes does not closely resemble the companies with which we compete for business.
Compensation Discussion & Analysis We currently participate in and use several executive compensation surveys for NEO positions. Primary surveys are the Willis Towers Watson General Industry Executive Compensation Survey, the Equilar
The Compensation Peer Group in
The Company selects a fair and challenging Compensation Peer Group as a reference point when setting its executive compensation. The Company’s percentage ranking (using Core performance measures, where applicable) versus the Compensation Peer Group is near to or well-above the median in virtually all measured categories. PERCENT RANK, CORNING VERSUS COMPENSATION PEER GROUP
Corning uses the Compensation Peer Group solely as a reference point, in combination with broader executive compensation surveys, to assess each NEO’s target total direct compensation (i.e., salary, target bonus, and the grant date fair value of long-term incentives). Our goal is to position our CEO’s target total direct compensation within a competitive range of the Compensation Peer Group median. Median target total direct CEO compensation in the Compensation Peer Group was determined to be Compensation Program – Other Governance Matters Role of Compensation Consultant The Compensation Committee has the authority to retain and terminate a compensation consultant, and to approve the consultant’s fees and all other terms of such engagement. Since 2014, the Committee has retained an executive compensation expert from Frederic W. Cook & Co., Inc. (FW Cook) as its independent consultant. In
Compensation Discussion & Analysis In The Committee conducted an independence review of FW Cook, CAP and WTW pursuant to SEC and NYSE rules, and concluded that the work of each firm for the Committee did not raise any conflicts of interest concerns. FW Cook provides no services to Corning other than the services rendered to the Committee.
Role of Executive Management in the Executive Compensation Process Corning’s The CEO may propose adjustments he deems appropriate before management’s recommendations are submitted to the Committee. Recommendations for the CEO’s compensation are prepared by the Committee’s independent compensation consultant (FW Cook) and are not discussed or reviewed with the CEO prior to the Committee’s review and the CEO is not present for discussion of his compensation by the Committee. The Committee recommends the CEO’s compensation to the Board annually. After the annual budget is finalized each year, the Committee receives management’s recommendations for the compensation plan performance metrics and sets the final targets for the year. The CFO and the Controller typically Clawback Policy Our clawback policy gives the Committee the sole and absolute discretion to make retroactive adjustments to any cash or equity-based incentive compensation paid to executive officers and other key employees if such payment was based upon the achievement of financial results that were subsequently the subject of a restatement. The Committee has discretion to seek recovery of any amount that it determines was received inappropriately by such individuals. Anti-Hedging Policy Our anti-hedging policy prohibits employees and directors from selling or buying publicly traded options on Corning stock, or trading in any Corning stock derivatives. Additionally, these individuals may not engage in transactions in which they may profit from short-term speculative swings in the value of Corning stock utilizing “short sales” or “put” or “call” options. Anti-Pledging Policy Our anti-pledging policy prohibits employees and directors from holding Corning stock in a margin account or pledging Company securities as collateral for a loan.
Accounting Implications In designing our compensation and benefit programs, we review the accounting implications of our decisions. We seek to deliver cost-effective compensation and benefit programs that meet both the needs of the Company and our employees.
Compensation Discussion & Analysis The Compensation Committee of the Board of Directors (the Committee), which is composed entirely of independent directors, is responsible to the Board of Directors and our shareholders for the oversight and administration of executive compensation at Corning. The Committee approves the principles guiding the Company’s compensation philosophy, reviews and approves executive compensation levels (including cash compensation, equity incentives, benefits and perquisites for officers) and reports its actions to the Board of Directors for review and, as necessary, approval. The Committee is responsible for interpreting Corning’s executive compensation plans and programs. In the event of any questions or disputes, the Committee may use its judgment and/or discretion to make final administrative decisions regarding these plans and programs. It is our practice that all compensation decisions affecting a corporate officer must be reviewed and approved by the Committee. Additional details regarding the role and responsibilities of the Committee are defined in the Committee Charter, located in the Corporate Governance section of the Company’s website. The Committee has reviewed and discussed the foregoing CD&A with management. Based on our review and discussions with management, we recommended to the Board of Directors that the CD&A be included in this proxy statement and in our Annual Report on Form 10-K for the year ended December 31, The Compensation Committee: Deborah D. Rieman,Chair
Compensation Discussion & Analysis
This table describes the total compensation paid to our NEOs for fiscal years
Despite ongoing pandemic-related business challenges, the Company performed very well during the second half of 2020, reflecting excellent team-based management, planning and execution. Year-over-year comparisons of executive total pay are complicated given the shareholder-recommended changes to the LTI Program resulting in an increase in the equity portion (from 40% to 75%) and corresponding decrease in the cash performance component (from 60% to 25%) as well as the increase in performance related LTI (from 60% of the total target to 70% of the total target) along with SSSO actions. For example, PSUs are disclosed at target value in the year of the grant, whereas CPUs are not disclosed until the payout factors are known, at which time the actual payout amount is shown. This makes year-over-year comparisons in the Summary Compensation Table below difficult. As a result, the Stock Awards column (d) reflects 100% of the new PSU design starting in 2020 while the Non-Equity Incentive Plan Compensation There was no increase to Mr. Weeks’ target pay in
Compensation Discussion & Analysis
In addition to the
CPUs represented 60% of the total LTI target opportunity in 2019 and 2018 but only 25% of the total LTI target opportunity in 2020 due to the change in LTI design starting in 2020.
Compensation Discussion & Analysis
Compensation Discussion & Analysis
Compensation Discussion & Analysis
Compensation Discussion & Analysis
Compensation Discussion & Analysis
Compensation Discussion & Analysis Outstanding Equity Awards at The following table shows stock option awards classified as exercisable and unexercisable as of December 31,
Compensation Discussion & Analysis
Compensation Discussion & Analysis
Options Exercised and Shares Vested in The following table sets forth certain information regarding options exercised and restricted stock and restricted stock units that vested during
Qualified Pension Plan Corning maintains a qualified defined benefit pension plan to provide retirement income to Corning’s U.S.-based employees which was amended effective July 1, 2000, to include a cash balance component. All salaried and non-union hourly employees as of July 1, 2000, were given a choice to prospectively accrue benefits under the previously existing career average earnings formula or a cash balance formula, if so elected. Employees hired subsequent to July 1, 2000, earn benefits solely under the cash balance formula. Benefits earned under the career average earnings formula are equal to 1.5% of plan compensation plus 0.5% of plan compensation on which employee contributions have been made. Under the career average earnings formula, participants may retire as early as age 55 with 5 years of service. Unreduced benefits are available when a participant attains the earlier of age 60 with 5 years of service or age 55 with 30 years of service. Otherwise, benefits are reduced 4% for each year by which retirement precedes the attainment of age 60. Pension benefits earned under the career average earnings formula are distributed in the form of a lifetime annuity with six years of payments guaranteed. Benefits earned under the cash balance formula are expressed in the form of a hypothetical account balance. Each month a participant’s cash balance account is increased by (1) pay credits based on the participant’s plan compensation for that month and (2) interest credits based on the participant’s hypothetical account balance at the end of the prior month. Pay credits vary between 3% and 8% based on the participant’s age plus service at the end of the year. Interest credits are based on 10-year Treasury bond yields, subject to a minimum credit of 3.80%. Pension benefits under the cash balance formula may be distributed as either a lump sum of the participant’s hypothetical account balance or an actuarial equivalent life annuity. Messrs. Weeks, Clappin, McRae and
Compensation Discussion & Analysis Supplemental Pension Plan and Executive Supplemental Pension Plan Since 1986, Corning has maintained non-qualified pension plans to attract and retain its executive workforce by providing eligible employees with retirement benefits in excess of those permitted under the qualified plans. The benefits provided under the Supplemental Pension Plan (SPP) are equal to the difference between the benefits provided under the Corning Incorporated Pension Plan and benefits that would have been provided thereunder if not for the limitations of the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended (the Code). Each NEO participates in the Corning Incorporated Executive Supplemental Pension Plan (ESPP). Participants in the ESPP receive no benefits from the SPP, other than earned SPP benefits under the cash balance formula prior to their participation in the ESPP, if any. Executives fully vest in their ESPP benefit upon attainment of age 50 with 10 years of service. All NEOs are fully vested in the ESPP.
Under the ESPP, participants earn benefits based on the highest 60 consecutive months of average plan compensation over the last 120 months immediately preceding the date of termination of employment. A change in the benefits provided under the ESPP formula was approved in December 2006. Following the change, gross benefits determined under this plan are equal to one of two benefit formulas: Formula A: 2.0% of average plan compensation multiplied by years of service up to 25 years. Formula B: 1.5% of average plan compensation multiplied by years of service. Benefits are determined under Formula A for all Benefits earned under the Corning Incorporated Pension Plan and the cash balance formula of the SPP prior to ESPP participation, if any, will offset benefits earned under the ESPP. Participants may retire as early as age 55 with 10 years of service. Unreduced benefits under Formulas A and B are available when a participant attains the earlier of age 60 with 10 years of service or age 55 with 25 years of Benefits earned under the ESPP are distributed in the form of a lifetime annuity, with six years of payments guaranteed except for benefits earned under the cash balance formula of the SPP prior to becoming a participant in the ESPP, which is distributed as a lump sum of the participant’s credited balance. All NEOs are currently eligible to retire under the ESPP. Pension Benefits The table below shows the actuarial present value of accumulated benefits payable to each of the NEOs, including the number of years of service credited to each such NEO, under the qualified pension plan and the ESPP. These amounts were determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements with the exception of the assumed retirement age and the assumed probabilities of leaving employment prior to retirement. Retirement was assumed to occur at the earliest possible unreduced retirement age for each plan in which the executive participates. For purposes of determining the earliest unreduced retirement age, service was assumed to be granted until the actual date of retirement. For example, an executive under the ESPP formula who is age 50 with 20 years of service would be assumed to retire at age 55 due to eligibility of unreduced benefits at 25 years of
Compensation Discussion & Analysis
The compensation considered for purposes of determining benefits under the qualified pension plan and the ESPP for the NEOs is the “Salary” plus the GoalSharing and PIP cash bonuses set forth in the Summary Compensation Table. Bonuses are included as compensation in the calendar year paid. Long-term cash or equity incentives are not (and have never been) considered as eligible earnings for determining retirement benefits under these plans. For the
Non-qualified Deferred Compensation The table below shows the contributions, earnings and account balances for the NEOs in the Supplemental Investment Plan. Pursuant to the Company’s Supplemental Investment Plan, the NEOs may choose to defer up to 75% of annual base salary and up to 75% of GoalSharing and PIP cash bonuses. The participant chooses from the same funds available under our Company Investment Plan (401(k)) in which to “invest” the deferred amounts. No cash is actually invested in the unfunded accounts under the Supplemental Investment Plan. Deferred amounts incur gains and losses based on the performance of the individual participant’s investment fund selections. Participants may change their elections among these fund options. Corning does not have any above market earnings under its Supplemental Investment Plan. All of our current NEOs have more than three years of service with the Company, so all of the Company’s matching contributions are fully vested. Participants cannot withdraw any amounts from their deferred compensation balances until retirement from the Company at or after age 55 with 5 years of service. Participants may elect to receive distributions as a lump sum payment or two to five annual installments. If an NEO leaves the Company prior to retirement, the account balance is distributed in a lump sum six months following the executive’s departure.
Compensation Discussion & Analysis
No NEO withdrawals or distributions were made in 2020.
Arrangements with Named Executive Officers Severance Agreements We have entered into severance agreements with each of our NEOs. All new executive severance agreements and executive change-in-control agreements entered into after July 2004, limit the benefits that may be provided to an executive to 2.99 times the executive’s annual compensation of base salary plus target incentive payments. Messrs. Weeks, Clappin, Severance Agreements—Mr. Weeks Under Mr. Weeks’ severance agreement, if he is terminated involuntarily, and without cause, or as a result of disability, he is entitled to the following:
If however, Mr. Weeks is terminated for cause or he resigns, he would (1) be entitled to accrued, but unpaid salary (lump sum payment) and any reimbursable expenses accrued or owing to him and, if terminated for cause, (2) forfeit any outstanding stock awards.
Compensation Discussion & Analysis Severance Agreements—Other Named Executive Officers Under the severance agreements, an NEO is entitled to severance payments if he is terminated involuntarily other than for cause. Generally, under the severance agreements, an NEO (other than Mr. Weeks) is entitled to receive the following:
The following table reflects the amounts that would be payable under the various arrangements assuming termination occurred at December 31,
TERMINATION SCENARIOS (INCLUDING SEVERANCE, IF ELIGIBLE)
Compensation Discussion & Analysis
Change-in-Control Agreements We have entered into change-in-control agreements with each of the NEOs. These agreements are intended to provide for continuity of management if there is a change in control of the Company. These agreements will be effective until the executive leaves the employ of Corning or until the executive ceases to be an officer of Corning. If during the term of the agreement a change in control occurs, the restrictions on all restricted stock and restricted stock units held by the NEO lapse, and any stock options vest and become immediately exercisable. The NEOs are also entitled to severance and other benefits upon certain terminations of employment following or in connection with a change in control.
The benefits payable are as follows:
If the employment of an NEO (other than Mr. Weeks) is terminated for cause or he resigns for other than good reason, or the NEO’s employment terminates by reason of death or disability, the NEO is entitled to accrued but unpaid base salary, reimbursable expenses, vacation pay and the executive’s target percentage for the annual bonus plans multiplied by the executive’s salary, pro-rated to the last day of the month closest to the termination date (lump sum payment). In addition, each NEO except Mr. Tripeny
Compensation Discussion & Analysis The following table reflects the amounts that would be payable under the various arrangements assuming that a change in control occurred on December 31,
In addition to the above, the NEOs may also request that Corning purchase their principal residence. Corning is unable to accurately and precisely estimate the value as it requires an independent appraisal of the executive’s residence and, for all, a calculation of the executive’s purchase price of such residence and any documented improvements made to the property. This is data that Corning does not maintain in its normal course of business. See footnote (3) to the “Termination Scenarios” on page
For This reflects analysis of our global workforce of Our estimates were based on an analysis of the pay components and payrolls in each of the The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Ratification of Appointment of Independent Registered The Audit Committee The Audit Committee and the PCAOB require key PwC partners assigned to our audit to be rotated at least every five years. The Audit Committee and its Chair oversee the selection process for each new lead engagement partner. Throughout this process, the Audit Committee and management provide input to PwC about the Company’s priorities, discuss candidate qualifications and interview potential candidates put forth by In determining whether to reappoint PwC, the Audit Committee took into consideration a number of factors, including:
Proposal 3Ratification of Appointment of Independent Registered Public Accounting Firm Based on its evaluation, the Audit Committee believes that the continued retention of PwC is in the best interests of the Company and its shareholders. The Board concurs and requests that the shareholders ratify the appointment of PwC as Corning’s independent registered public accounting firm for the fiscal year ending December 31, Corning expects representatives of PwC to be present at the Annual Meeting and available to respond to questions that may be raised there. These representatives may comment on the financial statements if they so desire.
Fees Paid to Independent Registered Public Accounting Firm Aggregate fees for professional services rendered by PwC in
Audit Fees.These fees are composed of professional services rendered in connection with the annual audit of Corning’s consolidated financial statements, including the audit of the effectiveness of internal control over financial reporting, and reviews of Corning’s quarterly consolidated financial statements on Form 10-Q that are customary under the PCAOB auditing Audit-Related Fees.These fees are composed of professional services rendered in connection with Tax Fees.These fees are composed of statutory tax compliance, assistance for Corning’s foreign jurisdiction subsidiaries’ tax returns, tax transfer pricing services, expatriate tax return compliance and other tax All Other Fees.
Proposal 3Ratification of Appointment of Independent Registered Public Accounting Firm Policy Regarding Audit Committee Pre-Approval of Audit and Permitted Non-Audit Services of Independent Registered Public Accounting Firm The Audit Committee has adopted a policy for pre-approval of audit and permitted non-audit services by Corning’s independent registered public accounting firm. The full Audit Committee approves annually projected services and fee estimates for these services and other major types of services. The Audit Committee The purpose of the Audit Committee is to assist the Board of Directors in its general oversight of Corning’s financial reporting, internal controls and audit functions. The Audit Committee operates under a written charter adopted by the Board of Directors. The directors who serve on the Audit Committee have no financial or personal ties to Corning (other than director compensation and equity ownership as described in this proxy statement) and are all “financially literate” and “independent” for purposes of the New York Stock Exchange listing standards. The Board of Directors has determined that none of the Audit Committee members has a relationship with Corning that may interfere with the members’ independence from Corning and its management. The Audit Committee met with management periodically during the year to consider the adequacy of Corning’s internal controls and the objectivity of its financial reporting. The Audit Committee discussed these matters with Corning’s independent registered public accounting firm and with the appropriate financial personnel and internal auditors. The Audit Committee also discussed with Corning’s senior management and independent registered public accounting firm the process used for certifications by Corning’s chief executive officer and chief financial officer that are required for certain of Corning’s filings with the SEC. The Audit Committee met privately with both the independent registered public accounting firm and the internal auditors, both of whom have unrestricted access to the Audit Committee. The Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. Management is responsible for: the preparation, presentation and integrity of Corning’s financial statements; accounting and financial reporting principles; establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)); establishing and maintaining internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)); evaluating the effectiveness of disclosure controls and procedures; evaluating the effectiveness of internal control over financial reporting; and evaluating any change that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting. The independent registered public accounting firm is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States, as well as expressing an opinion on the effectiveness of internal control over financial reporting. During the course of
also reviewed: the report of management contained in Corning’s Annual Report on Form 10-K
Proposal 3 Ratification of Appointment of Independent Registered Public Accounting Firm for the year ended December 31, The Audit Committee has discussed with the independent registered public accounting firm the matters required by the applicable requirements of the Public Company Accounting Oversight Based on these reviews and discussions, the Audit Committee recommended to the Board of Directors and the Board of Directors approved that the audited financial statements be included in Corning’s Annual Report on Form 10-K for the year ended December 31, The Audit Committee: Kurt M. Landgraf,Chair Stephanie A. Burns
Approval of 2021 Long-Term Incentive Plan Overview. The Corning In February 2021, the Board The new 2021 Plan replaces the 2012 Long-Term Incentive Plan (the “2012 Plan”) which expires by its terms in May 2022. Other than certain executive grants in an amount estimated to be no more than 3,000,000 shares (assuming a share price greater than $30.00) expected to be made in April 2021, no additional grants will be made under the 2012 Plan after March 1, 2021, the record date of
Rationale for Recommendation by Board of Directors
Proposal 4Approval of
While equity-based awards and incentives are an important part of Corning’s total compensation program, we are mindful of our responsibility to shareholders to exercise judgment in granting equity-based awards. Shareholders should take into account the following considerations with respect to the 2021 Plan: Approval of the 2021 Plan will
Summary of the Material Features of the 2021 Plan. The description of the material features of the 2021 Plan contained in this section is qualified in its entirety by reference to the actual text of the 2021 Plan, a Committee. The 2021 Plan will be administered by the Committee,
Eligibility. The Committee will select the individuals who are eligible to participate in the 2021 Plan. These individuals may include employees (including officers and
Proposal 4Approval of
Stock. Under the 2021 Plan, the maximum number of shares of Corning’s Common Stock that may be granted to eligible participants is 38,000,000. Any remaining unused Shares under the 2012 Plan will be canceled and will not be available for grant under the 2021 Plan. As of March 1, 2021, the record date of the Annual Meeting, the closing price of a share of Corning’s Common Stock on the NYSE was $39.47. At any given time, the number of shares remaining available for issuance under the 2021 Plan will be reduced by the number of shares subject to outstanding awards and, for awards that are not denominated in shares, by the number of shares actually delivered in settlement of the award. When determining the number of shares that remain available for issuance under the 2021 Plan, the following will not be added back to the shares available for issuance:
Shares granted under the 2021 Plan that are forfeited or cancelled or otherwise expire for any reason without having been exercised or settled, or that are settled through issuance of consideration other than shares (including cash), will be available for issuance under the 2021 Plan. Neither (i) shares issued or options granted to settle, assume or substitute outstanding awards or obligations to grant future awards as a condition to the purchase, merger or consolidation of another entity by Corning nor (ii) shares unallocated and available for grant under a stock plan of another entity acquired by Corning, based on the applicable exchange ratio, will reduce the number of shares available for issuance. Shares of Corning’s Common Stock which are granted under the 2021 Plan may be authorized but unissued shares, treasury shares, shares acquired by the Company on the open market or in private transactions, or a combination of these. The The 2021 Plan provides for appropriate adjustments in the aggregate number of shares and in the number of shares and the price per share, or either, of outstanding options in the case of changes in the capital stock of Corning resulting from any corporate event or distribution of stock or property in order to preserve, but not increase, the value of awards available under the 2021 Plan. The 2021 Plan also provides that, Grant of Stock Options and Stock Appreciation Rights. Under the 2021 Plan, the Committee may grant to eligible employees either non-qualified or “incentive” stock options, or both, to purchase shares of Corning’s Common Stock at not less than 100% of fair market value on the date of grant. No stock option may be outstanding for more than ten years. The Committee may
Proposal 4 Approval of 2021 Long-Term Incentive Plan The The 2021 Plan permits the granting of stock appreciation rights which permit a grantee to receive an amount equal to the difference between the fair market value on the date of grant and the market price of Corning’s Common Stock on the date the stock appreciation right is exercised, payable in cash or shares. No stock appreciation right may be outstanding for more than 10 years. Grant of Shares, Share Units, Cash Units and Cash Awards. Under the 2021 Plan, the Committee may award to eligible participants shares, the right to receive shares of Corning’s Common Stock, or the right to receive cash payments. The Committee determines the number of shares or amount of cash awarded to individual participants and the number of rights covering shares to be issued. The Committee determines the conditions, restrictions and contingencies placed upon the grant of shares or cash, except that no Registration. Corning intends to file with the SEC a registration statement on Form S-8 covering the shares of Corning’s Common Stock issuable under the Amendment, Administration and Termination. The 2021 Plan expires April 30, 2031 and no awards may be granted after that date. The Board of Directors is authorized to terminate or amend the 2021 Plan, except that no such termination or amendment is effective without the approval of shareholders, if such approval is required. Additional Award Information. Awards under the 2021 Plan will be made at the discretion of the Committee and accordingly are
Summary of Federal Income Tax Consequences of Awards. The following is a brief summary of certain U.S. federal income tax consequences of awards that may be granted under the 2021 Plan based upon the federal income tax laws in effect on the date hereof. This summary is not intended to be exhaustive and, among other things, does not describe local, state or foreign tax consequences:
Proposal 4 Approval of 2021 Long-Term Incentive Plan Stock Options and Stock Appreciation Rights. No income will be recognized by a grantee at the time either a non-qualified option, an Incentive Stock Option or a stock appreciation right is granted. A grantee who exercises a non-qualified option or a stock appreciation right will recognize compensation taxable as ordinary income (subject, in the case of employees, to withholding) in an amount equal to the difference between the exercise price and the fair market value of the shares on the date of exercise, and Corning or the subsidiary employing the grantee will be entitled to a deduction from income in the same amount. The grantee’s basis in such shares will be increased by the amount taxable as compensation, and the grantee’s capital gain or loss when the shares are sold will be calculated using such increased basis. The capital gain or loss on disposition of the shares will be either long-term or short-term depending on the holding period of the shares. If all applicable requirements of Section 422 of the Code are met with respect to Incentive Stock Options, including the requirement that the stock be held for more than two years from the date of grant of the option and more than one year from the date of exercise, no income to the optionee will be recognized at the time of exercise of an Incentive Stock Option. The excess of the fair market value of the shares at the time of exercise over the amount paid is an item of tax preference, which may be subject to the alternative minimum tax. In general, if an Incentive Stock Option is exercised after three months of termination of employment, or if the shares are sold within one year of the date of exercise or two years from the date of grant, the optionee will recognize ordinary income in an amount equal to the difference between the exercise price and the lesser of the fair market value of the shares on the date of exercise or the sale price. Any excess of the sale price over the fair market value on the date of exercise will be taxed as a capital gain. Corning will be entitled to a tax deduction only if its employee recognizes ordinary income and only in the amount of income the employee recognizes. Restricted Shares, Performance Stock, Restricted Share Units and Performance Stock Units. Shares of Common Stock awarded to an employee which are not subject to restrictions and the possibility of forfeiture will be taxed as ordinary income, subject to withholding, at the time of the transfer of the shares to the participant. The value of such awards will be deductible by Corning or by the subsidiary employing the employee at the same time and in the same amount. Shares subject to restrictions and the possibility of forfeiture (i.e., restricted shares and performance stock) will not be subject to tax nor will such grant result in a tax deduction for Corning at the time of award. However, when such shares become free of restrictions and the possibility of forfeiture, the fair market value of such shares at that time will be treated as ordinary income to the employee and will be deductible by Corning or by the subsidiary employing the employee. Alternatively, an employee receiving shares subject to restrictions and the possibility of forfeiture may elect to include in his or her gross income, for the taxable year in which such shares are transferred to him or her, the fair market value of such shares at that time; in such case, he or she need not include any amount in gross income at the time the shares become free of restrictions and the possibility of forfeiture. However, an employee making such an election will not be allowed a deduction if the shares are subsequently forfeited. The employee will have a tax basis for the shares equal to their fair market value at the time they are included in gross income and will realize long-term or short-term capital gain on disposition of the shares depending upon the holding period of the shares, which will commence at the time the employee is deemed to be in receipt of ordinary income with respect to such shares. Restricted share units and performance stock units awarded to an employee will be taxed as ordinary income, subject to withholding, at the time of the units are settled or paid to the participant. The value of such awards will be deductible by Corning or by the subsidiary employing the employee at the same time and in the same amount. Other Awards. With respect to other awards, including other equity-based awards and cash-based awards, generally when the participant receives payment with respect to an award, the amount of cash and/or the fair market value of any shares or other property received will be taxed as ordinary income to the participant, and the value of such awards will be deductible by Corning or by the subsidiary employing the employee at the same time and in the same amount. Certain awards under the 2021 Plan may be subject to the requirements applicable to nonqualified deferred compensation under Section 409A of the Code. Although Corning intends that awards will satisfy those requirements, if they do not, employees may be subject to additional income taxes and interest under Section 409A of the Code.
Proposal 4 Approval of 2021 Long-Term Incentive Plan Equity Compensation Plan Information The following table shows the total number of outstanding options and shares available for other future issuances of options under all of our existing equity compensation plans, including
Dilution Calculation While we believe that burn rate, adjusted to take into account share repurchases, is the best measure of the dilutive effect of annual equity compensation, for completeness, below is a summary of the potential dilution associated with the 2021 Plan, as of March 1, 2021.
Frequently Asked Why Did You Send Me This Proxy Statement? We sent this proxy statement and the enclosed proxy card to you because our Board of Directors is soliciting your proxy to vote at the Annual Meeting. This proxy statement summarizes information concerning the matters to be presented at the meeting and related information that will help you make an informed vote. This proxy statement and the accompanying proxy card are first being distributed or made available to shareholders on or about March When and Where is the Annual Meeting? Due to the ongoing public-health crisis caused by the COVID-19 pandemic and recommendations from federal and New York State authorities, our Board of Directors has determined to hold the Annual Meeting in a virtual-only format on Thursday, April 29, 2021 at 12 noon Eastern Time at virtualshareholdermeeting.com/GLW2021. You will not be able to attend the Annual Meeting physically. You are entitled to participate in the Annual Meeting if you were a shareholder as of the close of business on March 1, 2021. The live audio webcast of the Annual Meeting will We urge you to vote and submit your proxy in advance of the meeting using one of the methods described in the proxy materials whether or not you plan to attend the Annual Meeting. You may vote your shares at Who May Attend the Annual Meeting? The Annual Meeting is open to holders of our common shares who held such shares as of the meeting’s record date, March
Frequently Asked Questions About the Meeting and Voting What Am I Voting On? The following matters are scheduled for vote at the Annual Meeting:
How Do You Recommend That I Vote on These Items? The Board of Directors recommends that you vote your shares:
Who is Entitled to Vote? You may vote if you owned our common shares as of the close of business on March How Many Votes Do I Have? You are entitled to one vote for each common share you own. As of the close of business on March How Do I Vote By Proxy Before the Annual Meeting? Before the meeting, registered shareholders may vote shares in one of the following three ways:
Please refer to the proxy card for further instructions on voting by Internet or telephone. Please use onlyone of the three ways to vote. If you hold shares in the account of or name of a broker, your ability to vote those shares by Internet and telephone depends on the voting procedures used by your broker, as explained below under “How Do I Vote If My Broker Holds My Shares In “Street Name”?”
Frequently Asked Questions About the Meeting and Voting May I Vote My Shares Yes. You may vote your shares
May I Change My Mind After I Vote? Yes. You may change your vote or revoke your proxy at any time before the polls close at the meeting. You may change your vote by:
You also may revoke your proxy prior to the meeting without submitting any new vote by sending a written notice that you are withdrawing your vote to our Corporate Secretary at the address listed above. What Shares Are Included on My Proxy Card? Your proxy card includes shares held in your own name and shares held in any Corning plan. You may vote these shares by Internet, telephone or mail, as described on your proxy card, voting instruction form or the How Do I Vote if I Participate in the Corning Investment Plan? If you hold shares in the Corning Investment Plan, which includes shares held in the Corning Stock Fund in the Company’s 401(k) plan, these shares have been added to your other holdings on your proxy card. Your completed proxy card serves as voting instructions to the trustee of the plan. You may direct the trustee to vote your plan shares by submitting your proxy vote for those shares, along with the rest of your shares, by Internet, telephone or mail, all as described on your proxy card, voting instruction form or the How Do I Vote if My Broker Holds My Shares in “Street Name”? If your shares are held in a brokerage account in the name of your bank or broker (this is called “street name”), those shares are not included in the total number of shares listed as owned by you on the enclosed proxy card. Instead, your bank or broker will send you directions on how to vote those shares. Will My Shares Held in Street Name be Voted if I Do Not Provide My Proxy? Under the New York Stock Exchange rules, if you own shares in “street name” through a broker and do not vote, your broker may not vote your shares on proposals determined to be “non-routine.” In such cases, the absence of voting instructions results in a “broker non-vote.” Broker non-voted shares count toward achieving a quorum requirement for the Annual Meeting, but they do not affect the determination of whether the non-routine matter is approved or rejected. The proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm is the only matter in this proxy statement considered to be a routine matter for which brokers will be permitted to vote on behalf of their clients, if no voting instructions are furnished. Since Proposals 1, 2 and 4 are non-routine matters, broker non-voted shares will not count as votes cast to affect the determination of whether those proposals are approved or rejected. Therefore, it is important that you provide voting instructions to your broker.
Frequently Asked Questions About the Meeting and Voting What if I Return My Proxy Card or Vote by Internet or Telephone but Do Not Specify How I Want to Vote? If you sign and return your proxy card or complete the Internet or telephone voting procedures, but do not specify how you want to vote your shares, we will vote them as follows:
If you participate in the Corning Investment Plan and do not submit timely voting instructions, the trustee of the plan will vote the shares in your plan account in the same proportion that it votes shares in other plan accounts for which it did receive timely voting instructions, as explained above under the question “How Do I Vote If I Participate In The Corning Investment Plan?” What Does it Mean if I Receive More Than One Proxy Card? If you received more than one proxy card, you have multiple accounts with your brokers or our transfer agent. Please vote all of these shares. We recommend that you contact your broker or our transfer agent to consolidate as many accounts as possible under the same name and address. If you are registered holder, you may contact our transfer agent, Computershare Trust Company, N.A., at 1-(800)-255-0461. May Shareholders Ask Questions at the Virtual Annual Meeting? Yes. How Many Shares Must be Present to Hold the Meeting? In order for us to conduct our meeting, a majority of our outstanding common shares as of March
Frequently Asked Questions About the Meeting and Voting What is the Vote Required for Each Proposal?
With respect to Proposals 1, 2, 3 and 4 you may vote “FOR”, “AGAINST” or “ABSTAIN”. If you “ABSTAIN” from voting on any of these Proposals, the abstention will not constitute a vote cast. How Will Voting on “Any Other Business” be Conducted? We have not received proper notice of, and are not aware of, any business to be transacted at the meeting other than as indicated in this proxy statement. If any other item or proposal properly comes before the meeting, the proxies received will be voted on those matters in accordance with the discretion of the proxy holders. Who Pays for the Solicitation of Proxies? Our Board of Directors is making this solicitation of proxies on behalf of the Company. The Company will pay the costs of the solicitation, including the costs for preparing, printing and mailing this proxy statement. We have hired Innisfree M&A Incorporated to assist us in soliciting proxies. It may do so by telephone, in person or by other electronic communications. We anticipate paying Innisfree a fee of $25,000 plus expenses for these services. We also will reimburse brokers, nominees and fiduciaries for their costs in sending proxies and proxy materials to our shareholders so that you may vote your shares. Our directors, officers and regular employees may supplement Innisfree’s proxy solicitation efforts by contacting you by telephone or electronic communication or in person. We will not pay directors, officers or other regular employees any additional compensation for their proxy solicitation efforts. How Can I Find the Voting Results of the Annual Meeting? Following the conclusion of the Annual Meeting, we will include the voting results in a Form 8-K, which we expect to file with the
How Do I Submit a Shareholder Proposal For, or Nominate a Director For Election at, Next Year’s Annual Meeting? Proposals for Inclusion in Next Year’s Proxy Statement SEC rules permit shareholders to submit proposals for inclusion in our proxy statement if the shareholder and the proposal meet the requirements specified in SEC Rule 14a-8. When to send these proposals:Any shareholder proposals submitted in accordance with SEC Rule 14a-8 must be received at our principal executive offices no later than the close of business on November
Frequently Asked Questions About the Meeting and Voting Where to send these proposals:Proposals should be addressed to Corporate Secretary, Corning Incorporated, One Riverfront Plaza, Corning, New York 14831. What to include:Proposals must conform to and include the information required by SEC Rule 14a-8. Director Nominees for Inclusion in Next Year’s Proxy Statement Our by-laws permit a group of shareholders (up to 20) who have owned at least 3% of Corning’s common stock for at least 3 years to submit director nominees for the greater of two directors or 20% of our Board. These director nominees will be included in our proxy statement if the shareholder(s) and the nominee(s) satisfy the requirements specified in our by-laws. When to send these notices of director nominees:Notices of director nominees submitted under these by-law provisions must be received no earlier than October Where to send these notices of director nominees:Notices should be addressed to Corporate Secretary, Corning Incorporated, One Riverfront Plaza, Corning, New York 14831. What to include:Notices must include the information required by our by-laws, which are available on Corning’s website. Other Proposals or Nominees for Presentation at Next Year’s Annual Meeting Our by-laws require that any shareholder proposal, including director nominations, that is not submitted for inclusion in next year’s proxy statement (either under SEC Rule 14a-8 or our proxy access by-laws), but is instead sought to be presented directly at the When to send these proposals:Shareholder proposals, including director nominations, submitted under these by-law provisions must be received no earlier than Where to send these proposals:Proposals should be addressed to Corporate Secretary, Corning Incorporated, One Riverfront Plaza, Corning, New York 14831. What to include:Proposals must include the information required by our by-laws, which are available on Corning’s website. Why Haven’t I Received a Printed Copy of the Proxy Statement or Annual We are furnishing proxy materials to you online, as permitted by SEC rules, to expedite your receipt of materials while lowering costs and reducing the environmental impact of printing and mailing full sets of annual meeting materials. If you received by mail a notice of the electronic availability of these materials, you will not receive a printed copy unless you specifically request it. Such notice contains instructions on how to request a paper copy of the materials.
Is the Proxy Statement Available on the Internet? Yes. Most shareholders will receive the proxy statement and other annual meeting materials online. If you received a paper copy, you can also view these documents online by accessing our website atcorning.com/2021-proxy
Frequently Asked Questions About the Meeting and Voting Are You “Householding” For Shareholders Sharing the Same Address? Yes. The SEC’s rules regarding the delivery to shareholders of proxy statements, annual reports, prospectuses and information statements permit us to deliver a single copy of these documents to an address shared by two or more of our shareholders. This method of delivery is referred to as “householding,” and can significantly reduce our printing and mailing costs. It also reduces the volume of mail you receive. This year, we are delivering only one proxy statement and Our Board of Directors has adopted the Code of Ethics for the Chief Executive Officer and Financial Executives and the Code of Conduct for Directors and Executive Officers, which supplements the Code of Conduct governing all employees and directors. A copy of the Code of Ethics is available on our website atinvestor.corning.com/investor-relations/governance/overview/default.aspx. We will disclose any amendments to, or waivers from, the Code of Ethics on our website within four business days of such determination. During The Compensation Committee Report on page This proxy statement, our
Corning Incorporated and Subsidiary Companies
CORNING INCORPORATED AND SUBSIDIARY COMPANIES Year Ended December 31, (Unaudited; amounts in millions, except per share amounts)
See Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
Appendix A CORNING INCORPORATED AND SUBSIDIARY COMPANIES Year Ended December 31, (Unaudited; amounts in millions, except per share amounts)
See Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items. CORNING INCORPORATED AND SUBSIDIARY COMPANIES Year Ended December 31, 2018 (Unaudited; amounts in
See Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures, “Items which we exclude from GAAP measures to arrive at Core Performance measures” for the descriptions of the footnoted reconciling items.
Appendix A CORNING INCORPORATED AND SUBSIDIARY COMPANIES Three and Twelve Months Ended December 31, 2020 and 2019 (Unaudited; amounts in millions)
CORNING INCORPORATED AND SUBSIDIARY COMPANIES CORE PERFORMANCE MEASURES In managing the Company and assessing our financial performance, we adjust certain measures provided by our consolidated financial statements to exclude specific items to Core performance measures are not prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). We believe investors should consider these non-GAAP measures in evaluating our results as they are more indicative of our core operating performance and how management evaluates our operational results and trends. These measures are not, and should not be viewed as a substitute for, GAAP reporting measures. With respect to the Company’s outlook for future periods, it is not possible to provide reconciliations for these non-GAAP measures because the Company does not forecast the movement of Effective July 1, 2019, we replaced the term “Core Earnings” with “Core Net Income”. The terms are interchangeable and the underlying calculations remain the same. Items which we exclude from GAAP measures to arrive at core performance measures are as follows:
Constant-currency rates are as follows:
Appendix A
Corning Incorporated The purposes of the Plan are to (a) promote the long-term success of the Company and its Subsidiaries and to increase stockholder value by providing Eligible Individuals with incentives to contribute to the long-term growth and profitability of the Company and (b) assist the Company in attracting, retaining and motivating highly qualified individuals who are in a position to make significant contributions to the Company and its Subsidiaries. The Plan shall become effective on April 30, 2021, subject to its approval by the Company’s shareholders (the “Effective Date”). If the Plan is not approved by the Company’s shareholders, it shall be void ab initio and of no further force and effect. Upon the Effective Date and subject to shareholder approval of the Plan, no further Awards will be granted under the Prior Plan.
Appendix B “Change of Control” means an event set forth in any one of the following paragraphs shall have occurred: (a) any person (or any group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act) is or becomes the beneficial owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its Affiliates) representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities, excluding any person who becomes such a Beneficial Owner in connection with a transaction described in clause (I) of paragraph (iii) below; (b) the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who, on the Effective Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended; (c) there is consummated a merger or consolidation of the Company or any direct or indirect Subsidiary with any other corporation or other entity, other than (I) a merger or consolidation (A) which results in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary, more than fifty percent (50%) of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (B) immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger or consolidation is then a subsidiary, the ultimate parent thereof, or (II) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person is or becomes the beneficial owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its Affiliates) representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; or (d) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than (A) a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Company following the completion of such transaction in substantially the same proportions as their ownership of the Company immediately prior to such sale or (B) a sale or disposition of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof. Notwithstanding the foregoing, for each Award that constitutes deferred compensation under Section 409A of the Code, and to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, a Change of Control shall be deemed to have occurred under the Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code. “Code” means the Internal Revenue Code of 1986, as amended, and the applicable rulings, regulations and guidance promulgated thereunder as amended from time to time. “Committee” means the Compensation Committee of the Board, any successor committee thereto or any other committee appointed from time to time by the Board to administer the Plan, which committee shall meet the requirements of Section 16(b) of the Exchange Act, the applicable rules of NYSE and all other applicable rules and regulations (in each case as amended or superseded from time to time); provided, however, that, if any Committee member is found not to have met the qualification requirements of Section 16(b) of the Exchange Act, any actions taken or Awards granted by the Committee shall not be invalidated by such failure to so qualify. “Common Stock” means the common stock of the Company, par value $0.50 per share, or such other class of share or other securities as may be applicable under Section 14 of the Plan.
Appendix B “Company” means Corning Incorporated, a New York corporation, or any successor to all or substantially all of the Company’s business that adopts the Plan. “EBITDA” means earnings before interest, taxes, depreciation and amortization. “EBITA” means earnings before interest, taxes and amortization. “Eligible Individuals” means the individuals described in Section 4(a) of the Plan who are eligible for Awards under the Plan. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as amended from time to time. “Fair Market Value” means, with respect to a Share, the fair market value thereof as of the relevant date of determination, as determined in accordance with the valuation methodology approved by the Committee. In the absence of any alternative valuation methodology approved by the Committee, the Fair Market Value of a Share shall equal the closing selling price of a Share on the date on which such valuation is made as reported on the composite tape for securities listed on NYSE. “Incentive Stock Option” means an Option that is intended to comply with the requirements of Section 422 of the Code or any successor provision thereto. “Nonqualified Stock Option” means an Option that is not intended to comply with the requirements of Section 422 of the Code or any successor provision thereto. “NYSE” means the New York Stock Exchange. “Option” means an Incentive Stock Option or Nonqualified Stock Option granted pursuant to Section 7 of the Plan. “Other Award” means any form of Award (other than an Option, Stock Appreciation Right, share of Performance Stock, Performance Stock Unit, Cash Performance Unit, share of Restricted Stock, Restricted Stock Unit or Cash Award) granted pursuant to Section 11 of the Plan. “Participant” means an Eligible Individual who has been granted an Award under the Plan. “Performance Period” means the period established by the Committee and set forth in the applicable Award Document over which Performance Targets are measured. “Performance Stock” means a Target Amount of Shares (or a percentage thereof) granted pursuant to Section 10(a) of the Plan. “Performance Stock Unit” means a right to receive a Target Amount of Shares (or a percentage thereof) granted pursuant to Section 10(a) of the Plan. “Performance Target” means the performance criteria established by the Committee, which may include the performance criteria provided in Section 6(f) of the Plan, and set forth in the applicable Award Document. “Permitted Transferees” means (i) one or more trusts established in whole or in part for the benefit of one or more of a Participant’s family members and (iii) one or more entities which are beneficially owned in whole or in part by one or more of a Participant’s family members. “Plan” means this Corning Incorporated 2021 Long-Term Incentive Plan, as may be amended or restated from time to time. “Plan Limit” means the maximum aggregate number of Shares that may be issued for all purposes under the Plan as set forth in Section 5(a) of the Plan.
Appendix B
Appendix B
Appendix B
Appendix B
Appendix B
Appendix B
Appendix B
Appendix B
Appendix B
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Corning Incorporated One Riverfront Plaza U.S.A. www.corning.com
![]() CORNING INCORPORATED ATTN: LINDA E. JOLLY ONE RIVERFRONT PLAZA, HQ E2-10 CORNING, NY 14831
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on
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PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Lawrence D. McRae and Wendell P. Weeks and each of them, proxies with full power of substitution, to vote as designated on the reverse side, on behalf of the undersigned all shares of stock which the undersigned may be entitled to vote at the Meeting of Shareholders of Corning Incorporated on If you are a current or former employee of Corning Incorporated and own shares of Corning common stock through a Corning Incorporated benefit plan, share ownership as of March THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SPECIFICATIONS MADE. IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL LISTED NOMINEES AND IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS ON THE OTHER MATTERS REFERRED TO ON THE REVERSE SIDE HEREOF. |