UNITED STATES
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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CORNING INCORPORATED | ||
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CORNING
2024 Notice of Annual Meeting |
“We continue to make solid progress advancing our market leadership, strengthening our profitability, and improving our cash flow generation, even in a lower-demand environment. In 2024, we will build on our actions and initiatives while continuing to create life-changing innovations that make the world just a little bit better.”
Dear Fellow Shareholder,
Corning Incorporated will host its 2024 virtual Annual Meeting on May 2 at noon Eastern Time.
This meeting is your opportunity to hear about Corning’s 2023 accomplishments, performance, and innovations as well as our expectations for the future. During the meeting, shareholders will vote on the annual election of directors, the advisory approval of our executive compensation, and the ratification of Corning’s independent registered public accounting firm for 2024.
Longstanding shareholders know that life-changing innovation is our purpose and drives everything that we do. And the essence of what we do at Corning is invent, make, and sell innovations that make the world just a little bit better. We drive durable, multiyear growth by inventing category-defining products, developing scalable manufacturing platforms, and building strong, trust-based relationships with customers who are leaders in their industries.
At the start of 2023, we introduced plans to improve profitability and cash flow. Throughout the year, we took action to restore our productivity ratios to historical levels and raised prices to more appropriately share inflation with our customers. Our results demonstrate that we continue to make solid progress advancing market leadership, strengthening our profitability, and improving our cash flow generation even in the lower-demand environment that we are experiencing.
We entered 2024 operationally strong, and we remain confident that key industry growth drivers are intact. These include wireless, broadband, 5G, cloud computing, and artificial intelligence in Optical Communications, increased screen sizes in Display Technologies, tighter emission regulations that drive more and better filtration in Environmental Technologies, and the need for more advanced cover materials in Mobile Consumer Electronics. Therefore, we expect our markets to normalize in the midterm and return to growth. We are well-positioned to capture that growth with our strong market positions, established production capacity, and the necessary technical capabilities. This gives us the opportunity to deliver powerful incremental profit and cash to our shareholders.
Across our markets, we continue to move the world forward. I am proud that we continue to set the standard for durable, high-performance smartphone cover materials, such as Corning® Gorilla® Armor, which is featured on Samsung’s Galaxy S24 Ultra. I am proud that we continue to advance optical innovations in broadband, 5G, cloud computing, and artificial intelligence. And I am proud that we are advancing the driving experience by creating the next generation of automotive-interior displays; in fact, CES® named our LivingHinge™ Technology a 2024 “Best of Innovation Honoree” for enabling displays to dynamically bend.
We are committed to making the world a better place, not only with our innovations, but also with our actions. Corning strengthens the economy and enhances the quality of life in the communities where we live and work with investments that include support for libraries, daycare centers, schools, arts and cultural organizations, economic development initiatives, and infrastructure improvements. And for the second year in a row, Corning received a score of 100 on the Human Rights Campaign Foundation’s Corporate Equality Index.
In 2024, we will build on our progress while continuing our mission to create life-changing innovations. I am grateful to our shareholders for being on this journey with us, and I look forward to sharing more details at the Annual Meeting.
You’ll find the formal meeting notice and the proxy statement in the following pages. I encourage you to vote your proxy card by phone or online by May 1 so your shares will be represented at the meeting.
Thank you for your investment in Corning and your participation in our governance process.
Sincerely,
Wendell P. Weeks
Chairman of the Board and Chief Executive Officer
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Thursday, May 2, 2024 | ||||
virtualshareholdermeeting.com/ GLW2024 | ||||
How to Attend OurTable of Contents
Annual Meeting:
You are entitled to participate in the Annual Meeting if you were a shareholder as of the close of business on
To attend and 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
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Notice of 2021 AnnualMeeting of Shareholders
Thursday, April 29, 2021
12 noon Eastern Time
To be held virtually at: virtualshareholdermeeting.com/ GLW2021
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 firm for | |
4. | Any other business or action |
WHO CAN VOTE
You may vote at our 20212024 Annual Meeting if you were a shareholder of record at the close of business on March 1, 2021.
5, 2024.
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 April 29, 2021:May 2, 2024: our proxy statement, 2020our Annual Report on Form 10-K for the year ended December 31, 2023 and other materials are available on our website at corning.com/2021-proxy.2024-proxy.
Sincerely,
Linda E. Jolly
Vice President and Corporate Secretary
March 22, 2024
March 18, 2021
VOTE RIGHT AWAY
Your vote is very important. Please 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 the box at left). If you are a shareholder of record, you may vote during the meeting using the control number on the proxy card or the notice previously provided to you.you. If your shares are held in the name of a broker, nominee or other intermediary, such party can provide the control number to you. Shareholders without a control number may still attend the meeting as guests.
By telephone | By mail | By Internet | ||
Dial toll-free 24/7 1-800-690-6903 | Cast your ballot, sign the proxy card and send by mail | Visit 24/7 |
CORNING 2024 PROXY STATEMENT |
CORNING | 3 |
Corning Incorporated and Subsidiary Companies Reconciliation of Non-GAAP | |||
Forward-Looking Statements and Materiality Disclaimer
The statements, estimates, projections, guidance or outlook contained in this document include “forward-looking” statements that are intended to take advantage of the “safe harbor” provisions of the federal securities law. The words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “hope,” “want,” “strive,” “aim,” “goal,” “target,” “estimate,” “predict,” “potential,” “continue,” “contemplate,” “possible,” and similar words are intended to identify forward-looking statements. These statements may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. Our actual future results, including the achievement of our targets, goals or commitments, could differ materially from our projected results as a result of changes in circumstances, assumptions not being realized, or other risks, uncertainties and factors. Such risks, uncertainties and factors include but are not limited to unexpected delays, difficulties, and expenses in executing against our environmental, climate, diversity and inclusion or other “ESG” targets, goals and commitments outlined in this document, or our ability execute our strategies in the time frame expected or at all, changes in laws or regulations affecting us, such as changes in data privacy, environmental, safety and health laws and the risk factors discussed in our filings with the U.S. Securities and Exchange Commission, including our annual reports on Form 10-K and quarterly reports on Form 10-Q.
Historical, current, and forward-looking environmental and social-related statements may be based on standards for measuring progress that are still developing, and internal controls and processes that continue to evolve. Forward-looking and other statements in this document may also address our corporate responsibility and sustainability progress, plans, and goals, and the inclusion of such statements is not an indication that these contents are necessarily material for the purposes of complying with or reporting pursuant to the U.S. federal securities laws and regulations, even if we use the word “material” or “materiality” in this document.
Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.
4 | CORNING |
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.
Proposals That Require Your Vote
Proposal | Board Vote Recommendation | More Information | |||
1 | Election of 14 directors | For Each Nominee | page | ||
2 | Advisory approval of our executive compensation (Say on Pay) | For | page | ||
3 | Ratification of appointment of independent registered public accounting firm | For | page 94 |
Annual Meeting of Shareholders | ||
Date and Time: May 2, 2024, 12 noon Eastern Time | ||
To be held virtually at: virtualshareholdermeeting. com/GLW2024 | ||
Admission: See the instructions contained in “Frequently Asked Questions about the Meeting and Voting” on page 98. On March 22, 2024, we posted this proxy statement and our Annual Report on Form 10-K for the year ended December 31, 2023 on our website at corning.com/2024-proxy and began mailing them to shareholders who requested paper copies. |
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Proxy Statement Summary
Business Information – Who We Are
Corning is one ofvital to progress – in the world’s leading innovatorsindustries we help advance and in materials science.the world we share. For more than 170 years, Corning has appliedcombined its unparalleled expertise in specialty glass ceramicsscience, ceramic science and optical physics with deep manufacturing and engineering capabilities to develop category-defining products that have created newtransform industries transformedand enhance people’s liveslives.
Our materials science and unleashed significant new capabilities.manufacturing expertise, boundless curiosity and commitment to purposeful invention place us at the center of the way the world works, learns and lives. In addition, our sustained investment in research, development and engineering capabilities means we are always ready to solve the toughest challenges alongside our customers. Our innovation approach delivers long-term value for Corning and its shareholders.
We are best-in-the-world in three core technologies, four manufacturing and engineering platforms, and five market-access platforms. Corning directs 80 percent or more of our resources to opportunities that draw from at least two of these capabilities sets. We believe this approach increases our likelihood of success, reduces the cost of innovation, creates higher barriers to entry for our competitors, and ultimately delights our customers.
The core of what we do is invent, make, and sell. We create value by inventing category-defining products, developing scalable manufacturing platforms, and building strong, trust-based relationships with customers who are leaders in their industries.
—Wendell P. Weeks, Chairman and Chief Executive Officer
Our reportable segments are as follows:
Reportable Segments* | Net Sales % | |||
Optical Communications | manufactures carrier and enterprise network components and solutions for the telecommunications industry | |||
Display Technologies | manufactures high quality glass substrates for flat panel displays including liquid crystal displays and | |||
Specialty Materials | manufactures | |||
Environmental Technologies | manufactures ceramic substrates and filters for | |||
Life Sciences | develops, manufactures |
*All other segmentsbusinesses that do not meet the quantitative threshold for separate reporting arehave been grouped as “All Other.“Hemlock and Emerging Growth Businesses.” ThisNet sales for this group is comprised of the pharmaceutical technologies auto glass, new product lines and development projects, as well as other businesses and certain corporate investments. The Company obtained a controlling interest inare mainly attributable to Hemlock Semiconductor Group (“HSG”) during(HSG), an operating segment producing solar and semiconductor products. The Emerging Growth Businesses consists primarily of our pharmaceutical technologies business, automotive glass solutions business and the third quarteremerging innovations group. Hemlock and Emerging Growth Businesses represented 10% of 2020 and has consolidated results in “All Other” as of September 9, 2020. All Other represented 4% of Corning’s core net sales in 2020.
our 2023 Core Net Sales.
6 | CORNING |
Proxy Statement Summary
Guiding our Company and our People through a Challenging Year: Our Response 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.
2023 Results
$12,588 million | $0.68 (diluted | ||
2023 Core Results* | $13,580 million Core Net Sales | $1.70 (diluted Earnings Per Share) | |
2023 Cash Flow Results |
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Table of Contents*Refer to Appendix A for more information.
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.
In 2020:
2020 QUARTER-OVER-QUARTER CORE NET SALES AND CORE EPS
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
*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 included in our consolidated financial statements to arrive at measures that are not calculated in accordance with Generally Accepted Accounting Principlesaccounting principles generally accepted in the United States of America (“GAAP”) and exclude specific items that are non-recurring, related to foreign 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 metricsmetrics..
Proxy Statement Summary
Items that are excluded from certain Core Performance calculations include: gains and losses on ourthe impact of translating Japanese yen-denominated debt, the impact of translated earnings contracts, acquisition-related costs, certain discrete tax items and other tax-related adjustments, restructuring, impairment losses and other charges orand credits, certain litigation-related expenses,litigation, regulatory and other legal matters, 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, andEnvironmental Technologies, Specialty Materials and Life Sciences segments for the Japanese yen, South Korean won, Chinese yuan, and newNew Taiwan dollar, and usesthe euro, Japanese yen and Chinese yuan constant currency reporting for our Environmental Technologies and Life Sciences segments.as applicable to the segment. 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.
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These non-GAAP measures are not an alternative to, or a replacement for, financial results determined in accordance with 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 measuresmeasures..
CORNING 2024 PROXY STATEMENT | 7 |
Update onTable of Contents
Proxy Statement Summary
2023 Performance Highlights: Delivering Operational Objectives
At the start of 2023, we introduced plans to improve profitability and cash flow. Throughout the year, we took action to restore our productivity ratios to historical levels and to raise price to more appropriately share inflation with our customers. Our Leadership Prioritiesresults demonstrated that we continue to make solid progress advancing market leadership, strengthening our profitability, and improving our cash flow generation even in the lower-demand environment that we are experiencing.
Although demand in most of our markets is temporarily depressed due to supply chain corrections and macroeconomic factors, we are entering 2024 operationally strong and we remain confident that key industry growth drivers are intact: specifically, wireless, broadband, 5G, cloud computing and advanced artificial intelligence in Optical communications, increased screen sizes in Display Technologies, tighter emission regulations that drive more and better filtration in Environmental Technologies and the need for more and more advanced cover materials in Mobile Consumer Electronics. Additionally, we have built competitively-advantaged positions in the markets in which we participate and we believe we are the technology leader, as well as the lowest-cost producer, in those markets.
STRATEGY & GROWTH FRAMEWORK
In 2019, we successfully completed our 2016-2019 Strategy and Capital Allocation Framework. Under the Framework, we outlined and demonstrated how Corning’s probability of success increasesTherefore, as we investexpect our markets to normalize in our world-class capabilities. We concentrate approximately 80% of our research, developmentthe midterm, we believe we are well-positioned with the production capacity and engineering investment along with capital spending on a cohesive set of three core technologies, four manufacturing and engineering platforms, and five Market-Access Platforms. This strategy allows us to quickly apply our talents and repurpose our assets across the company, as needed,technical capabilities necessary to capture high-return opportunities.
Building on the success of the 2016-2019 Framework, we announced 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 prioritiesgrowth opportunity and our fundamental approach to capital allocation remain the same. We continue to focus our portfoliodeliver powerful incremental profit and 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.
2023 HIGHLIGHTS
• | Helping industry leaders advance the form and function of smartphones through step changes in |
• | Color-infused glass: Corning built on its deep relationship with Apple to deliver durable color-infused glass – a first for any smartphone – for the |
• | Ultra-thin bendable glass: For half a century, Corning has helped propel display and cover glass technologies in Korea – a global consumer-electronics innovation hotspot – with industry leaders like Samsung. Building on these relationships, Corning announced plans to expand capabilities in the region and create a hub for ultra-thin bendable-glass manufacturing. |
• | Advancing precision automotive glass to facilitate technology-rich interiors and enhance user interfaces for a more connected and safer driving experience. Corning announced a new collaboration with longtime customer AUO Corporation to expand and accelerate the production of AUO’s industry-leading, large-format curved display modules. In the announcement, AUO highlighted how Corning’s innovative ColdForm™ Technology advances sustainable practices while enabling differentiated designs. |
• | Contributing to global climate initiatives through innovative practices and products. |
• | The Science Based Targets Initiative validated Corning’s near-term science-based reduction targets for Scope 1 and Scope 2 emissions, determining them to be in line with the Paris Agreement’s goal to limit the global average temperature increase to 1.5° Celsius. |
• | The Company launched a Scope 3 emission reduction program with key strategic suppliers. |
• | The Company also built on its announcement of Corning® Viridian™ Vials – which reduce waste and carbon emissions in the pharmaceutical supply chain – with a suite of life sciences products that provides benefits ranging from renewable materials and sustainable packaging, to supply chain diversity, to energy efficiency and water conservation. |
• | Corning also provided a hyperspectral imaging sensor that enables Orbital Sidekick’s recently launched satellites to detect pipeline leaks and other environmental issues. |
8 | CORNING 2024 PROXY STATEMENT |
Proxy Statement Summary
Over the past five years, including |
ANNUAL DIVIDENDS PER COMMON SHARE AND INCREASE OVER PRIOR YEAR
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Proxy Statement Summary
Environmental, Social and GovernanceSustainability Matters at Corning
We believe that our innovations have transformed industries, enhanced people’s lives and addressed some of society’s biggest challenges. In accordance with Corning’s Values, we also believe that a commitment to positiveimproved environmental, social and governance-related business practices increases shareholder value, drives performance, strengthens our company and our community,Company, 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 as new ways of creatingopportunities to deliver value forto our shareholders, our employees, our customers, and the wider world.
Corning Sustainability Governance Structure
In 2021, we plan
Our commitment to publishsustainability starts at the top of our inaugural Sustainability Report preparedorganization. Four committees of our Board of Directors provide oversight 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 aboutdevelopment and execution of our sustainability philosophyefforts. These board committees receive briefings on relevant sustainability impact areas at every committee meeting. Our Office of the CEO (OCEO) has ultimate accountability for our strategy and program can be found at corning.com/performance, coordinating five sustainability categories. Each of the five categories bundle several related sustainability topics and are overseen by individual Advice & Consent Committees (ACC).
Each ACC consists of expert senior leaders and our vice president of sustainability and climate initiatives. Our MAPs are responsible for implementing Corning’s sustainability efforts throughout the business.
Our Boardvice president of sustainability and eachclimate initiatives, reporting to our executive vice president and chief strategy officer, leads our Sustainability Center of Excellence. Working closely with our senior leadership team, the OCEO, and sustainability leads from our MAPs and other business units, this position oversees the Company’s sustainability efforts and progress toward our goals.
Employees at every level contribute to the achievement of our sustainability goals. Many decide to go even further by joining the Corning Sustainability Network. Marking its committees oversees matters relatedsecond year in 2023, this grassroots initiative gives employees an opportunity to Corning’s ESG practices, performancebroaden their sustainability knowledge, participate in community events, and disclosures. For example:
network with other Corning employees who share their passion.
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
Our Environmental, Social, and Governance Goals
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Proxy Statement Summary
Our Commitment to Environmental, Social and Governance IssuesSustainability
Corning demonstrates its commitment to environmental, social, governance and human capital matters, and its Values, in many ways that can be explored onin our 2023 Sustainability Report and our Sustainability website, both which can be found at corning.com/sustainability. Specifically:
CLIMATE | • | In 2021, Corning committed to • In furtherance of its Scope 1, 2 and 3 GHG emissions goals set in 2021, in 2023 Corning invested more than • In 2023, the Science Based Targets Initiative (SBTI) approved our near-term science-based emissions reduction targets, underscoring our commitment first announced in 2021 to set near-term Company-wide emission reductions in line with | |
ENVIRONMENTAL | • | ||
Corning is | |||
example, Corning | |||
• | We are proud of our sustained participation and strong performance in the ENERGYSTAR® programs. • In 2023, Corning • In 2023, we commenced our Scope 3 supplier engagement program with suppliers that make up 80% of our GHG emissions. | ||
HEALTH AND | • Corning continues to maintain its best-in-class health and safety performance, ranking in the top quartile of global, industry-leading company performance as measured by a total case incidence rate. • Corning achieved over 95% compliance with corporate health and safety standards at Corning sites in 2023. • Safety in action: In 2023, our Mobile Consumer Electronics business pilotedSafety Together at our Canton, New York manufacturing facility. Employees submitted project ideas to improve safety, ergonomics, and the work environment. The team selected and completed more than 50 projects including paving uneven surfaces outside the facility to mitigate the risk of falls or trips and purchasing adjustable height workstations to reduce the risk of ergonomic injuries. |
CORNING 2024 PROXY STATEMENT |
Proxy Statement Summary
DIVERSITY, EQUITY | • Diversity, equity, and inclusion are integral to Corning’s belief in the fundamental dignity of The Individual – one of Corning’s seven core Values. • Corning • In 2023 we maintained our highest levels of leadership diversity: a quarter of our corporate officers are women and half of our Corporate Management Group is gender, ethnically and racially diverse. At the Board level, three diverse directors have been added to the Board in the last five years. • Corning received a 100% score on the Disability Equality Index |
HUMAN CAPITAL | • In order to produce the innovative, industry-changing technologies for which we are known, it is critical that Corning continues to attract and retain top talent. To facilitate talent attraction and retention, we strive to make Corning a diverse, inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits and health and wellness programs, and by programs that build connections between our employees and their communities. • In 2021, we achieved 100% gender pay equity for all salaried employees in our worldwide operations, having achieved it in the U.S. since 2017. Our U.S. analysis also includes minority groups compared with white salaried employees. We continue to monitor regularly and adjust where appropriate to maintain global gender pay equity. • In 2023, we launched an expanded paid parental leave policyin the United States • In 2023, Corning also scored 100% on the • Corning’s |
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Proxy Statement Summary
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 TheIn 2023, we combined the Corning Incorporated Foundation, (the Foundation),Corning Enterprises, and our Office of Racial Equality and Social Unity into a separate 501(c)3 organization. We believenew consolidated function and center of excellence called Community Impact & Investment. This centralizes our U.S. philanthropic contributions under a single organization, allowing us to maximize our impact in being an active corporate citizenthe areas that align most closely with our values and the Foundation directs its grant-making towardneeds of 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). Additionalwe operate. For more information about the Foundation can be found at corningfoundation.org.
Corning's Community Impact & Investment outreach, please see our 2023 Sustainability Report.
Corning’s direct giving also includes annual contributions to both local and international cultural and educational institutions. In particular, Corning isAmong them, we are proud to support The Corning Museum of Glass (CMoG)(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), and Edward A. Schlesinger (senior vice president and corporate controller) and David L. Morse (executive vice president and chief technology officer)CFO) serve on the CMoGCMOG board of trustees. In 2020,2023, Corning provided cash and non-cash contributions of services to CMoGCMOG of approximately $35.8$39 million.
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%53% of its enrollment. In 2020,2023, Corning’s non-cash contributions totaled approximately $1.6 million and cash contributions totaled $210,000.$346,000. Kim Frock Weeks (spouse of Wendell P. Weeks, our chairman and CEO) serves on the ASMS board of trustees and also serves as the executive head of school but receives no salary or benefits in this role.
CORNING 2024 PROXY STATEMENT | 13 |
Proxy Statement Summary
2023 Executive Compensation Program
As shown below, in 2020In 2023 approximately 89%91% of our CEO’s target total compensation (excluding employee benefits and perquisites), and 81%84% of the other Named Executive Officers’ (NEOs) target total compensation (excluding(in both cases excluding employee benefits and perquisites), was variable and dependent on Corning’s operatingfinancial performance or stock price.
20202023 Compensation Components
Components*
CEO | ALL OTHER NEOs | |
RSUs – Restricted Stock Units
PSUs – Performance Stock Units
CPUs – Cash Performance Units
* The chart reflects ordinary target compensation elements. In 2023 we utilized a Cash for Equity Exchange Program whereby each NEO voluntarily exchanged a portion of their cash salary for RSUs, and their 2023 cash PIP was automatically exchanged for PSUs (see page 60 for more details on the 2023 Cash for Equity Exchange Program).
14 | CORNING |
Proxy Statement Summary
20202023 Pay Components
Form and Method | Purpose | Award Value | |||||||||
Base Salary | • Attract and retain talent • Provide financial certainty | • Value of role to the Company • Value of role in competitive marketplace
• Skills and performance • Internal equity
| |||||||||
Short-Term Incentives (STI) | |||||||||||
• GoalSharing Plan | Cash -
|
• Focus |
| • Generally targeted at 5% of base salary based on annual corporate performanceand business unit objectives | |||||||
• | Cash - variable | • Provide additional incentive to executives to deliver specific annual corporate and business financial plans | • Target awards are set individually based on the competitive marketplace and level of experience • In | ||||||||
Long-Term Incentives (LTI) • Cash Performance Units • Performance Stock Units • Restricted Stock Units | 75% stock, 70% performance-based (CPUs and |
• Focus executives on • Align the long-term interests of executives and shareholders • • • Retain talent | • Target awards are based on competitive marketplace, level of executive, skills and performance • Actual • Value of PSUs and
| ||||||||
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 | • Employee health and safety • Competitive marketplace
• Level of executive
|
Our Metrics and Why We Use Them | ||
Core Earnings per Share (Core EPS): Core EPS is our key measure of profitability. (Note: Corning annual financial performance targets.) Core Net Sales:
| Adjusted Free Cash Flow: Strong 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 |
Core net sales is a primary indicator of Corning’s long- and short-term success. Evaluating performance against predetermined net sales metrics provides insight into how well the Company has retained sales and met sales growth targets, accounting for both organic growth efforts and the impact of acquisitions. We use core net sales as a performance measure in our annual bonus plans (GoalSharing and PIP) because GoalSharing impacts every employee and PIP impacts over 8,000 employees. In this way, every employee has alignment with Corning’s sales growth goals. The LTI plan, which impacts approximately 350 senior executives and key employees responsible for driving the short- and long-term financial growth of the Company, also includes a core net sales performance measure. Incorporating net sales into both the STI and LTI plans allows for a comprehensive evaluation of Corning’s ability to establish sustainable sales growth while also addressing near-term market fluctuations. It is a “duplicate goal” for only about 350 of our approximately 49,800 employees, and the Compensation and Talent Management Committee believes the increased focus on core net sales growth is appropriate for that smaller group of executives given the importance of sales growth for Corning over time.
CORNING | 15 |
Proxy Statement Summary
20202023 Compensation Plan Payout Percentages
The following table reflects our 20202023 compensation plan’s payout percentages based on our 20202023 financial performance:
SHORT TERM INCENTIVE PLAN | LONG TERM INCENTIVE PLAN | |||||||||||||||
ANNUAL CASH BONUS – GOALSHARING | CASH PERFORMANCE UNITS AND PERFORMANCE STOCK UNITS (70% OF LTI TARGET — 2023 PERFORMANCE RESULTS) | |||||||||||||||
Components | Weighting | % of target earned | Components | Weighting | % of target earned | |||||||||||
Corporate financial performance | 25% | 51% | Adjusted Free Cash Flow | 70% | 58% | |||||||||||
Average of all unit plans (>100 units) | 75% | 129% | Core Net Sales | 30% | 53% | |||||||||||
2023 payout (% of target) | 109.6%* | 2023 blended performance result | 56% | |||||||||||||
* Equal to 5.48% of base salary for each NEO based on a 5% target. | ||||||||||||||||
2023 CASH FOR EQUITY EXCHANGE PROGRAM PIP PERFORMANCE STOCK UNITS FOR NEOS | LTI PLAN PAYOUT FOR 3-YEAR PERIOD ENDING DECEMBER 31, 2023 | |||||||||||||||
Components | Weighting | % of target earned | Components | % of target earned | ||||||||||||
Corporate financial performance | 100% | 51% | 2021 performance result | 175% | ||||||||||||
2023 payout (% of target) | 51% | 2022 performance result | 49% | |||||||||||||
2023 performance result | 56% | |||||||||||||||
2021-2023 average performance | 93% | |||||||||||||||
ROIC MODIFIER | +2.5% | |||||||||||||||
2021-2023 average performance | × | ROIC Modifier | = | Final % pay-out of 2021 target CPUs and PSUs | ||||||||||||
93% × 1.025% | = | 95.33% Final Payout (% of target) | ||||||||||||||
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% |
CORNING |
Proxy Statement Summary
Our Director Nominees
All director nominees are independent with the exception ofexcept 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. | 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 |
Name and Primary Occupation | Age | Director since | Committee Memberships* | Other Public Company Boards | |
Leslie A. Brun Chairman and Chief Executive Officer, | 71 | 2018 | • Audit • Compensation | 1 | |
Stephanie A. Burns Retired Chairman and Chief Executive Officer, | 69 | 2012 | • Audit • Corporate Responsibility (Chair) | 2 | |
Pamela J. Craig Retired Chief Financial Officer, | 67 | 2021 | • Audit • Corporate Responsibility | 2 | |
Robert F. Cummings, Jr. Retired Vice Chairman of Investment Banking, | 74 | 2006 | • Executive • Finance (Chair) • Governance | 0 | |
Roger W. Ferguson, Jr. Steven A. Tananbaum Distinguished | 72 | 2021 | • Compensation • Governance | 2 | |
Thomas D. French Senior Partner Emeritus, | 64 | 2023 | • Audit • Corporate Responsibility | 0 | |
Deborah A. Henretta Retired Group President of Global E-Business, | 62 | 2013 | • Corporate Responsibility • Information Technology | 3 | |
Daniel P. Huttenlocher Dean, MIT Stephen A. Schwarzman | 65 | 2015 | • Finance • Information Technology | 1 | |
Kurt M. Landgraf Retired President, Washington College | 77 | 2007 | • Audit (Chair) • Compensation • Executive | 0 | |
Kevin J. Martin Vice President, US Public Policy, | 57 | 2013 | • Corporate Responsibility • Governance | 0 | |
Deborah D. Rieman Retired Executive Chairman, | 74 | 1999 | • Compensation (Chair) • Information Technology | 0 | |
Hansel E. Tookes II Retired Chairman and Chief Executive Officer, | 76 | 2001 | • Compensation • Executive • Governance (Chair) | 0 | |
Wendell P. Weeks Chairman and Chief Executive Officer, | 64 | 2000 | • Executive (Chair) | 1 | |
Mark S. Wrighton Professor and Chancellor Emeritus, | 74 | 2009 | • Finance • Information Technology (Chair) | 0 |
*Audit = Audit Committee; Compensation = Compensation and Talent Management 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
CORNING | 17 |
Proxy Statement Summary
Board of Directors Snapshot
Skills and Experience | |||||||||
8 Technology and Innovation | 10 Risk Oversight | 4 Public Company CEO or C-Suite Experience | 9 Industry Experience | ||||||
8Finance and M&A | 6 Operations | 7 Corporate Governance & Ethics | 13 Public Company Director Experience |
Refreshed board composition and diverse leadership
75% | 29% | 14% | 43% |
of directors elected in the past five years are diverse | of Committees chaired by women | of Committees chaired by racially/ethnically diverse directors | of Committees chaired by diverse directors |
18 | CORNING 2024 PROXY STATEMENT |
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.
The following is a brief overview of some of our most notable corporate governance practices and policies: | ||
•We contacted holders of approximately •We ensure alignment of our corporate governance practices with the Investor Stewardship Group’s corporate governance Principles for U.S. Listed •Our Board, through its committees, provides direct oversight of •We adopted the principles embodied in the Shareholder-Director Exchange (SDX) • We adopted proxy access whereby qualifying shareholders are permitted to include director nominees in the proxy statement. | ||
The Corporate Governance section beginning on page | ||
✓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 | ✓ ✓Robust stock ownership guidelines for directors and key executive officers ✓Prohibition on pledging, hedging or trading in derivatives of the Company’s stock for directors and employees ✓Clawback policy in accordance with NYSE Listing Standards for executive incentive compensation in the event of certain financial restatements |
Shareholder Communication
Communicating with shareholders, particularly about our 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 at corning.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 strategic priorities, we also conduct outreach to the governance teams at our largest shareholders. We value feedback from our shareholders and take it seriously.
In 2020, as part of our shareholder outreach:
More information on our shareholder engagement can be found on page 58.
CORNING | 19 |
Corporate Governanceand the Board of Directors
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 aligns 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.
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” | |||
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 | Corning has one class of voting stock. Each share is entitled to one vote. | |||
ISG Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives | ||||
Shareholder engagement | Our investor relations team maintains an ongoing dialogue with investors and portfolio managers year-round on matters of business performance and results. | |||
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 2024 PROXY STATEMENT |
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 | |||
Skills and qualifications | Our Board is composed of accomplished professionals with deep experiences, skills, and knowledge relevant to our business, resulting in a | |||
Commitment to Diversity | The Board seeks to achieve diversity among its members and is committed to actively seeking out highly qualified women and minority candidates, as well as candidates with diverse backgrounds, skills and | |||
Director tenure | The current average tenure of members of our Board, excluding our CEO Mr. Weeks and our retiring directors Mr. Blair and Mr. Clark, is | |||
Director overboarding | ||||
Board and committeeevaluations | The Board and each committee | |||
Meeting attendance | The Board met | |||
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 and | |||
Shareholder support forexecutive compensation | Corning’s executive compensation program received | |||
Committeeoversight of executivecompensation | The Compensation and Talent Management Committee annually reviews and approves | |||
Long- and short-termgoals drive executivecompensation | ||||
Clear communicationof economic drivers ofexecutive compensation | The proxy statement clearly communicates the link between management incentive compensation plans and the Company’s short- and long-term performance. |
21 |
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 35. The Company’s Corporate Governance Guidelines provide thatthe Board with the flexibility to select the appropriate leadership structure for the Company. Annually, the Board must annually review whether the role of Chairman should be a non-executive position or combined with that of the CEO. In making determinations about the leadership structure, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company’s shareholders. The current leadership structure comprises a combined Chairman and CEO, a Lead Independent Director, Board committees led primarily by independent directors and active engagement by all directors. The Board believes that this structure provides an effective balance between strong Company leadership and appropriate safeguards and oversight by independent directors.
In February 2021,2024, the Board determined that at the present time, our combined Chairman and CEO, supported by our strong Lead Independent Director, continues to provide appropriatestrong leadership and oversight and ensures effective functioning of management and the Company.
When the Chair The Board believes that having one person serve as Chairman and CEO roles are combined, as it is currently, our Corporate Governance Guidelines requirecan provide certain synergies and efficiencies that enhance 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 operationfunctioning of the Board as described below underand, importantly, allow it to most effectively execute its role in overseeing business strategy. Mr. Weeks’ vast knowledge of our Company, our diverse products and business lines, our global operations, the heading “Lead Independent Director.” The Company believesnuances of the innovation pipeline and the challenges and opportunities particular to Corning make him uniquely suited to identify many of the business issues that a Lead Independent Director enhances strongrequire Board governance and oversight.attention. As Chairman, he is best positioned to focus directors’ attention on the most critical business matters.
Richard T. Clark was re-appointed to the role of Lead Independent Director of the Board by the independent directors effective February 3, 2021.
7, 2024, pursuant to the requirement of our Corporate Governance Guidelines that when the Chairman and CEO roles are combined, the independent directors annually appoint a Lead Independent Director from their membership. Mr. Clark’s understanding of the Company and the industry, his experience on other public boards, and his management expertise as the former Chairman, Chief Executive Officer and President of Merck & Co., Inc. enables him to assure independent board leadership at the Company. The Board is comprised solely of independent directors other than the CEO, and 100 percent of the Audit, Compensation and Talent Management, Corporate Responsibility and Sustainability, Finance, Information Technology and Nominating and Corporate Governance Committee members are independent.
22 | CORNING |
Corporate Governance and the Board of Directors
As of April 1, 2021, the effective date of Roger Ferguson’s Board membership,this filing, the Board will have 14has 16 directors and the following seven committees: (1) Audit Committee; (2) Compensation and Talent Management Committee; (3) Corporate Responsibility and Sustainability Committee; (4) Executive Committee; (5) Finance Committee; (6) Information Technology Committee; and (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. Each committee reviews and reassesses the adequacy of its charter annually, conducts annual evaluations of its performance with respect to its 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 committeescommittee has the authority to retain outside advisors as the Board and/or each committee deems necessary.
Each committee (other than Executive) is chaired by and entirely composed of independent directors.
Board committee membership is set forth below. “C” denotes Chair of the committee.
CORNING | 23 |
Corporate Governance and the Board of Directors
Corning’s Board of Directors met eightseven times in 2020.2023. Its committees, the number of meetings, and their functions are as follows:
CORNING 2024 PROXY STATEMENT |
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 and Talent Management 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 |
CORNING | 25 |
Corporate Governance and the Board of Directors
and Refreshment Process
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, race, ethnicity and expertise contributes to a wide range of views. Our Board includes threefour women, three African-Americans,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 5457 and 7578 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, strategy, operations, international business, government, corporate governance, information technology, sustainability, cybersecurity 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 published 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. chosen.
The Board conducts an annual self-evaluationevaluation which helps identify skills and experiences to seek in future candidates that would benefit the Company, its stakeholders and the Board.
In It is the case of incumbent directors, the Nominating and Corporate Governance Committee will review such directors’ overall serviceCompany’s practice to add new Board members prior to the Company during their term, includinganticipated retirement of other members of the numberBoard, to maintain appropriate Committee sizes and to ensure continuity of meetings attended, level of participation, quality of performance,leadership 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 meetexpertise.
How We Evaluate 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.Effectiveness
26 | CORNING |
Corporate Governance and the Board of Directors
The Nominating and Corporate Governance Committee regularly considers the long-term make-up of our Board of Directors and how the composition of our board changes over time. The Nominating and Corporate Governance Committee also considers the skills needed on our board as our business and the markets in which we do business evolve. The Board’s believes that consistent refreshment balances the importance of the institutional knowledge of longer-tenured Board members with a desire for fresh and diverse perspectives. In the last ten years, we have added 6 new independent directors to the Board and 3 directors have retired.
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 97102 will be considered in the same manner in whichway 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“Shareholder Proposals and Director For Election At, Next Year’sNominations for the 2025 Annual Meeting” on page 97102 of this proxy statement.
Director education is vital to the ability of directors to fulfill their roles and supports Board members in their continuous learning. The Board encourages directors to participate annually in external continuing director education programs, and our company reimburses directors for their expenses associated with this participation. For example, Ms. Henretta recently received the Competent Board ESG Certification Program Certificate. All new directors also participate in our director orientation program during their first year on our Board. We also encourage Board members to gain credentials in specialized topics such as sustainability and cybersecurity and we reimburse them for costs associated with this effort.
BOARD COMPOSITION
BOARD OPERATION
CORNING 2024 PROXY STATEMENT | 27 |
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 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. Recently, succession planning has resulted in the appointment of highly qualified executives in the Chief Financial Officer and Chief Technology Officer roles, both internal candidates, and the Chief Digital and Information Officer and Chief Human Resources Officer roles, both external candidates. The Board regularly discusses succession planning for the chief executive officerChief Executive Officer and other senior management positions in executive sessions.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,” 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 20182021 between Corning and entities associated with our independent directors or members of their immediate family. The Board also reviewed and discussed information with regard toabout each director’s business and personal activities as they may relate to Corning and Corning’s management. It considered that each of Mr.Ms. Henretta, Messrs. Martin, Brun and Ferguson, and Drs. Huttenlocher and Wrighton are or were, during the previous three years, an employee, partner or affiliate 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 arisearose only from such director’s position as an employee, partner or affiliate 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.
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 written policy requiring the full Board or a designated Board committee to approve or ratifypre-approve 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. TheAs set forth in the Corporate Governance Guidelines, 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 ratificationapproval of any transaction if he or she, or his or her immediate family member, has a direct or indirect material interest in the transaction.
28 | CORNING 2024 PROXY STATEMENT |
There were no such transactions requiring reviewTable of Contents
Corporate Governance and approvalthe Board of Directors
Stephen M. Bell, an engineering supervisor at Corning’s facility in Newton, North Carolina, is the son of Michael A. Bell, an executive officer of Corning. In 2023, Corning paid Stephen M. Bell $134,489 and bonus amounts of $14,168. The Nominating and Corporate Governance Committee reviewed and approved Mr. Bell’s employment in accordance with this policy during 2020.Corning’s Policy on Transactions with Related Persons.
Compensation and Talent Management Committee Interlocks
and Insider Participation
Dr. Rieman and Messrs. Brun, Clark, Ferguson, Landgraf and Tookes served on the Compensation and Talent Management Committee during 2023. No member of the Compensation and Talent Management Committee that served during 2023 is now, or has ever been, an officer or employee of Corning. No member of the Compensation and Talent Management Committee had any relationship with Corning or any of its subsidiaries during 20202023 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 20202023 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 and Talent Management Committee.
Risk Oversight
Inherent in the Board’s responsibilities is the understanding and oversight of the various risks facing the Company. The Board does not view risk in isolation: risks are considered in virtually every business decision. The Board recognizes that it is neither possible nor prudent to eliminate all risk; indeed, purposeful and appropriate risk taking is essential for the Company to be competitive on a global basis and to achieve the Company’s long-term strategic objectives.
Effective risk oversight is of critical importance to our Board. The Board has implemented a risk governance framework designed to:
• | understand critical risks in the Company’s business and strategy; |
• | allocate responsibilities for risk oversight among the full Board and its committees; |
• | evaluate the Company’s risk management processes and whether they are functioning adequately; |
• | facilitate open communication between management and Directors; and |
• | foster an appropriate culture of integrity and risk awareness. |
To learn more about risks facing the Company, you can review Part I, “Item 1A. Risk Factors” in the Form 10-K. The risks described in the Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known or that may currently be deemed to be immaterial based on the information known to the Company also may materially adversely affect the Company’s business, financial condition or results of operations in future periods.
CORNING |
Corporate Governance and the Board of Directors
Our Board recognizes the importance of effective risk oversight in running a successful global business and in fulfilling its fiduciary responsibilities to Corning and our 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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Risks associated with current business status or strategic alternatives are subjected to analysis, discussion and deliberation by management and the Board. Once a strategy is in 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 Responsibility 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. The Chief Compliance Officer reports to the Audit Committee at each of its meetings on any relevant compliance issues, and annually presents an overview of the Company’s compliance function, processes and effectiveness.
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 directlyregularly to each of the Audit Committee and Corporate Responsibility and Sustainability Committee and reviews the Company’s compliance with laws and regulations of the countries in which we conduct business.
business as well as disclosures made by the Company about relevant risks.
CORNING |
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 boardBoard and the Company’s management, enables the Board to effectively oversee Corning’s management of risk.
Environmental, Social and Governance (ESG) Oversight
RatherWe have integrated ESG throughout our business, from our daily operations and our risk management processes to our executive leadership and our Board. In doing so, we follow guidance provided by the Committee of Sponsoring Organizations of the Treadway Commission and the World Business Council for Sustainable Development. We also leverage the framework of the Task Force for Climate-Related Financial Disclosures (TCFD) to assess and report on climate risks and opportunities for Corning. The Board believes that identifying risks and opportunities relating to sustainability is essential to the long-term viability of our Company and to deliver long-term value to shareholders. With respect to Board oversight of ESG matters, rather than concentrating all ESG initiativesmatters 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 tocommittee can leverage their specific subject-matter expertise to oversee and advise the Board on the ESG matters most relevant to their Committee’scommittee’s area of responsibility. In some circumstances, such as ourthe 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 thosethe ESG risks and issues most impactful to our enterprise and our communities.
Cybersecurity Oversight
Risk ManagementCorning’s Board plays a role in Action: Board Response to COVID-19
The Board has a defined risk management process that was put tooverseeing risks associated with cybersecurity threats. In particular, the test as the COVID-19 pandemic commenced. With operations in Wuhan, Corning was oneIT Committee of the first U.S. corporations to feelBoard is responsible for cybersecurity governance and has information security oversight as a key component of its charter. In all meetings, the impacts ofIT Committee reviews the virus. Key to effective risk management during this challenging time wasCompany’s cybersecurity posture as well as any significant cybersecurity events. Corning’s Chief Digital and Information Officer (CDIO), in combination with Corning’s Chief Information Security Officer (CISO), briefs the clear allocation of responsibilities to the Board’s committees,IT Committee on cybersecurity activities and long-term cybersecurity strategies, 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,well 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.
general
CORNING |
Corporate Governance and the Board of Directors
Many Corning manufacturing facilities were deemed essential, which ledcybersecurity trends that could have a material impact on the Company. On an annual basis, the CISO provides a cybersecurity update to significantthe Board discussions around how to provideand participates in 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 aspectjoint meeting of the SSSO program included converting part of our salaried employees’ cash compensation into equity with a focusIT and Audit Committees to review significant cybersecurity risks and their impact, if any, on preserving cash to protect the balance sheet andinternal controls. At any time, Board members may raise concerns regarding the Company’s long-term future. This program was enacted acrosscybersecurity posture and recommend future changes to controls or procedures. Should a cybersecurity incident rise to the Company,level of a corporate crisis, consistent 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,Company’s corporate crisis response escalation protocols, the Board has taken the same approach to preserve the enterprise.would be engaged.
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Corporate Governance and the Board of Directors
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 abilityOur directors are positioned to assess Company culture. Even when held virtually, members of theculture in many ways. The Company’s Senior Leadership Team attend everyattends Board meetingmeetings, and numerous other members of management attend Board committee meetings. Members 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, formalFormal dinners and informal lunches with meeting attendees provide DirectorsDirectors’ insight tointo 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 theThe Board visits our research campus to meet with dozens of employees working on our key innovation initiatives.initiatives and participates in a technology showcase annually, where our newest initiatives are highlighted and discussed. If the Board is unable to visit our research campus in person, virtual Technology Showcases are held where senior innovators demonstrate those products and innovations in the Company’s commercialization pipeline. 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 2021,2024, the Compensation and Talent Management Committee reviewed the conclusions of a risk assessment of ourthat it had instructed Frederic W. Cook & Co., Inc. to undertake regarding the Company’s 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 mix of cash and equity pay-outs tied to both short-term financial performance, mid-term financial performance, and long-term value creation; |
• | The time vesting requirements in our long-term incentive plans, which help align the interests of employees to shareholders; |
• | The use of multiple financial performance metrics that are readily monitored and reviewed, and aligned with the corporate and business unit objectives; |
• | The rigorous budget and goal-setting processes that involve both top-down and bottom-up analyses; |
• | The use of common performance metrics for incentives across Corning’s management team and all eligible employees with corporate results impacting the compensation of all Corning employees; |
• | Internal advisory committees and plan caps that are intended to avoid imprudent risk-taking; |
• | Our robust stock ownership, clawback, anti-hedging and anti-pledging policies for NEOs and other employees; |
• | Multiple levels of review and approval of awards, including Committee approval of all officer and equity compensation; and |
• | Immediate oversight of executive pay matters in mergers and acquisitions and unit compensation plans throughout the acquisition integration process. |
TheTalent Management Committee concluded that Corning’s executive compensation program is balanced and does not reward excessive financial risk-taking.
32 | CORNING |
Corporate Governance and the Board of Directors
Board and Shareholder Meeting Attendance
The Board of Directors met eightseven times during 2020. in 2023. Attendance at Board and committee meetings averaged 99%97% in 2020,2023, and each incumbent director attended no less than 95%86% of the meetings of the Board and committees on which the director served.
The Board has a policy requiring all directors to attend our Annual Meeting, absent extraordinary circumstances. All of our directors attended our 2020 Virtual2023 Annual Meeting of Shareholders except for Mr. Ferguson, whose effective date of Board membership is April 1, 2021.Shareholders.
We are committed to conducting business lawfully and ethically. Our directors, NEOs,executive officers, and all Corning employees are required tomust 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. Furthermore, our Code of Ethics for our Chief Executive Officer and Financial Executives requires business integrity, avoidance of conflicts of interest, and transparency. 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, requires directors and executive officers to avoid any conflict between their personal interests and the interests of the companyCompany in dealing with suppliers, customers, and other third parties, and imposes standards upon certain conduct in their personal affairs, including transactions in securities of the Company, any companyCompany 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 Codescodes of Conduct.conduct. We will disclose any future amendments to, or waivers from, any provision of our Codescodes of Conductconduct 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 2020.2023.
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 or executive branch officials 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 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 | 33 |
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 at investor.corning.com/investor-relations/governance/overview/default.aspxincluding:
Corning’s Human Rights Policy is available at corning.com/worldwide/en/sustainability/people/human-rights-policy.html.
• | Corporate Governance Guidelines with Director Qualification Standards |
• | Corning Incorporated By-Laws |
• | Political Contributions and Lobbying Policy |
• | Speak Up Policy |
• | Code of Conduct for Directors and Executive Officers |
• | Code of Ethics for Chief Executive Officer and Financial Executives |
• | Our Code of Conduct |
• | Audit Committee Charter |
• | Compensation and Talent Management Committee Charter |
• | Corporate Responsibility and Sustainability Committee Charter |
• | Finance Committee Charter |
• | Information Technology Committee Charter |
• | Nominating and Corporate Governance Committee Charter |
34 | CORNING |
Election of Directors
Board of Directors’ Qualifications and Experience
Our Board comprises accomplished professionals with diverse skills and areas of expertise. The broad range of 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 education provides significant value to the Company, and we intend to continue leveraging this strength.
Mr. Ferguson was appointed toClark will retire from Corning’s Board at the 2024 Annual Meeting after twelve years of service. In January 2024, Mr. Blair advised the Board at its February 3, 2021 meeting, with an effective date of April 1, 2021. He is standingthat he would not stand for election for the first time following his appointment.
re-election.
The following table describes key competencies and skills of our directors who are standing for re-election.
All directors other than Mr. Weeks are independent. Mr. Clark is the Lead Independent Director.
Director through the 2024 Annual Meeting of Shareholders. The Board will appoint its new Lead Independent Director in May.
CORNING | 35 |
Proposal 1 Election of Directors
What skills and characteristics are currently represented
on the Board?
The Nominating and Corporate Governance Committee determined that the skills listed below are inextricably linked to proper Board oversight of the Company. The Board Skills and Composition Matrix, which follows the chart below, sets forth which Directors have considerable or extensive experience in each of these necessary skill areas.
Skill | Description of the Skill and Explanation of Its Importance to Our Board |
Public Company | Directors who have served on other public company boards can offer perspectives on board dynamics and operations, relations between the board and management, and oversight of matters that are vital to long-term shareholder value creation including corporate governance, executive compensation, risk management, shareholder relations, management and board succession planning and strategic, operational and compliance matters. |
Finance | Corning is committed to strong financial discipline, effective allocation of capital, and an appropriate capital structure. The Company’s business is multi-faceted and involves complex financial transactions, including mergers and acquisitions, in many countries and in many currencies. We believe that directors who have senior financial leadership experience at large global organizations and financial institutions, and directors who are experienced allocators of investment capital, are important to Corning’s success. |
Risk Oversight | Corning considers risk management and risk oversight experience a required skillset represented by most directors on our Board. Directors who possess these skills are best positioned to evaluate whether the Company’s risk management policies and procedures are consistent with the Company’s strategy and business purpose; that these policies and procedures are functioning as directed; that steps are taken to foster an enterprise-wide culture that supports appropriate risk awareness, behavior and judgments about risk and that recognizes and appropriately addresses risk-taking that exceeds the company’s determined risk appetite. |
Accounting
| As a public company, Corning is subject to certain auditing, financial accounting, and financial reporting requirements. The Board, particularly through its Audit Committee, is responsible for reviewing Corning’s complex financial statements and disclosures, overseeing financial reporting and internal controls, and monitoring internal and external auditors. Directors who understand financial reporting and the auditing process are important to ensuring that Corning’s achieves accuracy and transparency in its public disclosures. |
Corporate | The Board is responsible for shaping the Company’s corporate governance priorities and structure, which must be transparent and responsive to our shareholders. Because corporate governance affects a company’s fundamental operation, it can significantly impact corporate operations. The Board must have directors with experience in keeping up with and understanding constantly changing corporate governance expectations and practices. Having directors with experience in corporate governance also better positions the Board to engage with shareholders on such matters. |
Legal and | Corning’s business requires compliance with multiple regulatory requirements across many countries and the ability to maintain relationships with various governmental entities and regulatory bodies. Directors who understand the legal and regulatory landscape applicable to the Company provide valuable advice and insight into navigating these regimes. |
36 | CORNING 2024 PROXY STATEMENT |
Proposal 1 Election of Directors
Skill | Description of the Skill and Explanation of Its Importance to Our Board |
Compensation | When properly structured, executive compensation and benefits drive business success, while discouraging imprudent risk-taking and aligning management’s interest with those of shareholders. Talent and human capital management is critical to succession planning and to fostering a productive and safe culture and working environment. Corning believes that these topics are inherently linked, and that director expertise in both is required to drive long-term value. |
Operations | Corning’s business thesis can be simplified to “Invent. Make. Sell.” Operations are integral to the manufacturing of our products and efficient management of the enterprise. Corning values board members who are knowledgeable about and possess experience in operations and supply chain management, and the risks inherent in both, so that the Board can oversee our efforts to improve our processes and products. |
Strategic | Directors who understand how to strategically plan for the future of the Company, in both the short- and long-term, are better able to oversee and advise management with respect to the formulation and execution of the Company’s strategic plans and their connection to long-term value. |
Cyber Security | A robust cybersecurity environment is critical to protecting Corning’s technology infrastructure, intellectual property, manufacturing and operations, customer and employee information, and integrity as a modern global business. Corning believes its Board should contain directors with experience in information technology and establishing or overseeing information/cyber security systems and protocols. |
Technology | At Corning, our growth is fueled by a commitment to innovation. We succeed through sustained investment in research, development, and engineering, a unique combination of material and process innovation, and close collaboration with customers to solve tough technology challenges. Corning values directors who understand the business of technology and have experience driving innovation and product development. In addition, Corning believes that artificial intelligence (AI) carries opportunities and risks for the Corporation and the world; directors with an understanding of artificial intelligence will enable the Board to make informed strategic decisions, manage risks and navigate the ethical and regulatory considerations associated with the adoption of AI technologies. |
Industry | Corning seeks directors with experience in industries that utilize specialty glass, ceramics, and related materials and technologies, including telecommunications, consumer electronics, display technologies, life sciences, automotive, and others. This experience is critical to the oversight of Corning’s businesses and strategies in these unique and rapidly changing industries. |
CORNING 2024 PROXY STATEMENT | 37 |
Donald W. Blair | Leslie A. Brun | Stephanie A. Burns | Richard T. Clark | Robert F. Cummings, Jr. | Roger W. Ferguson, Jr. | Deborah A. Henretta | Daniel P. Huttenlocher | Kurt M. Landgraf | Kevin J. Martin | Deborah D. Rieman | Hansel E. Tookes II | Wendell P. Weeks | Mark S. Wrighton | |||||||||||||||
Knowledge, Skills and Experience | ||||||||||||||||||||||||||||
Public Company Board Experience | n | n | n | n | n | n | n | n | n | n | n | n | n | n | ||||||||||||||
Financial | n | n | n | n | n | n | n | n | n | |||||||||||||||||||
Risk Management | n | n | n | n | n | n | n | n | n | n | n | n | ||||||||||||||||
Accounting | n | n | n | n | n | |||||||||||||||||||||||
Corporate Governance and Ethics | n | n | n | n | n | |||||||||||||||||||||||
Legal/Regulatory | n | n | n | n | n | n | ||||||||||||||||||||||
HR/Compensation | n | n | n | n | n | n | n | |||||||||||||||||||||
Operations | n | n | n | n | n | n | n | |||||||||||||||||||||
Strategic Planning/Oversight | n | n | n | n | n | n | n | n | n | n | n | n | n | n | ||||||||||||||
Cybersecurity/Information Security | n | n | ||||||||||||||||||||||||||
Technology/Innovation | n | n | n | n | n | n | ||||||||||||||||||||||
Mergers and Acquisitions | n | n | n | n | n | n | n | |||||||||||||||||||||
Industry Experience | n | n | n | n | n | n | n | n | n | |||||||||||||||||||
Academia/Education | n | n | n | |||||||||||||||||||||||||
Demographics | ||||||||||||||||||||||||||||
Black/African American | n | n | n | |||||||||||||||||||||||||
Asian/Pacific Islander | ||||||||||||||||||||||||||||
White/Caucasian | n | n | n | n | n | n | n | n | n | n | n | |||||||||||||||||
Hispanic/Latino | ||||||||||||||||||||||||||||
Native American | ||||||||||||||||||||||||||||
Gender | ||||||||||||||||||||||||||||
Male | n | n | n | n | n | n | n | n | n | n | n | |||||||||||||||||
Female | n | n | n | |||||||||||||||||||||||||
Board Tenure | ||||||||||||||||||||||||||||
Years | 7 | 3 | 9 | 10 | 15 | <1 | 8 | 6 | 14 | 8 | 21 | 20 | 19 | 12 |
Proposal 1 Election of Directors
Board Skills and Composition Matrix
After considering the recommendations of the Nominating and Corporate Governance Committee, the Board has 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 20202023 Annual Meeting. All of the nominees have consented to being named in this proxy statement and to serve as director if elected or re-elected.reelected. The Board believes that each of these nominees is qualified to serve as a director of Corning in light ofconsidering 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 20222025 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. |
38 | CORNING |
Proposal 1 Election of Directors
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Leslie A. BrunDirector Since 2018. Age 71. Chairman and Chief Executive Officer, Sarr Group Mr. Brun is chairman and chief executive officer of Sarr Group, LLC, co-founder, chairman and chief executive officer of Ariel Alternatives, LLC, Experience, Skills and Qualifications of Particular Relevance to Corning: As the current and former chief executive officer of several large investment organizations, Mr. Brun brings to the board
Top Skills |
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Committees • Audit • Compensation | |||||||||
Current Public and •
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Public and Investment • • | |||||||||
Public Company Board Experience | Finance and M&A | Risk Oversight | |||||||
Accounting | Corporate Governance and Ethics | Compensation and Talent Management | |||||||
Strategic Planning and Oversight |
CORNING | 39 |
Proposal 1 Election of Directors
Stephanie A. BurnsDirector Since 2012. Age 69. Retired Chairman and Chief Executive Officer, Dow Corning Corporation Dr. Burns has nearly Experience, Skills and Qualifications of Particular Relevance to Corning: As the former chief executive officer of a major chemical company, Dr. Burns brings Top Skills Brought to Our Board | |||||||||||
Committees
• Corporate Responsibility | |||||||||||
Current Public and
• Kellanova (formerly Kellogg Company) | |||||||||||
Public and
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Public Company Board Experience | Finance and | Risk Oversight | |||||||||
Corporate Governance and | Compensation and Talent Management | Operations | |||||||||
Strategic Planning and | Technology and Innovation | Industry Experience |
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• Corporate Responsibility | ||||
• The Progressive | ||||
Public and Investment • 3M Company • Akamai Technologies, Inc. | ||||
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Retired Chief Financial Officer, Accenture plc. From 2006 through 2013, Ms. Craig served as chief financial officer of Accenture plc., a global management consulting, technology services and outsourcing company, following many other leadership roles in line management, consulting and operations during her 34 years with the company. She is also actively involved in charitable organizations focused on education and on the advancement of women in business, including The Women’s Forum of New York, New York University Stern School of Business, Junior Achievement of New Jersey, and is a member of the Board of Trustees of Smith College. Experience, Skills and Qualifications of Particular Relevance to Corning: Ms. Craig brings to Corning’s Board over 34 years of finance, management, operational, technology and international business expertise from her time as chief financial officer at Accenture. Her skills and experience as the CFO of Accenture are particularly relevant to the perspective she brings to the Audit Committee. In particular, she brings knowledge of business transformations, mergers and acquisitions, strategic planning and business process improvement. She also brings broad oversight and strategic skills from her time on the boards of several large, global public companies. Top Skills Brought to Our Board |
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Public Company Board Experience | Finance and
| Operations | |||||
Strategic Planning and
| Industry Experience |
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Proposal 1 Election of Directors
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Current Public and • | |||||
Public and Investment Company Directorships Held During the Past 5 Years • |
Proposal 1 Election of Directors
Robert F. Cummings, Jr.Director Since 2006. Age 74. Retired Vice Chairman of Investment Banking, JPMorgan Chase & Co. Mr. Cummings retired as vice chairman of Investment Banking at JPMorgan Chase & Experience, Skills and Qualifications of Particular Relevance to Corning: Mr. Top Skills Brought to
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Public Company Board Experience | Finance and
| Risk Oversight | |||||||
Strategic Planning and
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CORNING 2024 PROXY STATEMENT | 41 |
Proposal 1 Election of Directors
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Current Public and • • International Flavors & | |||||
Public and Investment Company Directorships Held During the Past 5 Years • • Blend Labs, Inc. | |||||
Roger W. Ferguson, Jr.Director Since 2021. Age 72.
Steven A. Tananbaum Distinguished Fellow for International Economics, Council on Foreign Relations Mr. Ferguson System. 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 has been a national leader in banking and financial services for over 20 years as the former President and Chief Executive Officer of a Fortune 100 company and Vice Chairman of the Federal Reserve; he brings extensive banking, financial and executive leadership expertise to Corning’s Board. Mr. Ferguson is a member of the Smithsonian Institution’s Board of Regents Experience, Skills and Qualifications of Particular Relevance to Corning:
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Top Skills Brought to | |||||||||
Public Company Board Experience | Finance and M&A | Risk Oversight | |||||||
Accounting | Corporate Governance and Ethics | Legal and Regulatory | |||||||
Strategic Planning and Oversight |
*Mr. Ferguson has announced his intent to retire from his positions at TIAA effective March 31, 2021.
Skills and Qualifications
—
42 | CORNING 2024 PROXY STATEMENT |
Proposal 1 Election of Directors
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Current Public and •
| |||||
Public and Investment • None |
Proposal 1 Election of Directors
Thomas D. French Director Since 2023. Age 64.
Top Skills Brought to Our Board | ||||||||
Corporate Governance and Ethics | Strategic Planning and Oversight | |||||||
Technology and Innovation | Industry Experience | |||||||
CORNING 2024 PROXY STATEMENT | 43 |
Proposal 1 Election of Directors
Deborah A. HenrettaDirector Since 2013. Age 62. Retired Group President of Global E-Business, Procter & Gamble Company Ms. Henretta has Ms. Henretta was a member of Singapore’s Economic Development Board (EDB) from 2007 to 2013. Experience, Skills and Qualifications of Particular Relevance to Corning: Ms. Henretta brings to the board her extensive experience in
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Committees • Corporate Responsibility • Information Technology | |||||||||||
Current Public and • American Eagle • Meritage Homes • NiSource, Inc. | |||||||||||
Public and Investment • None | |||||||||||
Top Skills Brought to Our Board | |||||||||||
Public Company Board Experience | Risk Oversight | Corporate Governance and Ethics | |||||||||
Legal and Regulatory | Operations | Strategic Planning and Oversight | |||||||||
Technology and Innovation |
44 | CORNING 2024 PROXY STATEMENT |
Proposal 1 Election of Directors
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Current Public and •
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Public and Investment • | |||||
Daniel P. HuttenlocherDirector Since 2015. Age 65. Dean, MIT Stephen A. Schwarzman College of Computing Dr. Huttenlocher is the Dean of the MIT Schwarzman College of Computing. Prior to joining MIT, Dr. Huttenlocher served as dean and vice provost of Cornell Tech from 2012 He has also served as the Chair of the John D. and Catherine T. MacArthur Foundation, an independent foundation that makes grants and impact investments to support non-profit organizations addressing global social challenges. 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. Experience, Skills and Qualifications of Particular Relevance to Corning: Dr. Huttenlocher is a renowned computer science researcher and educator, inventor, innovator and
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Top Skills Brought to Our Board | |||||||||
Public Company Board Experience | Strategic Planning and Oversight | Cybersecurity and Information Security | |||||||
Technology and Innovation | Industry Experience | ||||||||
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• Executive | ||||
Current Public and • | |||||
Public and Investment Company Directorships Held During the Past 5 Years • |
Proposal 1 Election of Directors
Kurt M. LandgrafDirector Since 2007. Age 77. Retired President, Washington College From July 2017 to July 2020, Mr. Landgraf was president of Washington College. He previously served as president and chief executive officer of Educational Testing Service (ETS), a private non-profit educational testing and measurement organization, from 2000 until his retirement in December 2013. Prior to that, he was executive vice president and chief operating officer of E.I. Du Pont de Nemours and Company (DuPont), where he Experience, Skills and Qualifications of Particular Relevance to Corning: Mr. Landgraf | |||||||||
Top Skills Brought to Our Board | |||||||||
Public Company Board Experience | Finance and
| Risk Oversight | |||||||
Accounting | Corporate Governance and
| Compensation and Talent Management | |||||||
Operations | Strategic Planning and | Industry Experience |
CORNING 2024 PROXY STATEMENT | 45 |
Proposal 1 Election of Directors
| |||||
|
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Current Public and • | |||||
Public and Investment Company Directorships Held During the Past 5 Years • None | |||||
Kevin J. MartinDirector Since 2013. Age 57. Vice President, US Public Policy, Mr. Martin is Vice President, US Public Policy at Mr. Martin has two Experience, Skills and Qualifications of Particular Relevance to Corning: With twenty-years of legal, telecommunications, technology, and policy experience, Mr. Martin brings
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Top Skills Brought to Our Board |
Board Experience |
Proposal 1 Election of Directors
Strategic Planning and Oversight | |||||||
Technology and Innovation | Industry Experience |
CORNING 2024 PROXY STATEMENT |
Proposal 1 Election of Directors
Deborah D. RiemanDirector Since 1999. Age 74. Retired Executive Chairman, Dr. Rieman has more than Experience, Skills and Qualifications of Particular Relevance to Corning: Dr. Rieman brings to the Board significant expertise in information technology, innovation, and entrepreneurial endeavors, | |||||||||||
Committees • Compensation (Chair) • Information Technology | |||||||||||
Current Public and • None | |||||||||||
Public and Investment Company Directorships Held During the Past 5 Years • None | |||||||||||
Top Skills Brought to Our Board | |||||||||||
Public Company Board Experience | Risk Oversight | Compensation and Talent Management | |||||||||
Strategic Planning and
| Cybersecurity and Information Security | Technology and Innovation | |||||||||
Industry Experience |
CORNING 2024 PROXY STATEMENT | 47 |
Proposal 1 Election of Directors
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|
• Nominating and Corporate Governance (Chair) | ||||
Current Public and • None | |||||
Public and Investment Company Directorships Held During the Past 5 Years • • NextEra Energy, Inc. • Ryder Systems Inc. | |||||
Hansel E. Tookes IIDirector Since 2001. Age 76. 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. He is a former Lieutenant Commander and military pilot in the United States Navy, and former commercial pilot with United Airlines. He is also a former member of the National Academies Aeronautics and Space Engineering Board. Experience, Skills and Qualifications of Particular Relevance to Corning: Mr. Tookes
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Top Skills Brought to Our Board | |||||||||
Public Company Board Experience | Risk Oversight | Corporate Governance and Ethics | |||||||
Legal and Regulatory | Compensation and Talent Management | Operations | |||||||
Strategic Planning and Oversight | Industry Experience |
48 | CORNING 2024 PROXY STATEMENT |
Proposal 1 Election of Directors
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Current Public and • | |||||
Public and Investment Company Directorships Held During the Past 5 Years •
|
Proposal 1 Election of Directors
Wendell P. WeeksDirector Since 2000. Age 64. Chairman and Chief Executive Officer, Corning Incorporated Mr. Weeks has Mr. Weeks currently Experience, Skills and Qualifications of Particular Relevance to Corning:
| |||||||||
Top Skills Brought to Our Board | |||||||||
Public Company Board Experience | Finance and M&A | Risk Oversight | |||||||
Accounting | Industry Experience | Compensation and Talent Management | |||||||
Operations | Strategic Planning and Oversight | Technology and Innovation |
CORNING 2024 PROXY STATEMENT | 49 |
Proposal 1 Election of Directors
|
| ||||
Current Public and • | |||||
Public and Investment Company Directorships Held During the Past 5 Years • • Azenta, Inc. (formerly known as Brooks Automation, Inc.) | |||||
Mark S. WrightonDirector Since 2009. Age 74. Professor and Chancellor Emeritus, Washington University in St. Louis Dr. Wrighton has Experience, Skills and Qualifications of Particular Relevance to Corning: 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 Top Skills
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|
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Public Company Board Experience | Finance and M&A | Risk Oversight | ||||
Strategic Planning and Oversight | Technology and Innovation | |||||
50 | CORNING 2024 PROXY STATEMENT |
The Compensation and Talent Management Committee sets 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 comparable companies and for a significant portion of director compensation to be stock-based.stock based. The Compensation and Talent Management 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 and cash compensation for its directors. Corning believes that a significant portion of director compensation should be linked to the Company’s performance over time. Therefore, a portion of the Directors’directors’ compensation is paid as an annual equity grant of restricted sharestock units (in 2023, 60% of annual retainer), which are not settled in shares of common stock until retirement or resignation from the Board.
Directors may further defer receipt of theall or a portion of their cash compensation and may defer receipt of their annual equity retainer restricted stock units(in RSUs) by electing distribution in up to 10 annual installments and also may defer all or a portion of their cash compensation.installments. Cash amounts deferred may be allocated to:to 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; a restricted stock unit account; or a combination of such accounts. In 2020,addition, in 2023 directors were given the opportunity to participate in the 2023 Cash for Equity Exchange Program, on the same basis as active employees, whereby they could exchange up to 40% of cash fees for the first half of 2023 in exchange for RSUs equal to 120% of the amount exchanged. All directors except for Mr. French (who joined the Board after the 2023 Cash for Equity Exchange Program election period concluded) participated in the 2023 Cash for Equity Exchange Program, and seven directors elected to defer some or alladditional portions of their cash compensation.
compensation under the director deferral program. For more information on the 2023 Cash for Equity Exchange Program, see page 60.
As an employee of the Company, Mr. Weeks is not compensated separately for service on the Board or any of its Committees.committees.
20202023 Director Compensation
The following table outlines 20202023 director 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 |
| $215,000, comprised of
The grants are approved by the Board annually at its February meeting and directors joining after the February meeting receive a pro-rated grant for that year. | ||
Annual Cash | $110,000. The retainer amount is approved by the Board annually at its February meeting and directors joining after the February meeting receive a pro-rated retainer for that year. | |||
Lead Independent Director Cash Compensation | ||||
CORNING |
Director Compensation
Committee Chair Additional Cash Compensation | Audit Committee Chair: $25,000 Compensation and Talent Committee Chair: $20,000 Other Committee Chairs: $15,000 |
Director Compensation
Committee Member Additional Cash Compensation | Audit Committee Compensation and Talent Committee Executive, Finance, Nominating and Corporate Governance, Information Technology, and Corporate Responsibility and Sustainability Committee |
Members: $10,000 | |
In 2020,2023, the directors below performed the specified leadership roles:
Name | Leadership Role | ||
Mr. Clark | Lead Independent Director | ||
Mr. Landgraf | Audit Committee Chair | ||
Dr. Rieman | Compensation and Talent Management Committee Chair | ||
Dr. Burns | Corporate Responsibility and Sustainability Committee Chair | ||
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 currentlydirectly funded directly by the Company; however, in the past the program included funding by purchasing insurance policies on the lives of the directors. In 2020, we paid a total of $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.
corporate assets. 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 2020,2023, all directors except Messrs. Brun, Ferguson and FergusonFrench and Ms. Craig 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 maximumIn 2023, the matching gift amount available from the Foundation on behalf of each participant in the Program iswas $7,500 per calendar year.
Corning also pays premiums on our directors’ and officers’ liability insurance policies.
Changes to Director Compensation in 2021
2024
In February 2021,2024, the Board approved certain changesan increase to director compensationthe non-employee directors’ annual equity grant from $215,000 to $225,000 as a competitive measure, as proposed by the Compensation and Talent Management Committee in consultation with the Committee’s independent consultant in order to remain competitive. Effective February, 2021, the non-employee directors’consultant. This annual equity grant increased from $185,000 to $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 $15,000. As with the 2020 director equity compensation, this amount will be payable in restricted stock units, which will not be available for transfer or sale until six months after the date of a director’sunits.
In addition, beginning in 2024, Directors may elect to receive their equity retainer earlier than at retirement or resignation(as soon as 1 year from the board.
grant date), provided they make their election prior to the start of the calendar year in which the retainer is earned, and any such distribution would not result in the Director failing to meet the share ownership requirements described
on page 54.
CORNING |
Director Compensation
20202023 DIRECTOR COMPENSATION TABLE
Name | Fees Earned or Paid in Cash(1, 2) ($) | Stock Awards(2,3) ($) | All Other Compensation(4) ($) | Total ($) | ||||
Donald W. Blair | $105,800 | $217,195 | $ 7,500 | $330,495 | ||||
Leslie A. Brun | 107,333 | 217,666 | 324,999 | |||||
Stephanie A. Burns | 117,300 | 220,692 | 337,992 | |||||
John A. Canning, Jr.(5) | 46,666 | 61,644 | 108,310 | |||||
Richard T. Clark | 135,700 | 226,293 | 7,500 | 369,493 | ||||
Robert F. Cummings, Jr. | 118,834 | 221,164 | 1,500 | 341,498 | ||||
Deborah A. Henretta | 99,667 | 215,328 | 7,500 | 322,495 | ||||
Daniel P. Huttenlocher | 99,667 | 215,328 | 6,250 | 321,245 | ||||
Kurt M. Landgraf | 134,167 | 225,841 | 7,500 | 367,508 | ||||
Kevin J. Martin | 99,667 | 215,328 | 7500 | 322,495 | ||||
Deborah D. Rieman | 116,533 | 220,457 | 336,990 | |||||
Hansel E. Tookes II | 120,367 | 221,636 | 342,003 | |||||
Mark S. Wrighton | 111,167 | 218,826 | 7,500 | 337,493 |
Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | All Other Compensation(3) ($) | Total ($) | ||
Donald W. Blair | $138,000 | $220,542 | $7,500 | $366,042 | ||
Leslie A. Brun | 143,000 | 220,742 | 0 | 363,742 | ||
Stephanie A. Burns | 153,000 | 221,142 | 0 | 374,142 | ||
Richard T. Clark | 185,000 | 222,422 | 0 | 407,422 | ||
Pamela J. Craig | 138,000 | 218,472 | 0 | 356,472 | ||
Robert F. Cummings, Jr. | 155,000 | 221,222 | 0 | 376,222 | ||
Roger W. Ferguson, Jr. | 135,000 | 220,422 | 0 | 355,422 | ||
Thomas D. French | 80,500 | 125,426 | 7,500 | 213,426 | ||
Deborah A. Henretta | 130,000 | 220,222 | 0 | 350,222 | ||
Daniel P. Huttenlocher | 130,000 | 220,222 | 0 | 350,222 | ||
Kurt M. Landgraf | 178,000 | 219,422 | 7,500 | 404,922 | ||
Kevin J. Martin | 130,000 | 220,222 | 0 | 350,222 | ||
Deborah D. Rieman | 155,000 | 221,222 | 0 | 376,222 | ||
Hansel E. Tookes II | 160,000 | 221,422 | 7,500 | 388,922 | ||
Mark S. Wrighton | 145,000 | 220,822 | 7,500 | 373,322 |
(1) | Includes all fees |
(2) | |
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 2019 Equity Plan for Non-Employee |
The amounts in this column reflect charitable donation matches made by the Corning Foundation’s Matching Gifts Program. | |
The following areshows the total number of award shares and restricted stock units (RSUs)RSAs, RSUs and RSU deferrals each Director had outstanding for each director as ofat December 31, 2020.2023. No options were granted to non-employee directorsany Director in 20202023, and no director had any options outstanding as of December 31, 2020.
2023 no Director had any outstanding options.
Name | Deferrals Outstanding at December 31, 2023 | ||
Donald W. Blair | 106,199 | ||
Leslie A. Brun | 33,455 | ||
Stephanie A. Burns | 103,341 | ||
Richard T. Clark | 84,778 | ||
13,890 | |||
Robert F. Cummings, Jr. | 230,908 | ||
25,394 | |||
Thomas D. French | 3,644 | ||
Deborah A. Henretta | 104,654 | ||
Daniel P. Huttenlocher | 55,792 | ||
Kurt M. Landgraf | 187,921 | ||
Kevin J. Martin | 87,802 | ||
Deborah D. Rieman | 141,927 | ||
Hansel E. Tookes II | 129,271 | ||
Mark S. Wrighton | 100,476 |
53 |
We believe in the importance of equity ownership by directors and executive management as a direct link to shareholders, and require all directors, named executive officers (NEOs), and non-NEO executive management to achieve the required levels of ownership under our stock ownership guidelines within five years of their election, appointment or designation. Restricted, direct and indirectly owned shares, and current and deferred restricted stock units, each count toward our stock ownership guidelines. An NEO who falls below the ownership requirement for any reason will have up to three years to return to the required minimum ownership level. All directors and NEOs who have been so for five years or more currently comply with the guidelines.
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.
DIRECTORS | CEO | OTHER NEOs and SENIOR LEADERSHIP TEAM MEMBERS | ||
5X Annual Cash Retainer | 6X Base Salary | |||
3X Base Salary |
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 65.74.
Delinquent Section 16(a) Reports
SEC rules require disclosure of those directors, officers, and beneficial owners of more than 10% of our common stock who fail to timely file reports required by Section 16(a) of the Securities Exchange Act of 1934 during the most recent fiscal year. Based on review of reports furnished to us and written representations that no other reports were required during the fiscal year ended December 31, 2023, all Section 16(a) filing requirements were met.
CORNING |
Stock Ownership Information
As of December 31, 2020 | Shares Directly or Indirectly Owned(1)(2)(3) | Stock Options Exercisable Within 60 Days | Restricted Stock Units Vesting Within 60 Days | (A) Total Shares Beneficially Owned | Percent of Class | (B) Restricted Stock Units Not Vesting Within 60 Days(4) | Total of Columns (A) + (B) | |||||||
Samsung Display Co., Ltd. | — | — | — | 115,000,000 | (5) | 13.0 | % | — | — | |||||
The Vanguard Group | — | — | — | 84,650,440 | (6) | 11.08 | % | — | — | |||||
BlackRock, Inc. | — | — | — | 51,887,522 | (7) | 6.8 | % | — | — | |||||
Wellington Management Group LLP | — | — | — | 49,637,646 | (8) | 6.50 | % | — | — | |||||
State Street Corporation | — | — | — | 39,034,680 | (9) | 5.11 | % | — | — | |||||
Donald W. Blair | 17,243 | 17,243 | * | 60,480 | 77,723 | |||||||||
Leslie A. Brun | 0 | 0 | * | 16,196 | 16,196 | |||||||||
Stephanie A. Burns | 56,888 | 56,888 | * | 36,127 | 93,015 | |||||||||
Richard T. Clark | 41,962 | 41,962 | * | 25,270 | 67,232 | |||||||||
Robert F. Cummings, Jr. | 151,199 | 151,199 | * | 136,244 | 287,443 | |||||||||
Roger W. Ferguson, Jr. | — | — | — | — | — | |||||||||
Deborah A. Henretta | 25,965 | 25,965 | * | 54,101 | 80,066 | |||||||||
Daniel P. Huttenlocher | 13,910 | 13,910 | * | 24,712 | 38,622 | |||||||||
Kurt M. Landgraf | 62,957 | 62,957 | * | 107,930 | 170,887 | |||||||||
Kevin J. Martin | 31,506 | 31,506 | * | 28,526 | 60,032 | |||||||||
Deborah D. Rieman | 100,813 | 100,813 | * | 24,973 | 125,786 | |||||||||
Hansel E. Tookes II | 96,863 | 96,863 | * | 25,033 | 121,896 | |||||||||
Mark S. Wrighton | 66,088 | 66,088 | * | 24,890 | 90,978 | |||||||||
Wendell P. Weeks | 740,125 | (10) | 556,106 | 5,449 | 1,301,680 | * | 305,428 | 1,607,108 | ||||||
R. Tony Tripeny | 66,204 | 138,775 | 1,509 | 206,488 | * | 73,577 | 280,065 | |||||||
James P. Clappin | 80,324 | 110,860 | 1,584 | 192,768 | * | 79,207 | 271,975 | |||||||
Lawrence D. McRae | 161,960 | 183,714 | 1,608 | 347,282 | * | 80,996 | 428,278 | |||||||
Eric S. Musser | 72,201 | 0 | 1,717 | 73,918 | * | 80,360 | 154,278 | |||||||
All Directors and Executive Officers as a group (33 persons) | 2,052,665 | (11)(12) | 1,610,235 | 21,130 | 3,684,030 | 1,972,703 | 5,656,666 |
As of December 31, 2023 | Shares Directly or Indirectly Owned(1)(2)(3) | Stock Options Exercisable Within 60 Days | Restricted Stock Units Vesting Within 60 Days | (A) Total Shares Beneficially Owned | Percent of Class | (B) RSUs and PSUs Not Vesting Within 60 Days(4) | Total of Columns (A) + (B) | |||||||||||||
The Vanguard Group | — | — | — | 98,246,749 | (5) | 11.52 | % | — | — | |||||||||||
Samsung Display Co., Ltd. | — | — | — | 80,000,000 | (6) | 9.4 | % | (7) | — | — | ||||||||||
BlackRock, Inc. | — | — | — | 60,192,751 | (8) | 7.1 | % | — | — | |||||||||||
Donald W. Blair | 17,243 | 17,243 | * | 88,956 | 106,199 | |||||||||||||||
Leslie A. Brun | 0 | 0 | * | 33,455 | 33,455 | |||||||||||||||
Stephanie A. Burns | 56,888 | 56,888 | * | 62,807 | 119,695 | |||||||||||||||
Richard T. Clark | 41,962 | 41,962 | * | 42,816 | 84,778 | |||||||||||||||
Pamela J. Craig | 0 | 0 | * | 13,890 | 13,890 | |||||||||||||||
Robert F. Cummings, Jr. | 151,199 | 151,199 | * | 166,222 | 317,421 | |||||||||||||||
Roger W. Ferguson, Jr. | 6,938 | 6,938 | * | 25,394 | 32,332 | |||||||||||||||
Thomas D. French | 0 | 0 | 3,644 | 3,644 | ||||||||||||||||
Deborah A. Henretta | 25,965 | 25,965 | * | 78,689 | 104,654 | |||||||||||||||
Daniel P. Huttenlocher | 13,910 | 13,910 | * | 41,882 | 55,792 | |||||||||||||||
Kurt M. Landgraf | 62,957 | 62,957 | * | 124,964 | 187,921 | |||||||||||||||
Kevin J. Martin | 31,506 | 31,506 | * | 56,296 | 87,802 | |||||||||||||||
Deborah D. Rieman | 100,813 | 100,813 | * | 42,314 | 143,127 | |||||||||||||||
Hansel E. Tookes II | 96,863 | 96,863 | * | 42,408 | 139,271 | |||||||||||||||
Mark S. Wrighton | 66,088 | 66,088 | * | 42,163 | 108,251 | |||||||||||||||
Wendell P. Weeks | 862,041 | (9) | 474,609 | 11,304 | 1,347,954 | * | 491,378 | 1,839,332 | ||||||||||||
* | ||||||||||||||||||||
Edward A. Schlesinger | 66,081 | 39,717 | 2,934 | 108,732 | * | 67,981 | 176,713 | |||||||||||||
Lawrence D. McRae | 213,063 | 115,052 | 1,554 | 329,669 | * | 98,099 | 427,768 | |||||||||||||
Eric S. Musser | 180,159 | 53,490 | 6,021 | 239,670 | * | 184,240 | 423,910 | |||||||||||||
Lewis A. Steverson | 29,378 | 0 | 3,448 | 32,826 | * | 146,959 | 179,785 | |||||||||||||
All Directors and Executive Officers as a group (32 persons) | 2,579,274 | (10)(11) | 1,142,910 | 114,624 | 3,836,808 | * | 2,574,579 | 6,411,387 |
* | Less than 0.50% |
(1) | Includes shares of common stock subject to forfeiture and restrictions on transfer, granted under Corning’s Incentive Stock Plans. |
(2) | Includes shares of common stock subject to forfeiture and restrictions on transfer, granted under Corning’s Restricted Stock Plans for non-employee directors. |
(3) | Includes shares of common stock held by The Bank of New York Mellon Corporation as the trustee of Corning’s Investment Plans for the benefit of the members of the group, who may instruct the trustee as to the voting of such shares. If no instructions are received, the trustee votes the shares in the same proportion as it votes the shares for which instructions were received. The power to dispose of shares of common stock is also restricted by the provisions of the plans. The trustee holds for the benefit of Messrs. Weeks, |
(4) | The Restricted Stock Units |
(5) | ||
Reflects shares beneficially owned by The Vanguard Group (Vanguard), according to a Schedule 13G/A filed by Vanguard with the SEC on February |
(6) | Reflects shares beneficially owned by Samsung Display Co., Ltd. (Samsung), according to a Schedule 13G/A filed by Samsung with the SEC on April 8, 2021, reflecting ownership of shares as of April 8, 2021. Samsung lists its address as 1, Samsung-ro, Giheung-gu, Yongin-si, Gyeonggi-Do, 17113, Republic of Korea. Samsung has sole voting power and/or sole dispositive power with respect to 80,000,000 shares and shared voting power and/or shared dispositive power with respect to 0. According to the Schedule 13G/A, Samsung beneficially owned 9.0% of our common stock as of April 8, 2021. |
(7) | Samsung Display Co., Ltd.’s 80,000,000 shares of common stock were equal to 9.4% of our common stock as of December 31, 2023. |
(8) | Reflects shares beneficially owned by BlackRock, Inc. (BlackRock), according to a Schedule 13G/A filed by BlackRock with the SEC on January |
(9) | |
Does not include |
(10) | As of December 31, |
CORNING |
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 tabularcompensation tables and narrative disclosure on executive compensation.
While this vote is advisory and not binding on the Company, the Board of Directors values shareholder opinion and will consider the outcome of the vote in determining our executive compensation programs.
Our Board maintains a “pay for performance” philosophy that forms the foundation for all of the Compensation Committee’sand Talent Management Committee 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 strategies.
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 and Talent Management Committee has made under those programs and the factors considered in making those decisions, including 2020 Company performance and the direct alignment of pay with performance, focusing on the compensation of our NEOs.decisions. Our shareholders have affirmed their support of our executive pay programs in our outreach discussions and in their ongoing support of our Say on Pay proposals. We believe that we have created a compensation program deserving of shareholder support.
For these reasons, the Board of Directors recommends that shareholders vote in favor of the resolution:
RESOLVED, that the compensation paid to the Named Executive Officers disclosed in this proxy statement pursuant to the SEC’s executive compensation disclosure rules (which includes the Compensation Discussion & Analysis, the Summary Compensation Table, and the supporting tabularcompensation tables and related narrative disclosure on executive compensation) is hereby APPROVED.
FOR | Our Board unanimously recommends a vote FOR the approval of our executive compensation as disclosed in this proxy statement. |
CORNING |
This Compensation Discussion & Analysis (CD&A) presents Corning’s executive compensation for 2020,2023, including the compensation for our Named Executive Officers (NEOs), and. It also describes how this compensation aligns with our pay for performancepay-for-performance philosophy and recognizes the achievement of corporate goals during the challenges of the COVID-19 pandemic.goals.
OUR NEOsNEOS IN FISCAL YEAR 20202023 WERE:
Named Executive Officer | Role | Years in Role | Years at Corning | ||
Wendell P. Weeks | Chairman and Chief Executive Officer (CEO) | 41 years | |||
Edward A. Schlesinger | Executive Vice President and Chief Financial Officer | (7 years as Corporate Controller) | |||
Lawrence D. | |||||
Eric S. Musser | President and Chief Operating Officer | ||||
Lewis A. Steverson | Executive Vice President and Chief Legal and Administrative Officer | 4 Years (7 years as Chief Legal Officer) | 11 years |
*Mr. McRae retired from the Company as of December 31, 2023.
CD&A Table of Contents
To assist you in finding important information, we call your attention to the following sections of the CD&A:
CORNING |
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 CompensationPlan Philosophy
and Approach
Our compensation program is designed to attract and retain the most talented employees within our industry segments and to motivateincentivize them to perform at the highest level while executing on our strategic priorities. In order to retain and motivate this caliber of talent, the Compensation and Talent Management Committee (the Committee) is committed to promoting a performance-based and team-based culture. CompensationPerformance-based compensation is tied to financial metrics developed to incent management to deliver on our strategic priorities and our commitments to our shareholders. OurThe majority of our executive compensation is directly aligned with our Company performance.financial performance or linked to the value of our common stock.
2020 Target Compensation Components
Our key compensation program principles are as follows:
Provide a competitive base salary | ||
• | ||
• | Increase the proportion of performance-based incentive compensation for more senior positions | |
• | Align the interests of our executive group with shareholders |
Our Short-Term Incentives
Short-term incentives are designed to reward NEOs for Corning’s consolidated annual financial and operational performance supporting our strategic priorities and team-based management approach. Corning has two short-term incentive plans: the Performance Incentive Plan (PIP) and GoalSharing.
As part of our 2023 Cash for Equity Exchange Program implemented to preserve corporate cash, 2023 cash PIP was exchanged in February 2023 for Performance Stock Units (PSUs) vesting over 36 months. The PSU award is capped at 110% of the cash PIP target (versus the 200% cap that applies to the cash PIP plan) and is based entirely on corporate financial performance metrics (as described in the chart below). See page 60 for more information about 2023 Cash for Equity Exchange Program.
GoalSharing Plans are local and business unit performance plans designed to give every employee the opportunity to be rewarded for achieving business objectives. Employee GoalSharing Plans are weighted 75% on local unit performance metrics (typically financial and/or continuous improvement objectives such as cost reduction, quality, or manufacturing performance) and 25% weighted on overall corporate financial performance. The NEO GoalSharing Plan is based on the average payout of all unit GoalSharing plans.
Short-Term | ||
Performance Incentive Plan (PIP)* | NEO’s GoalSharing Plan |
58 | |
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Compensation Discussion & Analysis
Our Long-Term Incentives
Beginning in 2020We believe it is important that our long-term incentives drive the success of our strategic priorities and in response to shareholder feedback, we realigned the equity and cash portions of LTI, reducing the portion of cash performance units from 60% to 25% and increasing the equity portion from 40% to 75%. With the addition of PSUs (and elimination of stock options) wegenerate long-term value for our shareholders. We also increased the overallbelieve it is important for a significant portion of LTI tied to corporatebe in the form of equity to align our executives’ financial performance from 60% to 70%.interests with those of our shareholders.
The LTI plan awards are now comprised of 45% Performance Stock Units (PSUs) (45% of target), 25% Cash Performance Units (CPUs) (25% of target) and 30% Restricted Stock Units (RSUs) (30% of target).
20202023 CPU and PSU awards arepayouts will be based 70% on Adjusted Free Cash Flow, and 30% on Core Net Sales with annual results being averaged over a three-year performance period.period (2023–2025). In addition to the abovethese corporate financial metrics, CPUs and PSUs are also subject to an ROIC modifier of up to +/-10%- 10%, which acts as a multiplier, based on ROIC improvement over the three-year period 2020 through 2022 against pre-established objectives.
Long-Term Incentives Paid in Cash (CPUs) 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.
Long-Term Incentives
* The charts above reflects ordinary target compensation elements. In 2023 we utilized a Cash for Equity Exchange Program whereby each NEO voluntarily exchanged a portion of their cash salary for RSUs, and their 2023 cash PIP was automatically exchanged for PSUs (see page 60 for more details on the 2023 Cash for Equity Exchange Program).
59 |
Compensation Discussion & Analysis
2023 Cash for Equity Exchange Program
ImpactHeading into 2023, we saw recession-level demand in virtually all of COVID-19our MAPs and experienced significant inflationary cost pressures. To proactively conserve cash while we adapted to these business realities, we introduced the 2023 Cash for Equity Exchange Program. NEOs, along with other salaried employees, were offered the opportunity to exchange up to 40% of their base salary during the first six months of 2023 for RSUs equal to 120% of the salary amount exchanged, vesting over 18 months. Our external directors were also offered the opportunity to exchange up to 40% of their cash fees for the first six months of 2023 for RSUs equal to 120% of the fee amount exchanged.
Because the Cash For Equity base salary exchange was voluntary and employees would lose the opportunity for defined contribution plan and company matching contributions on Compensation and Benefits
Asthose dollars exchanged, the pandemic unfoldedCommittee decided to provide 20% additional RSUs to incentivize employees to participate in the earlyexchange. For example, in the US, an employee that contributes 6% of their salary to the Investment Plan receives a company matching contribution of 4%, for a total 10% defined contribution plan contribution. An employee that participated in the 2023 Cash for Equity Exchange and exchanged 6% of their salary for RSUs would have received a 20% special incentive of 1.2% in additional RSUs, for a total of 7.2% delivered in RSUs.
In addition, as 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 stability2023 cash PIP was exchanged for PSUs, which vest over 36 months, are capped at 110% of the Companycash PIP target, and retainare based entirely on corporate financial performance metrics. The actual value earned by each NEO based on actual 2023 performance was only 51% of target. The difference between the talent we would need as we returned to growth. These actions includednumber of PSUs awarded and the following:number of PSUs actually earned was forfeited.
2023 Performance Metrics
2020 Compensation Metrics and Results
In 2020, ourOur key compensation metrics were established to focus and align leadership toon the key priorities in light ofdrivers for creating long-term value for our shareholders. In 2023, 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.
WeCommittee determined that our prior year 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)flow) – were still the appropriate performance measures in 2020.for 2023.
2023 Key Compensation Metrics
Award | Type | Metrics Used | ||
GoalSharing (Cash) | Short-term/ Annual | 25% corporate financial performance 75% local and business unit performance plans (average of >100 unit plans) | ||
PIP (PSUs in 2023) | Short-term/ Annual* | 100% corporate financial • 25% core net sales, 75% core EPS (see 2023 Cash for Equity Exchange Program described above) | ||
CPUs/PSUs | Long-term/ three-year measurement period | Performance period metrics, average of three one-year performance periods: • 30% core net sales, 70% adjusted free cash flow Long-term modifier: final result adjusted +/-10%, which acts as a multiplier, based on ROIC improvement over the three-year performance period |
*PIP is typically an annual bonus plan; however, the 2023 Cash for Equity Exchange PIP PSUs vest over three years.
THREE-YEAR PAY-FOR-PERFORMANCE RESULTS | |||||
(% of target) | 2023 | 2022 | 2021 | ||
Short-Term Incentives (annual results): | |||||
PIP | 51% | 62.5% | 165% | ||
GoalSharing (% of base salary vs. 5% target) | 5.48% | 5.65% | 7.44% | ||
Long-Term Incentives: | |||||
CPUs and PSUs (annual result) | 56% | 49% | 175% | ||
CPUs and PSUs (3-year average result) | 93% | 135% | 139% | ||
x Three-year CPU/PSU ROIC modifier (up to +/- 10% multiplier) | +2.5% | +10% | +3.0% | ||
CPU/PSU final result (3-year period ending) | 95.33% | 148.5% | 143% | ||
The Committee made no discretionary adjustments to compensation results in 2023 (positive or negative). | |||||
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.
60 | CORNING 2024 PROXY STATEMENT |
Compensation Discussion & Analysis
2023 Performance Overview: A Focus on Adaptation
and Operational Strength
In 2023, Corning delivered on its commitments, adapted to adverse global market dynamics and recession-level demand, and positioned ourselves to capture growth when consumer demand returns. Our long-term metrics for CPUs2023 results demonstrated continued progress in advancing our market leadership, strengthening our profitability, and improving our cash-flow generation even in the new 2020 PSUs continue to be focused on core net sales (30% weight)lower-demand environment we experienced in 2023. Core gross margin grew 330 basis points year-over-year and adjusted free cash flow (70% weight)necessary to fund operations and future investments finished the year at $880 million.
Performance Results | ||||||
$13.6B | $1.70 | 330bps | $880M | |||
In core net sales | In core EPS | Core gross margin improvement | In adjusted free cash flow |
Demand in most of our markets is temporarily depressed due to supply chain corrections and macroeconomic factors. Therefore, our sales are well below long-term trends even as we are outperforming on price and productivity plans. These market conditions create a unique opportunity for us to deliver another $3 billion-plus in annual sales, without incremental capital investment, in the medium-term as our markets normalize. As we capture that growth, we expect to deliver incremental profit and cash to our shareholders. We also remain confident that key industry growth drivers are intact: specifically, wireless, broadband, 5G, cloud computing, advanced artificial intelligence in Optical Communications, increased screen sizes in Display Technologies, tighter emission regulations that drive more and better filtration in Environmental Technologies and the need for increasingly advanced cover materials in Mobile Consumer Electronics. We have built a competitively-advantaged position for greater than 80% of our sales over the last few years—we are the technology leader, as well as the lowest cost producer in those markets. Additionally, we have opportunities to capitalize on growth in our markets by increasing our value capture with our More Corning content approach.
Leveraging Our Focused Portfolio of Compelling Long-Term Growth
Opportunities
Corning strives to be a catalyst for positive change and to help move the world forward. The company invents, makes and sells life-changing products based on a set of vital capabilities that are increasingly relevant to profound transformations that touch many facets of daily life.
Recent highlights include:
• | Continuing to set the standard for durable, high-performance smartphone cover materials. Corning continued its legacy of innovation with its Corning® Gorilla® Armor, a new cover material featured on Samsung’s Galaxy S24 Ultra. Gorilla Armor offers an unparalleled combination of durability and visual clarity, delivering a richer display in sunlight and greater protection against damage caused by daily wear. |
• | Advancing optical innovations in broadband, 5G, cloud computing, and advanced AI. Corning’s fiber optics innovations and unique value proposition position the company to capitalize on opportunities in telecommunications, cloud computing, and advanced AI. |
• | Advancing the driving experience by creating the next generation of automotive-interior displays. Corning technologies are playing a central role in enabling new flexible OLED vehicle cockpit displays that are sustainable, ready to integrate, and can dramatically enhance the driving experience for consumers, enabling individualized user experiences behind the wheel. |
CORNING 2024 PROXY STATEMENT | 61 |
Compensation Discussion & Analysis
• | Helping automakers turn windows into system-enabling components. A recent MotorTrend article featured Corning’s new Fusion5™ Glass, which delivers windshields with superior durability, better optical performance, and lighter weight than conventional windshields. The innovative windshield technology helps enable the sensor systems needed for Advanced Driver Assistance Systems and higher levels of autonomy, while providing weight savings needed to extend electric vehicle range. |
• | Continuing its dedication to providing an equitable workplace. For the second year in a row, Corning received a score of 100 on the Human Rights Campaign Foundation’s Corporate Equality Index. |
Our Performance Metrics in Context
In 2023, we set our targets fairly flat year-over year, despite the macro-economic headwinds facing our businesses: • Core EPS: target set 0.5% above 2022 actual – 50% of target payout achieved • Core Net Sales: target set 0.6% above 2022 actual – 53% of target payout achieved • Adjusted Free Cash Flow: although targets are set independently each year, 2023 target was set $57M over 2022 actual – 58% of target payout achieved |
In 2023, we again set rigorous targets across our key performance metrics. The metrics we use to measure our performance include Core Earnings Per Share, Core Net Sales, and Adjusted Free Cash Flow, with a 3-year +/- 10% ROIC modifier.modifier on our LTI (see below). These metrics and ROIC modifier were chosen because they are key drivers for creating long-term shareholder value and the financial indicators that best reflect the achievement of the strategic and operational objectives set out for our management team.
We went into the year knowing that customer demand was declining. Our goals were to maintain flat revenues and offset inflationary trends with cost reduction and improved business performance, so that we would be well positioned to capture growth when customer demand returned. Because of the increased uncertainty our performance curves were set with a “flat spot” designed to avoid a windfall payout should markets rebound quicker than anticipated. For example a $0.20 decline of EPS drops the payout to 80% but a $0.20 increase in EPS only reaches a payout of 110%. A similar “flat spot” principle was incorporated into all of our 2023 targets.
While share price performance is extremely important and considered by the Committee, our executive compensation program, particularly for our CEO, is heavily based on our performance against underlying metrics that support long-term shareholder value creation, including the financial and operational metrics identified by our shareholders as meaningful for our business. We believe Corning remains in a strong position to execute our leadership priorities and deliver sustainable shareholder value.
Our Performance Against Our Corporate Metrics | ||||||||||
Core EPS: Measure of Corporate Profitability | Core Net Sales: Indicator of Short- and Long-term Success | Adjusted Free Cash Flow: Indicator of the Ability to Invest in Growth and Return Value to Shareholders | ||||||||
$2.09 2022 | $2.10 2023 | $1.70 2023 | $14.81 B 2022 | $14.9 B 2023 | $13.58 B 2023 | $1.24 B 2022 | $1.30 B 2023 | $0.88 B 2023 | ||
50% of 2023 | 53% of 2023 | 58% of 2023 Target Payout | ||||||||
ROIC Modifier: Target: 180 bps improvement over 2020 ROIC of 6.8% Result: ROIC 9.3%, 250 bps improvement results in a modifier of +2.5% to 2021 CPUs and PSUs (covering the three-year period 2021-2023) | *Cashflow goals are set independently each year | |||||||||
62 | CORNING 2024 PROXY STATEMENT |
Compensation Discussion & Analysis
Our Metrics and Why We Use Them | ||
Core Earnings per Share (Core EPS): | ||
Core EPS is our key measure of profitability. (Note: Corning Core Growing core net sales — both organically through innovation and through acquisitions — remains critical to our | Adjusted Free Cash Flow: Strong | |
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 |
Shareholder Returns
Corning prioritizes delivering returns to our shareholders. For information about Corning’s 5-year common dividend growth, see page 9. The Company’s TSR performance is important for management and the Board; however, the Compensation Committee has chosen to focus on performance metrics that are also drivers for creating long-term shareholder and that our employees can actively impact via their performance (i.e., core net sales, core EPS, adjusted free cash flow and ROIC improvement.)
ANNUALIZED TOTAL SHAREHOLDER RETURN As of December 31, 2023 |
CORNING |
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.
2020 SSSO PIP-PSU Measures | Long-Term Incentive 2020 CPU and PSU (Year Three of 2018-2020 Plan) | |||||||||||||||||
Core EPS Goal (Weighted 75%) | Core Net Sales Goal (Weighted 25%) | Adjusted Free Cash Flow Goal (Weighted 70%) | Core Net Sales Goal (Weighted 30%) | |||||||||||||||
Payout % | Core EPS ($) | % of 2020 Plan | Core Net Sales (in $M) | % of 2020 Plan | Adjusted FCF (in $M) | % of 2020 Plan | Core Net Sales (in $M) | % of 2020 Plan | ||||||||||
200% | 1,000 | 200 | $11,600 | 109.4 | ||||||||||||||
150% | Capped at 100% | 700 | 140 | 11,200 | 105.7 | |||||||||||||
125% | 600 | 120 | 11,000 | 103.8 | ||||||||||||||
TARGET | 100% | 1.21 | 100 | 10,600 | 100.0 | 500 | 100 | 10,600 | 100.0 | |||||||||
75% | 0.80 | 66 | 9,600 | 90.6 | 100 | 20 | 9,600 | 90.6 | ||||||||||
50% | 0.72 | 60 | 9,400 | 88.7 | 50 | 10 | 9,400 | 88.7 | ||||||||||
0% | 0.64 | 53 | 9,200 | 86.8 | 0 | 0 | 9,200 | 86.8 |
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 management’s assessment of future Company performance. The ROIC modifier for 2018 CPUs (based on 2018 through 2020 performance) was as follows:
ROIC Improvement 2018 – 2020 (in basis points) | Modifier (Adjustment to 2018 CPUs) |
250 | +10% |
175 | +5% |
100 | No adjustment |
50 | -5% |
0 | -10% |
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, South Korean won, Chinese yuan, new Taiwan dollar, and the euro against the U.S. dollar, and a constant tax rate of 21%. Invested capital is the sum of total assets excluding foreign currency hedge assets less total liabilities excluding foreign currency hedge liabilities and debt.
2020 Performance and Compensation Alignment
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 economy improved.
Compensation Discussion & Analysis
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 started to recover in many of the markets we serve. Our results tell the story.
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 performance results were substantially below target.
2020 | 2019 | |||||||
Measure | Actual and % increase vs. ’19 Actual | Target and % increase vs. ’19 Actual | Actual | Target | ||||
Core EPS | 1.43(1) | $1.21 | $1.76 | $1.96 | ||||
Percentage increase vs ’19 Actual | -18.8% | -31.3% | ||||||
Core Net Sales (millions) | $11,258(1) | $10,600 | $11,656 | $12,298 | ||||
-3.4% | -9.1% | |||||||
Adjusted Free Cash Flow (millions) | $932(1) | $500 | N/A(2) | N/A(2) |
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.
|
2020 | 2019 | ||
PIP-PSUs (capped at 100% of target) in 2020, cash PIP in 2019 | 100% | 24% | |
Goalsharing payout (vs. 5% target) | 6.84% | 4.37% | |
2020 CPU and PSU performance result (% of target) | 181% | 62% | |
3-year CPU ROIC modifier (+/- up to 10%) | -10% | -2.8% | |
3-year performance results ending in the year (including modifier) | 112% | 100% |
Compensation Discussion & Analysis
Shareholder Engagement
Strong Say on Pay Results. At our 20202023 Annual Meeting of shareholders, our Say on Pay proposal received support from 92%91% of votes cast. We have received an average of 92%91% support for our Say on Pay proposal over of the past three years. We view this level of shareholder support as an affirmation of our current pay practices and pay for performance philosophy.
Shareholder Outreach.In 2020, During the 2023-2024 outreach season, we contacted shareholders representing 52% of our outstanding shares to encourage engagement, and met with shareholders representing approximately 40%27% of our outstanding shares, and approximately 60%including five out of our 50ten largest shareholders. Additionally, executive management, Board members, Investor Relations and the Corporate Secretary engage annually
Topics discussed in 2023 shareholder outreach
Corporate Governance Board composition, refreshment and diversity Leadership structure Oversight of emerging risks Executive compensation |
Sustainability Sustainability goals, progress, investment and reporting Supply chain sustainability Science Based Targets initiative (SBTi) approval of Corning’s near-term science based emissions reduction target Water conservation goals |
People Succession planning Human capital management Diversity in leadership | ||||
An integrated outreach team | Engagement Process |
During our off-season engagement calls, executive management, Board members, Investor Relations and the Corporate Secretary engage with our largest investors to understand their perspectives on a variety of matters, including executive compensation, risk oversight, board composition and leadership structure, corporate governance practices and sustainability practices. Investors were complimentary of our GHG reduction goals, gender pay equity success, and board diversity, and continue to be pleased with our strategic priorities. Corning’s efforts to promote a diverse and equitable workforce were widely viewed as a differentiating element of the Company with positive actions toward diversity at both the board and Company level. We received positive feedback and heard general support of our executive compensation program and design changes made in recent years. Shareholders were pleased with the use of our strategic metrics to align executive incentives with long-term value creation. We look forward to continuing these engagements and incorporating shareholder feedback into our compensation program design. |
64 | CORNING 2024 PROXY STATEMENT |
Compensation Discussion & Analysis
Shareholder feedback is regularly shared with the governance teamsfull Board and incorporated as appropriate into decision-making. We have considered the views of our largest investors to understand their perspectives on a variety of matters, including executive compensation, risk oversight, corporate governance policies and corporate sustainability practices. We learned through these meetings that our investors approvedshareholders when making many of our COVID-19 pandemic responsegovernance and continue to be pleased with our strategic priorities. These shareholders also were generally supportive of our executive compensation program, the direct linkage of financial metricsdisclosure decisions in our performance-based variable compensation plans to our strategic priorities, and the decrease in the cash percentage/increase in the equity percentage of our Long-Term Incentive Program. As in previousrecent years, shareholders were not prescriptive about compensation plan design. Instead, they were more interested to see that the results and outcomes delivered by the incentive plans were aligned appropriately with Corning’s performance and had appropriately incented our executives to deliver on our strategic priorities.including:
• | Enhancing disclosure about board refreshment and board diversity |
• | Enhancing our directors’ skills matrix, and highlighting those skills considered most important to Corning |
• | Expanding disclosure regarding our supply chain sustainability practices and resiliency, as well as supplier practices and compliance with our supplier code of conduct |
• | Expanding disclosure about the board’s role in strategic planning and risk oversight |
• | Enhancing disclosure and governance regarding political contributions |
• | Publishing a Sustainability Report, setting GHG emission reduction goals, and obtaining SBTI validation |
• | Disclosing our annual EEO-1 Report concurrently with our Sustainability Report |
• | Enhancing disclosure about human capital management and the efforts of our Office of Racial Equity and Social Unity |
• | Adjusting our executive LTI program design |
• | Adopting proxy access |
We also communicate with shareholders through a number of routinemultiple forums, including quarterly earnings presentations, SEC filings, this Proxy Statement,Statements, our online Annualannual communications, our Sustainability Report, our Diversity and Inclusion Report, the annual shareholder meeting,Annual Meeting of shareholders, 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.
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Table of Contentsconstituents including other institutional shareholders, retail shareholders, proxy advisory firms, and ESG rating firms, among others, to address questions or concerns, provide prospective on Company policies and practices, and to incorporate feedback as appropriate.
Compensation Discussion & Analysis
20202023 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.
for NEOs
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 63.72. In 2020, as part of2023, our SSSO response to COVID-19, Mr. Weeks’NEOs did not receive any increase in base salary, was temporarily reduced by 40%, from June 1, 2020 through December 27, 2020 in exchange for a one-time grant of RSUs and stock options vesting over three years. Otherline with all salaried employees’ reductions varied by pay grade from 5% to 30% for executives (including all of our other NEOs).employees.
Short-Term Incentives
Short-term incentives are designed to reward NEOs for Corning’s consolidated annual financial and operational performance supporting our strategic priorities and team-based management approach. Corning has two short-term incentive plans: the Performance Incentive Plan (PIP) and GoalSharing.
PIP targets are established by the Committee each February as a percentage of the NEO’s year-end salary depending on the competitive marketplace and his or her level of experience.
In 2020, Mr. Weeks’2023, PIP targettargets (as a percentage of base salary) for our NEOs were as follows:
NEO | 2023 PIP Target (% of base salary) |
Wendell P. Weeks | 150% (unchanged from prior year’s target) |
Edward A Schlesinger | 90% (Increased from 80% to better align with external market benchmarks) |
Lawrence D. McRae | 85% (unchanged from prior year’s target) |
Eric S. Musser | 140% (increased from 120% to better align with external market benchmarks) |
Lewis A. Steverson | 95% (unchanged from prior year’s target) |
CORNING 2024 PROXY STATEMENT | 65 |
Compensation Discussion & Analysis
As discussed on page 60, cash PIP in 2023 was unchangedexchanged for PSUs for NEOs, capped at 150%110% of year-end base salary. Mr. Musser’s PIP targettarget. PSU performance measures were 100% corporate financial performance (75% of which was established at 90% of year-end base salary based on his promotion to Presidentcore EPS and Chief Operating Officer, Mr. McRae’s PIP25% on core net sales). 2023 core EPS performance was 50% of target, and core net sales was unchanged53% of target, resulting in PSUs earned at 85%51% of year-end base salary and Messrs. Tripeny and Clappin had unchanged PIP targets of 80%. As described above in “Impact of COVID-19 on Compensation and Benefits,” 2020 cash PIP was canceled and exchanged for a grant of PSUs (PIP-PSUs) for NEOs which were capped at 100%.
target.
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 opportunity generally equal to 5% of base salary. Earned GoalSharing awards may be 0% -to 10% of base salary and the award is weighted 25% on corporate financial performance (using the same metrics as used for PIP) and 75% on the applicable 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. In 2023 the NEO’s GoalSharing paid out at 5.48% of base salary.
See page 60 for details on the 2023 PIP and GoalSharing metrics and actual results for the year.
Long-Term Incentives
Beginning in 2020, Long-Term Incentives (LTI) were realigned. The portion of LTI provided in cash was reduced from 60% to 25% and the portion of LTI delivered in equity was increased from 40% to 75%. Stock options were eliminated and PSUs were added with PSUs comprising 45% of LTI target and RSUs comprising 30% of target. The total portion of LTI tied to corporate financial performance increased from 60% to 70%.
We believe it is important to link LTI metrics to financial measures that will drive the success of our strategic priorities and generate long-term value for our shareholders. We also believe it is important for a significant portionpercentage of LTI to be in the form of equity to align our executives’ stock ownershipfinancial interests with those of our shareholders.
Our LTI construct for 2023 is as follows:
Vehicle |
% of LTI Target | Cash | Equity | Performance-Based | Time-Based | |||||||||
Cash Performance Units (CPUs) | 25% | ✓ | ✓ | ||||||||||
Performance Share Units (PSUs) | 45% | ✓ | ✓ | ||||||||||
Restricted Stock Units (RSUs) | 30% | ✓ | ✓ |
Compensation Discussion & Analysis
LTI targets are established by the Committee for each NEO annually in February. Mr. Weeks’ 2020
In 2023, LTI targets for our NEOs were mostly unchanged as follows:
NEO | 2023 LTI Target Value |
Wendell P. Weeks | $12,650,000 (unchanged from prior year’s target) |
Edward A Schlesinger | $2,350,000 (increased by $350,000 to better align to external market benchmarks) |
Lawrence D. McRae | $2,600,000 (unchanged from prior year’s target) |
Eric S. Musser | $4,750,000 (unchanged from prior year’s target) |
Lewis A. Steverson | $3,800,000 (unchanged from prior year’s target) |
2023 Key Compensation Metrics
Award | Type | Metrics Used | |||
GoalSharing (Cash) | Short-term/ Annual | 25% corporate financial performance 75% local and business unit performance plans (average of >100 unit plans) | |||
PIP (PSUs in 2023) | Short-term/ Annual* | 100% corporate financial • 25% core net sales • 75% core EPS | |||
CPUs/PSUs | Long-term/three-year measurement period | Performance period metrics, average of three one-year performance periods: • 30% core net sales • 70% adjusted free cash flow Long-term modifier: result adjusted +/- 10% as a multiplier based on ROIC performance over the three-year performance period |
*PIP is typically an annual bonus plan; however, the 2023 Cash for Equity Exchange PIP PSUs vest over three years.
66 | CORNING 2024 PROXY STATEMENT |
Compensation Discussion & Analysis
Additional Context for Core Net Sales Metric
Core net sales, which is a metric used in both our STI (PIP) and LTI plans, is a primary indicator of Corning’s long- and short-term success. Evaluating performance against predetermined net sales targets provides insight into how well the Company has both retained and grown sales, accounting for both organic growth efforts and the impact of acquisitions.
We use core net sales as a performance measure in our annual GoalSharing and PIP plans because GoalSharing impacts every employee and PIP impacts over 8,000 employees. In this way, every employee has alignment with Corning’s growth goals. Core net sales is also included as a performance measure in the LTI plan, impacting approximately 350 senior executives and key employees, because those employees are responsible for driving the long-term financial growth of the Company.
Incorporating core net sales performance into both STI and LTI plans allows for a comprehensive evaluation of Corning’s ability to establish sustainable sales growth while also addressing near-term market fluctuations, which drives both short-and long-term value. Core net sales is a “duplicate goal” for only about 350 out of approximately 49,800 employees, and the Committee believes the increased focus on core net sales growth is appropriate for that smaller group of executives given the importance of sales growth for Corning over time.
How Corning Uses Other Metrics
In addition to corporate financial measures, each year the Company establishes key operational objectives, typically linked to key business, technology, financial, supply chain and human capital goals. These operational objectives are, in turn, cascaded into division and operational unit annual objectives. Unit GoalSharing plans contain goals linked to those unit objectives, creating alignment with the key Company operational objectives.
Other important initiatives such as sustainability, diversity, and safety that the Company continuously monitors are factored into short-term incentives for employees directly responsible for such efforts. Acknowledging that specific operational objectives and other special initiatives are reflected in operational unit annual objectives and other focused short-term incentives, the Committee has elected to focus on key financial metrics in the design of executive compensation, as described in this CD&A.
2023 Performance and Compensation Alignment
In 2023, as customer demand declined to recessionary levels in many of our markets, our goals were to maintain sales, improve business performance and offset the impacts of higher inflation. Although we were able to partially achieve our goals, we could not completely offset the impact of reduced customer demand and higher inflation; as a result, our performance results were significantly below target. We froze base salaries, enabled a voluntary exchange of a portion of salary for RSUs vesting over 18 months, kept short- and long-term incentive targets flat for most NEOs and exchanged cash PIP for PSUs (which will payout at 51% of target was unchanged at $9.75 million. Other NEOs’over the 36 month vesting period). Pay for our NEOs year-over-year is down (and realized pay down even more) aligning to our below-target results. Nonetheless, we did realign and improve our operational performance and are well positioned for growth as our markets rebound.
See page 61 for more performance highlights.
Details of our financial targets may be found in footnote 3for 2023 compared to 2022 actual results are shown on the Summary Compensation Tablechart on page 6762 and range from $2.35 milliondemonstrate the rigor we apply to $2.925 million.
setting targets for compensation purposes.
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Compensation Discussion & Analysis
Details of 2023 Performance Targets and Results
2023 PIP PSUs & GoalSharing Corporate Performance Measures
(100% of PIP and 25% of GoalSharing)
PIP: The final PIP PSU payout for NEOs is 51% of target, with units vesting over 3 years from the grant date of February 8, 2023. Unearned units are forfeited and canceled.
GoalSharing: The final GoalSharing payout for NEOs is 5.48% of their base salaries. GoalSharing is based on the blended result of 1) the corporate financial performance shown in the chart above (51%, weighted at 25%) and 2) the average performance of over 100 unit plans (129%, weighted at 75%).
LTI: 2023 CPU and PSU Performance Measures
PSUs and CPUs represent 45% and 25% of the annual target LTI value, respectively. Payout is based on cash generation and sales growth—measures that support our long-term financial health and success. The 2023 performance measures for PSUs and CPUs are:
1) | Adjusted | |
2) | Core | |
2018 – 2020Actual CPUs and 2020 PSUs — Our 3-Year Performance Period Measurementsearned are based on the average of the actual performance for each year in the three-year period and are subject to an ROIC modifier of up to ±10% (for the years 2023, 2024 and 2025). CPUs and PSUs granted in 2023 will be vested and released (in the case of PSUs) and paid out (in the case of CPUs) in 2026 based on pre-established performance goals, which are set at the start of each respective year, and the three-year ROIC modifier which is established at the beginning of the three-year performance period, and acts as a multiplier of -10% to +10% to the three-year average at the end of the performance period (depending on ROIC improvement over the period).
See page 69 for details on the 2023 PSU and CPU metrics and actual results for the year as well as the results for the 3-year plan ending in 2023, covering the performance period from 2021-2023.
RSUs represent 30% of the annual target LTI value. The number of RSUs granted is determined based on the closing stock price on the grant date (the first business day in April), and awards cliff vest approximately three years from the grant date.
CORNING |
Compensation Discussion & Analysis
2023 CPU & PSU Performance Measures
*Adjusted free cash flow goals are not set with reference to the prior years’ goal or results and are set independently each year.
Please see page 7 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.
2021-2023 CPU and PSU ROIC Modifier (Multiplier)
3-year ROIC Improvement
Starting Point - December 31, 2020 Long-Term Incentives – Equity Components- ROIC: 6.8%
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, South Korean won, Chinese yuan, New Taiwan dollar, and the euro against the U.S. dollar, and a constant tax rate of 21%. Invested capital is the sum of total assets less total liabilities and debt.
Compensation Discussion & Analysis
CPUs and PSUs — Our Three-Year Performance — How It Works
The following illustration shows how earned CPUs and PSUs are calculated at the end of the three-year performance period. The 2023 performance result is the third performance year of the three-years ending in 2023 (2021, 2022 and 2023), which is averaged and then subject to the ROIC modifier, which is a multiplier (of up to +/- 10%) on the average result.
*Performance targets are generally established in February each year for the calendar year. See page 68 for performance measures and results for the applicable year.
**3-year ROIC improvement target is established at the beginning of each three-year performance period. See page 69 for the 2021-2023 performance measures and results.
CEO Compensation
Over the past sixteennineteen years, under the leadership of Mr. Weeks, Corning has grown significantly, achieved the lowest cost position and market leadership in key businesses, and created new-to-the-world product categories, such as Corning® Gorilla® Glass, heavy-duty diesel substrates and filters, customized fiber-to-the-home solutions and Corning Valor® Glass.
In 2020, Mr. Weeks’ significant experience and tenure as a CEO washas been of particular value to the companyCompany and its Directors as we navigated the pandemic, supply chain disruptions, and the current inflationary economic environment, having successfully steered the companyCompany through other periods of significant uncertainty. Mr. Weeks was personally involved in all aspects of the company’s responseHowever, due to the COVID-19 pandemic. He and the senior leadership team successfully refocusedmacro-economic challenges impacting the Company, which resulted in return to growth in the second half of the year and maintenance of a strong balance sheet throughout the year. 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 very strong free cash flow. For the year, we generated almost a billion dollars of free cash flow, and our balance sheet remains very strong.
In 2020Committee left Mr. Weeks’ target compensation was not changed, and Mr. Weeks participatedflat in the SSSO program along with other employees and executives:
2023.
• | Base salary– |
• | Short-Term Incentives – 2023 PIP and GoalSharing targets were unchanged at 150% and 5% of base salary, respectively. 2023 cash PIP was exchanged for PSUs pursuant to the 2023 Cash for Equity Exchange Program (described on page 60). |
• | |
Eighty-nineNinety-one percent of Mr. Weeks’ target pay is directly tied to Corning’s business, operating and financial performance or stock price.
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.
(via equity).
70 | CORNING |
Compensation Discussion & Analysis
Robust Compensation Program Governance
The target mix for Mr. Weeks’ 2020 LTI awards was: 45% PSUs, 25% CPUsCorning has rigorous 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% increaserobust governance with respect 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.
its executive compensation plan:
What We Don’t Do | |||
✓ Close alignment of pay with performance over both the short- and long-term horizon, and delivery of the goals of our strategic priorities ✓ Mix of cash and equity incentives tied to short-term financial performance and long-term value creation ✓ CEO total compensation targeted within a competitive range of the Compensation Peer Group median ✓ Caps on payout levels for annual incentives in ✓ Significant NEO share ownership requirements ✓ Anti-hedging and pledging policies ✓ Clawback policy applicable to both cash and equity compensation ✓ Minimum twelve-month vesting period for restricted stock or restricted stock unit awards in the employee equity plan ✓ All members of the Committee are independent ✓ Independent compensation consultant advises the Compensation and Talent Management Committee ✓ History of demonstrated responsiveness to shareholder concerns and feedback, ✓ Limited and modest perquisites that have a sound benefit to the | x No tax gross-ups or tax assistance on perquisites x No repricing or cash buyout of x No excise tax gross-ups for officer agreements executed after July 2004 | ||
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 26about 20 active participants, including all of the NEOs. In 2006, we capped theThe percentage of cash compensation earned as a retirement benefit under the ESPP atis a maximum of 50% of final average pay for 25 or more years of service, a change that applies to all the NEOs.service. The definition of pay used to determine benefits includes base salary and annual cash bonuses. Long-term cash or equity incentives are not included and do not affect retirement benefits. Executives must have at least ten years of service to be vested under this plan. AllAs of theDecember 31, 2023, all NEOs meet the ten-year vesting requirement.
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 76.83.
CORNING 2024 PROXY STATEMENT | 71 |
Compensation Discussion & Analysis
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 assignmentreported under perquisites 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 on assignment in Japan and China Messrs. Clappin and Musser were eligible for expatriate benefits afforded to all expats on temporary international assignments. Tax-related assistance extends for several years beyond the assignment end due to LTI amounts earned while on assignment which vest after the assignment end date and settlement of taxes. These amounts are detailed in footnote 5, section (v) to the Summary Compensation Table.Tables.
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 anythe 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 Mr. Musser was 90 hours and $147,500; the cap for the other NEOs was approximately half this leveltwo-thirds of the CEO cap or lower. Actual utilization in 20202023 fell well below these caps, especially with limited flight options due to the pandemic.caps. For additional details, refer to footnotes relating to “All Other Compensation” included with the Summary Compensation Table starting on page 67.76.
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 79.86.
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 81.
88.
In 2012, the Committee approved updated forms of agreements for all corporate officers entering into severance and change-in-control agreements after July |
Corning is a diversified technology company with five reportable business segments. The majorityMost 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-heldprivately held companies that do not provide comparable executive compensation disclosure.disclosure and, while such businesses may be a competitor to one of our businesses, are not appropriate peers to our Company as a whole. 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,These companies, and not competitors to our peer group for compensation purposes does not closely resemble the companies with which we compete for business.
individual businesses, are those included in our Compensation Peer Group.
• | Our largest competitors and most relevant financial performance peers are not U.S. public companies. | |
• | As a result, Corning |
72 | CORNING |
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 TrueView Survey and Aon Hewittthe Radford Total Compensation Measurement SurveyDatabase for Executives. TheThese surveys provide general market data for relevant positions in companies with revenues and market capitalization similar to Corning’s in both the technology industry and in general industry.
20202023 Compensation Peer Group
TheOur 2023 Compensation Peer Group in 2020 is set forth below. It is
Given the same asgrowth of the Company over the past several years, in 2022 the Committee (with the assistance and advice of its consultant, Frederic W. Cook & Co., Inc.) reviewed and approved changes to the Compensation Peer Group removing two companies (Thermo Fischer Scientific and Broadcom) and adding seven new companies (Honeywell International, 3M Company, Illinois Tool Works, Emerson Electric, Amphenol Corporation, IQVIA Holdings and DuPont de Nemours). This had the net effect of increasing the Compensation Peer Group from 21 companies to 26 companies with the goal of creating a data set of sufficient size which would not require further update for several years, outside of adjustments for peer M&A activity, etc. No changes were made to the Compensation Peer Group in 2019.
2023.
3M Company | Cummins Inc. | Illinois Tool Works, Inc. | PPG Industries, Inc. | |||
Advanced Micro Devices, Inc. | QUALCOMM, Inc. | |||||
Agilent Technologies, Inc. | Dover Corporation | Juniper Networks, Inc. | Rockwell Automation, Inc. | |||
Amphenol Corporation | DuPont de Nemours, Inc. | L3Harris Corporation | TE Connectivity Limited | |||
Medtronic, Inc. | Texas Instruments Incorporated | |||||
BorgWarner, Inc. | Emerson Electric Co. | Motorola Solutions, Inc. | ||||
Boston Scientific Corporation | ||||||
The Company selectsutilizes 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.indicated below.
PERCENT RANK,COMPARISON, CORNING VERSUS COMPENSATION PEER GROUP
(in millions, except for Employees) | ||
Revenue | Net Income | |
Total Assets | Employees | |
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., base salary, STI and LTI 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 $14.7$16.6 million, and 75th percentile target total direct CEO compensation was $17.7$20.2 million, compared with Corning target total direct CEO compensation of $13.5$16.7 million. The Committee deems this market position for CEO pay to be appropriate given (a) Mr. Weeks’ strong performance in managing the complexity of the Company and (b) his years of experience in the role. Beyond the CEO, external data serves as a reference point, with internal equity and individual performance and impact being more important considerations in establishing a base salary and target total direct compensation for the other NEOs.
CORNING 2024 PROXY STATEMENT | 73 |
Compensation Discussion & Analysis
Compensation Program – Other Governance Matters
Role of Compensation Consultant
The Compensation Committee has thesole authority to retain and terminate aits 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 expertexperts from Frederic W. Cook & Co., Inc. (FW Cook) as its independent consultant.
.
In 2020,2023, FW Cook attended all Committee meetings. FW Cook advises the Committee on all matters related to NEO and director compensation and assists the Committee in interpreting its data as well as data and recommendations received from the Company.
Compensation Discussion & Analysis
In 2020,2023, the Company also engaged Compensation Advisory Partners LLC (CAP) and Willis Towers Watson (WTW) to assist management and the Committee with various executive compensation matters.
matters and disclosures.
The Committee conducted anreviewed the independence review of FW Cook, CAP and WTW pursuant to SEC and NYSE rules and concluded that theeach firm’s 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 senior vice president (SVP),Chief Human Resources Officer and SVP, Global Compensation and Benefits, working closely with other members of Corning’s Human Resources, Law and Finance departments, are responsible for designing and implementing executive compensation programs and discussing with the Committee significant proposals or topics that affect executive compensation at the Company. The SVP, Global Compensation and Benefits, formulates the target total compensation recommendations for all of the NEOsexecutive officers (except the CEO) and reviews the recommendations for each of the other NEOs with the CEO. The NEOs do not recommend or suggest individual compensation actions that benefit them personally.
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.
annually for approval.
After the annual budget is finalized each year, the Committee receives management’s recommendations for the compensation planannual bonus and long-term incentive plans performance metrics and sets the final targets for the year.
The CFO and the Corporate Controller typically attend the annual Committee meeting to review the CD&A and at least one of them attends thatthe portion of the February Committee meeting where performance metrics are reviewed.
Clawback Policy
Our clawback policy givesThe Compensation and Talent Management Committee of the CommitteeBoard has adopted a formal Compensation Clawback Policy, as required by the sole and absolute discretion to make retroactive adjustments to any cashNYSE Listing Standards. The Clawback Policy provides for the recovery of incentive-based compensation erroneously received by current or equity-based incentive compensation paid toformer executive officers and other key employees if such payment was based uponduring the achievementthree fiscal years immediately preceding the year in which the company is required to prepare an accounting restatement due to material noncompliance with financial reporting requirements. The requirements under the Clawback Policy are separate from any recoupment required by the Sarbanes-Oxley Act of financial results that were subsequently the subject of a restatement.2002. The Committee also has discretion to seek recovery of any amount that it determines was received otherwise inappropriately by such individuals.
Anti-Hedging Policy
Our anti-hedgingwritten insider trading policy, which governs trading activity by directors, officers and employees, 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-pledgingwritten insider trading policy, which governs trading activity by directors, officers and employees, prohibits employees and directors from holding Corning stock in a margin account or pledging Company securities as collateral for a loan.
74 | CORNING 2024 PROXY STATEMENT |
Compensation Discussion & Analysis
Accounting Implications
In designing our compensation and benefitbenefits 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
Compensationand Talent Management Committee Report
The Compensation and Talent Management 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, as appropriate, for the year ended December 31, 2020.
2023.
The Compensation and Talent Management Committee:
Deborah D. Rieman, Chair
Leslie A. Brun
Richard T. Clark
Roger W. Ferguson, Jr.
Kurt M. Landgraf
Hansel E. Tookes II
CORNING | 75 |
Compensation Discussion & Analysis
20202023 Summary Compensation Table
This table describes the total compensation paid to our NEOs for fiscal years 2020, 20192023, 2022 and 2018,2021, as required. The components of the total compensation are described in the footnotes below and in more detail in the tables and narratives that follow. For information on the role of each component of compensation, see the description under “Compensation Discussion and Analysis.”
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 column (f) includes cash LTI awards earned related to prior year CPU awards; future disclosed values will be declining over the next two years as the pre-2020 LTI design phases out.
There was no increase to Mr. Weeks’ target pay in 2020 compared to 2019.
(a) | (b) | (c) | (d)(1) | (e)(2) | (f)(3) | (g)(4) | (h)(5) | (i) | ||||||||
Named Executive Officer | Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value And Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||
Wendell P. Weeks | 2020 | $1,151,245 | $8,417,516 | $151,467 | $7,549,868 | $1,330,636 | $351,021 | $18,951,753 | ||||||||
Chairman and Chief | 2019 | 1,457,604 | 2,437,491 | 1,262,629 | 3,963,645 | 4,527,898 | 634,387 | 14,283,654 | ||||||||
Executive Officer | 2018 | 1,412,769 | 2,250,004 | 1,068,905 | 9,496,910 | 214,550 | 477,933 | 14,921,071 | ||||||||
R. Tony Tripeny | 2020 | 593,210 | 2,098,154 | 54,636 | 1,829,521 | 702,995 | 95,859 | 5,374,375 | ||||||||
Executive Vice President | 2019 | 700,769 | 587,494 | 304,322 | 960,485 | 1,856,908 | 134,966 | 4,544,944 | ||||||||
and Chief Financial Officer | 2018 | 643,269 | 531,248 | 252,380 | 2,128,343 | 784,470 | 137,172 | 4,476,882 | ||||||||
James P. Clappin | 2020 | 644,837 | 2,252,393 | 59,421 | 1,976,704 | 383,419 | 156,974 | 5,473,748 | ||||||||
Vice Chairman and | 2019 | 761,731 | 625,010 | 323,746 | 1,047,808 | 1,565,776 | 149,794 | 4,473,864 | ||||||||
Strategic Advisor | 2018 | 731,515 | 587,497 | 279,101 | 2,521,206 | 49,144 | 333,350 | 4,501,812 | ||||||||
Lawrence D. McRae | 2020 | 687,804 | 2,400,770 | 63,336 | 2,019,691 | 471,510 | 48,505 | 5,691,625 | ||||||||
Vice Chairman and | 2019 | 812,500 | 637,492 | 330,221 | 1,104,186 | 1,842,624 | 77,664 | 4,804,687 | ||||||||
Corporate Development Officer | 2018 | 780,113 | 600,012 | 285,043 | 2,720,709 | 58,395 | 68,687 | 4,512,959 | ||||||||
Eric S. Musser | 2020 | 645,040 | 2,616,593 | 65,598 | 1,917,331 | 427,990 | 80,943 | 5,753,495 | ||||||||
President and Chief Operating Officer | ---------------- Not a NEO ---------------- |
As part of the 2023 Cash for Equity Exchange Program, 2023 cash PIP was exchanged for PSUs granted on February 8, 2023. Such PSUs, at target, are included in the Stock Awards column below. However, the PSUs were only earned (and paid out) at 51% of target. Unearned PSUs were forfeited and cancelled. |
(a) | (b) | (c)(1) | (d)(2) | (e) | (f)(3) | (g)(4) | (h)(5) | (i) | ||||||||||
Named Executive Officer | Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value And Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||
Wendell P. Weeks | 2023 | $1,580,000 | $11,355,517 | $0 | $ 1,968,325 | $329,695 | $394,116 | $15,627,653 | ||||||||||
Chairman and Chief | 2022 | 1,553,077 | 10,661,224 | 0 | 3,479,983 | 0 | 475,185 | 16,169,469 | ||||||||||
Executive Officer | 2021 | 1,492,648 | 8,023,645 | 0 | 10,820,127 | 0 | 429,612 | 20,766,032 | ||||||||||
Edward A. Schlesinger | 2023 | 650,000 | 2,056,577 | 0 | 281,601 | 509,115 | 68,921 | 3,566,214 | ||||||||||
Executive Vice President | 2022 | 641,085 | 1,232,451 | 0 | 530,850 | 0 | 62,099 | 2,466,485 | ||||||||||
and Chief Financial Officer | ||||||||||||||||||
Lawrence D. McRae(6) | 2023 | 880,500 | 2,611,344 | 0 | 449,464 | 109,596 | 156,709 | 4,207,613 | ||||||||||
Vice Chairman and Corporate | 2022 | 865,585 | 2,404,366 | 0 | 974,452 | 0 | 184,143 | 4,428,546 | ||||||||||
Development Officer | 2021 | 833,604 | 1,897,383 | 0 | 3,010,569 | 0 | 79,247 | 5,820,803 | ||||||||||
Eric S. Musser | 2023 | 929,300 | 4,655,565 | 0 | 738,207 | 249,101 | 144,382 | 6,716,555 | ||||||||||
President and Chief | 2022 | 913,523 | 3,659,339 | 0 | 1,379,649 | 0 | 115,315 | 6,067,826 | ||||||||||
Operating Officer | 2021 | 870,837 | 2,630,873 | 0 | 3,761,798 | 163,366 | 86,427 | 7,513,301 | ||||||||||
Lewis A. Steverson | 2023 | 851,800 | 3,500,556 | 0 | 608,457 | 702,772 | 96,931 | 5,760,516 | ||||||||||
Executive Vice President | 2022 | 837,369 | 3,007,811 | 0 | 1,083,552 | 0 | 198,904 | 5,127,636 | ||||||||||
and Chief Legal and | 2021 | 780,288 | 2,228,528 | 0 | 2,751,037 | 442,144 | 115,660 | 6,317,657 | ||||||||||
Administration Officer |
(1) | Includes all amounts paid in cash, deferred under the Investment Plan and/or Supplemental Investment Plan and amounts exchanged for RSUs under the 2023 Cash for Equity Salary Exchange program (see page 60) vesting over 18 months. |
(2) | The amounts in the Stock Awards column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of awards of |
The amounts in the Non-Equity Incentive Plan Compensation column reflect the sum of annual short-term incentive payments |
Named Executive Officer | 2023 Year End Base Salary | 2023 PIP Target % | Actual 2023 PIP Performance (% Target) | (A) 2023 PIP $ Award | Actual 2023 GoalSharing Payout (% base) | (B) 2023 GoalSharing $ Award | ||||||
Wendell P. Weeks | $1,580,000 | 150% | 51.00% | N/A | 5.48% | $86,584 | ||||||
Edward A. Schlesinger | 650,000 | 90% | 51.00% | N/A | 5.48% | 35,620 | ||||||
Lawrence D. McRae | 880,500 | 85% | 51.00% | N/A | 5.48% | 48,251 | ||||||
Eric S. Musser | 929,300 | 140% | 51.00% | N/A | 5.48% | 50,926 | ||||||
Lewis A. Steverson | 851,800 | 95% | 51.00% | N/A | 5.48% | 46,679 |
76 | CORNING |
Compensation Discussion & Analysis
Named Executive Officer | Year End Base Salary | 2020 PIP Target % | Actual 2020 PIP Performance Results (% Tgt.) | (A) 2020 PIP $ Award | Actual 2020 GoalSharing Performance % | (B) 2020 GoalSharing $ Award | |||||||
Wendell P. Weeks | $1,481,800 | 150% | N/A | $0 | 6.84% | $101,355 | |||||||
R. Tony Tripeny | 712,400 | 80% | N/A | 0 | 6.84% | 48,728 | |||||||
James P. Clappin | 774,400 | 80% | N/A | 0 | 6.84% | 52,969 | |||||||
Lawrence D. McRae | 826,000 | 85% | N/A | 0 | 6.84% | 56,498 | |||||||
Eric S. Musser | 855,000 | 90% | N/A | 0 | 6.84% | 58,482 |
In addition to the 20202023 GoalSharing awards noted above, the amounts in column (f) also reflect the earned portions of CPU Awards granted in 2020, 20192023, 2022 and 20182021 on the basis of 20202023 performance against established goals. 2020measures. 2023 CPU award payouts will be made in 2023February 2026 based on actual corporate performance compared to the established performance goals averaged over three years (2020, 2021(2023, 2024 and 2022)2025) and subject to a ±10% 3-year ROIC modifier as described starting on page 56. 201968. 2022 and 20182021 CPU award payouts are based on performance goals averaged over three years (2019, 2020(2022, 2023 and 2021)2024) and (2018, 2019(2021, 2022 and 2020)2023), respectively, and are also subject to a ±10% 3-year ROIC modifier. Performance goals for 20212024 and 20222025 are yet to be established. While the final payout amounts for 20202023 and 20192022 CPU awards are unknown, the table below reflects the earned amount of 2020, 20192023, 2022 and 20182021 CPU awards, which are reflected in column (f) above on the basis of 20202023 performance goalsmetrics, and which excludesexclude the portion of the 20202023 award that remains unearned becauseas a result of the three-year3-year performance modifier result that is not yet known. The 3-year ROIC modifier for the period 2018-20202021-2023 is -10.0%+2.5%, so there is nothe adjustment in the Summary Compensation Table as a result of this modifier is noted below since the amount “at risk” which had beenwas previously unreported is unearned.until final performance was known.
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.
Named Executive Officer | 2020 LTI Target | 2020 CPU Target Award ($) | 2020 CPU Performance Results % | (C) Prorated Earned 2020 CPU Award Based on 2020 Performance (Year One of Three) ($)* | 2019 CPU Target Award ($) | (D) Prorated Earned 2019 CPU Award Based on 2020 Performance (Year Two of Three) ($)* | 2018 CPU Target Amount | (E) Prorated Earned 2018 CPU Award Based on 2020 Performance (Year Three of Three) ($)* | (F) Prorated Earned 2018 CPU Award Based on 2018 - 2020 ROIC Modifier** ($) | |||||||||
Wendell P. Weeks | $9,750,000 | $2,437,500 | 181% | $1,323,563 | $5,850,000 | $3,176,550 | $5,400,000 | $2,948,400 | $0 | |||||||||
R. Tony Tripeny | 2,350,000 | 587,500 | 181% | 319,013 | 1,410,000 | 765,630 | 1,275,000 | 696,150 | 0 | |||||||||
James P. Clappin | 2,500,000 | 625,000 | 181% | 339,375 | 1,500,000 | 814,500 | 1,410,000 | 769,860 | 0 | |||||||||
Lawrence D. McRae | 2,550,000 | 637,500 | 181% | 346,163 | 1,530,000 | 830,790 | 1,440,000 | 786,240 | 0 | |||||||||
Eric S. Musser | 2,925,000 | 731,250 | 181% | 397,069 | 1,410,000 | 765,630 | 1,275,000 | 696,150 | 0 |
Named Executive Officer | 2023 LTI Target ($) | 2023 CPU Target Award ($) | 2023 CPU Performance Results % | (C) Prorated Earned 2023 CPU Award Based on 2023 Performance (Year One of Three) ($)* | 2022 CPU Target Award ($) | (D) Prorated Earned 2022 CPU Award Based on 2023 Performance (Year Two of Three) ($)* | 2021 CPU Target Award ($) | (E) Prorated Earned 2021 CPU Award Based on 2023 Performance (Year Three of Three) ($)* | (F) Prorated Earned 2021 CPU Award Based on 2021 - 2023 ROIC Modifier** ($) | |||||||||||||||||||||
Wendell P. Weeks | $ | 12,650,000 | $ | 3,162,500 | 56 | % | $531,300 | $ | 3,162,500 | $531,300 | $ | 2,912,500 | $489,300 | $329,841 | ||||||||||||||||
Edward A. Schlesinger | 2,350,000 | 587,500 | 56 | % | 98,700 | 500,000 | 84,000 | 225,000 | 37,800 | 25,481 | ||||||||||||||||||||
Lawrence D. McRae | 2,600,000 | 650,000 | 56 | % | 109,200 | 650,000 | 109,200 | 650,000 | 109,200 | 73,613 | ||||||||||||||||||||
Eric S. Musser | 4,750,000 | 1,187,500 | 56 | % | 199,500 | 1,187,500 | 199,500 | 1,025,000 | 172,200 | 116,081 | ||||||||||||||||||||
Lewis A. Steverson | 3,800,000 | 950,000 | 56 | % | 159,600 | 950,000 | 159,600 | 862,500 | 144,900 | 97,678 | ||||||||||||||||||||
* |
** | |
The amount disclosed in column (f) consists of the total (A) + (B) + (C) + (D) + (E) + (F) shown in this footnote (2).
Named Executive Officer | 2020 Present Value in Pension Benefits ($) | 2019 Present Value in Pension Benefits ($) | 2018 Present Value in Pension Benefits ($) | 2017 Present Value in Pension Benefits ($) | |||||
Wendell P. Weeks | $33,561,304 | $32,230,668 | $27,702,770 | $27,488,220 | |||||
R. Tony Tripeny | 9,534,467 | 8,831,472 | 6,974,564 | 6,190,094 | |||||
James P. Clappin | 11,429,231 | 11,045,812 | 9,480,036 | 9,430,892 | |||||
Lawrence D. McRae | 12,749,428 | 12,277,918 | 10,435,294 | 10,376,899 | |||||
Eric S. Musser | 10,984,568 | --------- Not a NEO ---- | |||||||
Valuation Discount Rate | 2.52% | 3.31% | 4.29% | 3.60% |
(4) The amounts in column (g) reflect the increase in the actuarial present value of the NEOs’ benefits under all defined benefit pension plans established by the Company determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. Although column (g) is also used to report the amount of above-market earnings on compensation that is deferred under the nonqualified deferred compensation plan, Corning does not have any above-market earnings under its nonqualified deferred compensation plan, also referred to as the Supplemental Investment Plan. In 2023, the discount rate used to value the actuarial liability decreased approximately 34 basis points from 5.49% to 5.15%. This change resulted in an increase in the present value of pension benefits for all NEOs. Discount rate changes over the past several years have resulted in significant year-to-year fluctuations in the present value of pension benefits as shown below:
Named Executive Officer | 2023 Present Value of Pension Benefits ($) | 2022 Present Value of Pension Benefits ($) | 2021 Present Value of Pension Benefits ($) | 2020 Present Value of Pension Benefits ($) | ||
Wendell P. Weeks | $26,373,034 | $26,043,339 | $31,472,765 | $33,561,304 | ||
Edward A. Schlesinger | 2,031,594 | 1,522,479 | ------------------- Not a NEO ------------------- | |||
Lawrence D. McRae | 10,381,432 | 10,271,836 | 12,187,537 | 12,749,428 | ||
Eric S. Musser | 10,761,945 | 10,512,844 | 11,147,934 | 10,984,568 | ||
Lewis A. Steverson | 4,193,361 | 3,490,589 | 3,555,981 | -- Not a NEO -- | ||
Valuation Discount Rate | 5.15% | 5.49% | 2.88% | 2.52% |
CORNING | 77 |
Compensation Discussion & Analysis
(5) | The following table shows “All Other Compensation” amounts provided to the |
Named Executive Officer | Company Match on Qualified 401(k) Plan | Company Match on Supplemental Investment Plan | Value of Personal Aircraft Rights(i) | Value of Home Security Costs and Financial Counseling(ii) | Other(iii) | Total All Other Compensation | |||||||||||
Wendell P. Weeks | $10,377 | $67,545 | $154,607 | $148,166 | (iv) | $13,421 | $394,116 | ||||||||||
Edward A. Schlesinger | 13,757 | 24,019 | 22,949 | 4,102 | 4,094 | 68,921 | |||||||||||
Lawrence D. McRae | 4,800 | 77,558 | 69,666 | 4,295 | 390 | 156,709 | |||||||||||
Eric S. Musser | 13,200 | 0 | 125,672 | 0 | 5,510 | 144,382 | |||||||||||
Lewis A. Steverson | 0 | 22,155 | 68,642 | 5,745 | 389 | 96,931 |
(i) |
Named Executive Officer | Year | Company Match on Qualified 401(k) Plan | Company Match on Supplemental Investment Plan | Value of Personal Aircraft Rights | Value of Home Security Costs and Financial Counseling(i) | Expatriate Benefits | Other(ii) | Total All Other Compensation | |||||||||
Wendell P. Weeks | 2020 | $10,703 | $28,009 | $87,031 | $212,913 | (iii) | $0 | $12,365 | $351,021 | ||||||||
2019 | 15,907 | 79,781 | 279,448 | 250,500 | (iii) | 0 | 8,751 | 634,387 | |||||||||
2018 | 16,227 | 77,320 | 195,485 | 179,746 | (iii) | 0 | 9,155 | 477,933 | |||||||||
R. Tony Tripeny | 2020 | 5,200 | 13,573 | 7,923 | 56,798 | 0 | 12,365 | 95,859 | |||||||||
2019 | 5,000 | 52,621 | 3,961 | 61,039 | 0 | 12,345 | 134,966 | ||||||||||
2018 | 4,900 | 54,092 | 17,758 | 47,219 | 0 | 13,203 | 137,172 | ||||||||||
James P. Clappin | 2020 | 17,599 | 11,035 | 37,907 | 42,094 | 11,003 | (iv) | 37,336 | 156,974 | ||||||||
2019 | 17,153 | 38,131 | 56,279 | 23,720 | 1,929 | (iv) | 12,582 | 149,794 | |||||||||
2018 | 16,810 | 89,499 | 53,820 | 18,680 | 132,122 | (iv) | 22,419 | 333,350 | |||||||||
Lawrence D. McRae | 2020 | 17,599 | 11,770 | 14,548 | 4,223 | 0 | 365 | 48,505 | |||||||||
2019 | 17,290 | 0 | 57,109 | 2,920 | 0 | 345 | 77,664 | ||||||||||
2018 | 16,981 | 0 | 47,673 | 3,620 | 0 | 413 | 68,687 | ||||||||||
Eric S. Musser | 2020 | 17,599 | 0 | 48,083 | 967 | 1,929 | (iv) | 12,365 | 80,943 | ||||||||
(ii) | NEOs may use their executive allowance for residential security or financial counseling services. |
(iii) | ||
These amounts include costs attributable to executive physicals, including associated travel costs, an annual Board gift, and contributions made under the Corning Foundation Matching Gifts Program. |
(iv) | ||
This reflects Company-paid expenses relating to personal and residential security benefitting Mr. Weeks and, through association, his family. Mr. Weeks’ personal safety and security are of vital importance to the Company’s business and prospects, and the Board considers these costs to be appropriate. However, because these costs can be viewed as conveying a personal benefit to Mr. Weeks, they are reported as perquisites in this column. | ||
(6) | Mr. McRae retired as of December 31, 2023. |
78 | CORNING |
Compensation Discussion & Analysis
20202023 Grants of Plan-Based Awards
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | ||||||||||||||||||||||||||||
(a) | (b) | (c) | (d)(1) | (e)(1) | (f)(1) | (g)(2) | (h)(2) | (i)(2) | (j) | (k) | (l) | (m) | (n) | ||||||||||||||||
Named Executive Officer | Award | Grant Date | Date of Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Closing Market Price on Date of Grant ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||
Wendell P. Weeks | Performance Incentive Plan | n/a | $0 | $2,222,700 | $4,445,400 | ||||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 74,090 | 148,180 | |||||||||||||||||||||||||
Cash Performance Units | 2/5/20 | 2/5/20 | 0 | 2,437,500 | 5,362,500 | ||||||||||||||||||||||||
2020 Performance Stock Units | 7/15/20 | 2/5/20 | 0 | 76,531 | 168,368 | 28.06 | $2,147,460 | (3) | |||||||||||||||||||||
Time-Based Restricted Stock Units | 4/1/20 | 2/5/20 | 153,061 | 19.11 | 2,924,996 | (4) | |||||||||||||||||||||||
Performance Incentive Plan - Performance Stock Units | 7/15/20 | 5/15/20 | 0 | 113,115 | 113,115 | 28.06 | 3,174,007 | (5) | |||||||||||||||||||||
SSSO - Time-Based Restricted Stock Units | 5/15/20 | 5/15/20 | 8,705 | 19.65 | 171,053 | (6) | |||||||||||||||||||||||
SSSO - Stock Options | 5/15/20 | 5/15/20 | 43,525 | 19.65 | 19.65 | 151,467 | (7) | ||||||||||||||||||||||
R. Tony Tripeny | Performance Incentive Plan | n/a | 0 | 569,920 | 1,139,840 | ||||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 35,620 | 71,240 | |||||||||||||||||||||||||
Cash Performance Units | 2/5/20 | 2/5/20 | 0 | 587,500 | 1,292,500 | ||||||||||||||||||||||||
2020 Performance Stock Units | 7/15/20 | 2/5/20 | 0 | 18,446 | 40,581 | 28.06 | $517,595 | (3) | |||||||||||||||||||||
Time-Based Restricted Stock Units | 4/1/20 | 2/5/20 | 36,892 | 19.11 | 705,006 | (4) | |||||||||||||||||||||||
Performance Incentive Plan - Performance Stock Units | 7/15/20 | 5/15/20 | 0 | 29,004 | 29,004 | 28.06 | 813,852 | (5) | |||||||||||||||||||||
SSSO - Time-Based Restricted Stock Units | 5/15/20 | 5/15/20 | 3,140 | 19.65 | 61,701 | (6) | |||||||||||||||||||||||
SSSO - Stock Options | 5/15/20 | 5/15/20 | 15,700 | 19.65 | 19.65 | 54,636 | (7) |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d)(1) | (e)(1) | (f)(1) | (g)(2) | (h)(2) | (i)(2) | (j) | (k) | (l) | ||||||||||||||||||||
Named Executive Officer | Award | Grant Date | Date of Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Closing Market Price on Date of Grant ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||||||
Wendell P. Weeks | Cash for Equity - PIP Exchange PSUs | 2/8/23 | 0 | 67,445 | 74,190 | 35.14 | 2,370,017 | (3) | |||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 79,000 | 158,000 | |||||||||||||||||||||||||||
Cash for Equity - Salary Exchange RSUs | 2/8/23 | 10,792 | 35.14 | 379,231 | (4) | ||||||||||||||||||||||||||
Cash Performance Units | 2/8/23 | 2/8/23 | 0 | 3,162,500 | 6,957,500 | ||||||||||||||||||||||||||
2021 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 39,725 | 87,395 | 35.14 | 1,395,937 | (5) | |||||||||||||||||||||||
2022 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 52,186 | 114,809 | 35.14 | 1,833,816 | (6) | |||||||||||||||||||||||
2023 Performance Share Units | 4/3/23 | 2/8/23 | 0 | 54,292 | 119,442 | 34.95 | 1,897,505 | (7) | |||||||||||||||||||||||
Time-Based Restricted Stock Units | 4/3/23 | 2/8/23 | 108,584 | 34.95 | 3,795,011 | (8) | |||||||||||||||||||||||||
Edward A. Schlesinger | Cash for Equity - PIP Exchange PSUs | 2/8/23 | 0 | 16,648 | 18,313 | 35.14 | 585,011 | (3) | |||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 32,500 | 65,000 | |||||||||||||||||||||||||||
Cash for Equity - Salary Exchange RSUs | 2/8/23 | 2,775 | 35.14 | 97,514 | (4) | ||||||||||||||||||||||||||
Cash Performance Units | 2/8/23 | 2/8/23 | 0 | 587,500 | 1,292,500 | ||||||||||||||||||||||||||
2021 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 3,069 | 6,752 | 35.14 | 107,845 | (5) | |||||||||||||||||||||||
2022 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 8,251 | 18,152 | 35.14 | 289,940 | (6) | |||||||||||||||||||||||
2023 Performance Share Units | 4/3/23 | 2/8/23 | 0 | 10,086 | 22,189 | 34.95 | 352,506 | (7) | |||||||||||||||||||||||
Time-Based Restricted Stock Units | 4/3/23 | 2/8/23 | 20,172 | 34.95 | 705,011 | (8) |
CORNING | 79 |
Compensation Discussion & Analysis
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | ||||||||||||||||||||||||||||
(a) | (b) | (c) | (d)(1) | (e)(1) | (f)(1) | (g)(2) | (h)(2) | (i)(2) | (j) | (k) | (l) | (m) | (n) | ||||||||||||||||
Named Executive Officer | Award | Grant Date | Date of Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Closing Market Price on Date of Grant ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||
James P. Clappin | Performance Incentive Plan | n/a | 0 | 619,520 | 1,239,040 | ||||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 38,720 | 77,440 | |||||||||||||||||||||||||
Cash Performance Units | 2/5/20 | 2/5/20 | 0 | 625,000 | 1,375,000 | ||||||||||||||||||||||||
2020 Performance Stock Units | 7/15/20 | 2/5/20 | 0 | 19,623 | 43,173 | 28.06 | $550,621 | (3) | |||||||||||||||||||||
Time-Based Restricted Stock Units | 4/1/20 | 2/5/20 | 39,246 | 19.11 | 749,991 | (4) | |||||||||||||||||||||||
Performance Incentive Plan - Performance Stock Units | 7/15/20 | 5/15/20 | 0 | 31,528 | 31,528 | 28.06 | 884,676 | (5) | |||||||||||||||||||||
SSSO - Time-Based Restricted Stock Units | 5/15/20 | 5/15/20 | 3,415 | 19.65 | 67,105 | (6) | |||||||||||||||||||||||
SSSO - Stock Options | 5/15/20 | 5/15/20 | 17,075 | 19.65 | 19.65 | 59,421 | (7) | ||||||||||||||||||||||
Lawrence D. McRae | Performance Incentive Plan | n/a | 0 | 702,100 | 1,404,200 | ||||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 41,300 | 82,600 | |||||||||||||||||||||||||
Cash Performance Units | 2/5/20 | 2/5/20 | 0 | 637,500 | 1,402,500 | ||||||||||||||||||||||||
2020 Performance Stock Units | 7/15/20 | 2/5/20 | 0 | 20,016 | 44,035 | 28.06 | $561,649 | (3) | |||||||||||||||||||||
Time-Based Restricted Stock Units | 4/1/20 | 2/5/20 | 40,031 | 19.11 | 764,992 | (4) | |||||||||||||||||||||||
Performance Incentive Plan - Performance Stock Units | 7/15/20 | 5/15/20 | 0 | 35,731 | 35,731 | 28.06 | 1,002,612 | (5) | |||||||||||||||||||||
SSSO - Time-Based Restricted Stock Units | 5/15/20 | 5/15/20 | 3,640 | 19.65 | 71,526 | (6) | |||||||||||||||||||||||
SSSO - Stock Options | 5/15/20 | 5/15/20 | 18,200 | 19.65 | 19.65 | 63,336 | (7) |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d)(1) | (e)(1) | (f)(1) | (g)(2) | (h)(2) | (i)(2) | (j) | (k) | (l) | ||||||||||||||||||||
Named Executive Officer | Award | Grant Date | Date of Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Closing Market Price on Date of Grant ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||||||
Lawrence D. McRae | Cash for Equity - PIP Exchange PSUs | 2/8/23 | 0 | 21,299 | 23,429 | 35.14 | 748,447 | (3) | |||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 44,025 | 88,050 | |||||||||||||||||||||||||||
Cash for Equity - Salary Exchange RSUs | 2/8/23 | 752 | 35.14 | 26,425 | (4) | ||||||||||||||||||||||||||
Cash Performance Units | 2/8/23 | 2/8/23 | 0 | 650,000 | 1,430,000 | ||||||||||||||||||||||||||
2021 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 8,866 | 19,505 | 35.14 | 311,551 | (5) | |||||||||||||||||||||||
2022 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 10,726 | 23,597 | 35.14 | 376,912 | (6) | |||||||||||||||||||||||
2023 Performance Share Units | 4/3/23 | 2/8/23 | 0 | 11,159 | 24,550 | 34.95 | 390,007 | (7) | |||||||||||||||||||||||
Time-Based Restricted Stock Units | 4/3/23 | 2/8/23 | 22,318 | 34.95 | 780,014 | (8) | |||||||||||||||||||||||||
Eric S. Musser | Cash for Equity - PIP Exchange PSUs | 2/8/23 | 0 | 37,024 | 40,726 | 35.14 | 1,301,023 | (3) | |||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 46,465 | 92,930 | |||||||||||||||||||||||||||
Cash for Equity - Salary Exchange RSUs | 2/8/23 | 6,347 | 35.14 | 223,034 | (4) | ||||||||||||||||||||||||||
Cash Performance Units | 2/8/23 | 2/8/23 | 0 | 1,187,500 | 2,612,500 | ||||||||||||||||||||||||||
2021 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 13,980 | 30,756 | 35.14 | 491,257 | (5) | |||||||||||||||||||||||
2022 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 19,596 | 43,111 | 35.14 | 688,603 | (6) | |||||||||||||||||||||||
2023 Performance Share Units | 4/3/23 | 2/8/23 | 0 | 20,386 | 44,849 | 34.95 | 712,491 | (7) | |||||||||||||||||||||||
Time-Based Restricted Stock Units | 4/3/23 | 2/8/23 | 40,773 | 34.95 | 1,425,016 | (8) |
80 | CORNING |
Compensation Discussion & Analysis
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | |||||||||||||||||||||||||||
(a) | (b) | (c) | (d)(1) | (e)(1) | (f)(1) | (g)(2) | (h)(2) | (i)(2) | (j) | (k) | (l) | (m) | (n) | ||||||||||||||||
Named Executive Officer | Award | Grant Date | Date of Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Closing Market Price on Date of Grant ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||
Eric S. Musser | Performance Incentive Plan | n/a | 0 | 769,500 | 1,539,000 | ||||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 42,750 | 85,500 | |||||||||||||||||||||||||
Cash Performance Units | 2/5/20 | 2/5/20 | 0 | 587,500 | 1,292,500 | ||||||||||||||||||||||||
2020 Performance Stock Units | 7/15/20 | 2/5/20 | 0 | 18,446 | 40,581 | 28.06 | $517,595 | (3) | |||||||||||||||||||||
Time-Based Restricted Stock Units | 4/1/20 | 2/5/20 | 36,892 | 19.11 | 705,006 | (4) | |||||||||||||||||||||||
Performance Incentive Plan - Performance Stock Units | 7/15/20 | 5/15/20 | 0 | 37,711 | 37,711 | 28.06 | 1,058,171 | (5) | |||||||||||||||||||||
SSSO - Time-Based Restricted Stock Units | 5/15/20 | 5/15/20 | 3,770 | 19.65 | 74,081 | (6) | |||||||||||||||||||||||
SSSO - Stock Options | 5/15/20 | 5/15/20 | 18,850 | 19.65 | 19.65 | 65,598 | (7) | ||||||||||||||||||||||
Cash Performance Units | 6/15/20 | 6/15/20 | 0 | 143,750 | 316,250 | ||||||||||||||||||||||||
2020 Performance Stock Units | 7/15/20 | 6/15/20 | 0 | 3,180 | 6,998 | 28.06 | 89,231 | (3) | |||||||||||||||||||||
Time-Based Restricted Stock Units | 6/15/20 | 6/15/20 | 6,361 | 27.12 | 172,510 | (4) |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d)(1) | (e)(1) | (f)(1) | (g)(2) | (h)(2) | (i)(2) | (j) | (k) | (l) | ||||||||||||||||||||
Named Executive Officer | Award | Grant Date | Date of Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Closing Market Price on Date of Grant ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||||||
Lewis A. Steverson | Cash for Equity - PIP Exchange PSUs | 2/8/23 | 0 | 23,029 | 25,332 | 35.14 | 809,239 | (3) | |||||||||||||||||||||||
GoalSharing Plan | n/a | 0 | 42,590 | 85,180 | |||||||||||||||||||||||||||
Cash for Equity - Salary Exchange RSUs | 2/8/23 | 2,909 | 35.14 | 102,222 | (4) | ||||||||||||||||||||||||||
Cash Performance Units | 2/8/23 | 2/8/23 | 0 | 950,000 | 2,090,000 | ||||||||||||||||||||||||||
2021 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 11,764 | 25,881 | 35.14 | 413,387 | (5) | |||||||||||||||||||||||
2022 Performance Share Units | 2/8/23 | 2/8/23 | 0 | 15,677 | 34,489 | 35.14 | 550,890 | (6) | |||||||||||||||||||||||
2023 Performance Share Units | 4/3/23 | 2/8/23 | 0 | 16,309 | 35,880 | 34.95 | 570,000 | (7) | |||||||||||||||||||||||
Time-Based Restricted Stock Units | 4/3/23 | 2/8/23 | 32,618 | 34.95 | 1,139,999 | (8) |
(1) | The amounts shown in columns (d), (e) and (f) reflect the award amounts under (i) the |
(2) | The amounts shown in columns (g), (h) and (i) reflect the award amounts under |
Compensation Discussion & Analysis
(3) | These amounts reflect the |
(4) | These amounts reflect the |
(5) | These amounts reflect the total grant date fair value computed in accordance with FASB ASC Topic 718 of the portion of the 2021 PSUs |
(6) | These amounts reflect the total grant date fair value computed in accordance with FASB ASC Topic 718 of |
(7) | These amounts reflect the total grant date fair value computed in accordance with FASB ASC Topic 718 of |
(8) | These amounts reflect the total grant date fair value computed in accordance with FASB ASC Topic 718 of restricted stock units granted in calendar year 2023 pursuant to the Corning 2012 Long-Term Incentive Plan and correspond to the amounts set forth in column |
CORNING |
Compensation Discussion & Analysis
Outstanding Equity Awards at 20202023 Fiscal Year-End
The following table shows stock option awards classified as exercisable and unexercisable as of December 31, 2020.2023. The table also shows unvested restricted stock, restricted stock unit and restrictedperformance stock unit awards assuming a market value of $36.00 a$31.94 per share (the NYSE closing price of the Company’s stock on December 31, 2020)30, 2023).
Option Awards | Stock Awards | |||||||||||||||||||||||||||
Named Executive Officer | Grant Date | Vesting Code(1) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | ||||||||||||||||||
Wendell P. Weeks | 03/31/17 | A | 137,514 | 0 | 27.00 | 03/31/27 | 455,479 | $ | 13,869,336 | 292,944 | $ | 8,920,145 | ||||||||||||||||
04/02/18 | A | 149,849 | 0 | 27.03 | 04/02/28 | |||||||||||||||||||||||
04/01/19 | A | 143,721 | 0 | 33.92 | 04/01/29 | |||||||||||||||||||||||
05/15/20 | B | 43,525 | 0 | 19.65 | 05/15/30 | |||||||||||||||||||||||
Total | 474,609 | – | ||||||||||||||||||||||||||
Edward A. Schlesinger | 04/29/16 | A | 3,013 | 0 | 18.67 | 04/29/26 | 60,593 | 1,845,057 | 56,807 | 1,729,773 | ||||||||||||||||||
05/31/16 | A | 2,693 | 0 | 20.89 | 05/31/26 | |||||||||||||||||||||||
03/31/17 | A | 7,501 | 0 | 27.00 | 03/31/27 | |||||||||||||||||||||||
04/02/18 | A | 8,741 | 0 | 27.03 | 04/02/28 | |||||||||||||||||||||||
04/01/19 | A | 8,844 | 0 | 33.92 | 04/01/29 | |||||||||||||||||||||||
05/15/20 | B | 8,925 | 0 | 19.65 | 05/15/30 | |||||||||||||||||||||||
Total | 39,717 | – | ||||||||||||||||||||||||||
Lawrence D. McRae | 03/31/17 | A | 37,504 | 0 | 27.00 | 03/31/27 | 95,021 | 2,893,389 | 67,646 | 2,059,821 | ||||||||||||||||||
04/02/18 | A | 39,960 | 0 | 27.03 | 04/02/28 | |||||||||||||||||||||||
04/01/19 | A | 37,588 | 0 | 33.92 | 04/01/29 | |||||||||||||||||||||||
Total | 115,052 | 0 | ||||||||||||||||||||||||||
Eric S. Musser | 04/01/19 | A | 34,640 | 0 | 33.92 | 04/01/29 | 168,533 | 5,131,830 | 121,698 | 3,705,704 | ||||||||||||||||||
05/15/20 | B | 18,850 | 0 | 19.65 | 05/15/30 | |||||||||||||||||||||||
Total | 53,490 | 0 | ||||||||||||||||||||||||||
Lewis A. Steverson | 135,283 | 4,119,367 | 90,768 | 2,763,886 | ||||||||||||||||||||||||
Total | 0 | 0 |
Option Awards | Stock Awards | |||||||||||||||||||
Named Executive Officer | Grant Date | Vesting Code(1) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | ||||||||||
Wendell P. | 03/31/14 | A | 42,027 | 0 | 20.82 | 03/31/24 | 423,992 | 15,263,712 | 229,592 | 8,265,312 | ||||||||||
Weeks | 04/30/14 | A | 41,846 | 0 | 20.91 | 04/30/24 | ||||||||||||||
05/30/14 | A | 41,080 | 0 | 21.30 | 05/30/24 | |||||||||||||||
03/31/15 | A | 44,092 | 0 | 22.68 | 03/31/25 | |||||||||||||||
04/30/15 | A | 47,778 | 0 | 20.93 | 04/30/25 | |||||||||||||||
05/29/15 | A | 47,801 | 0 | 20.92 | 05/29/25 | |||||||||||||||
03/31/16 | A | 49,366 | 0 | 20.89 | 03/31/26 | |||||||||||||||
04/29/16 | A | 55,236 | 0 | 18.67 | 04/29/26 | |||||||||||||||
05/31/16 | A | 49,366 | 0 | 20.89 | 05/31/26 | |||||||||||||||
03/31/17 | A | 137,514 | 0 | 27.00 | 03/31/27 | |||||||||||||||
04/02/18 | A | 0 | 149,849 | 27.03 | 04/02/28 | |||||||||||||||
04/01/19 | A | 0 | 143,721 | 33.92 | 04/01/29 | |||||||||||||||
05/15/20 | B | 0 | 43,525 | 19.65 | 05/15/30 | |||||||||||||||
Total | 556,106 | 337,095 | ||||||||||||||||||
R. Tony | 03/28/13 | A | 16,075 | 0 | 13.33 | 03/28/23 | 104,090 | 3,747,240 | 55,338 | 1,992,168 | ||||||||||
Tripeny | 04/30/13 | A | 14,778 | 0 | 14.50 | 04/30/23 | ||||||||||||||
05/31/13 | A | 13,942 | 0 | 15.37 | 05/31/23 | |||||||||||||||
03/31/14 | A | 6,004 | 0 | 20.82 | 03/31/24 | |||||||||||||||
04/30/14 | A | 5,978 | 0 | 20.91 | 04/30/24 | |||||||||||||||
05/30/14 | A | 5,869 | 0 | 21.30 | 05/30/24 | |||||||||||||||
03/31/15 | A | 5,787 | 0 | 22.68 | 03/31/25 | |||||||||||||||
04/30/15 | A | 6,271 | 0 | 20.93 | 04/30/25 | |||||||||||||||
05/29/15 | A | 6,274 | 0 | 20.92 | 05/29/25 | |||||||||||||||
03/31/16 | A | 8,377 | 0 | 20.89 | 03/31/26 | |||||||||||||||
04/29/16 | A | 9,373 | 0 | 18.67 | 04/29/26 | |||||||||||||||
05/31/16 | A | 8,377 | 0 | 20.89 | 05/31/26 | |||||||||||||||
03/31/17 | A | 31,670 | 0 | 27.00 | 03/31/27 | |||||||||||||||
04/02/18 | A | 0 | 35,381 | 27.03 | 04/02/28 | |||||||||||||||
04/01/19 | A | 0 | 34,640 | 33.92 | 04/01/29 | |||||||||||||||
05/15/20 | B | 0 | 15,700 | 19.65 | 05/15/30 | |||||||||||||||
Total | 138,775 | 85,721 |
Compensation Discussion & Analysis
Option Awards | Stock Awards | |||||||||||||||||||
Named Executive Officer | Grant Date | Vesting Code(1) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | ||||||||||
James P. | 03/31/15 | A | 11,574 | 0 | 22.68 | 03/31/25 | 112,319 | 4,043,484 | 58,870 | 2,119,320 | ||||||||||
Clappin | 04/30/15 | A | 12,542 | 0 | 20.93 | 04/30/25 | ||||||||||||||
05/29/15 | A | 12,548 | 0 | 20.92 | 05/29/25 | |||||||||||||||
03/31/16 | A | 12,566 | 0 | 20.89 | 03/31/26 | |||||||||||||||
04/29/16 | A | 14,060 | 0 | 18.67 | 04/29/26 | |||||||||||||||
05/31/16 | A | 12,566 | 0 | 20.89 | 05/31/26 | |||||||||||||||
03/31/17 | A | 35,004 | 0 | 27.00 | 03/31/27 | |||||||||||||||
04/02/18 | A | 0 | 39,127 | 27.03 | 04/02/28 | |||||||||||||||
04/01/19 | A | 0 | 36,851 | 33.92 | 04/01/29 | |||||||||||||||
05/15/20 | B | 0 | 17,075 | 19.65 | 05/15/30 | |||||||||||||||
Total | 110,860 | 93,053 | ||||||||||||||||||
Lawrence D. | 05/31/13 | A | 30,982 | 0 | 15.37 | 05/31/23 | 118,335 | 4,260,060 | 60,047 | 2,161,692 | ||||||||||
McRae | 03/31/14 | A | 12,008 | 0 | 20.82 | 03/31/24 | ||||||||||||||
04/30/14 | A | 11,956 | 0 | 20.91 | 04/30/24 | |||||||||||||||
05/30/14 | A | 11,737 | 0 | 21.30 | 05/30/24 | |||||||||||||||
03/31/15 | A | 11,850 | 0 | 22.68 | 03/31/25 | |||||||||||||||
04/30/15 | A | 12,840 | 0 | 20.93 | 04/30/25 | |||||||||||||||
05/29/15 | A | 12,847 | 0 | 20.92 | 05/29/25 | |||||||||||||||
03/31/16 | A | 13,463 | 0 | 20.89 | 03/31/26 | |||||||||||||||
04/29/16 | A | 15,064 | 0 | 18.67 | 04/29/26 | |||||||||||||||
05/31/16 | A | 13,463 | 0 | 20.89 | 05/31/26 | |||||||||||||||
03/31/17 | A | 37,504 | 0 | 27.00 | 03/31/27 | |||||||||||||||
04/02/18 | A | 0 | 39,960 | 27.03 | 04/02/28 | |||||||||||||||
04/01/19 | A | 0 | 37,588 | 33.92 | 04/01/29 | |||||||||||||||
05/15/20 | B | 0 | 18,200 | 19.65 | 05/15/30 | |||||||||||||||
Total | 183,714 | 95,748 | ||||||||||||||||||
Eric S. | 04/02/18 | A | 0 | 35,381 | 27.03 | 04/02/28 | 119,788 | 4,312,368 | 64,879 | 2,335,644 | ||||||||||
Musser | 04/01/19 | A | 0 | 34,640 | 33.92 | 04/01/29 | ||||||||||||||
05/15/20 | B | 0 | 18,850 | 19.65 | 05/15/30 | |||||||||||||||
Total | 0 | 88,871 |
(1) | The Company uses the following vesting codes: |
A: | 100% Vesting 3 years after grant date |
B: | 1/3 Vesting 1 year after grant date, 1/3 Vesting 2 years after grant date and 1/3 Vesting 3 years after grant date |
(2) | Amounts include: |
(i) |
(ii) |
(iii) |
(iv) | 10,792; 2,775; 752; 6,347 and |
Compensation Discussion & Analysis
(v) | 110,765; 8,507; 24,720; 38,981; and | |
(vi) | 48,500, 7,669, 9,968, 18,211, and 14,569 performance stock units granted to Weeks, Schlesinger, McRae, Musser and Steverson, respectively, on April 1, 2022 which vest on April 15, 2025 for which 2022 and |
82 | CORNING 2024 PROXY STATEMENT |
Compensation Discussion & Analysis
(3) | Year-end market price is based on the December |
(4) | Amounts include: |
(i) |
(ii) | 162,876; 30,258; 33,476; 61,159, and 48,927 performance stock units granted to Weeks, Schlesinger, McRae, Musser, and Steverson, respectively, on April 3, 2023, which vest on April 15, 2026. |
(iii) | 67,445; 16,648; 21,299; 37,024, and 23,029 performance stock units granted to Weeks, Schlesinger, McRae, Musser, and Steverson, respectively, on February 8, 2023, which final vesting date is February 8, 2026. |
Options Exercised and Shares Vested in 20202023
The following table sets forth certain information regarding options exercised and restricted stock, restricted stock units and restrictedperformance stock units that vested during 20202023 for the NEOs.
Option Awards | Stock Awards | |||||||||||
Named Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||
Wendell P. Weeks | 97,167 | $1,419,109 | 525,954 | $ | 18,147,521 | |||||||
Edward A. Schlesinger | 0 | 0 | 42,716 | 1,460,356 | ||||||||
Lawrence D. McRae | 60,190 | 787,926 | 139,824 | 4,816,123 | ||||||||
Eric S. Musser | 0 | 0 | 151,488 | 5,219,134 | ||||||||
Lewis A. Steverson | 3,169 | 46,239 | 129,392 | 4,462,018 |
Option Awards | Stock Awards | |||||||
Named Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||
Wendell P. Weeks | 0 | $0 | 75,437 | $1,536,066 | ||||
R. Tony Tripeny | 21,685 | 436,273 | 17,514 | 359,375 | ||||
James P. Clappin | 0 | 0 | 19,321 | 395,887 | ||||
Lawrence D. McRae | 28,994 | 270,038 | 20,679 | 423,153 | ||||
Eric S. Musser | 105,579 | 1,227,258 | 18,371 | 376,506 |
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 ofas 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 Musser are earning benefits under the career average earnings formula. Mr. Tripeny isMessrs. Schlesinger and Steverson are earning benefits under the cash balance formula. All of the active NEOs are currently eligible to retire under the plan.
Mr. McRae retired at the end of 2023 with benefits earned under the career average earnings formula.
CORNING | 83 |
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.any (the value of which is subtracted from the final ESPP annuity benefit). 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 Gross benefits provided under the ESPP formula was approved in December 2006. Following the change, gross benefits determined under this planfor all NEOs 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 NEOs.
(the “ESPP Formula”). 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 Bthe ESPP Formula are available when a participant attains the earlier of age 60 with 10 years of service or age 55 with 25 years of service. Participants with accrued benefits in excess of four times the annual compensation limitation under Section 401(a)(17) of the Code must be age 57 with 25 years of service to receive an unreduced benefit under the ESPP. Otherwise, benefits are reduced 4% for each year by which retirement precedes the attainment of age 60. Benefit reductions of 1% per year by which retirement precedes age 57 apply if the four-times-annual-compensation-limit rule noted above is in effect for the participant.
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.
sum.
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 ofexcept for 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 age 55 with 25 years of service. No termination, disability or death was assumed to occur prior to retirement. Otherwise, the assumptions used are described in Note 1211 to our Financial Statements for the year ended December 31, 2020,2023, of our Annual Report on Form 10-K filed with the SEC on February 12, 2021.
2024.
84 | CORNING |
Compensation Discussion & Analysis
Named Executive Officer | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | |||||
Wendell P. Weeks | Qualified Pension Plan | 38 | $2,435,353 | $0 | |||||
ESPP | 25(1) | 31,125,951 | 0 | ||||||
R. Tony Tripeny | Qualified Pension Plan | 35 | 459,842 | 0 | |||||
ESPP | 25(1) | 9,074,625 | 0 | ||||||
James P. Clappin | Qualified Pension Plan | 41 | 1,820,973 | 0 | |||||
ESPP | 25(1) | 9,608,258 | 0 | ||||||
Lawrence D. McRae | Qualified Pension Plan | 35 | 2,058,604 | 0 | |||||
ESPP | 25(1) | 10,690,824 | 0 | ||||||
Eric S. Musser | Qualified Pension Plan | 35 | 1,858,496 | 0 | |||||
ESPP | 25(1) | 9,126,072 | 0 |
Named Executive Officer | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | |||||||
Wendell P. Weeks | Qualified Pension Plan | 41 | $ 1,997,943 | $ 0 | |||||||
ESPP | 25 | (1) | 24,375,091 | 0 | |||||||
Edward A. Schlesinger | Qualified Pension Plan | 11 | 180,798 | 0 | |||||||
ESPP | 11 | 1,850,796 | 0 | ||||||||
Lawrence D. McRae | Qualified Pension Plan | 38 | 1,680,590 | 0 | |||||||
ESPP | 25 | (1) | 8,700,842 | 0 | |||||||
Eric S. Musser | Qualified Pension Plan | 38 | 1,535,923 | 0 | |||||||
ESPP | 25 | (1) | 9,226,022 | 0 | |||||||
Lewis A. Steverson | Qualified Pension Plan | 11 | 203,781 | 0 | |||||||
ESPP | 11 | 3,989,580 | 0 |
(1) | Under Formula A, years of service are capped at 25 years, in determining benefits under the ESPP. |
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 20202023 calendar year, the NEOs’ eligible earnings and final average compensation were as follows:
As of December 31, 2023 | |||||||
Named Executive Officer | Eligible Pension Earnings | Final Average Earnings | |||||
Wendell P. Weeks | $ | 3,150,520 | $ | 4,163,490 | |||
Edward A. Schlesinger | 1,011,725 | 820,200 | |||||
Lawrence D. McRae | 1,398,015 | 1,677,550 | |||||
Eric S. Musser | 1,678,780 | 1,707,978 | |||||
Lewis A. Steverson | 1,405,683 | 1,457,593 |
As of December 31, 2020 | ||||
Named Executive Officer | Eligible Pension Earnings | Final Average Earnings | ||
Wendell P. Weeks | $2,080,003 | $3,800,265 | ||
R. Tony Tripeny | 880,313 | 1,086,214 | ||
James P. Clappin | 956,926 | 1,377,970 | ||
Lawrence D. McRae | 1,030,600 | 1,486,864 | ||
Eric S. Musser | 954,355 | 1,250,831 |
Non-qualified Deferred Compensation
The table below shows the contributions, earnings and account balances for the NEOs in the Supplemental Investment Plan. Pursuant to the Company’s Supplemental Investment Plan, the NEOs may choose to defer up to 75% of annual base salary and up to 75% of GoalSharing and PIP cash bonuses. The participant chooses from the same funds available under our Company Investment Plan (401(k)) in which to “invest” the deferred amounts. No cash is actually invested in the unfunded accounts under the Supplemental Investment Plan. Deferred amounts incur gains and losses based on the performance of the individual participant’s investment fund selections. Participants may change their elections among these fund options. Corning does not have any above marketabove-market earnings under its Supplemental Investment Plan. All of our current NEOs have more than three years of service with the Company, so all of the Company’s matching contributions are fully vested. Participants cannot withdraw any amounts from their deferred compensation balances until retirement from the Company at or after age 55 with 5 years of service. Participants may elect to receive distributions as a lump sum payment or two to five annual installments. If an NEO leaves the Company prior to retirement, the account balance is distributed in a lump sum six months following the executive’s departure.
CORNING | 85 |
Compensation Discussion & Analysis
No NEO withdrawals or distributions were made in 2020.
Named Executive Officer | Aggregate Balance at January 1, 2020 ($) | Executive Contributions in 2020 ($)(1) | Company Contributions in 2020 ($)(2) | Aggregate Earnings in 2020 ($)(3) | Aggregate Withdrawals/ Distributions in 2020 ($) | Aggregate Balance as of December 31, 2020 ($) | |||||||
Wendell P. Weeks | $7,397,951 | $ | 58,675 | $28,009 | $1,097,157 | $0 | $8,581,792 | ||||||
R. Tony Tripeny | 3,590,472 | 118,553 | 13,573 | 640,257 | 0 | 4,362,855 | |||||||
James P. Clappin | 6,131,368 | 24,796 | 11,035 | 756,246 | 0 | 6,923,445 | |||||||
Lawrence D. McRae | 0 | 26,448 | 11,770 | 7,084 | 0 | 45,302 | |||||||
Eric S. Musser | 0 | 0 | 0 | 0 | 0 | 0 |
Named Executive Officer | Aggregate Balance at January 1, 2023 ($) | Executive Contributions in 2023 ($)(1) | Company Contributions in 2023 ($)(2) | Aggregate Earnings in 2023 ($)(3) | Aggregate Withdrawals/ Distributions in 2023 ($) | Aggregate Balance as of December 31, 2023 ($) | |||||||||||||
Wendell P. Weeks | $8,288,935 | $ 65,631 | $67,545 | $1,098,624 | $0 | $9,520,735 | |||||||||||||
Edward A. Schlesinger | 346,090 | 54,043 | 24,019 | 81,422 | 0 | 505,574 | |||||||||||||
Lawrence D. McRae | 626,811 | 203,228 | 77,558 | 120,464 | 0 | 1,028,060 | |||||||||||||
Eric S. Musser | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Lewis A. Steverson | 1,279,934 | 110,777 | 22,155 | 224,040 | 0 | 1,636,906 |
(1) | Reflects participation in the Supplemental Investment Plan by |
(2) | Reflects Company match on the Supplemental Investment Plan, which was credited to the account of the Named Executive Officers in |
(3) | Reflects aggregate earnings on each type of deferred compensation listed above. The earnings on deferred base salary and bonus payments are calculated based on the actual returns from the same fund choices that Company employees have in the qualified 401(k) plan. Currently, employees have 16 fund choices that they may select from. As nonqualified plans, these plans are unfunded, which means that no actual dollars are invested in these funds. The Company does not provide any |
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 intoexecuted 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.Mr. Weeks Clappin, and McRae have agreements which werehas an agreement in effect prior tobefore July 2004. Messrs. Musser, Schlesinger and Steverson all have the new form of agreement. Mr. Tripeny and Mr. Musser have a severance agreement dated as of January 1, 2015.
McRae retired voluntarily on December 31, 2023.
Severance Agreements—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:
• | Base salary, reimbursable expenses and annual bonus accrued and owing as of the date of termination (lump sum payment); |
• | A severance amount equal to 2.99 times the sum of his then-base salary plus |
• | ||
Continued participation in the Company’s benefit plans for up to three years; and |
• | ||
In the calendar year following the year in which the termination occurs (subject to a six-month waiting period), the purchase of his principal residence by the Company upon request. |
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)he would forfeit any outstanding stock awards.
86 | CORNING |
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:
• | Accrued but unpaid base salary, reimbursable expenses, |
• | ||
• | ||
Continued medical, dental and hospitalization benefits for 24 months; |
• | ||
In the calendar year following the year in which the termination occurs (subject to a six-month waiting period), the purchase of his principal residence by the Company upon request; and |
• | ||
Outplacement benefits up to a maximum amount of $50,000. |
The following table reflects the amounts that would be payable under the various arrangements assuming termination occurred at December 31, 2020.2023.
TERMINATION SCENARIOS (INCLUDING SEVERANCE, IF ELIGIBLE) | |||||||||||||
Named Executive Officer | Voluntary(1) | For Cause | Death(2) | Disability(1) | Without Cause | ||||||||
Wendell P. Weeks | Severance Amount | n/a | n/a | n/a | n/a | $12,046,710 | |||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | 61,452 | (3) | |||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | n/a | ||||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | 250,000 to 1,000,000 | (4) | |||||||
Pension - Non-Qualified Annuity | $1,923,907 | $0 | $1,923,907 | $1,923,907 | 1,923,907 | ||||||||
Pension - Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | ||||||||
Pension - Qualified Annuity | 157,838 | 157,838 | 78,919 | 157,838 | 157,838 | ||||||||
Edward A. Schlesinger | Severance Amount | n/a | n/a | n/a | n/a | 2,275,000 | |||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | 62,034 | (3) | |||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | 50,000 | ||||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | 50,000 to 250,000 | (4) | |||||||
Pension - Non-Qualified Annuity | 138,203 | 0 | 118,563 | 163,942 | 138,203 | ||||||||
Pension - Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | ||||||||
Pension - Qualified Lump Sum | 195,870 | 195,870 | 195,870 | 195,870 | 195,870 | ||||||||
Lawrence D. McRae(5) | Severance Amount | n/a | n/a | n/a | n/a | n/a | |||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | n/a | ||||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | n/a | ||||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | n/a | ||||||||
Pension - Non-Qualified Annuity | 530,107 | n/a | n/a | n/a | n/a | ||||||||
Pension - Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | ||||||||
Pension - Qualified Annuity | 135,884 | n/a | n/a | n/a | n/a | ||||||||
Eric S. Musser | Severance Amount | n/a | n/a | n/a | n/a | 3,717,200 | |||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | 40,968 | (3) | |||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | 50,000 | ||||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | 50,000 to 250,000 | (4) | |||||||
Pension - Non-Qualified Annuity | 732,016 | 0 | 541,936 | 732,016 | 732,016 | ||||||||
Pension - Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | ||||||||
Pension - Qualified Annuity | 121,973 | 121,973 | 60,987 | 121,973 | 121,973 |
CORNING 2024 PROXY STATEMENT | 87 |
TERMINATION SCENARIOS (INCLUDING SEVERANCE, IF ELIGIBLE)Table of Contents
Compensation Discussion & Analysis
Named Executive Officer | Voluntary(1) | For Cause | Death | Disability(1) | Without Cause | |||||||
Wendell P. Weeks | Severance Amount | n/a | n/a | n/a | n/a | $11,297,984 | ||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | 54,129(2) | |||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | n/a | |||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | $250,000 to $1,000,000(3) | |||||||
Pension—Non-Qualified Annuity | $1,763,723 | $0 | $1,763,723 | $1,763,723 | $1,763,723 | |||||||
Pension—Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | |||||||
Pension—Qualified Annuity | $137,676 | $137,676 | $68,838 | $137,676 | $137,676 | |||||||
R. Tony Tripeny | Severance Amount | n/a | n/a | n/a | n/a | 2,493,400 | ||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | 54,672(2) | |||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | 50,000 | |||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | 50,000 to 250,000(3) | |||||||
Pension—Non-Qualified Annuity | 518,500 | 0 | 384,163 | 518,500 | 518,500 | |||||||
Pension—Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | |||||||
Pension—Qualified Lump Sum | 441,851 | 441,851 | 441,851 | 441,851 | 441,851 | |||||||
James P. Clappin | Severance Amount | n/a | n/a | n/a | n/a | 2,865,280 | ||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | 22,584(2) | |||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | 50,000 | |||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | 0(3) | |||||||
Pension—Non-Qualified Annuity | 579,980 | 0 | 436,388 | 579,980 | 579,980 | |||||||
Pension—Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | |||||||
Pension—Qualified Annuity | 109,680 | 109,680 | 54,840 | 109,680 | 109,680 | |||||||
Lawrence D. McRae | Severance Amount | n/a | n/a | n/a | n/a | 3,138,800 | ||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | 54,672(2) | |||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | 50,000 | |||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | 50,000 to 250,000(3) | |||||||
Pension—Non-Qualified Annuity | 622,693 | 0 | 494,635 | 622,693 | 622,693 | |||||||
Pension—Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | |||||||
Pension—Qualified Annuity | 119,634 | 119,634 | 59,817 | 119,634 | 119,634 | |||||||
Eric S. Musser | Severance Amount | n/a | n/a | n/a | n/a | 3,420,000 | ||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | 54,672(2) | |||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | 50,000 | |||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | 50,000 to 250,000(3) | |||||||
Pension—Non-Qualified Annuity | 520,352 | 0 | 388,869 | 520,352 | 520,352 | |||||||
Pension—Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | |||||||
Pension—Qualified Annuity | 105,723 | 105,723 | 52,862 | 105,723 | 105,723 |
Named Executive Officer | Voluntary(1) | For Cause | Death(2) | Disability(1) | Without Cause | ||||||||
Lewis A. Steverson | Severance Amount | n/a | n/a | n/a | n/a | 2,981,300 | |||||||
Value of Benefits Continuation | n/a | n/a | n/a | n/a | 62,034 | (3) | |||||||
Value of Outplacement Services | n/a | n/a | n/a | n/a | 50,000 | ||||||||
Purchase of Principal Residence | n/a | n/a | n/a | n/a | 50,000 to 250,000 | (4) | |||||||
Pension - Non-Qualified Annuity | 290,693 | 0 | n/a | 290,693 | 290,693 | ||||||||
Pension - Non-Qualified Lump Sum | n/a | n/a | n/a | n/a | n/a | ||||||||
Pension - Qualified Lump Sum | 213,701 | 213,701 | 213,701 | 213,701 | 213,701 |
(1) | Non-qualified plan benefits shown for all NEOs are payable from the Executive Supplemental Pension Plan. The timing and form of the benefits payable in the table above for a voluntary termination for all NEOs except McRae is as an immediate life annuity. McRae’s form of payment being received is six-year certain and 50% joint and survivor. The amount shown above reflects the 50% joint and survivor benefit after the six-year certain period ends. During the six-year certain period, the annual annuity is $702,891. |
(2) |
Compensation Discussion & Analysis
The value of welfare benefits continuation is estimated at |
Under the terms of the severance agreements, the NEOs may also request that Corning purchase their principal residence in the Corning, New York area. Corning is unable to accurately and precisely estimate the value that may be delivered under this provision as it requires an independent appraisal of the executive’s residence, as well as, for |
(5) | McRae is not |
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.
Cash performance units and performance stock units are adjusted based on actual performance for completed performance periods and assumed performance of 100% for incomplete performance and adjusted CPUs and PSUs are vested and released immediately.
The NEOs are also entitled to severance and other benefits upon certain terminations of employment following or in connection with a change in control.
• | For Mr. Weeks, benefits are payable if he (i) is terminated without cause or resigns for “good reason,” each during a “potential change in control period” or (ii) resigns or is terminated for any reason or within four years following a change in control. |
• | ||
For the NEOs (other than Mr. Weeks), benefits are payable if their employment is terminated (other than for cause, by reason of death or disability, or by the executive for any reason) during a potential change in control period, or within two years following a change in control. |
The benefits payable are as follows:
• | Accrued but unpaid base salary, reimbursable expenses, |
• | ||
A severance amount equal to 2.99 times (for Mr. Weeks) |
• | ||
Continued participation in the Company’s benefit plans for 3 years; |
• | ||
Upon request, purchase of the NEO’s principal residence in the Corning, NY area; and |
• | ||
Outplacement benefits (equal to 20% of base salary) (excluding Mr. Weeks). |
88 | CORNING 2024 PROXY STATEMENT |
Compensation Discussion & Analysis
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 and Mr. Musser areMessrs. Weeks is generally entitled to receive a gross-up payment in an amount sufficient to make him whole for any federal excise tax on excess parachute payments imposed under Section 280G and 4999 of the IRC.Internal Revenue Code. However, if the federal excise tax can be avoided by reducing the related payments by a present value of $45,000 or less, then the payment will be reduced to the extent necessary to avoid the excise tax and no gross-up payment will be made to the NEO.
Compensation Discussion & Analysis
other NEOs.
The following table reflects the amounts that would be payable under the various arrangements assuming that a change in control occurred on December 31, 2020.2023.
Cash-based | Long-Term Incentives(1) | Cash-based | Long-Term Incentives(1) | ||||||||||||||||||||||||||||||||||||||
Named Executive Officer | Cash Severance ($) | Interrupted Perf. Cycles ($) | ESPP ($) | Misc. Benefits ($) | Excise Tax Gross Up ($) | Interrupted CPU Perf. Cycles ($) | Share-based Awards ($) | Total Benefits ($) | Cash | Interrupted | ESPP ($) | Misc. | Excise | Interrupted | Share-based | Total | |||||||||||||||||||||||||
Wendell P. Weeks | 11,335,770 | 0 | 30,555,458 | 104,128 | 0 | 9,784,125 | 20,474,635 | 72,254,116 | $ | 12,087,051 | $0 | $ | 24,410,235 | $ | 111,452 | $0 | $ | 4,859,708 | $ | 24,078,429 | $ | 65,546,875 | |||||||||||||||||||
R. Tony Tripeny | 2,493,400 | 0 | 8,914,187 | 104,672 | 0 | 2,358,225 | 5,090,782 | 18,961,266 | |||||||||||||||||||||||||||||||||
James P. Clappin | 2,865,280 | 0 | 9,485,132 | 72,584 | 0 | 2,508,750 | 5,491,520 | 20,423,266 | |||||||||||||||||||||||||||||||||
Lawrence D. McRae | 3,138,800 | 0 | 10,518,765 | 104,672 | 0 | 2,558,925 | 5,750,038 | 22,071,200 | |||||||||||||||||||||||||||||||||
Edward A. Schlesinger | 859,319 | 0 | 1,954,509 | 112,035 | 0 | 843,000 | 3,230,836 | 6,999,699 | |||||||||||||||||||||||||||||||||
Lawrence D. McRae(2) | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||||||||||
Eric S. Musser | 3,420,000 | 0 | 6,267,140 | 104,672 | 0 | 2,540,788 | 5,788,556 | 18,121,156 | 3,717,200 | 0 | 9,238,142 | 90,968 | 0 | 1,824,792 | 8,821,944 | 23,693,046 | |||||||||||||||||||||||||
Lewis A. Steverson | 2,981,300 | 0 | 4,014,587 | 112,035 | 0 | 1,459,833 | 7,024,480 | 15,592,235 |
(1) | Long-term |
(2) | McRae would not be eligible for change in control benefits due to his retirement on December 31, 2023. |
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)(4) to the “Termination Scenarios” on page 80.87.
CORNING 2024 PROXY STATEMENT | 89 |
Pay Ratio Disclosure
For 2020, our last completed fiscal year,2023, the annual total compensation of the median employee, excluding our CEO, was $56,791$42,240 and the annual total compensation of our CEO was $18,951,753.$15,627,653. Accordingly, the ratio of the CEO’s annual total compensation to the annual total compensation of the median employee was 334:370:1.
This reflects analysis of our global workforce of 47,804 employees as of October 1, 2020,2023, which excludes 6861 employee in Argentina, 307 employees in Brazil, 93130 employees in Hungary, 353406 employees in India, 2 employees in Indonesia, 3 employees in Pakistan, 15713 employees in South Africa, 182the Philippines, 9 employees in the Russian Federation, and 269 employees in Turkey and 59 employees in Russia, which are de minimis.minimis relative to the size of our global workforce. We used estimated total cash compensation to determine the median employee. Our estimate of total cash compensation for our full 20202023 fiscal year included (i) annual base salary plus annual incentives calculated at target for salaried employees and (ii) hourly salary rate times annual standard hours plus additional adjustments for shift differentials, estimated overtime rates, production bonuses, holiday bonuses, fixed bonuses and other cash allowances paid to hourly employees.
Our estimates were based on an analysis of the pay components and payrolls in each of the 3736 countries in which we operate, excluding Argentina, Brazil, Hungary, India, Indonesia, Pakistan, Russia, South AfricaPhilippines, Russian Federation and Turkey. Total cash compensation rates of employees paid in foreign currencies were converted into U.S. dollars using our standard monthly foreign exchange conversion rates in effect on October 1, 20202023 for the determination of the median and December 31, 20202023 for the year-end actual total compensation. Once the median employee was identified, actual total compensation was determined in accordance with Item 402(c)(2)(x) of Regulation S-K.
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.
90 | CORNING 2024 PROXY STATEMENT |
Other Information
Pay Versus Performance Table and Disclosures | |||||||||||||||||||||
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (as defined by SEC rules) and certain financial performance of the Company. The Compensation and Talent Management Committee (the Committee) did not consider the pay versus performance disclosure when making its incentive compensation decisions. For further information about how we align executive compensation with the Company’s performance, see “Compensation Discussion and Analysis” starting on page 57. The following table sets forth the required compensation information for our NEOs, calculated in accordance with SEC regulations, for fiscal years 2023, 2022, 2021 and 2020.
| |||||||||||||||||||||
Year(1) | Summary Compensation Table Total for CEO(2) | Compensation Actually Paid to CEO(2) | Average Summary Compensation Table Total for Non-CEO NEOs(2) | Average Compensation Actually Paid to Non-CEO NEOs(2) | Value of Initial Fixed $100 Investment Based On: | Corning GAAP Net Income ($mm) | Corning Core Net Sales ($mm) | ||||||||||||||
Corning Total Shareholder Return | S&P 500 Communications Equipment Total Shareholder Return(3) | ||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | |||||||||||||
2023 | $15,627,653 | $12,798,655 | $5,062,725 | $3,993,516 | $118.03 | $150.85 | $ 581 | $13,580 | |||||||||||||
2022 | 16,169,469 | 8,744,301 | 4,271,097 | 2,645,033 | 119.50 | 123.73 | 1,316 | 14,805 | |||||||||||||
2021 | 20,766,032 | 27,146,225 | 6,421,907 | 7,930,517 | 135.13 | 154.17 | 1,906 | 14,120 | |||||||||||||
2020 | 18,951,753 | 26,306,100 | 5,573,311 | 7,431,466 | 127.57 | 101.28 | 512 | 11,452 |
(1) | Our CEO, Wendell P. Weeks, served as our Chief Executive Officer in 2023, 2022, 2021 and 2020. Our other NEOs (“Non-CEO NEOs”) included: |
a. | For 2023, Edward A. Schlesinger, Lawrence D. McRae, Eric S. Musser and Lewis A. Steverson. |
b. | For 2022, R. Tony Tripeny (who served for four months in 2022), Edward A. Schlesinger, Lawrence D. McRae, Eric S. Musser and Lewis A. Steverson. |
c. | For 2021, R. Tony Tripeny, Lawrence D. McRae, Eric S. Musser and Lewis A. Steverson. |
d. | For 2020, R. Tony Tripeny, Lawrence D. McRae, James P. Clappin and Eric S. Musser |
(2) | For each year, the values included in columns (c) and (e) for the compensation actually paid to our CEO and the average compensation paid to our non-CEO NEOs reflect the following adjustments to the values included in column (b) and column (d), respectively: |
Reconciliation of Summary Compensation Totals and Compensation Actual Paid | 2023 | 2022 | 2021 | 2020 | ||||||||||||||||||||||
CEO | Average Non-CEO NEOs | CEO | Average Non-CEO NEOs | CEO | Average Non-CEO NEOs | CEO | Average Non-CEO NEOs | |||||||||||||||||||
Summary Compensation Table Total for CEO (column (b)) | $15,627,653 | $5,062,725 | $ | 16,169,469 | $ | 4,271,097 | $ | 20,766,032 | $ | 6,421,907 | $ | 18,951,753 | $ | 5,573,311 | ||||||||||||
+/- Net Change in Pension Value | -327,691 | -229,731 | -13,662 | 174,240 | -12,790 | -129,044 | -1,341,183 | -503,540 | ||||||||||||||||||
+/- Net Change in Stock Awards Value | -2,487,192 | -834,429 | -7,362,526 | -1,767,045 | 5,119,430 | 1,318,544 | 7,354,059 | 1,953,404 | ||||||||||||||||||
+/- Net Change in Option Award Value | -14,116 | -5,049 | -48,980 | -33,259 | 1,273,553 | 319,111 | 1,341,470 | 408,292 | ||||||||||||||||||
Compensation Actually Paid | 12,798,655 | 3,993,516 | 8,744,301 | 2,645,033 | 27,146,225 | 7,930,517 | 26,306,100 | 7,431,466 |
CORNING 2024 PROXY STATEMENT | 91 |
Other Information
For each year, the value of stock awards and stock option awards used to calculate Compensation Actually Paid reflect the following assumptions:
2023 | 2022 | 2021 | 2020 | |
Restricted Stock Units | ||||
Stock Price | $30.45 - $34.78 | $31.94 - $35.54 | $37.23 - $45.90 | $19.99 - $36.00 |
Performance Stock Units | ||||
Stock Price | $30.45 - $34.78 | $31.94 - $35.54 | $37.23 - $44.28 | $36.00 |
Performance Multiplier | 0.49 – 1.99 | 0.49 – 1.99 | 1.00 – 1.81 | 1.00 – 1.81 |
Stock Options Stock Options [Member] | ||||
Stock Price | $31.20 | $31.94 - $37.23 | $37.23 - $44.28 | $20.54 - $36.00 |
Expected Life | – | – | – | |
Risk-Free Rate | - | - | - | |
Volatility | - | - | - | |
Dividend Yield | - | - | - |
3) | For each year, total shareholder return is shown for the Company, the constituent companies of the S&P 500 Communications Equipment Industry index (the “Comparison Group”). The Comparison Group is the same peer group used by Corning for purposes of Item 201(e) of Regulation S-K under the Exchange Act in Corning’s Annual Reports on Form 10-K for each of the fiscal years ended December 31, 2023, 2022, 2021 and 2020, which consists of the following five companies: Arista Networks, Cisco Systems, F5, Juniper Networks and Motorola Solutions, weighted according to the constituent companies’ market capitalization at the beginning of each period for which a return is indicated. |
92 | CORNING |
Other Information
Pay Versus Performance Relationship
RatificationThe following comparisons describe the relationships between the amounts included in the Pay Versus Performance Table for each of Appointment2023, 2022, 2021 and 2020, including a comparison between our cumulative total shareholder return and the total shareholder return of Independent RegisteredPublic Accounting Firmthe Comparison Group and comparisons between the compensation actually paid to the CEO and the average compensation actually paid to our non-CEO NEOs and (ii) each of the performance measures set forth in columns (f), (h) and (i) of the Pay Versus Performance Table.Restricted Stock Units [Member]
Most Important Financial Measures Used to Link Compensation Actually Paid to our NEOs to Company Performance in 2023
The following table identifies the six most important financial performance measures used by the Committee to link the compensation actually paid to our CEO and other NEOs in 2023 to company performance. The role of each of these performance measures in our NEOs’ compensation is discussed in the CD&A above.
Financial Performance Measures |
Core Net Sales |
Core Earnings Per Share |
Adjusted Free Cash Flow |
Return on Invested Capital (ROIC) |
Core Gross Margin |
Core NPAT |
CORNING 2024 PROXY STATEMENT | 93 |
The Audit Committee evaluates our independent registered public accounting firm each year and has appointed PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for 2021.2024. PwC has served in this role since 1944. The Audit Committee concluded that many factors contribute to the continued support of PwC’s independence, such as the oversight of the Public Company Accounting Oversight Board (PCAOB) through the establishment of audit, quality, ethics, and independence standards in addition to conducting audit inspections; the mandating of reports on internal control over financial reporting; PCAOB requirements for audit partner rotation; and limitations imposed by regulation and by the Audit Committee on non-audit services provided by PwC. The Audit Committee preapproves all audit and permitted non-audit services that PwC performs for the Company, and it approves the fees associated with the engagement of PwC. All services provided to Corning by PwC in 20192022 and 20202023 were pre-approved by the Audit Committee in accordance with the policy.
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 PwC.
In determining whether to reappoint PwC, the Audit Committee took into consideration a number of factors, including:
• | PwC’s global capabilities to handle the breadth and complexity of Corning’s global operations; |
• | PwC’s technical expertise and knowledge of Corning’s industry and global operations; |
• | The quality and candor of PwC’s communications with the Audit Committee and management, which include routine executive sessions with the Audit Committee held without management present and a management survey of PwC’s performance; |
• | PwC’s independence; |
• | The appropriateness of PwC’s fees; and |
• | PwC’s tenure as our independent registered public accounting firm, including the benefits of that tenure (including higher audit quality due to PwC’s deep understanding of Corning’s business and accounting policies and practices), the avoidance of significant costs and disruptions that would be associated with retaining a new independent auditor, and the controls and processes in place such as rotation of key partners and an annual assessment of PwC’s qualifications, service quality, sufficiency of resources, quality of communications, working relationship with our management, objectivity and professional skepticism that help ensure PwC’s continued independence. |
94 | CORNING |
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, 2021.2024. If the selection of PwC is not ratified by a majority of the sharesvotes cast by the holders of common stock present or represented at the annual meeting andshares entitled to vote on the matter, the Audit Committee will review its future selection of an independent registered public accounting firm in light of that vote result. Even if the selection is ratified, the Audit Committee in its discretion may appoint a different registered public accounting firm at any time during the year if the Audit Committee determines that such change would be appropriate.
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.
FOR | Our Board unanimously recommends a vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, |
Fees Paid to Independent Registered Public Accounting Firm
Aggregate fees for professional services rendered by PwC in 20192022 and 2020:2023:
2023 | 2022 | ||||||
Audit Fees | $ | 9,825,000 | $ | 9,918,000 | |||
Audit-Related Fees | 188,000 | 311,000 | |||||
Tax Fees | 504,000 | 487,000 | |||||
All Other Fees | 10,000 | 65,000 | |||||
Total Fees | $ | 10,527,000 | $ | 10,781,000 |
2019 | 2020 | ||||||
Audit Fees | $ | 9,479,000 | $ | 9,479,000 | |||
Audit-Related Fees | 73,000 | 34,000 | |||||
Tax Fees | 408,000 | 484,000 | |||||
All Other Fees | 13,000 | 11,000 | |||||
Total Fees | $ | 9,973,000 | $ | 10,008,000 |
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 standards. Audit fees also include statutory audits, comfort letters, consents for other SEC filings and reviews of documents filed with the SEC.
Audit-Related Fees.These fees are composed of professional services rendered in connection with due diligence pertaining to acquisitions, procedures to translate certain financial statements for foreign subsidiaries, employee benefit plan audits, agreed-upon procedures, and other audit-related activities.
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 consulting projects.
All Other Fees.Consists of fees not included in the Audit, Audit-Related, or Tax categories, including licensing technical accounting software from the independent registered public accounting firm.
CORNING | 95 |
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 chair has been designated by the Audit Committee to approve any services arising during the year that were not pre-approved by the Audit Committee and services that were pre-approved, but for which the associated fees will materially exceed the budget established for the type of service at issue. Services approved by the chair are communicated to the full Audit Committee at its next regular meeting. For each proposed service, the independent registered public accounting firm is required to provide supporting documentation detailing said service and confirm that the provision of such services does not impair its independence. The Audit Committee regularly reviews reports detailing services provided to Corning by its independent registered public accounting firm.
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 2020,2023, management updated the documentation, and performed testing and evaluation of Corning’s system of internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations. The Audit Committee was kept apprised of the progress of the evaluation, and it provided oversight and advice to management during the process. In connection with this oversight, the Audit Committee received periodic updates provided by management, internal audit and the independent registered public accounting firm at each regularly scheduled Audit Committee meeting. At the conclusion of the process, management provided the Audit Committee with, and the Audit Committee reviewed a report on, the effectiveness of Corning’s internal control over financial reporting. The Audit Committee 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, 2020,2023, filed with the SEC; as well as PricewaterhouseCoopers LLP’s Report of Independent Registered Public Accounting Firm included in Corning’s Annual Report
96 | CORNING 2024 PROXY STATEMENT |
Proposal 3Ratification of Appointment of Independent Registered Public Accounting Firm
on Form 10-K for the year ended December 31, 20202023 related to its audits of the consolidated financial statements and financial statement schedule, and the effectiveness of internal control over financial reporting.
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 Board and the SEC. In addition, the Audit Committee has received from the independent registered public accounting firm the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and discussed with them their independence from Corning and its management. The Audit Committee has considered whether the provision of permitted non-audit services by the independent registered public accounting firm to Corning is compatible with the auditor’s independence.
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, 2020.
2023.
The Audit Committee:
Kurt M. Landgraf, Chair
Donald W. Blair
Leslie A. Brun
Stephanie A. Burns
Pamela J. Craig
Thomas D. French
CORNING | 97 |
Approval of 2021 Long-Term Incentive Plan
Overview. The Corning Incorporated 2021 Long-Term Incentive Plan (the “2021 Plan”) is a continuation of similar long-term incentive plans first adopted in 1974. The 2021 Plan is designed to provide a flexible mechanism to permit employees and other service providers to obtain equity ownership in Corning, rewarding them for achievement of strategic objectives that aim to maximize shareholder value. The Board of Directors believes that long-term incentives are a critical element in Corning’s plans for future growth and Corning’s total compensation program and should be continued.
In February 2021, the Board of Directors approved the 2021 Plan and directed it be submitted to shareholders for approval. The affirmative vote of the holders of a majority of the shares of Corning’s common stock, par value $0.50 per share (“Common Stock”) cast at the Annual Meeting is required to approve the 2021 Plan. If shareholders approve, the 2021 Plan will become effective on April 30, 2021 with 38,000,000 shares of Corning’s Common Stock available for issuance and will expire on the tenth anniversary of the effective date.
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 the Annual Meeting. Upon approval of the 2021 Plan, the 2012 Plan will be terminated, the remaining unused shares under the 2012 Plan will be canceled and will not be available for grant under the 2021 Plan, and any outstanding awards under the 2012 Plan will remain outstanding and continue to vest in accordance with their terms. In the event shareholders do not approve, the 2021 Plan will not become effective and the 2012 Plan will continue until its scheduled expiration in May 2022, or when shares are no longer available, whichever is earlier.
Rationale for Recommendation by Board of Directors to Approve the 2021 Plan. The 2021 Plan will enable Corning to continue to offer long-term performance based compensation through the grant of a variety of awards. Awards available under the 2021 Plan include stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance stock units, cash performance units, cash awards, or other awards granted by the Compensation Committee of the Board of Directors (the “Committee”). If the 2021 Plan is not approved by shareholders, we may be unable to adequately incentivize our employees and other service providers in connection with services to be performed after the scheduled expiration of the 2012 Plan, or when shares are no longer available under such plan, whichever is earlier.
Proposal 4 Approval of 2021 Long-Term Incentive Plan
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:
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 copy of which is attached to this proxy statement as Appendix B.
Committee. The 2021 Plan will be administered by the Committee, consisting of independent directors whose members shall meet the requirements of Section 16(b) promulgated under the Exchange Act. The Committee may delegate some or all of its authority under the 2021 Plan to a subcommittee or subcommittees thereof or to any person or group of persons as it deems necessary, including the limited right to grant awards to individuals, except that only the Committee may grant awards to employees subject to the reporting rules under Section 16(a) of the Exchange Act.
Eligibility. The Committee will select the individuals who are eligible to participate in the 2021 Plan. These individuals may include employees (including officers and employees who are directors), independent contractors, and consultants of Corning and its affiliates. Non-employee directors are not eligible to participate in the 2021 Plan. As of March 1, 2021, the record date of the Annual Meeting, approximately (i) 50,110 employees (including officers and employees who are directors) will be eligible to receive awards under the 2021 Plan and (ii) fewer than 50 independent contractors and consultants will be eligible to receive awards under the 2021 Plan. (Corning does not have a practice of making grants to independent contractors or consultants.)
Proposal 4 Approval of 2021 Long-Term Incentive Plan
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 2021 Plan prohibits repricing of stock options and stock appreciation rights without shareholder approval, including amendment of outstanding awards to reduce the exercise price and cancellation of outstanding options or stock appreciation rights in exchange for cash or property, options or stock appreciation rights with lower exercise prices, or other awards.
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, unless otherwise provided in an individual award document, upon the occurrence of certain corporate events that constitute a change of control of Corning, including a merger or consolidation in which Corning is not the survivor, and either (i) awards are not granted to a participant in substitution of awards outstanding under the 2021 Plan, or (ii) awards are granted to a participant in substitution of awards outstanding under the 2021 Plan but the participant is subsequently terminated without cause within two years of the merger or consolidation, then (a) any unvested or unexercisable portion of any award carrying a right to exercise shall become fully vested and exercisable and (b) the applicable restrictions, deferral limitations and payment or forfeiture conditions shall lapse and the award shall be considered fully vested and any applicable performance conditions shall be deemed achieved at the greater of target or actual performance levels. Without limiting the above, subject to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in connection with certain corporate events or distribution of stock or property, the Committee may provide for the cancellation of any outstanding award in exchange for payment in cash or other property equal to the fair market value of the shares, cash or other property covered by the award, as reduced by the exercise of the award (or cancel such award if the fair market value of the exercise price is greater than the related shares, cash or other property covered by the award).
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 also provide that options may not be exercised in whole or in part for any period or periods of time. The number of shares covered by incentive stock options that may be first exercised by an individual in any year cannot have an aggregate fair market value in excess of $100,000, measured at the date of grant. The maximum number of shares that may be issued in connection with incentive stock options intended to comply with Section 422 of the Code, shall be 38,000,000. The Committee may provide that in the event the employment or service of an employee or other service provider is terminated, the right to exercise options held under the 2021 Plan may continue through its original expiration date or for such shorter period of time after such event as the Committee may determine appropriate. Options are not assignable or transferable except for limited circumstances such as death and, with the consent of the Committee, to certain family members to assist with estate planning. The 2021 Plan does not permit an optionee to defer recognition of gain upon the exercise of a stock option.
Proposal 4 Approval of 2021 Long-Term Incentive Plan
The exercise price is to be paid to Corning by the optionee, in full, concurrently with the issuance or delivery of the stock. The optionee may pay the option price in cash or with shares of Corning’s Common Stock owned by the optionee or a combination thereof, through net share settlement or similar procedure involving the withholding of shares, or by such other means as the Committee may authorize. The optionee has no rights as a shareholder with respect to the shares subject to option until shares are issued upon exercise of the option. No less than 95% of all equity-based awards, including options and stock appreciation rights, shall have minimum vesting of one year.
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 less than 95% of all equity-based awards shall have minimum vesting of one year. These conditions and contingencies may include the attainment of predetermined performance goals, such as operating or net profits, cash flow, earnings per share, profit returns, margins, revenues, shareholder returns and/or value, stock price, economic value added and working capital and any other goal that the Committee may deem appropriate. The shares or cash awarded to or earned by individual participants are subject to transfer restriction and/or forfeiture for a period of time as determined by the Committee in its discretion. The restrictions on transfer and the possibility of forfeiture may be waived, with the approval of the Committee, including, without limitation, if a participant’s employment or service relationship is terminated by reason of death, disability or retirement, or by reason of a subsidiary ceasing to be such. Shares may be issued to recognize past performance either generally or upon attainment of specific objectives.
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 2021 Plan.
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 not yet determinable. Consequently, it is not possible at this time to determine the benefits that might be received by participants under the Incentive Plan. See “2020 Grants of Plan Based Awards” on page 70 for information about awards made to the named executive officers under the 2012 Plan during fiscal year 2020.
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 our 2010 Variable Compensation Plan, our 2005 Employee Equity Participation Program, our 2010 Equity Plan for Non-Employee Directors as of December 31, 2011, and our 2012 Plan.
A | B | C | ||||
Plan Category | Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights $ | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column A) | |||
Equity Compensation Plans Approved by Security Holders(1) | 32,800,570 | 12.94 | 35,909,926 | |||
Equity Compensation Plans Not Approved by Security Holders | 0 | 0 | 0 | |||
Total | 32,800,570 | 12.94 | 35,909,926 |
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 AskedQuestions About theMeeting and Voting
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 18, 2021.
22, 2024.
When and Where isIs 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, ourOur Board of Directors has determined to hold the Annual Meeting in a virtual-only format on Thursday, April 29, 2021May 2, 2024 at 12 noon Eastern Time at virtualshareholdermeeting.com/GLW2021GLW2024. 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, 2021.5, 2024. The live audio webcast of the Annual Meeting will begin promptly at 12 noon Eastern Time. Online access to the audio webcast will open 30 minutes prior to the start ofbefore the Annual Meeting.Meeting starts. We encourage you to access the meeting in advance of the designated start time.
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 proxyvote.com ProxyVote.comin advance of the Annual Meeting. This process has not changed from prior years.
Who May Attend the Annual Meeting?
The Annual Meeting is open to holders of shares of our common sharesstock who held such shares as of the meeting’s record date, March 1, 2021.5, 2024. To attend and vote your shares during the virtual Annual Meeting, you will need to log in to virtualshareholdermeeting.com/GLW2021 GLW2024using, (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 meeting website during the meeting. If you do not have a control number, you may log in as a Guest,guest, although you will not be able to vote during the virtual Annual Meeting.
Frequently Asked Questions About the Meeting and Voting
What Am I Voting On?
The following matters are scheduled for vote at the Annual Meeting:
• | Election of each of the 14 |
• | Advisory approval of our executive compensation (Say on Pay); |
• | Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, |
• | 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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Proposal 3 Frequently Asked Questions About the Meeting and Voting
How Do You Recommend That I Vote on These Items?
The Board of Directors recommends that you vote your shares:
• | FOR |
• | ||
FORthe advisory approval of our executive compensation, as such information is disclosed in the Compensation Discussion & Analysis, the compensation tables and the accompanying disclosure (Say on Pay) (Proposal 2); and |
• | ||
FORratification of the | ||
Who is Entitled to Vote?
You may vote if you owned shares of our common sharesstock as of the close of business on March 1, 2021,5, 2024, the record date for the Annual Meeting.
How Many Votes Do I Have?
You are entitled to one vote for each share of common sharestock you own. As of the close of business on March 1, 2021,5, 2024, we had 769,164,000855,352,470 shares of common sharesstock outstanding. The shares held in our treasury are not considered outstanding and will not be voted or considered present at the meeting.
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:
• | By Internet at |
• | ||
By telephone (from the United States and Canada only) at 1-(800)-690-6903; |
• | By mail by completing, signing, dating and returning the enclosed proxy card in the postage paid envelope provided (see instructions on proxy card). |
Please refer to the proxy card for further instructions on voting by Internet or telephone.
Please use only one 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”?Street Name?”
How Do I Vote My Shares During the Annual Meeting?
Even if you plan to attend and participate in our virtual Annual Meeting, we encourage you to vote by telephone or over the Internet, or by returning a proxy card following your request for printed materials. This will ensure that your vote will be counted if you are unable to, or later decide not to, participate in the virtual Annual Meeting. Whether you are a shareholder of record or hold your shares in “street name,” you may vote online at the Annual Meeting. You will need to enter your control number (included in your notice, your proxy card or the voting instructions that accompanied your proxy materials) to vote your shares at the Annual Meeting.
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Proposal 3Frequently Asked Questions About the Meeting and Voting
May I Vote My Shares During the Virtual Annual Meeting?
Yes. You may vote your shares during the virtual annual meeting even if you previously submitted a proxy card or voted by Internet or telephone. Whether or not you plan to attend the meeting, however, we strongly encourage you to vote your shares by proxy before the meeting.
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:
• | voting again by Internet or telephone prior to the meeting; |
• | voting again at the meeting; or |
• | signing another proxy card with a later date and returning it to Corning’s Corporate Secretary at One Riverfront Plaza, Corning, NY 14831, prior to the | |
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 notice you previously received. Your proxy card does not include any shares held in a brokerage account in the name of your bank or broker (such shares are said to be held in “street name”).
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 notice you previously received. If you do not instruct the trustee to vote, your plan shares will be voted by the trustee in the same proportion that it votes shares in other plan accounts for which it did receive timely voting instructions.
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 beBe 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 42 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.
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Proposal 3Frequently 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:
• | FOR |
• | ||
FORthe advisory approval of our executive compensation, as such information is disclosed in the Compensation Discussion & Analysis, the compensation tables and the accompanying disclosure (Say on Pay) (Proposal 2); and |
• | ||
FORratification of the | ||
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 the 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. We have designed the format of the virtual Annual Meeting to ensure that our shareholders are afforded the same rights and opportunities to participate as they would have at an in-person meeting. After the business portion of the Annual Meeting concludes and the meeting is adjourned, we will hold a Q&A session during which we intend towill answer questions submitted during the meeting that are pertinent to the Company, as time permits, and in accordance with our Rules for Conduct of the Shareholder Meeting. During the Annual Meeting, you can view our Rules for Conduct of the Shareholder Meeting and submit any questions at virtualshareholdermeeting.com/GLW2021GLW2024. Answers to any questions not addressed during the meeting will be posted following the meeting on the investor page of our website.website following the meeting. Questions and answers will be grouped by topic, and substantially similar questions will be answered only once.
How Many Shares Must be Present to Hold the Meeting?
In order for us to conduct our meeting, a majority of our outstanding shares of common sharesstock as of March 1, 2021,5, 2024, the record date for the meeting, must be present in person (by logging in to our virtual annual meeting with your control number) or by proxy at the meeting. This is called a quorum. Your shares are counted as present at the meeting if you attend the virtual meeting and voteby logging in personwith your control number or if you properly return a proxy by Internet, telephone or mail.
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Proposal 3Frequently Asked Questions About the Meeting and Voting
What isIs the Vote Required for Each Proposal?
Affirmative Vote Required | Broker Discretionary Voting Allowed | |||||
Proposal 1: Election of each of the 14 director nominees | Majority of votes cast at the meeting in person or by proxy | No | ||||
Proposal 2: Advisory approval of our executive compensation (Say on Pay) | Majority of votes cast at the meeting in person or by proxy | No | ||||
Proposal 3: Ratification of the appointment of independent registered public accounting firm for fiscal year | Majority of votes cast at the meeting in person or by proxy | Yes | ||||
With respect to Proposals 1, 2 3 and 43 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” beBe 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 out-of-pocket 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 ofAfter the Annual Meeting, we will include the voting results in a Form 8-K, which we expect towill file with the SEC on or before May 3, 2021.8, 2024.
Shareholder Proposals and Director Nominations for the 2025 Annual Meeting
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 permitUnder Rule 14a-8 of the Securities Exchange Act of 1934 (the Exchange Act), eligible shareholders tomay submit proposals for inclusion in ourthe proxy statement if the shareholder and the proposal meetfor our 2025 Annual Meeting. Shareholder proposals must comply with the requirements specified inestablished by the SEC Rule 14a-8.
When to send these proposals: Any shareholder proposalsand must be submitted in accordance with SEC Rule 14a-8 must bewriting and received atby our principal executive offices no later thanCorporate Secretary on or before the close of business on November 19, 2021.
Frequently Asked Questions About22, 2024 (for them to be considered for inclusion in 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
2025 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 the largest whole number that does not exceed 20% of our Board. These director nominees will be included in our proxy statement for the 2025 Annual Meeting if the shareholder(s)
102 | CORNING 2024 PROXY STATEMENT |
Proposal 3 Frequently Asked Questions About the Meeting and Voting
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 20, 2021January 2, 2025 and no later than November 19, 2021.February 1, 2025.
WhereIf you would like to present a matter not included in our proxy statement for consideration at our 2025 Annual Meeting, including nominations for director candidates, you must send these notices of director nominees: Notices should be addressedadvance written notice to our 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 2022 Annual Meeting, must be received at our principal executive offices no earlier than the 120th day prior to the first anniversary of the preceding year’s annual meeting (January 2, 2025) and no later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting.
Whenmeeting (February 1, 2025). Any matter or nomination must comply with our by-laws. Eligible shareholders who intend to send these proposals: Shareholder proposals, includingsolicit proxies for the 2025 Annual Meeting in support of director nominations, submittednominees other than the Company’s nominees under these by-law provisionsRule 14a-19 of the Exchange Act must be received no earlier than December 31, 2021comply with the requirements of the Company’s by-laws and provide the notice required by, and in compliance with, Rule 14a-19 no later than January 30, 2022.March 3, 2025.
Where to send these proposals: ProposalsAll proposals in this section should be addressed to Corporate Secretary, Corning Incorporated, One Riverfront Plaza, Corning, New York 14831.
What to include: Proposals14831 and must includebe received by the information required by our by-laws, which are available on Corning’s website.
applicable dates specified above.
Why Haven’t I Received a Printed Copy of the Proxy Statement or Annual Report on Form 10-K?
Report?
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 at corning.com/2021-proxy2024-proxy. You can elect to receive future proxy statements and annual reports by Internet instead of receiving paper copies by mail by following the instructions for making such election when you electronically vote your shares.
Frequently Asked Questions About the Meeting and Voting
Are You “Householding” Forfor 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 20202023 Annual Report on Form 10-K to multiple registered shareholders sharing an address, unless we receive instructions to the contrary from one or more of the shareholders. We will still be required, however, to send you and each other shareholder at your address an individual proxy voting card. If you would like to receive more than one copy of this proxy statement and annual report, we will promptly send you additional copies upon written or oral request directed to Broadridge Financial Solutions, Inc. (“Broadridge”), either by calling toll free at (866) 540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. The same phone number and mailing address may be used to notify us that you wish to receive a separate proxy statement or annual report in the future, or to request delivery of a single copy of a proxy statement or Annual Report on Form 10-K if you are receiving multiple copies.
Our Board of Directors has adopted (i) the Code of Conduct for Directors and Executive Officers, which supplement our Code of Conduct that governs all employees and directors and (ii) the Code of Ethics for the Chief Executive Officer and Financial Executives (Code of Ethics). These Codes have existed for over ten years. The Code of Ethics applies to our Chief Executive
CORNING 2024 PROXY STATEMENT | 103 |
Proposal 3 Frequently Asked Questions About the Meeting and Voting
Officer, Chief Financial Officer, Controller and other financial executives. During 2023, no amendments to or waivers of the Code of ConductEthics provisions were made for Directors and Executive Officers, which supplements the Codeany of Conduct governing all employees and directors.our directors or executive officers. A copy of the Code of Ethics is available on our website at investor.corning.com/http://www.corning.com/worldwide/en/about-us/investor-relations/governance/overview/default.aspxcodes-of-conduct-ethics.html. We will disclose anyfuture amendments to, or waivers from, the Code of Ethics on our website within four business days following the date of such determination. During 2020, no amendments toamendment or waivers of the provisions of the Code of Ethics were made with respect to any of our directors or executive officers.waiver.
The Compensation and Talent Management Committee Report on page 66 and the Report of Audit Committee on page 85, are75 is not deemed filed with the SEC and shall not be deemed incorporated by reference into any prior or future filings made by Corning under the Securities Act or the Exchange Act, except to the extent that Corning specifically incorporates such information by reference. In addition, this proxy statement includes several website addresses. These website addressesWebsite references throughout this document are provided for convenience only and are intended to provide inactive, textual references only. The informationcontent on thesethe referenced websites is not incorporated herein by reference and does not constitute a part of this proxy statement.
This proxy statement, our 20202023 Annual Report on Form 10-K, and all other filings with the SEC, each of the Board Committee Charters and the Corporate Governance Guidelines andwith Director Qualification Standards may be accessed via the Investor Relations page on Corning’s website at corning.com. These documents are also available without charge upon a shareholder’s written or oral request to Investor Relations, Corning Incorporated, One Riverfront Plaza, Corning, NY, 14831, telephone number 1-(607)-974-9000.
104 | CORNING |
Corning Incorporated and Subsidiary CompaniesReconciliation of Non-GAAP Financial Measures toGAAP Financial Measures
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASUREMEASURES
Year Ended December 31, 20202023
(Unaudited; amountsAmounts in millions, except per share amounts)
Net sales | Net income | Earnings per share | |||||||||||
As reported | $ | 11,303 | $ | 512 | $ | 0.54 | |||||||
Constant-currency adjustment(1) | 44 | 17 | 0.02 | ||||||||||
Translation loss on Japanese yen-denominated debt(2) | 67 | 0.09 | |||||||||||
Translated earnings contract loss, net(3) | 36 | 0.05 | |||||||||||
Acquisition-related costs(4) | 114 | 0.15 | |||||||||||
Discrete tax items and other tax-related adjustments(5) | (24 | ) | (0.03 | ) | |||||||||
Litigation, regulatory and other legal matters(6) | 120 | 0.16 | |||||||||||
Restructuring, impairment and other charges and credits(7) | 621 | 0.80 | |||||||||||
Cumulative adjustment related to customer contract(8) | 105 | 105 | 0.14 | ||||||||||
Equity in losses of affiliated companies(9) | 98 | 0.13 | |||||||||||
Pension mark-to-market adjustment(10) | 24 | 0.03 | |||||||||||
Transaction-related gain, net(11) | (387 | ) | (0.50 | ) | |||||||||
Bond redemption loss(12) | 17 | 0.02 | |||||||||||
Gain on investment(13) | (83 | ) | (0.11 | ) | |||||||||
Core performance measures | $ | 11,452 | $ | 1,237 | $ | 1.39 |
Net Sales | Gross Margin | Net income attributable to Corning Incorporated | Per share | ||||||||||
As reported - GAAP | $ | 12,588 | $ | 3,931 | $ 581 | $ | 0.68 | ||||||
Constant-currency adjustment(1) | 992 | 744 | 550 | 0.64 | |||||||||
Translation gain on Japanese yen-denominated debt(2) | (81 | ) | (0.09 | ) | |||||||||
Translated earnings contract gain(3) | (130 | ) | (0.15 | ) | |||||||||
Acquisition-related costs(4) | 90 | 0.10 | |||||||||||
Discrete tax items and other tax-related adjustments(5) | 34 | 0.04 | |||||||||||
Restructuring, impairment and other charges and credits(6) | 283 | 378 | 0.44 | ||||||||||
Litigation, regulatory and other legal matters(7) | (5 | ) | 54 | 0.06 | |||||||||
Pension mark-to-market adjustment(8) | 12 | 0.01 | |||||||||||
Gain on investments(9) | (10 | ) | (0.01 | ) | |||||||||
Gain on sale of assets(10) | (20 | ) | (15 | ) | (0.02 | ) | |||||||
Core performance measures | $ | 13,580 | $ | 4,933 | $ 1,463 | $ | 1.70 |
See Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures, “Items which we excludeAdjusted from GAAP measures to arrive at Core Performance measures”Measures” for the descriptions of the footnoted reconciling items.
CORNING | 105 |
Appendix A
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASUREMEASURES
Year Ended December 31, 20192022
(Unaudited; amountsAmounts in millions, except per share amounts)
Net sales | Net income | Earnings per share | |||||||||||
As reported | $ | 11,503 | $ | 960 | $ | 1.07 | |||||||
Constant-currency adjustment(1) | 153 | 115 | 0.13 | ||||||||||
Translation loss on Japanese yen-denominated debt(2) | 2 | 0.00 | |||||||||||
Translated earnings contract gain, net(3) | (190 | ) | (0.21 | ) | |||||||||
Acquisition-related costs(4) | 99 | 0.11 | |||||||||||
Discrete tax items and other tax-related adjustments(5) | 37 | 0.04 | |||||||||||
Litigation, regulatory and other legal matters(6) | (13 | ) | (0.01 | ) | |||||||||
Restructuring, impairment and other charges and credits(7) | 334 | 0.37 | |||||||||||
Equity in losses of affiliated companies(9) | 165 | 0.18 | |||||||||||
Pension mark-to-market adjustment(10) | 69 | 0.08 | |||||||||||
Core performance measures | $ | 11,656 | $ | 1,578 | $ | 1.76 |
Net Sales | Gross Margin | Net income attributable to Corning Incorporated | Per share | ||||||||||
As reported - GAAP | $ | 14,189 | $ | 4,506 | $ 1,316 | $ | 1.54 | ||||||
Constant-currency adjustment(1) | 616 | 483 | 369 | 0.43 | |||||||||
Translation gain on Japanese yen-denominated debt(2) | (146 | ) | (0.17 | ) | |||||||||
Translated earnings contract gain(3) | (267 | ) | (0.31 | ) | |||||||||
Acquisition-related costs(4) | 109 | 0.13 | |||||||||||
Discrete tax items and other tax-related adjustments(5) | 84 | 0.10 | |||||||||||
Restructuring, impairment and other charges and credits(6) | 337 | 316 | 0.37 | ||||||||||
Litigation, regulatory and other legal matters(7) | 77 | 0.09 | |||||||||||
Pension mark-to-market adjustment(8) | 1 | 10 | 0.01 | ||||||||||
Gain on investments(9) | (8 | ) | (0.01 | ) | |||||||||
Gain on sale of business(11) | (41 | ) | (0.05 | ) | |||||||||
Contingent Consideration(12) | (25 | ) | (0.03 | ) | |||||||||
Core performance measures | $ | 14,805 | $ | 5,327 | $ 1,794 | $ | 2.09 |
See Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures, “Items which we excludeAdjusted from GAAP measures to arrive at Core Performance measures”Measures” for the descriptions of the footnoted reconciling items.
106 | CORNING 2024 PROXY STATEMENT |
Appendix A
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASUREMEASURES
Year Ended December 31, 20182021
(Unaudited; amountsAmounts in millions, except per share amounts)
Net sales | Net income | Earnings per share | |||||||||||
As reported | $ | 11,290 | $ | 1,066 | $ | 1.13 | |||||||
Constant-currency adjustment(1) | 108 | 127 | 0.13 | ||||||||||
Translation loss on Japanese yen-denominated debt(2) | 15 | 0.02 | |||||||||||
Translated earnings contract loss, net(3) | 97 | 0.10 | |||||||||||
Acquisition-related costs(4) | 103 | 0.11 | |||||||||||
Discrete tax items and other tax-related adjustments(5) | 79 | 0.08 | |||||||||||
Litigation, regulatory and other legal matters(6) | 96 | 0.10 | |||||||||||
Restructuring, impairment and other charges and credits(7) | 96 | 0.10 | |||||||||||
Equity in earnings of affiliated companies(9) | (119 | ) | (0.13 | ) | |||||||||
Pension mark-to-market adjustment(10) | 113 | 0.12 | |||||||||||
Core performance measures | $ | 11,398 | $ | 1,673 | $ | 1.78 |
Net Sales | Gross Margin | Net income attributable to Corning Incorporated | Per share | ||||||||||
As reported - GAAP | $14,082 | $ | 5,063 | $ 1,906 | $ | 1.28 | |||||||
Preferred stock redemption(a) | 0.90 | ||||||||||||
Subtotal | 14,082 | 5,063 | 1,906 | 2.18 | |||||||||
Constant-currency adjustment(1) | 38 | 81 | 76 | 0.09 | |||||||||
Translation gain on Japanese yen-denominated debt(2) | (138 | ) | (0.16 | ) | |||||||||
Translated earnings contract gain(3) | (273 | ) | (0.32 | ) | |||||||||
Acquisition-related costs(4) | 18 | 123 | 0.15 | ||||||||||
Discrete tax items and other tax-related adjustments(5) | (24 | ) | (0.03 | ) | |||||||||
Restructuring, impairment and other charges and credits(6) | 80 | 78 | 0.09 | ||||||||||
Litigation, regulatory and other legal matters(7) | 27 | 0.03 | |||||||||||
Pension mark-to-market adjustment(8) | 25 | 0.03 | |||||||||||
Loss on investment(9) | 17 | 0.02 | |||||||||||
Gain on sale of business(11) | (46 | ) | (0.05 | ) | |||||||||
Preferred stock conversion(13) | 17 | 0.02 | |||||||||||
Bond redemption loss(14) | 23 | 0.03 | |||||||||||
Core performance measures | $ | 14,120 | $ | 5,242 | $ 1,811 | $ | 2.07 |
(a) | Pursuant to the Share Repurchase Agreement, the Preferred Stock was converted into 115 million Common Shares. Corning immediately repurchased 35 million of the converted Common Shares and excluded them from the weighted-average common shares outstanding for the calculation of the Company’s basic and diluted earnings per share. The redemption of these Common Shares resulted in an $803 million reduction of retained earnings which reduced the net income available to common shareholders |
See Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures, “Items which we excludeAdjusted from GAAP measures to arrive at Core Performance measures”Measures” for the descriptions of the footnoted reconciling items.
Appendix A
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASUREMEASURES
Three and Twelve MonthsYear Ended December 31, 20202023 and 20192022
(Unaudited; amounts in millions)
Year ended December 31, | |||||||||
2023 | 2022 | ||||||||
Cash flows from operating activities | $ 2,005 | $ 2,615 | |||||||
Realized gains on translated earnings contracts | 326 | 300 | |||||||
Translation losses on cash balances | (61 | ) | (68 | ) | |||||
Adjusted cash flows from operating activities | $ 2,270 | $ 2,847 | |||||||
Less: Capital Expenditures | $ 1,390 | $ 1,604 | |||||||
Adjusted free cash flow | $ 880 | $ 1,243 | |||||||
CORNING 2024 PROXY STATEMENT | 107 |
Year ended December 31, | |||||||||||||
2020 | 2019 | ||||||||||||
Cash flows from operating activities | $ | 2,180 | $ | 2,031 | |||||||||
Realized gains on translated earnings contracts | 12 | 55 | |||||||||||
Premiums received from options contracts | 11 | ||||||||||||
Translation gains (losses) on cash balances | 133 | (33 | ) | ||||||||||
Other adjustments | 45 | ||||||||||||
Adjusted cash flows from operating activities | $ | 2,325 | $ | 2,109 | |||||||||
Less: Capital expenditures | $ | 1,377 | $ | 1,978 | |||||||||
Adjusted free cash flow | $ | 948 | $ | 131 |
Appendix A
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
CORE PERFORMANCE MEASURES
In managing the Company and assessing our financial performance, we adjust certain measures provided byincluded in our consolidated financial statements to exclude specific items to reportarrive at our core performance measures. These items include gains and losses on ourthe impact of translating the Japanese yen-denominated debt, the impact of the translated earnings contracts, acquisition-related costs, certain discrete tax items and other tax-related adjustments, restructuring, impairment losses, and other charges and credits, certain litigation-related expenses,litigation, regulatory and other legal matters, pension mark-to-market adjustments and other items which do not reflect on-goingthe ongoing operating results of the Company orCompany.
In addition, because a significant portion of our equity affiliates. Corningrevenues and expenses are denominated in currencies other than the U.S. dollar, management believes it is important to understand the impact on sales and net income of translating these currencies into U.S. dollars. Therefore, management utilizes constant-currency reporting for ourthe Display Technologies, Specialty Materials, Environmental Technologies Specialty Materials and Life Sciences segments forto exclude the impact from the Japanese yen, South Korean won, Chinese yuan, newNew Taiwan dollar and euro, as applicable to the euro. Effective January 1, 2019, Corning began usingsegment. The most significant constant-currency reportingadjustment relates to the Japanese yen exposure within the Display Technologies segment. The constant-currency rates established for our Environmental Technologiescore performance measures are internally derived long-term management estimates, which are closely aligned with our hedging instrument rates. These hedging instruments may include, but are not limited to, foreign exchange forward or option contracts and Life Sciences segments. The Company believesforeign-denominated debt. For details of the rates used, please see the footnotes to the “Reconciliation of Non-GAAP Measures” section.
We believe that the use of constant-currency reporting allows investorsmanagement to understand our results without the volatility of currency fluctuations, analyze underlying trends in the businesses and reflects the underlying economics of the translated earnings contracts used to mitigate the impact of changes in currency exchange rates on our earningsestablish operational goals and cash flows. Corning also believes that reporting core performance measures provides investors greater transparency to the information used by our management team to make financial and operational decisions.
forecasts.
Core performance measures are not prepared in accordance with Generally Accepted Accounting Principlesaccounting principles generally accepted in the United States of America (“GAAP”). We believeprovide investors should considerwith these non-GAAP measures in evaluatingto evaluate our results as we believe they are more indicative of our core operating performance and provide greater transparency to how management evaluates our operational results and trends.trends and makes financial and operational decisions. 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 Companymanagement does not forecast the movement of foreign currencies against the U.S. dollar, or other items that do not reflect ongoing operations, nor does it forecast items that have not yet occurred or are out of the Company’smanagement’s control. As a result, the Companymanagement is unable to provide outlook information on a GAAP basis.
For a reconciliation of non-GAAP performance measures to their most directly comparable GAAP financial measure, please see “Reconciliation of Non-GAAP Measures.”
108 | CORNING 2024 PROXY STATEMENT |
Appendix A
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 ADJUSTED FROM GAAP MEASURES
Items which we excludeadjusted from GAAP measures to arrive at core performance measures are as follows:
(1) | Constant-currency |
We believe that the use of constant-currency reporting allows management to understand our results without the volatility of currency fluctuation, analyze underlying trends in the businesses and establish operational goals and forecasts.
Constant-currency rates are as follows:
follows and are applied to all periods presented and to all foreign exchange exposures during the period, even though we may be less than 100% hedged:
Currency | Japanese yen | Korean won | Chinese yuan | New Taiwan dollar | Euro | |||||||||||||||||
Rate | ¥107 | ₩1,175 | ¥6.7 | NT$31 | €.81 |
(2) | Translation |
(3) | ||
Translated earnings |
(4) |
Appendix A
Acquisition-related |
(5) | ||
Discrete tax items and other tax-related |
(6) | Restructuring, impairment and other charges and credits: Amount reflects certain restructuring, impairment losses and other charges and credits, as well as other expenses, including severance, accelerated depreciation, asset write-offs and facility repairs resulting from power outages, which are not related to ongoing operations. The activity during 2023 primarily relates to asset write-offs associated with the |
(7) | ||
Litigation, regulatory and other legal |
(8) | ||
Pension mark-to-market |
(9) | ||
(10) | ||
Gain on |
Corning Incorporated2021 Long-Term Incentive Plan
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
assets. |
(11) |
(12) | Contingent consideration: Amount reflects the fair value mark-to-market cost adjustment of contingent consideration. |
(13) | Preferred stock conversion: Amount reflects the put option from the Share Repurchase Agreement with Samsung Display Co., Ltd. |
(14) | Bond redemption loss: Amount reflects premiums on redemption of debentures. |
CORNING | 109 |
Appendix B
CORNING
Corning Incorporated
One Riverfront Plaza
Corning, NY 14831-0001
U.S.A.
www.corning.com
© |
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on April 28, 2021 for shares held directly and by 11:59 p.m. Eastern Time on April 26, 2021 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/GLW2021
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on April 28, 2021 for shares held directly and by 11:59 p.m. Eastern Time on April 26, 2021 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSFOR THE 2021 MEETING OF SHAREHOLDERS
APRIL 29, 2021
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 April 29, 2021, and any adjournments thereof, with all powers that the undersigned would possess if personally present. In their discretion, the proxies are hereby authorized to vote upon such other business as may properly come before the meeting and any adjournments or postponements thereof.
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 1, 2021 is shown on this proxy card. Your vote will provide voting instructions to the trustees of the plans. If no instructions are given, the trustees will vote shares as described in the proxy statement.
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.