OLIN Corp DEF 14A, filed Mar 17, 2023
OLIN Corp (OLN)
DEF 14A
2023-03-17
View Original
Added on
June 12, 2026
About this DEF 14A
OLIN Corp filed this DEF 14A on March 17, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒
Filed by a party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement | ||||
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||||
| ☒ | Definitive Proxy Statement | ||||
| ☐ | Definitive Additional Materials | ||||
| ☐ | Soliciting Material under §240.14a-12 | ||||
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
| ☒ | No fee required. | |||||||
| ☐ | Fee paid previously with preliminary materials. | |||||||
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||||||
190 CARONDELET PLAZA, SUITE 1530, CLAYTON, MISSOURI 63105 USA
March 17, 2023
Dear Olin Shareholder:
We cordially invite you to attend our 2023 annual meeting of shareholders (annual meeting) on April 27, 2023.
This booklet includes the notice of the annual meeting and proxy statement, which describe the business we will conduct at the annual meeting and provides information about Olin that you should consider when you vote your shares. We have not planned a communications segment or any presentations for the 2023 annual meeting.
Whether or not you plan to attend, it is important that your shares are represented and voted at the annual meeting. If you do not plan to attend the annual meeting, you may vote your shares online, by telephone or if you received paper copies of our proxy materials by completing, signing and dating and returning a proxy card in the postage paid envelope provided. Even if you plan on attending the annual meeting in person, we encourage you to vote your shares by submitting your proxy in advance of the annual meeting.
At last year’s annual meeting more than 89% of our shares were represented in person or by proxy. We hope for the same high level of representation at this year’s meeting and we urge you to vote as soon as possible.
Sincerely, | ||
Scott Sutton | ||
| Chairman, President and Chief Executive Officer | ||
| YOUR VOTE IS IMPORTANT We urge you to promptly vote your shares online, by telephone or by completing, signing and dating and returning a proxy card in the postage prepaid envelope. | ||
OLIN CORPORATION
Notice of Annual Meeting of Shareholders
Time: | 8:00 a.m. (Central Daylight Time) | ||||
Date: | Thursday, April 27, 2023 | ||||
Place: | Plaza in Clayton Office Tower | ||||
190 Carondelet Plaza | |||||
Annex Room—16th Floor | |||||
Clayton, MO 63105 USA | |||||
Purpose: | To consider and act upon the following: | ||||
(1)Election of eight directors, all of whom are identified in the proxy statement. | |||||
(2) Conduct an advisory vote to approve the compensation for named executive officers. | |||||
(3) Conduct an advisory vote on the frequency of a shareholder vote on executive compensation. | |||||
(4) Ratification of the appointment of the independent registered public accounting firm for 2023. | |||||
(5) Such other business that is properly presented at the meeting. | |||||
| Who May Vote: | You may vote if you were a record owner of Olin common stock at the close of business on February 27, 2023. | ||||
By Order of our Board of Directors: | ||
Dana C. O’Brien | ||
| Secretary | ||
Clayton, Missouri
March 17, 2023
OLIN CORPORATION
PROXY STATEMENT
____________________
TABLE OF CONTENTS
| Page | |||||
| 24 | |||||
| DIRECTOR COMPENSATION | 54 | ||||
| COMPENSATION COMMITTEE REPORT | 56 | ||||
| PAY RATIO DISCLOSURE | |||||
| PAY VERSUS PERFORMANCE | 57 | ||||
| 59 | |||||
| 59 | |||||
i
OLIN CORPORATION
PROXY STATEMENT
____________________
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE 2023 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2023
MATERIALS FOR THE 2023 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2023
Olin’s Notice of 2023 Annual Meeting of Shareholders and Proxy Statement and 2022 Annual Report on Form 10-K are available at www.olin.com/proxy.
GENERAL QUESTIONS
Why did I receive a notice in the mail regarding the availability of proxy materials instead of printed copies of the proxy materials?
In accordance with rules adopted by the U.S. Securities and Exchange Commission (SEC), we may furnish proxy materials to the shareholders by providing access to these documents online instead of mailing printed copies. Unless you are a participant in the Olin Corporation Contributing Employee Ownership Plan (CEOP), you will not receive printed copies of the materials unless you request them. Instead, we mailed you the notice regarding the availability of proxy materials (notice) (unless you have previously consented to electronic delivery or already requested to receive printed copies), which describes how you may access and review all of the proxy materials online. The notice regarding the availability of proxy materials provides instructions as to how shareholders can access the proxy materials online, contains a listing of matters to be considered at the meeting, and sets forth instructions as to how shares can be voted. Shares must be voted either in person, online, by telephone, or by completing and returning a proxy card. Shares cannot be voted by marking, writing on and/or returning the notice regarding the availability of proxy materials. Any notices regarding the availability of proxy materials that are returned will not be counted as votes. Instructions for requesting a paper copy of the proxy materials are included on the notice regarding the availability of proxy materials.
This process is designed to expedite shareholders’ receipt of proxy materials, lower the cost of the annual meeting, and help conserve natural resources. However, if you prefer to receive printed proxy materials via mail or receive an e-mail with links to the electronic materials, please follow the instructions included on the notice regarding the availability of proxy materials.
Why did I receive this proxy statement?
You received this proxy statement because you owned shares of Olin common stock, $1 par value per share, which we sometimes refer to as common stock or shares, at the close of business on February 27, 2023. Olin’s Board of Directors (Board) is asking you to vote at the 2023 annual meeting FOR each of our director nominees identified in Item 1, FOR Items 2 and 4 and FOR a one-year frequency for Item 3 listed in the notice of the annual meeting of shareholders. This proxy statement describes the matters on which we would like you to vote and provides information so that you can make an informed decision.
When was the notice regarding the availability of proxy materials distributed to shareholders?
We began to distribute the notice regarding the availability of proxy materials to shareholders via mail and email on or about March 17, 2023.
When was this proxy material mailed to shareholders?
We began to mail the proxy statement and form of proxy to shareholders on or about March 17, 2023.
What if I have questions?
If you have questions, please write them down and send them to the Office of the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA.
What will I be voting on?
You will be voting on:
(1)the election of eight directors identified in this proxy statement;
(2)an advisory vote to approve the compensation for named executive officers (NEOs);
(3)an advisory vote on the frequency of a shareholder vote on executive compensation;
(4)the ratification of the appointment of KPMG LLP (KPMG) as Olin’s independent registered public accounting firm for 2023; and
(5)any other business properly presented at the annual meeting.
Could other matters be voted on at the annual meeting?
As of March 17, 2023, the items listed in the preceding question are the only matters being considered. If any other matters are properly presented for action, the persons acting as proxies will vote each proxy in accordance with their good faith business judgment as to what is in the best interests of Olin.
How does our Board recommend I vote on the proposals?
Our Board recommends a vote FOR each of the director nominees identified in Item 1, FOR Items 2 and 4 and FOR a one-year frequency under Item 3.
What is a broker non-vote?
A broker non-vote occurs when brokers, banks or other nominees holding shares for a beneficial owner have discretionary authority to vote on “routine” matters brought before a shareholder meeting, but the beneficial owner of the shares fails to provide the broker, bank or other nominee with specific instructions on how to vote on any “non-routine” matters brought to a vote at the shareholders meeting.
Brokers, banks and other nominees will be entitled to vote your shares on “routine” matters without instructions from you. The only proposal that would be considered “routine” in such event is the proposal for the ratification of the appointment of KPMG as Olin’s independent registered public accounting firm. A broker, bank or other nominee will not be entitled to vote your shares on any “non-routine” matters, absent instructions from you. “Non-routine” matters include the election of directors, the approval, on a non-binding advisory basis, of the compensation paid to Olin’s NEOs and the non-binding advisory vote on the frequency of a shareholder vote on executive compensation. If you are a shareholder that holds shares through an account with a broker, bank or other nominee, please provide specific voting instructions to your broker, bank or other nominee.
Consequently, if you do not submit any voting instructions to your broker, bank or other nominee, your broker, bank or other nominee may exercise its discretion to vote your shares only on the proposal to ratify the appointment of KPMG. If you do not direct your broker, bank or other nominee as to how your shares should be voted, your shares will constitute broker non-votes on each of the other proposals. Broker non-votes will count for purposes of determining whether a quorum exists, but will not be counted as votes cast with respect to such proposals.
What do I need to do to attend the 2023 annual meeting in person?
Each attendee must bring a valid, government-issued photo ID, such as a driver’s license or passport, and verification of Olin common stock ownership. For a shareholder of record (a shareholder with a stock certificate or who holds shares in an account with our transfer agent, EQ Shareowner Services) or CEOP participant, please bring your notice of the annual meeting or the upper half of your proxy card. If you hold your shares in an account with a broker, bank or other nominee (i.e., your shares are held in street name), please bring the notice or voting instruction form you received from your broker, bank or other nominee. You may also bring your brokerage or bank account statement reflecting your Olin common stock ownership as of February 27, 2023, the record date for voting. If you hold your shares through a broker, bank or other nominee, you will not be permitted to vote at the meeting without obtaining a “legal proxy” from that nominee.
Please note that cameras, sound or video recording equipment, mobile phones and other similar devices, as well as purses, briefcases, backpacks and packages, will not be allowed in the meeting room. No one will be admitted to the meeting once it begins.
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How can I obtain directions to be able to attend the annual meeting and vote in person?
You may obtain directions to the Plaza in Clayton Office Tower in Clayton, MO, USA by calling 1-314-290-5039 or online at http://theplazainclayton.axisportal.com/Directions.axis.
VOTING
Who can vote?
All shareholders of record at the close of business on February 27, 2023, are entitled to vote at the annual meeting.
How many votes can be cast by all shareholders?
At the close of business on February 27, 2023, the record date for the annual meeting, we had 130,869,243 outstanding shares of common stock. Each shareholder on the record date may cast one vote for each full share owned. The presence in person or by proxy of the holders of a majority of such outstanding shares constitutes a quorum. If a share is present for any purpose at the meeting, it is deemed to be present for the transaction of all business. Abstentions and shares held in street name (broker shares) that are voted on any matter will be included in determining the number of votes present. Broker shares that are not voted on any matter at the meeting will not be included in determining whether a quorum is present.
How do I vote if I am not the shareholder of record?
If you are not the shareholder of record but hold shares through an account with a broker, bank or other nominee, the broker, bank or other nominee may have special voting instructions that you should follow. Please see the materials sent to you by your broker, bank or other nominee for information on how to vote your shares.
How do I vote if I am the shareholder of record?
You may vote either in person at the annual meeting or by proxy. To vote by proxy, you must select one of the following options:
•Vote online:
•Access the website listed in the proxy materials you received.
•Have the notice regarding the availability of proxy materials and/or your proxy card in hand.
•Follow the instructions provided on the website.
•Submit the electronic proxy before the required deadline (April 24, 2023 at 11:59 p.m. Eastern Time for CEOP participants and April 26, 2023 at 11:59 p.m. Eastern Time for all other shareholders).
•Vote by telephone:
•Call the numbers listed in the proxy materials you received.
•Have the notice regarding the availability of proxy materials and/or your proxy card in hand.
•Follow and comply with the recorded instructions by the applicable deadline (April 24, 2023 at 11:59 p.m. Eastern Time for CEOP participants and April 26, 2023 at 11:59 p.m. Eastern Time for all other shareholders).
•Vote by proxy card:
•Complete all of the required information on the proxy card.
•Sign and date the proxy card.
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•Return the proxy card in the postage paid envelope provided. We must receive the proxy card no later than April 24, 2023 for CEOP participants or no later than April 26, 2023 for all other shareholders, for your vote to be counted.
If you vote in a timely manner online or by telephone, you do not have to return the proxy card for your vote to count.
If you want to vote in person at the 2023 annual meeting, and you own Olin common stock in an account with a broker, bank or other nominee, you must obtain a legal proxy from that party in their capacity as owner of record for your shares and bring the legal proxy to the 2023 annual meeting.
Where can I access an electronic copy of the Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2022?
You may access an electronic, searchable copy of the 2023 Proxy Statement and the Annual Report on Form 10-K for the year ended December 31, 2022, at www.olin.com/proxy.
How are votes counted?
If you specifically mark the proxy card (or vote online or by telephone) and indicate how you want your vote to be cast regarding any matter, your directions will be followed. If you sign and submit the proxy card but do not specifically mark it with your instructions as to how you want to vote, the proxy will be voted FOR the election of our director nominees named in Item 1, FOR Items 2 and 4, and FOR a one-year frequency under Item 3 listed in this proxy statement. If you submit a proxy card marked “abstain” on any item, your shares will not be voted on that item so marked and your vote will not be included in determining the number of votes cast on that matter. Broker shares that are not voted in the election of director nominees in Item 1 or on Items 2, 3 and 4 will not be included in determining the number of votes cast on those matters.
As of the date of this proxy statement, our Board knows of no business other than that set forth above to be transacted at the annual meeting, but if other matters requiring a vote do arise, it is the intention of the persons acting as proxies to whom you are granting your proxy to vote in accordance with their good faith business judgment as to what is in the best interests of Olin on such matters.
EQ Shareowner Services tabulates the shareholder votes and provides an independent inspector of election as part of its services as our registrar and transfer agent.
Can I change my vote?
Yes. If you are a shareholder of record, you can revoke a proxy or change your vote before the completion of voting at the meeting by:
•casting a new vote online or by telephone;
•submitting another written proxy with a later date;
•sending a written notice of the change in your voting instructions to the Office of the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA if received no later than April 24, 2023 for CEOP participants or no later than April 26, 2023 for all other shareholders; or
•revoking the grant of a previously submitted proxy and voting in person at the annual meeting. Please note that your attendance at the annual meeting itself will not revoke a proxy.
If your shares are held in street name, you should follow the instructions provided by your broker, bank or other nominee to revoke or change your voting instructions.
When are the votes due?
Proxies submitted by shareholders online or by telephone will be counted in the vote only if they are received no later than April 26, 2023 by 11:59 p.m. Eastern Time. Shares voted using a proxy card will be counted in the vote only if we receive your proxy card no later than April 26, 2023. Proxies submitted by CEOP participants will be counted in the vote only if they are received by mail, online or by telephone no later than April 24, 2023 by 11:59 p.m. Eastern Time.
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How do I vote my shares held in the Olin Contributing Employee Ownership Plan?
On February 27, 2023, our CEOP held 1,720,525 shares of our common stock. Voya Institutional Trust Company serves as the Trustee of our CEOP. If you are a CEOP participant, you may instruct our CEOP Trustee on how to vote shares of common stock credited to your CEOP account on the items of business listed on the proxy card by voting online, by telephone or by indicating your instructions on your proxy card and completing, signing and dating and returning the proxy card in the postage paid envelope provided. The Trustee will vote shares of common stock held in our CEOP for which they do not receive voting instructions in the same manner proportionately as they vote the shares of common stock for which they do receive instructions. In order for your instructions to be counted by the Trustee, your vote must be received by the Trustee no later than April 24, 2023 at 11:59 p.m. Eastern Time.
How do I vote my shares held in the Automatic Dividend Reinvestment Plan?
EQ Shareowner Services is our registrar and transfer agent and administers our Automatic Dividend Reinvestment Plan. If you participate in our Automatic Dividend Reinvestment Plan, EQ Shareowner Services will vote any shares of common stock that it holds for you in accordance with your instructions indicated on the proxy card you complete, sign, date and return or the vote you make online or by telephone if received no later than April 26, 2023 at 11:59 p.m. Eastern Time. If you do not submit a proxy card for your shares of record or vote online or by telephone, EQ Shareowner Services will not vote your dividend reinvestment shares.
MISCELLANEOUS
Can I contact Board members directly?
Our Audit Committee has established the following methods for shareholders or other interested parties to communicate directly with our Board and/or its members.
•Mail—Letters may be addressed to our Board or to an individual Board member as follows:
The Olin Board or (Name of the director)
c/o Office of the Secretary
Olin Corporation
190 Carondelet Plaza, Suite 1530
Clayton, MO 63105 USA
•E-mail—You may send an e-mail message to Olin’s Board at the following address: odirectors@olin.com. In addition, you may send an e-mail message to an individual Board member by addressing the e-mail using the first initial of the director’s first name combined with his or her last name in front of @olin.com.
•Telephone—Olin has established a safe and confidential process for reporting, investigating and resolving employee and other third party concerns. Shareholders or other interested parties may also use this Help-Line to communicate with one or more directors on any Olin matter. The Olin Help-Line is operated by an independent, third party service 24 hours a day, 7 days a week. In the United States and Canada, the Olin Help-Line can be reached by dialing toll-free 800-362-8348. Callers outside the United States and Canada can find toll-free numbers for several countries available under “Dialing Options” at www.OlinHelp.com or can reach the Olin Help-Line by calling the United States collect at 770-810-1127.
Who pays for this proxy solicitation?
Olin will pay the entire expense of this proxy solicitation.
Who solicits the proxies and what is the cost of this proxy solicitation?
Our Board is soliciting the proxies on behalf of Olin. Olin will reimburse brokers, banks and other nominees for their expenses in forwarding proxy solicitation materials to holders.
How will the proxies be solicited?
Our directors, officers and employees may solicit proxies by personal interview, e-mail, mail and telephone, and we will request brokerage houses and other custodians, brokers and other agents to forward proxy solicitation materials to the beneficial owners of Olin common stock for whom they hold shares.
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How can I submit a shareholder proposal at the 2024 annual meeting?
If you want to present a proposal for consideration at the 2024 annual meeting without including your proposal in the proxy statement, you must deliver a written notice containing the information required by Olin’s Bylaws to the Office of the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA no later than December 29, 2023, and also comply with other applicable requirements described in Olin’s Bylaws. You must also present your proposal in person at the 2024 annual meeting.
If you want to present a proposal to be considered for inclusion in the proxy statement for the 2024 annual meeting, you must deliver a written notice containing the information required by Olin’s Bylaws to the Office of the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA no later than November 18, 2023, and also comply with other applicable requirements described in Olin’s Bylaws, including the requirements under the SEC Rule 14a-8 . You must then present your proposal in person at the 2024 annual meeting.
How can I recommend a director for the slate of candidates to be nominated by Olin’s Board for election at the 2024 annual meeting?
You can suggest that our Nominating and Governance Committee consider a person for inclusion in the slate of candidates to be proposed by our Board for election at the 2024 annual meeting. A shareholder can recommend a person by delivering written notice to the Office of the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA no later than October 19, 2023. The notice must include the information described under the heading “What Is Olin’s Director Nomination Process?” on page 18, and must be sent to the address indicated under that heading. Our Board is not required to include such nominee in our proxy statement.
How can I directly nominate a director for election to the Board at the 2024 annual meeting?
Our Bylaws set forth the procedures that a shareholder must follow to nominate a candidate for election as a director. You may directly nominate an individual for election to our Board at the 2024 annual meeting by delivering a written notice of the nomination containing the information required by Olin’s Bylaws to the Office of the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA no later than December 29, 2023, and also complying with the applicable requirements relating to the inclusion of shareholder nominees as described in Olin’s Bylaws, including the requirements under the SEC Rule 14a-19 and the delivery of a written notice that includes the proposing shareholder and nominee information, representations, undertakings and agreements.
How can I obtain shareholder information?
Shareholders may contact EQ Shareowner Services, our registrar and transfer agent, who also manages our Automatic Dividend Reinvestment Plan at:
EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100 USA
Telephone: 800-401-1957
Online: www.shareowneronline.com, click on “contact us.”
Shareholders can sign up for online account access through EQ Shareowner Services for fast, easy and secure access 24 hours a day, 7 days a week for future proxy materials, investment plan statements, tax documents and more. To sign up log on to www.shareowneronline.com where step-by-step instructions will prompt you through enrollment or you may call 800-401-1957 from the United States or 651-450-4064 from outside the United States for customer service.
How do you handle proxy materials for shareholders in the same household?
We are required to provide an annual report and proxy statement or notice of availability of these materials to all shareholders of record. If you have more than one account in your name or at the same address as other shareholders, Olin or your broker may discontinue mailings of multiple copies. If you received only one copy of this proxy statement and the annual report or notice of availability of these materials and wish to receive a separate copy for each shareholder at your household, or if, at any time, you wish to resume receiving separate proxy statements or annual reports or notices of availability, or if you are receiving multiple statements and reports and wish to receive only one, please notify your broker if your shares are held in a brokerage account or us if you hold registered shares. You can notify us by sending a written request to the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA or by calling 1-800-468-9716. If you request a separate copy of an annual report and proxy statement, they will be mailed to you promptly.
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CERTAIN BENEFICIAL OWNERS
Except as listed below, to our knowledge, no person beneficially owned more than 5% of our common stock as of February 27, 2023. For each entity included in the table below, percentage ownership is calculated by dividing the number of shares reported as beneficially owned by such entity by the 130,869,243 shares of our common stock outstanding on February 27, 2023.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||||||||
| FMR LLC | 6,908,386 (a) | 5.3% | ||||||||||||
| 245 Summer Street | ||||||||||||||
| Boston, MA 02210 | ||||||||||||||
| The Vanguard Group, Inc. | 14,729,968 (b) | 11.3% | ||||||||||||
| 100 Vanguard Boulevard | ||||||||||||||
| Malvern, PA 19355 | ||||||||||||||
| BlackRock, Inc. | 13,291,247 (c) | 10.2% | ||||||||||||
| 55 East 52nd Street | ||||||||||||||
| New York, NY 10055 | ||||||||||||||
____________________
(a)Based on Schedule 13G filed February 9, 2023, as of December 30, 2022.
(b)Based on Amendment No. 11 to a Schedule 13G filed February 9, 2023, as of December 30, 2022.
(c)Based on Amendment No. 17 to a Schedule 13G filed February 9, 2023, as of January 31, 2023.
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ITEM 1—PROPOSAL FOR THE ELECTION OF DIRECTORS
Who are the individuals nominated by our Board to serve as directors?
Each director nominee will be elected annually for a one-year term ending at the next annual meeting (in this case, the 2024 annual meeting) and until his or her successor is elected or until his or her earlier death, resignation or removal.
Our Board has nominated Beverley A. Babcock, C. Robert Bunch, Matthew S. Darnall, Earl L. Shipp, Scott M. Sutton, William H. Weideman, W. Anthony Will and Carol A. Williams to serve as directors for a one-year term expiring at our 2024 annual meeting.
Our Board expects that all of the nominees recommended by it will be able to serve as directors. If any nominee is unable to accept election, a proxy voting in favor of such nominee will be voted for the election of a substitute nominee selected by our Board, unless our Board reduces the number of directors.
Our Board recommends a vote FOR the election of Beverley A. Babcock, C. Robert Bunch, Matthew S. Darnall, Earl L. Shipp, Scott M. Sutton, William H. Weideman, W. Anthony Will and Carol A. Williams as directors.
Heidi S. Alderman, age 63, who has served as a member of our Board since 2019, will retire from our Board following the completion of her current term. As a result, our Board will be reduced to eight members on the date of the annual meeting. Proxies cannot be voted for a greater number of individuals than the number of nominees.
How many votes are required to elect a director?
A nominee will be elected as a director by a majority of the votes cast. A majority of the votes cast means that the number of votes FOR a nominee must exceed the number of votes AGAINST that nominee. Abstentions and broker shares that are not voted in the election of directors (broker non-votes) will not be included in determining the number of votes cast and will not affect the outcome of the vote in the election of directors.
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| Director Nominee Composition, Skills and Experience Matrix | ||
Our Nominating and Governance Committee, and our full Board, periodically review the experience and skills that they believe are desirable to be represented on our Board in the context of the current Board composition, and that otherwise align with our businesses and operations. Below is a summary of the composition of our director nominees (who have an average tenure on Olin’s Board of 6.3 years), followed by a summary of the significant experience and skills possessed by our director nominees.
| Limited skill / experience | Some skill / experience | Very skilled / experienced | |||||||||||||||
Senior Leadership Experience (CEO, President or other C-Suite Role) | 12% | 12% | 76% | ||||||||||||||||||||||||||||||||||||||
| Significant experience leading and operating in large, complex businesses, including developing, implementing and assessing business plans and strategies | |||||||||||||||||||||||||||||||||||||||||
| Global Business Experience | 25% | 75% | |||||||||||||||||||||||||||||||||||||||
| Significant experience developing and managing business in markets around the World and/or as part of a global business leadership team | |||||||||||||||||||||||||||||||||||||||||
| Financial Experience | 25% | 75% | |||||||||||||||||||||||||||||||||||||||
| Significant experience making capital decisions, reviewing and analyzing financial information and reports, understanding financial markets and investment decision-making | |||||||||||||||||||||||||||||||||||||||||
| Risk Management Experience | 62% | 38% | |||||||||||||||||||||||||||||||||||||||
| Significant experience identifying, prioritizing and managing risks, including strategic, operational, compliance, cyber-security, and environmental, health and safety | |||||||||||||||||||||||||||||||||||||||||
| Corporate Governance / Public Company Experience | 12% | 25% | 63% | ||||||||||||||||||||||||||||||||||||||
| Significant experience with corporate governance planning, management accountability, ESG implementation, reporting obligations and regulatory compliance | |||||||||||||||||||||||||||||||||||||||||
| Operations / Technology Experience | 25% | 38% | 38% | ||||||||||||||||||||||||||||||||||||||
| Significant experience in complex manufacturing, engineering, logistics and/or chemical operations, EHS requirements, driving productivity initiatives and information technology solutions | |||||||||||||||||||||||||||||||||||||||||
| Commodity / Cyclical Business Experience | 12% | 25% | 63% | ||||||||||||||||||||||||||||||||||||||
| Significant experience in managing commodity or cyclical businesses | |||||||||||||||||||||||||||||||||||||||||
| Marketing / Sales Experience | 38% | 63% | |||||||||||||||||||||||||||||||||||||||
| Significant experience enhancing sales into existing markets and developing new markets and products | |||||||||||||||||||||||||||||||||||||||||
| Corporate Development / Strategic Planning Experience | 63% | 38% | |||||||||||||||||||||||||||||||||||||||
| Significant experience with implementing and reviewing strategic plans and processes, including acquisitions, divestitures, joint ventures and other opportunities | |||||||||||||||||||||||||||||||||||||||||
| Human Capital / Executive Compensation / Talent Management Experience | 50% | 50% | |||||||||||||||||||||||||||||||||||||||
| Significant experience with executive development, performance and compensation planning and analysis, human capital management and ESG social elements | |||||||||||||||||||||||||||||||||||||||||
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*Based on self-identified demographic information provided by the director nominees.
| Business Experience of Nominees | ||
Set forth on the following pages are descriptions of the business experience of each director nominee, including a brief summary of the specific experience, qualifications, attributes and skills that led our Board to conclude that these individuals should serve as our directors. Ages are reflected as of the date of our annual meeting (April 27, 2023).
NOMINEES FOR ONE YEAR TERMS EXPIRING IN 2024
Beverley A. Babcock Director Since: June 2019 Independent Age: 62 •Olin Committees: Chair of the Audit Committee; Member of the Executive Committee •‘Audit Committee Financial Expert’ under applicable SEC rules •Former Chief Financial Officer and Senior Vice President, Finance and Administration and Controller of Imperial Oil Limited •Former Assistant Controller and Vice President, Corporate Financial Services of ExxonMobil Corporation •Former Member of NYSE Listed Company Advisory Board •Member of the Chartered Professional Accountants of Canada Ms. Babcock brings a combination of extensive global financial, accounting and treasury management expertise, and relevant industry experience to the Olin’s Board. | |||||
Ms. Babcock retired in May 2018 as Chief Financial Officer and Senior Vice President, Finance and Administration and Controller of Imperial Oil Limited, a publicly-held Canadian petroleum company with 69.6% ownership by ExxonMobil Corporation, a position she held since September 2015. Prior to that, Ms. Babcock served as Vice President, Corporate Financial Services from 2013 to 2015, Assistant Controller, Corporate Accounting Services from 2011 to 2013, and in various other senior leadership positions from 1998 to 2013, all at ExxonMobil Corporation. Earlier in her career, she was an Auditor of Clarkson Gordon, which became part of Ernst & Young. Ms. Babcock is a former member of the NYSE Listed Company Advisory Board and is a member of the Chartered Professional Accountants of Canada. Ms. Babcock serves on the Board of Directors of Forté Foundation and Westinghouse Air Brake Technologies Corporation. Ms. Babcock earned a bachelor’s degree from Queen’s University and a master’s degree in business administration from McMaster University. | |||||
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C. Robert Bunch Director Since: December 2005 Independent Age: 68 •Olin Committees: Chair of the Compensation Committee; Member of the Executive Committee •Former Chairman of the Board and Chief Executive Officer of Global Tubing •Former Chairman, President and Chief Executive Officer of Maverick Tube Corporation Mr. Bunch brings extensive corporate governance, executive leadership, and business strategy experience to Olin’s Board. Mr. Bunch most recently served as Chairman of the Board and Chief Executive Officer of Global Tubing, LLC, a privately held company which manufactured and sold coiled tubing and related products and services to the energy industry. Previously, he served as Chairman, President and CEO of Maverick Tube Corporation, a producer of welded tubular steel products used in energy and industrial applications. Mr. Bunch served on the Board of Directors of Pioneer Drilling Company from May 2004 until August 2008. He began his career at Input/Output in 1999 as Vice President and Chief Administrative Officer, where he later became President and Chief Operating Officer from 2002 to 2003. He was also an independent oil service consultant. Mr. Bunch serves on the Board of Trustees of Awty International School. Mr. Bunch earned a bachelor’s degree in economics and a master’s degree in accounting from Rice University and a juris doctorate degree from the University of Houston. | |||||
Matthew S. Darnall Director Since: September 2021 Independent Age: 60 •Olin Committees: Audit Committee and Nominating and Governance Committee •Former Managing Director, Industrials Group of The Goldman Sachs Group, Inc. Mr. Darnall brings significant investment banker expertise and merger and acquisitions, capital structure and allocation, and corporate structure and reorganization experience to Olin’s Board of Directors. Mr. Darnall retired in July 2021 from his position as Managing Director, Industrials Group of The Goldman Sachs Group, Inc. (a financial institution), a position he held since 2003. Over a 36-year career at The Goldman Sachs Group, Mr. Darnall advised companies on corporate financial matters and merger transactions within the Communications, Media and Entertainment Group from 1994 to 2003; Energy and Power Group from 1990 to 1994; Midwest Regional Coverage Group from 1988 to 1990 and as an Analyst in the Mergers and Acquisitions Group from 1985 to 1988. Mr. Darnall earned a bachelor’s degree in economics from DePauw University and a master’s degree in business administration from the University of Chicago. | |||||
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Earl L. Shipp Director Since: October 2017 Independent Age: 65 •Olin Committees: Audit Committee and Compensation Committee •Former Vice President, US Gulf Coast Operations of The Dow Chemical Company •Former President, Dow Africa and Former President, Basic Chemicals Group of Dow •Director of National Grid plc and Great Lakes Dredge & Dock Co. •NACD Cyber Security Oversight Certified Mr. Shipp brings substantial chemical industry expertise, and manufacturing, engineering and operations management experience to Olin’s Board. Mr. Shipp retired in September 2017 as Vice President, US Gulf Coast Operations of The Dow Chemical Company, a diversified chemical manufacturing company, a position he held since November 2010. Prior to that, he served as President of Dow Africa from June 2009 to October 2010 and as President of Basic Chemicals Group at Dow from May 2007 to May 2009. During his 36-year history at Dow, he held a variety of leadership and engineering roles, including appointments as Site Director of Louisiana Operations and Global Operations Director for Propylene Oxide/Propylene Glycol, Business Director for Propylene Oxide/Propylene Glycol, Business Vice President for Oxides and Glycols, and Business Vice President—Ethylene Oxide and Ethylene Glycol and President—India, Middle East and Africa Region. Mr. Shipp serves on the Board of Directors of National Grid plc, and is chair of its Board’s Safety & Sustainability Committee and a member of its Board’s People & Governance Committee. He also serves on the Board of Directors of Great Lakes Dredge & Dock Co. and is a member of that Board’s Audit Committee. Mr. Shipp also is on the Board of Directors of various not-for-profit organizations, including CHI St. Luke’s Health - Texas Division and The Economic Development Alliance of Brazoria County, Texas. Mr. Shipp earned a bachelor’s degree in chemical engineering from Wayne State University and completed the executive education program at Indiana State University School of Business. | |||||
Scott M. Sutton Director Since: September 2018 Chairman, President and Chief Executive Officer Age: 58 •Olin Committees: Chair of the Executive Committee •President and Chief Executive Officer of Olin Corporation •Former Chief Executive Officer and Director of Prince International Corporation •Former Chief Operating Officer at Celanese Corporation •Former President and General Manager of AgroSolutions at Chemtura Corporation Mr. Sutton brings extensive experience in operations, engineering, manufacturing, finance, sales, marketing, and management of complex businesses with worldwide operations to Olin’s Board. Mr. Sutton became Chairman, President and Chief Executive Officer of Olin Corporation on April 22, 2021, after serving as Olin’s President and Chief Executive Officer since September 2020. From December 2019 to July 2020, he served as Chief Executive Officer and a member of the Board of Directors of Prince International Corporation, a privately held specialty chemicals company. From August 2013 to February 2019, he served in a variety of roles of increasing responsibility at Celanese Corporation, a global chemical and specialty materials company, including Chief Operating Officer, Executive Vice President and President, Materials Solutions, and Vice President and General Manager, Engineered Materials. Earlier in his career, Mr. Sutton served as President and General Manager of Chemtura Corporation’s AgroSolutions business, business manager for Landmark Structures and a division vice president for Albemarle Corporation. Mr. Sutton earned a bachelor’s degree in civil engineering from Louisiana State University and is a registered professional engineer in Texas. | |||||
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William H. Weideman Director Since: October 2015 Independent Age: 68 •Olin Committees: Lead Director; Member of the Audit Committee and Executive Committee •‘Audit Committee Financial Expert’ under applicable SEC rules •Former Chief Financial Officer and Executive Vice President of The Dow Chemical Company •Former Director of Dow Chemical Employees’ Credit Union, Mid-Michigan Medical Center and Sadara Chemical Company Mr. Weideman brings valuable financial, audit, and business administration expertise to Olin’s Board, as well as extensive knowledge of the businesses Olin acquired from The Dow Chemical Company. Mr. Weideman retired in January 2015 as Chief Financial Officer and Executive Vice President of The Dow Chemical Company, a diversified chemical manufacturing company, a position he held since March 2010. Prior to that, Mr. Weideman served as an Interim Chief Financial Officer from November 2009 to March 2010, and Executive Vice President of Finance, Dow Agrosciences & Corporate Strategic Development from April 2010 to September 2012, all at Dow. He joined Dow in 1976 as a Cost Accountant in Midland, Michigan and held a variety of accounting and controller roles for different Dow businesses. Mr. Weideman served on the Board of Directors of Mid-Michigan Medical Center and on the Board of Trustees for Central Michigan University through December 31, 2020. From October 30, 2011 through December 2015, he served on the Board of Directors of Sadara Chemical Company, a joint venture between Saudi Aramco and Dow. From August 30, 2000 through December 2015, he was on the Board of Directors of the Dow Chemical Employees’ Credit Union. Mr. Weideman earned a bachelor’s degree in business administration and accounting from Central Michigan University. | |||||
W. Anthony Will Director Since: September 2021 Independent Age: 57 •Olin Committees: Compensation Committee and Nominating and Governance Committee •President and Chief Executive Officer and Director of CF Industries Holdings Inc. Mr. Will brings significant public company chief executive officer, operations and corporate development expertise and risk management, accounting and finance and human capital management experience to Olin’s Board of Directors. Mr. Will serves as President and Chief Executive Officer and a member of the Board of Directors of CF Industries Holdings Inc. (a leading global manufacturer of hydrogen and nitrogen products), positions he has held since January 2014. Prior to that, he served as Senior Vice President, Manufacturing and Distribution from January 2012 to January 2014; Vice President, Manufacturing and Distribution from March 2009 to December 2011 and Vice President, Corporate Development from April 2007 to March 2009. Mr. Will served in comparable officer positions with Terra Nitrogen GP Inc. (an indirect, wholly-owned subsidiary and the sole general partner of Terra Nitrogen Company, L.P. until purchased by CF Industries in April 2018) and as a member of its board of directors from June 2010 until February 2016 and as chairman of the Board from January 2014 to February 2016. Earlier in his career, Mr. Will served as a partner at Accenture Ltd., vice president, business development at Sears, Roebuck and Company, consultant for Egon Zehnder International, vice president, strategy and corporate development at Fort James Corporation, manager at Boston Consulting Group and group leader at Motorola Solutions, Inc. | |||||
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Mr. Will earned a bachelor’s degree in electrical engineering from Iowa State University and a master’s degree in business administration from Northwestern University. | |||||
Carol A. Williams Director Since: October 2015 Independent Age: 65 •Olin Committees: Chair of the Nominating and Governance Committee; Member of the Executive Committee •Former Executive Vice President, Manufacturing and Engineering, Supply Chain and Environmental, Health & Safety Operations of The Dow Chemical Company •Former Vice President, Chlor-alkali Assets Business of Dow, and Senior Vice President of Basic Chemicals •Director of O-I Glass, Inc. Ms. Williams brings extensive management expertise in manufacturing, purchasing and supply chain operations, substantial experience in research and development, and comprehensive knowledge of the chlor-alkali and general chemicals industry to Olin’s Board. Ms. Williams retired in 2015 as Special Advisor to the Chief Executive Officer of The Dow Chemical Company, a diversified chemical manufacturing company, a position she held since January 2015. Prior to this, she served as Dow’s Executive Vice President of Manufacturing and Engineering from September 2011 to December 2014, adding responsibility for Supply Chain and Environmental, Health & Safety Operations in 2012, President of Chemicals & Energy from August 2010 to August 2011, and Senior Vice President of Basic Chemicals from January 2009 to July 2010, all at Dow. During Ms. Williams’ 34-year history at Dow, she assumed increasingly more significant management positions in research and development before becoming operations leader and then Vice President for the global chlor-alkali assets business. Ms. Williams joined the Board of Directors of O-I Glass, Inc. in May 2014 and currently serves on its Nominating/Corporate Governance Committee and Compensation and Talent Management Committee. She served as its Independent Board Chair from 2015 to 2021. Ms. Williams is a member of the Engineering Advisory Board and Energy Futures Institute Presidential Consultation Committee for Carnegie Mellon University. She was on the Board of Directors of Zep, Inc. from 2012 through June 2015. Ms. Williams earned a bachelor’s degree in chemical engineering from Carnegie Mellon University. | |||||
CORPORATE GOVERNANCE MATTERS
How Many Meetings Did Board Members Attend? | ||
During 2022, our Board held six meetings. As part of each regularly scheduled Board meeting, the non-employee directors met in executive session without management present. Overall attendance at Board and Board Committee meetings was 94%. Each incumbent director attended at least 75% of the aggregate total number of meetings held by the Board and all Board Committees on which he or she served. We have a policy requiring directors to attend each annual meeting, absent serious extenuating circumstances. All of our directors who were members of our Board at the time of our 2022 annual meeting participated in our 2022 annual meeting.
Which Board Members Are Independent? | ||
Our Board has determined that each of the director nominees named above, except Scott M. Sutton, is independent in accordance with applicable New York Stock Exchange (NYSE) listing standards and applicable provisions of our Principles of Corporate Governance. Additionally, our Board determined that Ms. Alderman, who is not standing for re-election at the 2023 annual meeting, is also independent in accordance with applicable NYSE listing standards and applicable provisions of our Principals of Corporate Governance. In determining independence, our Board confirms that a director has no relationship with Olin that violates the “bright line” independence standards under the NYSE listing standards. Our Board also reviews whether a director has any other material relationship with Olin, after consideration of
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all relevant facts and circumstances. In assessing the materiality of a director’s relationship to Olin, our Board considers the issues from the director’s standpoint and from the perspective of the persons or organizations with which the director has an affiliation. Our Board reviews commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships.
Our Board has adopted criteria for the types of de minimis transactions that do not warrant Board consideration when making director independence determinations. Our Board has concluded that the following transactions do not impair a director’s independence, and are not considered by our Board in its determination of director independence:
•our match of up to $5,000 in charitable contributions made by directors under our 50% matching contribution program; and
•any transaction or series of transactions between Olin (or its subsidiaries) and a director (or an organization in which he/she serves as a director, partner, shareholder or officer) for the purchase or sale of products or services that (i) involve less than $50,000 in the aggregate in any 12-month period and (ii) have the same pricing and other terms and conditions as transactions with unrelated and similarly situated customers or suppliers.
Except as provided below, during 2022, none of our current non-employee directors or director nominees had any relationship or transaction other than those which are permitted under the de minimis criteria described above.
In 2022, we purchased approximately $2,981,000 of energy-related services from National Grid US, a subsidiary of National Grid plc. One of our directors, Earl Shipp, is a member of the Board of Directors of National Grid plc, chair of such Board’s Safety & Sustainability Committee and is a member of such Board’s People & Governance Committee. Our Board determined that Mr. Shipp had no material interest in these transactions, and they did not impair Mr. Shipp’s independence because the transactions were made on customary terms and conditions and were immaterial relative to annual sales of both companies.
In 2022, we sold a gross aggregate of approximately $937,000 of chlor alkali products to CF Industries Holdings. One of our directors, Anthony Will, is the President and Chief Executive Officer and a member of the Board of Directors of CF Industries Holdings. Our Board determined that Mr. Will had no material interest in these sales transactions and they did not impair Mr. Will’s independence. The Board based its decision on the facts that the business relationship preceded Mr. Will joining our Board and remained consistent with prior years, and the transactions were made on customary terms and conditions and were immaterial relative to annual sales of both companies.
In 2022, we sold a gross aggregate of approximately $2,056,000 of epoxy products to ChampionX Corporation. One of our directors, Heidi Alderman, is a member of the Board of Directors of ChampionX Corporation and is a member of its Board’s Compensation Committee. Our Board determined that Ms. Alderman had no material interest in these transactions, and they did not impair Ms. Alderman’s independence because the transactions were made on customary terms and conditions and were immaterial relative to annual sales of both companies.
Does Olin Have Corporate Governance Guidelines and a Code of Conduct? | ||
Our Board has adopted Principles of Corporate Governance and a Code of Conduct. Our Code of Conduct applies to our directors and all of our employees, including our chief executive officer (CEO), chief financial officer (CFO) and principal accounting officer/controller. We discuss certain provisions of these documents in more detail under the heading “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.”
Each of Board Committees (Audit, Compensation, Nominating and Governance, and Executive) acts under a written charter adopted by our Board. Our Committee charters can be viewed on our website at www.olin.com/investors/leadership-governance/committees. Our Principles of Corporate Governance and Code of Conduct can all be viewed on our website at www.olin.com/investors/leadership-governance/governance-documents. In addition, we will disclose on that website any amendment to, or waiver from, a provision of our Code of Conduct for our directors and executive officers, including our CEO, CFO, principal accounting officer/controller or other employees performing similar functions. The contents of our website referenced in this section are not and should not be considered to be part of this proxy statement.
| Does Olin Prohibit Hedging and Pledging of Its Stock by Insiders? | ||
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Our insider trading policy prohibits our directors and executive officers from engaging in any hedging or pledging transactions in our securities. Our policy does not specifically permit any type of hedging transaction, but instead imposes a broad prohibition of any “hedging or monetization transactions” if the director or executive officer “continues to own the underlying security without all the risks and rewards of ownership.” Our prohibition on pledging of our securities is similarly broad, and prohibits all pledges of our securities, whether as part of a hedging transaction or a loan transaction.
As of February 27, 2023, no shares of our common stock were pledged by any director or executive officer.
| Do Olin’s Board and Committees Conduct Evaluations? | ||
As required by NYSE rules, Olin’s Board as well as its Audit, Compensation, and Nominating and Governance Committees each conduct an annual performance evaluation. In addition, Olin’s Board conducted individual evaluations of all non-employee directors during 2022, except Mr. Ferguson who resigned from our Board on November 9 , 2022.
| What Are our Board Committees? | ||
Our Board Committees are:
Our Audit Committee, which held eight meetings during 2022, advises our Board on internal and external audit matters affecting us. In accordance with NYSE listing standards and applicable provisions of our Principles of Corporate Governance, our Audit Committee is comprised solely of directors who meet the enhanced independence standards for Audit Committee members under the Securities Exchange Act of 1934 (Exchange Act) and the related rules as incorporated into the NYSE standard for independence. Its current members are: Beverley A. Babcock (Chair), Matthew S. Darnall, Earl L. Shipp and William H. Weideman. Our Board has determined that Ms. Babcock and Mr. Weideman meet the SEC definition of an “Audit Committee Financial Expert,” and that each member of our Audit Committee is financially literate, as such term is interpreted by our Board in its business judgment. Our Audit Committee has a number of responsibilities as set forth in its Committee charter and our Principles of Corporate Governance, including:
•sole authority to directly appoint, retain, oversee, compensate, evaluate and terminate our independent registered public accounting firm;
•reviews with our independent registered public accounting firm the scope and results of their examination of our financial statements and any investigations and surveys by such independent registered public accounting firm;
•pre-approves and monitors audit and non-audit services performed by our independent registered public accounting firm;
•conducts an annual performance evaluation of the Committee and annual review of the Committee charter and ensures it is publicly available in accordance with SEC regulations;
•reviews our annual audited and quarterly unaudited financial statements and management’s discussion and analysis of financial condition and operations in our annual reports on Form 10-K and quarterly reports on Form 10-Q before filing or distribution;
•reviews with management and our independent registered public accounting firm the interim financial results and related press releases before issuance to the public;
•reviews audit plans, activities and reports of our independent registered public accounting firm and internal and regulatory audit departments;
•reviews the presentations by management and our independent registered public accounting firm regarding our financial results;
•monitors significant litigation and other legal matters that impact our financial statements or compliance with the law;
•monitors compliance with legal and regulatory requirements including environmental, health, safety and transportation;
•monitors our enterprise risk management process;
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•reviews and discusses management’s assessment and management of risks and exposures related to cybersecurity and information technology, including steps taken to mitigate and manage the same;
•oversees our ethics and business conduct programs and procedures;
•reviews our compliance with Section 404 of the Sarbanes-Oxley Act of 2002; and
•has the authority to hire its own independent advisors.
Our Compensation Committee, which held four meetings during 2022, sets policies, develops and monitors strategies for, and administers the programs that are used to compensate our CEO and other senior executives and our non-employee directors. In accordance with NYSE listing standards and applicable provisions of our Principles of Corporate Governance, our Compensation Committee is comprised solely of directors who meet the NYSE standards for independence of Compensation Committee members. Its current members are: C. Robert Bunch (Chair), Heidi S. Alderman, Earl L. Shipp and W. Anthony Will. Mr. Shipp was appointed to the Compensation Committee by our Board at its February 22, 2023 meeting. Our Compensation Committee has a number of responsibilities as set forth in its Committee charter and our Principles of Corporate Governance, including:
•approves the salary plans for all executive officers including their total direct compensation opportunity, comprised of salary, annual incentive bonus and long-term incentive award components;
•approves the measures, goals, objectives, weighting, payout matrices, performance certification and actual payouts for the incentive compensation plans;
•administers the incentive compensation plans, stock option plans, and long-term incentive plans;
•annually evaluates the performance of our CEO;
•reviews and recommends establishing, amending and terminating retirement plans;
•reviews and approves executive employment, severance and change in control agreements;
•reviews and establishes the compensation of non-employee directors;
•reviews and discusses our Compensation Discussion and Analysis with management and, based on that review, makes a recommendation to our Board regarding inclusion of the Compensation Discussion and Analysis in our annual proxy statement or annual report on Form 10-K filed with the SEC;
•reviews and recommends Board approval of stock ownership guidelines for directors and Section 16 officers;
•reviews and develops for Board approval, and assesses enforcement, of policies that provide for the “clawback” of incentive-based compensation paid to current or former employees, upon the occurrence of a triggering event;
•conducts an annual performance evaluation of the Committee and annual review of the Committee charter and ensures it is publicly available in accordance with SEC regulations; and
•has the authority to hire its own independent advisors, including compensation consultants.
Our Nominating and Governance Committee, which held three meetings during 2022, assists our Board in fulfilling its responsibility to the shareholders relating to the selection and nomination of executive officers and directors. In accordance with NYSE listing standards and applicable provisions of our Principles of Corporate Governance, our Nominating and Governance Committee is comprised solely of directors who meet the NYSE standard for independence. Its members are: Carol A. Williams (Chair), Heidi S. Alderman, Matthew S. Darnall and W. Anthony Will. Our Nominating and Governance Committee has a number of responsibilities as set forth in its Committee charter and our Principles of Corporate Governance, including:
•makes recommendations to our Board regarding the selection of the Board Chair, Lead Director, the CEO and other executive officers;
•reviews and makes recommendations to our Board regarding the size and composition of our Board and the qualifications and experience that might be sought in Board nominees, and assesses whether the qualifications and experience of Board nominees meet the current needs of our Board;
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•seeks out and considers candidates for nomination and re-nomination as directors;
•recommends individuals to fill any vacancies created on our Board, and recommends the slate of nominees to be proposed for election to our Board by shareholders at the annual meeting;
•reviews plans for management development and succession;
•periodically reviews corporate governance trends, issues and best practices and makes recommendations to our Board regarding the adoption of best practices most appropriate for the governance of the affairs of our Board;
•reviews and makes recommendations to our Board regarding the composition, duties and responsibilities of various Board Committees;
•reviews and advises our Board on such matters as protection against liability and indemnification;
•oversee and assists the Board with evaluating the performance of the Board;
•conducts an annual performance evaluation of the Committee and annual review of the Committee charter and ensures it is publicly available in accordance with SEC regulations;
•reviews in advance all related party transactions for potential conflicts of interest and prohibits such transactions determined to be inconsistent with the interests of the company and its shareholders; and
•has the authority to hire its own independent advisors.
Our Executive Committee meets as needed in accordance with its charter and Olin’s Bylaws. Between meetings of our Board, our Executive Committee may exercise all the power and authority of our Board (including authority and power over our financial affairs) except for matters reserved to the full Board by Olin’s Articles, Bylaws or Virginia law and matters for which our Board gives specific directions. During 2022, our Executive Committee held one formal meeting. Its members are: Scott M. Sutton (Chair), Beverley A. Babcock, C. Robert Bunch, William H. Weideman and Carol Williams.
| Compensation Committee Interlocks and Insider Participation | ||
No director who served on our Compensation Committee at any time during 2022 (Heidi S. Alderman, C. Robert Bunch, Scott D. Ferguson, William H. Weideman, W. Anthony Will, and Carol A. Williams):
•served as an employee for Olin during that year;
•is currently or has ever been an officer of Olin; or
•had any relationship with Olin requiring disclosure under Item 404 of Regulation S-K under the Exchange Act.
None of our executive officers:
•serves on the compensation committee of any other company for which one of our directors serves as an executive officer; or
•serves on the Board of Directors of any other company where a member of our Compensation Committee serves as an executive officer.
| What Is Olin’s Director Nomination Process? | ||
Our Nominating and Governance Committee acts as our nominating committee. As a policy, our Committee considers any director candidates suggested by shareholders if we receive the appropriate information in a timely manner. Our Committee uses the same process to review and evaluate all potential director nominees, regardless of who recommends the candidate. Our Committee reviews and evaluates each nominee and our Committee chair, our Board chair, CEO and lead director interview the potential new Board candidates selected by our Committee. The interview results, along with our Committee’s recommended nominees, are reviewed with our full Board.
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Our Principles of Corporate Governance describe criteria for new Board members including recognized achievement plus skills such as a special understanding or ability to contribute to some aspect of Olin’s business. Our Committee is tasked with seeking Board members with the personal qualities and experience that taken together will ensure a strong Board. Our Principles of Corporate Governance provide that racial, ethnic and gender diversity are important factors in assessing potential Board members, in addition to particular qualifications and experience required to meet the needs of our Board.
As part of their review of Board nominations, our Board and our Committee consider a variety of experience and background in an effort to ensure that the composition of our directors ensures a strong and effective Board. Our Principles of Corporate Governance cite strength of character, an inquiring and independent mind, practical wisdom and mature judgment as among the principal qualities of an effective director.
This year, we have 8 nominees standing for re-election.
A shareholder can suggest a person for nomination as a director by providing the name and address of the candidate, and a detailed description of the candidate’s experience and other qualifications for the position, in writing addressed to the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA. The notice may be sent at any time, but for a candidate to be considered by our Committee as a nominee for an annual meeting, we must receive the written information at least 150 days before the anniversary of the date of our prior year’s proxy statement. For example, for candidates to be considered for nomination by our Committee at our 2024 annual meeting, we must receive the information from shareholders on or before October 19, 2023.
In addition to shareholders proposing candidates for consideration by our Committee, Olin’s Bylaws allow shareholders to directly nominate individuals at our annual meeting for election to our Board by delivering a written notice as described under the heading “MISCELLANEOUS—How can I directly nominate a director for election to the Board at the 2024 annual meeting?” on page 6.
| What Is the Board Leadership Structure? | ||
Our Principles of Corporate Governance state that our Board may select either a combined CEO Board chair coupled with a lead director, or appoint a Board chair who does not also serve as CEO. Currently, Mr. Sutton serves as our combined CEO and Chairman of the Board, and our Board selected Mr. Weideman as our independent lead director.
Our Board believes that this leadership structure is best for Olin at the current time, as it appropriately balances the need for the CEO to run the company on a day-to-day basis with significant involvement and authority vested in an outside independent Board member—the lead director. Our lead director assumes many functions traditionally within the purview of a chairman of the Board. Under our Principles of Corporate Governance, our lead director must be independent, and is responsible for:
•advising on our Board meeting schedule to ensure that our independent directors can perform their duties responsibly without interfering with company operations;
•providing the Board Chair with input on agendas for the Board and Board Committee meetings, and approving Board agendas and information sent to our Board;
•advising on quality, quantity, and timeliness of the flow of information from management to independent directors;
•interviewing all potential new Board candidates, and making recommendations on candidates;
•coordinating, developing the agenda for and chairing all executive sessions of our Board’s independent directors, as well as sessions where the Board Chair is not present;
•acting as principal liaison between our independent directors and our Board chair on sensitive issues;
•recommending membership and chairs of Board Committees;
•recommending to our Board chair the retention of consultants who report directly to our Board;
•calling meetings of our independent directors; and
•being available for direct communication if requested by major shareholders, as appropriate.
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| How Does the Board Oversee Olin’s Risk Management Process? | ||
Our Board is responsible for oversight of Olin’s risk assessment and management process. Our ESG and corporate social responsibility strategy is overseen by our Board as a part of its oversight of our overall strategy and risk management. Our Board delegated to our Compensation Committee basic responsibility for oversight of management’s compensation risk assessment, and that Committee reports to our Board on its review. Our Board also delegated tasks related to risk process oversight to our Audit Committee, which reports the results of its review process to our Board. Our Audit Committee’s process includes:
•a review, at least annually, of our internal audit process, including the organizational structure and staff qualifications, as well as the scope and methodology of the internal audit process;
•reviewing activity and special reports of the Corporation’s Internal Audit and Environmental, Health, Safety & Transportation (EHS&T) Audit functions including management responses and corrective action plans for significant findings;
•a review, at least annually, of our enterprise risk management (ERM) program to ensure that an appropriate ERM process is in place, including discussion of the major risk exposures identified by Olin, the key strategic plan assumptions considered during the assessment and steps implemented to monitor and mitigate such exposures on an ongoing basis; and
•a review and discussion, at least annually, with senior management regarding our assessment and management of risks and exposures related to cybersecurity and information technology, including steps taken to mitigate and manage the same.
In addition to the reports from our Audit and Compensation Committees, our Board periodically discusses risk oversight, including as part of its annual detailed corporate strategy reviews.
Brian J. Clucas, our Vice President, Global Internal Audit, Ethics and Compliance reports directly to our Audit Committee and has direct and unrestricted access to that Committee. Todd A. Slater, our Senior Vice President and CFO, oversees our ERM process and fulfills the responsibilities of a chief risk officer. Mr. Slater reports to our CEO, but has direct access to our Audit Committee chair. Messrs. Slater and Clucas, individually or with other members of our management team, periodically meet in executive session with our Audit Committee.
REPORT OF OUR AUDIT COMMITTEE
Our Audit Committee’s primary responsibility is to assist our Board in its oversight of the integrity of Olin’s financial reporting process and systems of internal control, to review Olin’s enterprise risk management process, to evaluate the independence and performance of Olin’s independent registered public accounting firm, KPMG LLP (KPMG), and internal audit functions and to encourage private communication between our Audit Committee and KPMG and our internal auditors.
Our Committee held eight meetings during the year. During the second half of 2022, our Audit Committee also completed a self-assessment.
In discharging its responsibility, our Audit Committee reviewed and discussed the audited consolidated financial statements for fiscal year 2022 with management and KPMG, including the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the U.S. Securities and Exchange Commission (SEC).
In addition, our Audit Committee has received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with our Audit Committee concerning independence. Our Audit Committee discussed with KPMG the issue of its independence from Olin and reviewed KPMG’s reports on the firm’s quality review procedures and findings, results of peer reviews and investigations and inquiries, including corrective actions taken. Our Audit Committee also negotiated the hiring of KPMG for the 2022 audit and pre-approved all fees which SEC rules require our committee to approve to ensure that the work performed was permissible under applicable standards and would not impair KPMG’s independence.
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Based on our Audit Committee’s discussions with management and KPMG and our Audit Committee’s review of KPMG’s written report and the other materials discussed above, our Audit Committee recommended that our Board include the audited consolidated financial statements in Olin’s Annual Report on Form 10-K for the year ended December 31, 2022, to be filed with the SEC.
| February 22, 2023 | Beverley A. Babcock, Chair Matthew S. Darnall Earl L. Shipp William H. Weideman | ||||
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
How much stock is beneficially owned by each director, director nominee and by the our NEOs in the Summary Compensation Table?
This table shows how many shares of our common stock certain persons beneficially owned on February 27, 2023, rounded to the nearest whole share. The persons listed include each current director, each director nominee, each NEO in the Summary Compensation Table on page 38, and all directors and executive officers as a group. A person has “beneficial ownership” of shares if the person has voting or investment power over the shares or the right to acquire such power within 60 days. “Investment power” means the power to direct the sale or other disposition of the shares. Each person has sole voting and investment power over the number of shares listed, except as noted in the following table.
| Name of Beneficial Owner | Number of Shares Beneficially Owned (2) | Percent of Common Stock (3) | ||||||||||||
| Heidi S. Alderman | 21,127 | — | ||||||||||||
| Beverley A. Babcock | 22,188 | — | ||||||||||||
| C. Robert Bunch | 35,915 | — | ||||||||||||
| Matthew S. Darnall | 8,759 | — | ||||||||||||
| Earl L. Shipp | 45,286 | — | ||||||||||||
| William H. Weideman | 44,852 | — | ||||||||||||
| W. Anthony Will | 18,759 | — | ||||||||||||
| Carol A. Williams | 44,852 | — | ||||||||||||
Scott M. Sutton | 338,657 | — | ||||||||||||
Todd A. Slater | 745,248 | — | ||||||||||||
| Damian Gumpel (1) | 134,602 | — | ||||||||||||
| Pat D. Dawson | 37,150 | — | ||||||||||||
| Dana C. O’Brien | 18,867 | — | ||||||||||||
| Patrick M. Schumacher | 16,334 | — | ||||||||||||
Directors and executive officers as a group, including those named above (18 persons) | 2,122,821.71 | 1.6 | ||||||||||||
_______________________
(1)Mr. Gumpel beneficially owns 6,804 shares of common stock jointly with his spouse.
(2)Includes shares credited under the CEOP as of February 27, 2023, phantom stock units credited to deferred accounts under the Directors Plan, and shares that may be acquired within 60 days of February 27, 2023 (by April 27, 2023) through the exercise of stock options, rounded to the nearest whole share, as follows:
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| Name | Number of Phantom Stock Units Held in Director Deferred Accounts (4) | Number of Shares Subject to Options Exercisable in 60 days | ||||||||||||
| Heidi S. Alderman | 21,127 | — | ||||||||||||
| Beverley A. Babcock | 22,188 | — | ||||||||||||
| C. Robert Bunch | 35,915 | — | ||||||||||||
| Matthew S. Darnall | 8,759 | — | ||||||||||||
| Earl L. Shipp | 35,126 | — | ||||||||||||
| William H. Weideman | 33,200 | — | ||||||||||||
| W. Anthony Will | 8,759 | — | ||||||||||||
| Carol A. Williams | 39,026 | — | ||||||||||||
| Scott M. Sutton | 18,450 | 263,101 | ||||||||||||
Todd A. Slater | — | 608,000 | ||||||||||||
| Damian Gumpel | — | 99,734 | ||||||||||||
| Dana C. O’Brien | — | 18,867 | ||||||||||||
| Patrick M. Schumacher | — | 16,334 | ||||||||||||
Directors and executive officers as a group, including those named above (18 persons) | 222,550 | 1,444,006 | ||||||||||||
_______________________
(3)Unless otherwise indicated, beneficial ownership does not exceed 1% of the outstanding shares of common stock. For each individual, as well as the group included in the table above, percentage ownership is calculated by dividing (1) the number of shares reported as beneficially owned on February 27, 2023, by (2) 130,869,243, which is the number of shares outstanding on February 27, 2023, plus the number of shares of common stock that such person or group had the right to acquire on or within 60 days of February 27, 2023 (April 27, 2023).
(4)Such securities have no voting rights.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our Principles of Corporate Governance and our Code of Conduct include policies and procedures requiring prior review and oversight of certain transactions involving our directors, director nominees, employees and their immediate family members and affiliated organizations if Olin is a direct or indirect participant. Our Principles of Corporate Governance require our Nominating and Governance Committee (or, if that Committee determines it is appropriate, another independent body of our Board) to conduct a prior review of all “related party transactions” for potential conflicts of interest and prohibit any such transaction if it determines it to be inconsistent with the interests of our company and shareholders. Related party transactions are those which are required to be disclosed under Item 404 of Regulation S-K, which currently includes transactions where Olin was or is to be a participant and the amount exceeds $120,000 and in which any “related person” has a direct or indirect material interest. A “related person” means a director, director nominee, executive officer, a beneficial owner of 5% or more of Olin’s outstanding voting securities, or “immediate family members” of any of the foregoing. Immediate family members means a child, stepchild, parent, stepparent, spouse, sibling, mother-, father-, son-, daughter-, brother-, or sister- in-law, or any person (other than a tenant or employee) sharing the household of such specified person.
Our Principles of Corporate Governance require our Nominating and Governance Committee to pre-approve service by any executive officer (our CEO and other Section 16 officers) on the Board of another public company or on the Board of any private company that would represent a material commitment of time. Our Principles of Corporate Governance prohibit any of our executive officers from serving on the Board of a company for which one of our non-employee directors serves in any management capacity. In addition, our Code of Conduct and related Corporate Policy Statements require the approval of our Board before an officer may serve as a director or provide services to another organization (as an officer, employee, consultant, etc.). Any such service by other employees must be pre-approved by our management, if the potential for a conflict of interest exists. These provisions also prohibit any employee or family member from having any direct or indirect interest in, or any involvement with or obligation to, any business organization that does or seeks to do business with Olin, or any Olin competitor, without pre-approval from the employee’s department head.
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In granting pre-approval, our Nominating and Governance Committee, Board members and management focus on the best interests of Olin.
In addition to the pre-approval process described above, our Code of Conduct and related Corporate Policy Statements prohibit any director or employee from engaging in a transaction that might conflict with the best interests of Olin.
CORPORATE RESPONSIBILITY
Throughout its 130-year history, Olin has been committed to excellence in protecting the environment and health, safety, and security of our employees and those who live and work around our operations globally. Our published Environment, Social, Governance (ESG) Scorecard shares our targets and progress in those areas which we believe Olin can make the most impact. In 2022, the Olin Board of Directors approved the Olin Sustainability Strategy Statement:
Olin will increase value for our investors, employees, and customers by enhancing our Winning Model through focused ESG actions and investments. We will:
•Protect our employees and communities through our industry-leading occupational and process safety programs
•Proudly strengthen United States defense, international defense, law enforcement, and conservation through our Winchester ammunition brand
•Significantly reduce environmental impact by taking concrete steps through technology and commercial innovation to lower our carbon footprint, net water usage, and resource consumption
•Develop and enable sustainable solutions within the value chain through our product and service offerings
•Consistently uphold our Olin values and governance standards as we amplify our culture of inclusion and cultivate our diverse workforce
Olin’s industry leadership, focused ESG actions, and our engaged people create a positive, long-lasting impact on our communities and the environment.
Our Board has responsibility for monitoring our response to important public policy issues, including oversight of our environmental, health and safety performance, which it reviews no less than each quarter. Diversity and talent management are key areas related to sustainability that our Board reviews. The Board’s Compensation Committee has structured our compensation program to balance financial results with Olin’s achievement of annual goals relating to environmental impact, safety, sustainability, and ethical conduct. We have engaged with shareholders on sustainability matters and are publicly transparent regarding our ESG and sustainability platform and progress in key areas.
Our Chemical division maintains third-party certification to the RC14001®:2015 standard, including the internationally recognized ISO 14001:2015 standard for environmental management systems. Our product stewardship policy ensures that our product safety performance is properly evaluated, and continuously improved, and relevant elements are made publicly available. We regularly audit our environmental, health, safety and transportation programs and performance against applicable legal requirements and our own internal standards, the results of which are regularly reviewed with the Audit Committee of our Board.
Additional information, including our ESG Scorecard, Olin Sustainability Report, Winchester Corporate Social Responsibility Report, and Olin Sustainability Success Stories are shared online at www.olin.com/corporate-responsibility. The contents of our website referenced in this section are not and should not be considered to be part of this proxy statement.
®RC14001 is a registered trademark of American Chemistry Council
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EXECUTIVE OFFICERS
The below table provides information regarding our executive officers as of February 27, 2023:
Name and Age | Title | Served as an Olin Officer Since | ||||||||||||
| Scott M. Sutton (58) | Chairman, President and CEO | 2020 | ||||||||||||
| Brett A. Flaugher (58) | Vice President and President, Winchester | 2018 | ||||||||||||
| Damian Gumpel (48) | Vice President and President, Epoxy and Corporate Strategy | 2020 | ||||||||||||
| Dana C. O’Brien (55) | Senior Vice President, General Counsel and Secretary | 2021 | ||||||||||||
| Valerie A. Peters (59) | Vice President, Human Resources | 2018 | ||||||||||||
| Patrick M. Schumacher (48) | Vice President and President, Chlor Alkali Products and Vinyls | 2021 | ||||||||||||
| Todd A. Slater (59) | Senior Vice President and CFO | 2005 | ||||||||||||
| Randee N. Sumner (48) | Vice President and Controller | 2014 | ||||||||||||
| Teresa M. Vermillion (47) | Vice President and Treasurer | 2018 | ||||||||||||
No family relationship exists between any of the above executive officers or our directors. Such officers were elected to serve, subject to our Bylaws, until their respective successors are chosen.
All executive officers except Damian Gumpel, Dana C. O’Brien, Valerie A. Peters, Patrick M. Schumacher and Scott M. Sutton have served as executive officers of Olin for more than five years. All executive officers except Dana C. O’Brien, Patrick M. Schumacher and Scott M. Sutton have been employed by Olin for more than five years.
Brett A. Flaugher was appointed Vice President of Olin and President, Winchester effective January 1, 2018, having served as President, Winchester since November 2016. From January 2003 until October 2016, he served as Vice President, Marketing & Sales at Winchester. He joined Olin in 1986 as a Sales Representative in the Winchester Ammunition Division for the Texas and Oklahoma area and held a number of positions of increasing responsibility within Winchester’s sales and marketing department.
Damian Gumpel was appointed Vice President of Olin and President, Epoxy and Corporate Strategy effective November 29, 2021. He previously was appointed Vice President of Olin and President, Chlor Alkali Products and Vinyls effective December 15, 2020, having served as President, Chlor Alkali Products and Vinyls starting in April 2019. From August 2017 through March 2019, he served as Vice President, Global Caustic, KOH, and Vinyls; from January 2016 through July 2017, he served as Vice President, Global Caustic and Vinyls; and from October 5, 2015 to December 2015, he served as Commercial Director, U.S. Gulf Coast–Chlor Alkali and Vinyls, all at Olin. From January 2015 to October 4, 2015, he served as Commercial Director, U.S. Gulf Coast–Chlor Alkali and Vinyls; from January 2014 to December 2014, he served as Marketing Director, U.S. Gulf Coast–Chlor Alkali and Vinyls; from July 2012 to December 2013, he served as Global Commercial Director, EDC/VCM/HCl; from September 2011 through June 2012, he served as North American Product Director, Caustic Soda; and from July 2009 to August 2011, he served as North America Business Manager, Oxygenated Solvents, all at The Dow Chemical Company. Prior to that, he served in various positions from Analyst to Senior Manager at Accenture.
Dana C. O’Brien was appointed Senior Vice President, General Counsel and Secretary of Olin effective November 29, 2021. Prior to joining Olin in November 2021, she was Senior Vice President, General Counsel and Chief Ethics & Compliance Officer at The Brinks Company, starting in April 2019. Prior to her time at The Brinks Company, Ms. O'Brien was Senior Vice President and General Counsel at CenterPoint Energy from May 2014 to March 2019. She also served as Corporate Secretary from May 2014 to October 2017. Ms. O’Brien was Chief Legal Officer and Chief Compliance Officer at CEVA Logistics from August 2007 to April 2014, and General Counsel, Chief Compliance Officer and Secretary at EGL, Inc. from October 2005 until it was purchased by CEVA Logistics in August 2007. She held various legal roles, including general counsel and secretary, at Quanta Services, Inc. from August 1999 to October 2005. Ms. O'Brien was an associate attorney at Weil, Gotshal & Manges from 1996 to 1999 and a briefing attorney with the Supreme Court of Texas from August 1995 to August 1996.
Valerie A. Peters was appointed Vice President, Human Resources of Olin effective September 1, 2018. From March 2018 through August 2018, she served as Vice President, Human Resources—Corporate and Shared Services; from March 2016 to February 2018, she served as Senior Director, Human Resources; from January 2013 to February 2016, she served as Director, Human Resources—Corporate; from December 2007 through December 2012, she served
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as Director Human Resources, Winchester; and from December 2001 to November 2007, she served as Director Human Resources, Brass and Winchester, all at Olin. Her Olin career began in 1991.
Patrick M. Schumacher was appointed Vice President of Olin and President, Chlor Alkali Products & Vinyls effective November 29, 2021. Prior to joining Olin in November 2021, he was Senior Vice President for Prince International Corporation where he led the sales organization and global mergers and acquisitions activities during 2020. Prior to his time at Prince International Corporation, Mr. Schumacher worked at Celanese Corporation in various leadership positions. From 2018 to 2020, he served as Senior Vice President of multiple business areas; in 2018 he served as Vice President, Emulsion Polymers; and from 2014 to 2018 he served as Vice President, Business and Strategy Development, all at Celanese Corporation. He was Managing Director, Head of Chemicals M&A Practice at Blackstone Group from 2009 to 2014, Senior Vice President at UBS Investment Bank from 2004 to 2009, and held associate positions from 1999 to 2004 at Lehman Brothers and from 1998 to 1999 at Valuemetrics.
Todd A. Slater was appointed Senior Vice President and CFO of Olin effective January 1, 2022. He previously had served as Vice President and CFO of Olin from May 4, 2014. From October 2010 until May 3, 2014, he served as Vice President, Finance and Controller; and from May 2005 until September 2010, he served as Vice President and Controller, all at Olin.
Randee N. Sumner was appointed Vice President and Controller of Olin effective May 4, 2014. From December 2012 until May 3, 2014, she served as Division Financial Officer for Chemical Distribution; from 2010 until December 2012, she served as Assistant Controller; from 2008 to 2010, she served as Director, Corporate Accounting and Financial Reporting; and from 2006 to 2008, she served as Manager, Corporate Accounting and Financial Reporting, all at Olin.
Scott M. Sutton became Chairman, President and Chief Executive Officer of Olin on April 22, 2021, after serving as President and Chief Executive Officer since September 1, 2020 and joining Olin’s Board on September 19, 2018. Prior to that, he served as President and Chief Executive Officer and a member of the Board of Directors of Prince International Corporation from December 2019 through July 2020. From March 2017 to February 2019, he served as Chief Operating Officer; from June 2015 to February 2017, he served as Executive Vice President and President, Material Solutions; from January 2015 to June 2015, he served as Vice President, Supply Chain and General Manager, Engineered Materials; from March 2014 to January 2015, he served as Vice President of Supply Chain; and from August 2013 to March 2014, he served as Vice President, Acetic Acid and Anhydride, all at Celanese Corporation.
Teresa M. Vermillion was appointed Vice President and Treasurer of Olin effective February 1, 2018. From October 2015 through January 2018, she served as Vice President, Tax; and from July 2010 through September 2015, she served as Director, Tax Planning and Financial Analysis, all at Olin. Prior to that, she was a Senior Tax Manager at Ernst & Young.
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COMPENSATION DISCUSSION AND ANALYSIS
____________________
TABLE OF CONTENTS
| Page | |||||
| Comparator Group | |||||
| PAY VERSUS PERFORMANCE | |||||
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| Introduction | ||||||||||||||
This Compensation Discussion and Analysis (CD&A) describes, in detail, our executive compensation philosophy and the compensation programs in which our senior executive team participates. The CD&A explains the decisions the compensation committee of our board of directors (committee) made under those programs for 2022, and the factors it considered in making those decisions. The CD&A focuses on the compensation paid to our NEOs as they are determined under SEC rules. Our NEOs for 2022 were:
| Name | Title | |||||||
Scott M. Sutton | Chairman, President and CEO | |||||||
Todd A. Slater | Senior Vice President and CFO | |||||||
Dana C. O'Brien | Senior Vice President, General Counsel and Secretary | |||||||
Damian Gumpel | Vice President and President, Epoxy and Corporate Strategy | |||||||
Patrick M. Schumacher | Vice President and President, Chlor Alkali Products and Vinyls | |||||||
| Pat D. Dawson | Former Executive Vice President | |||||||
On April 30, 2022, Mr. Dawson retired as an executive officer.
| Compensation Best Practices | ||
To enhance investor understanding of our compensation decision making, we summarize below certain executive compensation practices we have implemented to reinforce our objectives and drive Olin performance. We also identify practices we have not implemented because we do not believe they would serve our shareholders’ long-term interests.
| We align executive compensation with the interests of our shareholders | •Pay for Performance by Ensuring that Executive Compensation is Largely Contingent on Results (pages 28-29) •Target Compensation Opportunities to the Midpoint of Market Practices (page 31) •Performance Share Program correlates 50% of these awards with Relative Total Shareholder Return and 50% with Net Income (pages 34-35) | |||||||
| We design our executive compensation programs to foster sustainable growth without excessive risk taking | •Maintain a Clawback Policy (page 37) •Regularly Assess the Risk Inherent in Our Compensation Policies and Programs (page 37) •Impose Robust Share Ownership Guidelines (page 36) | |||||||
| We adhere to the best practices in executive compensation | •Utilize an Independent Compensation Consulting Firm, which Provides No Other Services to Olin (pages 29-30) •Offer Change in Control Protection that Complies with Prevailing Good Governance Standards, Including No Excise Tax Gross-Up (page 53) •Permit No Repricing of Underwater Stock Options •Exclude the Value of Equity Awards in Pension or Severance Calculations •Extend No Perquisites to NEOs, except minimal excess liability insurance | |||||||
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At the 2022 annual meeting of our shareholders, we held an advisory vote on executive compensation. Approximately 97.7% of the shares voted were cast in support of our 2022 executive compensation and related disclosures. Our committee viewed the results of this vote as general broad shareholder support for our executive compensation program. While we made no changes to our executive compensation program as a result of that vote, our committee continuously evaluates our executive compensation program and makes changes to respond to market trends and other relevant factors.
| Pay for Performance | ||
We understand that there are different ways to view “pay for performance.” In the following sections, we highlight how our committee thinks about executive pay and Olin performance, and why we believe our executive compensation programs are appropriately aligned with results that benefit our investors.
Compensation Program Construction
Our executive compensation program is designed to align with the long-term interests of our shareholders, to reward employees for producing sustainable growth, and to attract and retain world-class talent that will ensure we succeed. Our committee strongly believes that these objectives will be fulfilled if executive compensation—pay opportunities and pay actually realized—is tied to Olin’s results. Our committee measures Olin’s performance in two primary ways for purposes of establishing executive compensation:
•our financial results, particularly our adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), Adjusted Cash Flow and Levered Free Cash Flow (see pages 31-33), and
•our relative total return to shareholders over time.
By tying our executives’ pay to Olin’s actual results, our compensation programs (i) align our executives’ interests with those of our shareholders and (ii) induce our management team to achieve our most important goals.
Our total direct compensation package comprises three elements:
•salary;
•short-term incentive; and
•long-term incentive (equity-based) compensation.
Each NEO has a target total direct compensation opportunity that is reviewed annually by our committee to ensure its alignment with Olin’s pay for performance objectives. Target total direct compensation various with our performance and as the following chart illustrates is 89% for our CEO and 73% for our NEOs (other than our current CEO).
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NEO TARGET COMPENSATION
2022 Results
In 2022, Olin’s success with running our system value over volume strategy (strategic operating model) was evident in several important ways. Even during a difficult economic landscape with inflationary pressure and recessionary conditions in the second half of the year, we generated record levels of Levered Free Cash Flow, which provided the opportunity for Olin to repurchase approximately 16% of our outstanding shares, while also reducing our net debt level. Olin also generated more than $1.3 billion of net income and more than $2.4 billion of Adjusted EBITDA.
Our performance on non-financial objectives was strong. We continued to demonstrate our commitment to safety, further reducing the number of personal safety incidents year over year. We reduced Tier 1 and Tier 2 process safety events over 2021 performance and – for the sixth consecutive year – there were no life events. Management also exceeded its targeted productivity improvements by almost 175% with more than 2,223 ideas submitted by Olin employees generating more than $253 million in cost savings and $201 million in cost avoidance. We continued to show good progress toward the pro-rata achievement of our sustainability objectives, reducing our total carbon emissions by 4% year over year. We also increased employee volunteer hours by 175% year over year.
| Our Compensation Committee | ||
Our committee is the body primarily responsible for overseeing compensation to our senior officers. Our committee consists of directors who are independent under the NYSE listing criteria. Our committee establishes total compensation opportunities (and each of the individual elements) for our CEO, and approves compensation for the other executive officers, including our NEOs, based on recommendations by our CEO.
To assist in performing its duties, our committee engages Exequity LLP (Exequity), an independent board and management advisory firm. In engaging Exequity, our committee considered a number of factors in assessing Exequity’s independence, including the facts that Exequity performs no other work for Olin, that none of Exequity’s consultants owns stock in Olin, and that Exequity’s consultants have no other business interests with any Olin officer or director. In the past several years, our committee discussed its compensation philosophy with Exequity, but otherwise did not impose any specific limitations or constraints on, or otherwise direct, the manner in which Exequity performed its advisory services.
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As advisor to our committee, Exequity:
•reviewed the total compensation strategy and pay levels for our NEOs;
•examined all aspects of our executive compensation programs to ensure their ongoing support of our business strategy;
•informed our committee of developing legal and regulatory considerations affecting executive compensation and benefit programs; and
•provided general advice to our committee on all compensation decisions pertaining to our CEO and to all senior executive compensation recommendations submitted by management.
Our committee routinely meets in executive session (without our CEO or other officers present). As appropriate, Exequity attends some of those executive sessions. In addition to our committee’s retention of Exequity, Olin periodically retains one or more other compensation consulting firms to provide general services, such as actuarial services for pension plans.
| Comparator Group | ||
In designing and implementing our executive compensation programs, it has been our committee’s practice to review compensation data from a peer group that is adjusted periodically in consultation with Exequity. We refer to this group as the “comparator group.” For 2022 compensation decisions, the comparator group referenced by the committee comprised a community of 24 chemicals companies that align reasonably with Olin’s revenues, industry affiliation and corporate structure:
| Air Products and Chemicals, Inc. | H.B. Fuller Company | |||||||
| Albemarle Corporation | Huntsman Corporation | |||||||
| Ashland Global Holdings, Inc. | Ingevity Corporation | |||||||
| Avient Corporation | International Flavors & Fragrances, Inc. | |||||||
| Axalta Coating Systems Ltd. | PPG Industries, Inc. | |||||||
| Cabot Corporation | RPM International, Inc. | |||||||
| Celanese Corporation | The Chemours Company | |||||||
| CF Industries Holdings, Inc. | The Mosaic Company | |||||||
| Eastman Chemical Company | The Scotts Miracle-Gro Company | |||||||
| Ecolab Inc. | The Sherwin-Williams Company | |||||||
| Element Solutions, Inc. | W. R. Grace & Co. | |||||||
| FMC Corporation | Westlake Chemicals Corporation | |||||||
Our committee annually evaluates the comparator group composition and makes adjustments as appropriate. For 2023, our committee removed Ashland Global Holdings, Inc., Element Solutions, Inc. and Ingevity Corporation from the comparator group and added DuPont de Nemours, Inc. and Corteva, Inc. to the comparator group. These changes were made to align our comparator group with chemicals industry companies of comparable revenue and size to Olin. We believe these modifications will enhance the comparator group’s representation of Olin’s revenue position, industry affiliation and corporate structure.
| What We Pay and Why: Elements of Compensation | ||
We extend to our executives three elements of total direct compensation: salary; short-term incentive; and long-term incentive (equity-based), plus provide a limited number of other benefits that commonly are available to senior management at other companies of similar stature.
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Elements of Compensation
Below are the primary elements of our executive compensation, together with relevant information about each element:
| Compensation Element | Purpose | Factors Used to Determine Amount | ||||||||||||
| Salary | • Rewards day-to-day value of executives consistent with the market | • Scope of responsibilities • Time in position • Value of the employee in the market • Individual performance | ||||||||||||
| Short-Term Incentive Program (STIP) | • Ties compensation to the achievement of short-term company goals and objectives • Motivates executives to achieve short-term financial targets and non-financial strategic objectives • Communicates key goals of the company to executives | • Criteria for corporate NEOs: (1)Adjusted EBITDA and Levered Free Cash Flow (2)Performance on key non-financial objectives that we believe are important to our long-term success • Criteria for NEOs with divisional responsibility: (1)Adjusted Division EBITDA and Adjusted Division Cash Flow (2)Overall corporate performance (3)Performance on key non-financial objectives that we believe are important to our long-term success | ||||||||||||
| Long-Term Incentive (Equity-Based) Compensation (LTIP) | • Ties compensation to investor returns • Motivates executives to achieve long-range goals that benefit shareholders • Aligns financial interests of executives and shareholders | • Performance share payouts for NEOs and other executive officers based on our performance on key metrics (as defined below) | ||||||||||||
| Other Compensation and Benefits (Retirement and Severance) | • Allows us to retain and compete for strong employee talent • Ensures that executive officers are personally indifferent to the outcome of a transaction in a change in control situation | • Market competitive programs • Employee’s length of service for defined benefits were frozen on 12/31/07 for Olin plans and on 10/5/15 for the former Dow plans, which continue to accrue interest • Salary and cash incentive | ||||||||||||
Our committee determines the total target direct compensation level for our CEO, as well as the appropriate mix of the compensation elements, based on prevailing practices in the comparator group. Our CEO relies on comparator group standards to recommend, for our committee’s review and approval, the target levels and mix of elements for the balance of our executive officers. Although our committee is not bound to mirror the comparator group standards when it makes decisions on compensation levels and the mix of elements, our committee generally relies on the identified competitive norms to ensure that we can compete for executive talent. Our committee also reviews the relationship between our CEO’s compensation and the compensation for our other NEOs. In connection with establishing 2022 compensation, our committee determined that internal pay relationships were appropriate and reflected the typical CEO-NEO pay relationships at other companies.
As a guideline, our committee evaluates salaries, total cash compensation (salary and short-term incentive), and total direct compensation opportunities (total cash compensation plus the grant date value of long-term incentive awards) extended to our NEOs as a group relative to the market median of the comparator group. Pay levels for any individual NEO, however, may be below or above the market median of the comparator group for that executive’s particular role. Our committee believes that its approach to managing total target pay allows us to attract, motivate, and retain the quality executive talent Olin needs.
Salary
Our committee normally adjusts NEO salaries annually to reflect merit, promotion or change in role and changes in market rates for the job. No increase in salary is automatic or guaranteed. Our committee increased salaries for Messrs. Sutton, Slater and Gumpel effective January 1, 2022. Due to their November 2021 hire date, Ms. O’Brien and Mr. Schumacher did not receive a salary increase in 2022.
Short-Term Incentive Program (Non-equity Incentive Program Compensation)
STIP Overview. Our committee makes annual cash awards under our STIP. Actual STIP payouts are determined
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based on our achievement against our financial performance targets and our non-financial goals, as discussed below.
In December 2021, our committee approved changes to the STIP for awards made in 2022 which have been reflected below. Additionally, the committee approved the consolidation of the Chlor Alkali Products & Vinyls Division and the Epoxy Division to a single “Chemicals Organization” for purposes of the STIP. As such, for 2022 there was one Adjusted EBITDA target and one Adjusted Cash Flow target for the Chemicals Organization. To further support our efforts to promote a company culture responsive to the ongoing environmental, social and governance ideals of our employees and shareholders, the committee approved non-financial objectives for the 2022 STIP including the following categories: Safety, Health & Environmental; Sustainability; People; and Valuation. Each division shared equally the accountability for the achievement of the non-financial objectives.
For the financial portion of the STIP award, no payments are made for any financial target if the actual financial performance is below threshold of the target. Payouts for all financial performance metrics under the STIP are discretionary if the Adjusted EBITDA threshold is not met. Achievement of threshold of a financial target results in a 50% payout of the portion of the target STIP award allocated to that target. For each 1% that actual financial performance exceeds the threshold (up to the target level), the STIP payment is increased by approximately 1.8%. In addition, for each 1% by which the actual financial performance exceeds the financial targets (100%), the payout is increased by approximately 6.25%. The total STIP payout for an NEO cannot exceed 200% of that individual’s target STIP award for awards made in 2022.
Payouts based on achievement of non-financial objectives are independent of achievement of financial targets.
For 2022, 80% of the target STIP awards for all officers (including our NEOs) were based on financial targets and 20% of the target STIP awards were based on non-financial objectives. The following table illustrates the portion of each NEO’s target STIP award based on corporate and division financial targets and non-financial objectives for 2022:
| Corporate/Division Financial Targets | Non-Financial Objectives | Total | ||||||||||||||||||
| NEOs with Corporate-wide Responsibility | 80% / 0% | 20% | 100% | |||||||||||||||||
| NEOs with Divisional Responsibility | 20% / 60% | 20% | 100% | |||||||||||||||||
As set forth in the table above, for Messrs. Sutton and Slater and Ms. O’Brien, our NEOs with corporate-wide responsibility, target STIP awards were based 80% on corporate financial targets related to Adjusted EBITDA and Levered Free Cash Flow (as defined below) and 20% on non‑financial objectives.
For Messrs. Dawson, Gumpel and Schumacher, our NEOs with Divisional Responsibility, target STIP awards were based 80% on financial targets and 20% on non-financial objectives. The financial targets were weighted 75% on division financial targets of Division Adjusted EBITDA and Division Adjusted Cash Flow and 25% on corporate financial targets of Adjusted EBITDA and Levered Free Cash Flow.
Financial Targets and Performance Against Objectives. Our committee established goals for each of the performance measures relevant to our NEOs. The table below provides information on each financial performance measure, including a weighting, performance target, performance threshold, performance maximum, 2022 actual performance and related payout percentage earned. Dollar amounts in the table below are shown in millions.
| 2022 | ||||||||||||||||||||
| Performance Measure | Weighting | Performance Target | Performance Threshold | Performance Maximum | Actual 2022 Performance | Actual 2022 Payout Percentage | ||||||||||||||
| Adjusted EBITDA—Corporate | 50% | $ | 2,500.0 | $ | 1,800.0 | $ | 3,000.0 | $ | 2,427.8 | 47.4% | ||||||||||
| Levered Free Cash Flow—Corporate | 30% | $ | 1,394.0 | $ | 1,059.4 | $ | 1,672.8 | $ | 1,710.7 | 67.5% | ||||||||||
| Adjusted EBITDA—Chemicals Division | 60% | $ | 2,189.0 | $ | 1,663.6 | $ | 2,626.8 | $ | 2,135.3 | 57.4% | ||||||||||
| Adjusted Cash Flow—Chemicals | 20% | $ | 1,802.0 | $ | 1,369.5 | $ | 2,162.4 | $ | 2,044.9 | 36.8% | ||||||||||
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For 2022, in calculating Adjusted EBITDA, we used 2022 EBITDA excluding the effect of the following special charges, gains and losses (which were reflected in our 2022 EBITDA): (i) restructuring charges of $25.3 million, (ii) $13.0 million pretax gains on the sale of two former manufacturing facilities, and (iii) environmental insurance recoveries for costs incurred and expensed in prior years of $1.0 million.
Adjusted Cash Flow represents our after-tax operating cash flows of the business, including interest paid and changes in working capital, reduced by capital expenditures and payments under long-term supply contracts.
Levered Free Cash Flow represents our cash flow after interest paid, income taxes paid, changes in working capital, capital expenditures and payments under long-term supply contracts.
As described above, for our NEOs, the 80% portion of the STIP target award related to financial targets would be paid at the target award level (set forth in the Grants of Plan-Based Awards table) if our Adjusted EBITDA and Adjusted Cash Flow equal the financial performance targets. If any of the three metrics fall above or below the target level, our committee adjusts the STIP cash payment as described above. In the event that actual Adjusted EBITDA is below the threshold level of the target Adjusted EBITDA, all STIP payments for the financial portion of the STIP award (80%) are discretionary.
Our NEOs with corporate-wide responsibility (Messrs. Sutton and Slater and Ms. O’Brien) received a payout of 47.4% for Adjusted EBITDA–Corporate and 67.5% for Levered Free Cash Flow–Corporate.
Our NEOs with Chemicals division responsibility (Messrs. Dawson, Gumpel, and Schumacher) received a payout of 57.4% for Adjusted EBITDA–Chemicals Division and 36.8% for Adjusted Cash Flow–Chemicals Division.
Non-Financial Objectives. In 2022, safety, health and environmental, and strategic goals comprised 20% of the STIP award opportunity for our NEOs.
| Performance Goal | Possible | Achieved | ||||||
| Strategic Goals | 15% | 12.5% | ||||||
| Safety, Health & Environmental Goals | 5% | 3.0% | ||||||
| Total | 20% | 15.5% | ||||||
For 2022, all NEOs earned 15.5% of their target STIP award, out of a possible 20%, related to achievement of non-financial objectives.
Long-Term Incentive (Equity-Based) Compensation (LTIP)
In 2022, we allocated the value of LTIP awards equally between performance shares and stock options.
Why Stock Options? | Why Performance Shares? | |||||||
• Performance-based because their value is solely tied to Olin’s stock price, which directly correlates to our shareholders’ interests. • Fosters an environment focused on long-term growth and shareholder value creation. • Declines in stock price following the grant of stock options detrimentally impact executive pay (i.e., when a stock option is “underwater” it has no value). • Highly valued by employees; an important retention tool. | • Performance-based both because the number of shares earned depends on performance against pre-defined financial goals and the value of the shares fluctuates based on the stock price. • Motivates decision making that maximizes performance over a multi-year timeframe. • Tied to key financial metrics—relative total shareholder return and net income. • Coordinates the activities of all award recipients (including our NEOs) in support of long-term organizational value enhancement. | |||||||
All LTIP participants, including NEOs, are assigned target award levels which for 2022 were:
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| NEO | Target Award | |||||||
Scott M. Sutton | $ | 7,200,000 | ||||||
Todd A. Slater | $ | 1,500,000 | ||||||
Dana C. O'Brien | $ | 900,000 | ||||||
Damian Gumpel | $ | 1,000,000 | ||||||
Patrick M. Schumacher | $ | 1,000,000 | ||||||
| Pat D. Dawson | $ | 1,500,000 | ||||||
Performance Shares. Half the value of each participant’s 2022 LTIP target award value was delivered in performance shares. The target number of performance shares awarded to each NEO was formulated by dividing half the participant’s target award value by the fair market value of our common stock (the average of the high and low per share sales price of our common stock on the NYSE on the grant date). The total number of performance shares that vest and will be paid to each NEO from awards made in 2022 will vary between 0% and 200% of this target number.
Half of the target number of performance shares will be earned based on our relative total shareholder return (TSR) over the three-year period ending December 31, 2024 compared to the community of companies in the S&P 1500 Material Index, plus two selected direct competitors—Huntsman Corporation and Westlake Chemical Corporation. We refer to this group of companies as the Performance Share Comparison Group.
The remaining half of the target number of performance shares will be earned based on our actual net income compared to the net income goal set by our committee for the same three-year period. The following charts identify the relationship between the target number of Performance Shares earned and performance generated:
| If Olin’s TSR for a Performance Cycle is: | The number of TSR Performance Shares paid as a percentage of the target TSR Performance Share Award will be: | ||||
At or above the 80th Percentile of the Performance Share Comparison Group | 200% | ||||
Above the 50th Percentile, but below the 80th Percentile of the TSR for the Performance Share Comparison Group | 100% of the target number of TSR Performance Shares plus 3.33% of the target number of TSR Performance Shares for each incremental percentile position above the 50th Percentile | ||||
At the 50th Percentile of the TSR for the Performance Share Comparison Group | 100% of the target number of TSR Performance Shares | ||||
Above the 20th Percentile, but below the 50th Percentile of the TSR for the Performance Share Comparison Group | 25% of the target number of TSR Performance Shares plus 2.5% of the target number of TSR Performance Shares for each incremental percentile position above the 20th Percentile | ||||
At the 20th Percentile of the TSR for the Performance Share Comparison Group | 25% of the target number of TSR Performance Shares | ||||
Below the 20th Percentile of the TSR for the Performance Share Comparison Group | 0% | ||||
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| If Olin’s Net Income (LTIP) for the relevant portion of the Performance Cycle is: | The number of Net Income Performance Shares paid as a percentage of the target Net Income Performance Shares allocated to that Net Income Goal will be: | ||||
| At least 140% of the relevant Net Income (LTIP) Goal | 200% of the target number of Net Income Performance Shares allocated to that Net Income Goal | ||||
| More than 100% but less than 140% of the relevant Net Income (LTIP) Goal | 100% of the target number of Net Income Performance Shares allocated to that Net Income Goal plus a proportionate number of target Net Income Performance Shares determined using linear interpolation | ||||
| 100% of the relevant Net Income (LTIP) Goal | 100% of the target number of Net Income Performance Shares allocated to that Net Income Goal | ||||
| More than 60% but less than 100% of the relevant Net Income (LTIP) Goal | 50% of the target number of Net Income Performance Shares allocated to that Net Income Goal plus a proportionate number of target Net Income Performance Shares determined using linear interpolation | ||||
| 60% of the relevant Net Income (LTIP) Goal | 50% of the target number of Net Income Performance Shares allocated to that Net Income Goal | ||||
| Less than 60% of the relevant Net Income (LTIP) Goal | 0% | ||||
Stock Options. The remaining half of each participant’s 2022 LTIP target award value is delivered in stock options. The number of shares subject to the option award is determined by dividing half the value of the overall LTIP target by the Black-Scholes value of options for our common stock (not to be lower than 20% of the then-current market price of our common stock).
Our committee typically approves option awards at its first committee meeting each year. In 2022, the first committee meeting was February 22, 2022. At that meeting, our committee approved the granting of option awards effective on February 22, 2022. The exercise price on February 22, 2022 was $49.71 per share, the average of the high and low per share sales price of our common stock on the NYSE on that date. These option awards were made consistent with past practice in which the option awards have:
•a grant effective date at least 10 business days after the release of year-end earnings; and
•an exercise price equal to fair market value on the grant effective date.
This practice ensures that the exercise price for stock options reflects full disclosure of prior year earnings information. We have not engaged in “back dating” of options, as our policies do not allow back dating. In addition, our equity plans do not permit option grants with an exercise price below the fair market value of our stock on the effective date of the option grant.
2020 LTIP Award. In February 2020, as part of our annual LTIP award cycle, our committee granted performance share awards to Messrs. Slater, Gumpel, and Dawson, who were each executive officers at that time. The performance share award was granted according to the award structure and vesting conditions described above with a performance period covering 2020 through 2022. Our TSR for the 2020 – 2022 performance period was over the 98th percentile as compared to our Performance Share Comparison Group resulting in a maximum vesting at 200% for TSR Performance Shares. We achieved a cumulative percentage of 139.9% of our applicable adjusted net income goals for an aggregate payout percentage of 169.96% of our 2020 LTIP Performance Share award.
Restricted Stock. Our committee does not award restricted stock or restricted stock units to NEOs on a regular basis. In 2022, no grants of restricted stock units were made to any NEOs.
CEO Grant of Authority. Our CEO also has authority to grant a limited number of options and restricted stock units at other times during the year. The aggregate grants to any one employee during the year cannot exceed 10,000 options and/or 5,000 restricted stock units. The aggregate grants to all employees by our CEO during the year cannot exceed 150,000 options or 80,000 restricted stock units. Our CEO may not grant options or restricted stock units to anyone who is an officer within the definition of the rules under Section 16 of the Exchange Act, or “back date” any options. Consistent with the terms of our equity plans, options granted by our CEO may not have an exercise price below the fair market value of our stock on the effective date of the option grant.
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Other Compensation
We also offer a small number of other personal benefits to groups of employees, including our NEOs. We extend some benefits, such as a portion of health insurance premiums and certain retirement benefits, to all eligible employees. We tie the size and construction of these benefits to competitive practices in the market, a decision our committee believes enables us to attract and retain executives with the talents and skill sets we require. We provide other compensatory items, such as certain life insurance benefits and the retirement and change in control benefits described below, to our NEOs and other officers. Effective July 1, 2020, we terminated the Key Executive Life Insurance program.
Retirement Benefits. We offer retirement benefits as part of the package to recruit and retain employees. Our retirement benefits also reflect an individual’s contributions over his or her career with Olin, as those benefits are based on compensation. In general, we establish market competitive retirement benefits. Our committee believes that retirement plans like ours are commonly provided to executives at other companies, and offering these benefits helps us remain competitive for qualified senior-level executive talent. We periodically re-evaluate and update those plans to respond to changes in the market.
The Olin Contributing Employee Ownership Plan (CEOP) is a funded, qualified 401(k) plan which provides eligible employees the opportunity to make pre-tax, Roth 401(k), after-tax and catch-up contributions. Olin generally matches a portion of eligible compensation that the participant contributes to the plan. For eligible employees, Olin makes contributions to the Defined Contribution Retirement Account based on a percentage of eligible compensation as defined in the plan.
The Supplemental CEOP is an unfunded, nonqualified deferred compensation plan for our NEOs and a select group of other senior management employees. Our committee believes that historically it was common for companies to offer these kinds of nonqualified retirement supplements to executives and offering these benefits has allowed us to remain competitive in the market for qualified senior-level executive talent. Because this plan is unfunded, participants receive benefits only if we have the financial resources to make the payments when due.
Executive Severance Plans. In adopting the Executive Severance Plans, it was our intention to provide security to our senior executives in the event of a loss of employment generally consistent with the arrangements provided by our peer companies, and in the case of our double-trigger change in control agreements, to ensure that our executives work to secure the best outcome for shareholders in the event of a possible change in control, even if it meant that they lost their jobs as a result. These agreements are described under the headings “Potential Payments Upon Termination or Change in Control” and “Executive Severance Plans.”
| Compensation Governance Best Practices | ||
Stock Ownership Guidelines
Our stock ownership guidelines require all of our Section 16(b) Officers to maintain specified ownership levels of our stock within five years after the guideline applies. Stringent stock ownership requirements mitigate any risk that options may cause management to focus on short-term stock price movement.
Our committee monitors compliance with the stock ownership guidelines annually. To determine “stock ownership” under the guidelines, we include, in addition to shares the individual owns outright, restricted stock and restricted stock units, shares and phantom shares held in the executive’s CEOP and Supplemental CEOP accounts, and shares subject to vested stock options with an exercise price below the current market price. No unvested performance share awards are included in the determination of stock ownership. The committee believes that more senior executives, who have significant policy-making responsibilities impacting our stock price, should retain a higher amount of stock ownership to ensure their interests are aligned with our shareholders.
Officer Title | Salary Multiple | |||||||
| Chairman, President and CEO | 6 | |||||||
| Executive Vice President/Senior Vice President | 3 | |||||||
| Vice President | 2 | |||||||
All of our NEOs met the guidelines for 2022, to the extent applicable to them, based on the 365-day average price
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of our stock between April 1, 2021 and March 31, 2022.
Clawback Policy
Each of our NEOs is subject to a clawback policy applicable to all of our executive officers. Olin’s clawback policy allows recovery of all or a portion of payments under the STIP and stock options and performance share awards from executives who also participate in the LTIP. To recover compensation, our board or our committee must determine that the executive was grossly negligent or engaged in intentional misconduct that was a “significant contributing factor” to:
(i) a restatement of our financial statements; or
(ii) a significant increase in the value of that executive’s incentive awards.
Amounts that we recover under this policy are not included in calculating that executive’s benefits under our Supplemental CEOP, and our recovery of amounts under the policy does not trigger any benefits under our severance plans. In addition to the clawback policy, our equity plans provide that if a participant renders service to one of our competitors, discloses confidential information without our consent, or violates other terms of the plan, our committee may terminate any unvested, unpaid or deferred awards held by the participant, or may require the participant to forfeit benefits received under the plan within the six month period preceding the participant’s action triggering the clawback.
The SEC recently released final rules regarding clawback policies, which will become effective following NYSE’s publication of corresponding rules. Once published, we will evaluate our existing clawback policies for compliance with NYSE standards.
Risk Assessment
Management and our committee regularly evaluate the risks involved with our compensation programs. In November 2022, we conducted a comprehensive risk assessment after compiling an inventory of incentive plans and programs and conducting an analysis of the risk associated with each. The assessment considered factors such as the plan metrics, number of plan participants, maximum payments, and risk mitigation factors. Exequity reviewed the risk assessment and advised our committee of its comfort with the level of risk inherent in Olin’s compensation programs. Based on our committee’s review of the risk assessment and Exequity’s input, our committee concluded that it did not believe any of our compensation programs or policies create risks that are reasonably likely to have a material adverse impact on Olin. Based on this conclusion, we implemented no material changes to our compensation policies or practices after our risk assessment.
| Tax and Accounting Considerations | ||
All elements of compensation, including salaries, generate charges to earnings under generally accepted accounting principles (GAAP). We generally do not adjust compensation based on accounting factors.
Our committee considers the deductibility of long-term and annual incentive awards in structuring our executive compensation program, to the extent practical. To hire and retain highly skilled executives and remain competitive, our committee also looks at other factors and retains the discretion to make awards and pay amounts that do not qualify as tax deductible.
Our equity and severance plans do not provide any “gross-up” for the amount of excise tax, if any, due on “excess parachute payments” as defined under Code Section 280G. These benefits are described in more detail under “Potential Payments Upon Termination or Change in Control.”
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EXECUTIVE COMPENSATION
| Summary Compensation Table | ||
The table below summarizes the total compensation paid to or earned by each of our NEOs for the fiscal years ended December 31, 2022, 2021 and 2020:
Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus (1) ($) (d) | Stock Awards (2) ($) (e) | Option Awards (2) ($) (f) | Non-equity Incentive Plan Compensation (3) ($) (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (4) ($) (h) | All Other Compensation (5) ($) (i) | Total ($) (j) | |||||||||||||||||||||||||||||||||||||||||||||||
Scott M. Sutton Chairman, President and CEO | 2022 | $ | 1,065,000 | $ | — | $ | 3,975,484 | $ | 3,657,786 | $ | 1,806,040 | $ | — | $ | 241,256 | $ | 10,745,566 | |||||||||||||||||||||||||||||||||||||||
| 2021 | $ | 750,000 | $ | — | $ | 4,479,480 | $ | 3,055,253 | $ | 1,725,750 | $ | — | $ | 94,810 | $ | 10,105,293 | ||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 250,000 | $ | — | $ | 1,012,500 | $ | — | $ | — | $ | — | $ | 383,519 | $ | 1,646,019 | ||||||||||||||||||||||||||||||||||||||||
Todd A. Slater Senior Vice President and CFO | 2022 | $ | 650,000 | $ | — | $ | 829,141 | $ | 762,480 | $ | 717,200 | $ | — | $ | 131,306 | $ | 3,090,127 | |||||||||||||||||||||||||||||||||||||||
| 2021 | $ | 615,000 | $ | — | $ | 934,848 | $ | 636,222 | $ | 840,750 | $ | — | $ | 76,563 | $ | 3,103,383 | ||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 600,000 | $ | — | $ | 778,901 | $ | 595,504 | $ | 142,500 | $ | 31,637 | $ | 57,028 | $ | 2,205,570 | ||||||||||||||||||||||||||||||||||||||||
Dana C. O’Brien Senior Vice President, General Counsel and Secretary | 2022 | $ | 600,000 | $ | 150,000 | $ | 499,681 | $ | 457,488 | $ | 586,800 | $ | — | $ | 63,000 | $ | 2,356,969 | |||||||||||||||||||||||||||||||||||||||
Damian Gumpel Vice President and President, Epoxy and Corporate Strategy | 2022 | $ | 550,000 | $ | — | $ | 554,591 | $ | 508,320 | $ | 459,500 | $ | — | $ | 115,204 | $ | 2,187,615 | |||||||||||||||||||||||||||||||||||||||
| 2021 | $ | 493,501 | $ | — | $ | 1,140,824 | $ | 305,228 | $ | 637,200 | $ | — | $ | 59,271 | $ | 2,636,024 | ||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 450,000 | $ | — | $ | 270,536 | $ | 257,237 | $ | 82,040 | $ | 23,621 | $ | 40,447 | $ | 1,123,881 | ||||||||||||||||||||||||||||||||||||||||
Patrick M. Schumacher Vice President and President, Chlor Alkali Products and Vinyls | 2022 | $ | 550,000 | $ | — | $ | 554,591 | $ | 508,320 | $ | 459,500 | $ | — | $ | 50,400 | $ | 2,122,811 | |||||||||||||||||||||||||||||||||||||||
Pat D. Dawson Former Executive Vice President | 2022 | $ | 231,667 | $ | — | $ | 829,141 | $ | 762,480 | $ | 225,922 | $ | — | $ | 124,674 | $ | 2,173,884 | |||||||||||||||||||||||||||||||||||||||
| 2021 | $ | 695,000 | $ | — | $ | 1,120,952 | $ | 764,061 | $ | 1,044,300 | $ | — | $ | 99,332 | $ | 3,723,645 | ||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 695,000 | $ | — | $ | 933,612 | $ | 714,532 | $ | 334,088 | $ | 257,389 | $ | 80,968 | $ | 3,015,589 | ||||||||||||||||||||||||||||||||||||||||
_______________________
(1)For Ms. O’Brien, the value in this column represents the payment of the second half of a retention award made in conjunction with her hire.
(2)Represents the aggregate grant date fair value of equity awards granted in that year (performance shares and restricted stock units in column (e) and options in column (f)), in each case calculated in accordance with ASC Topic 718. Please refer to Footnote 4 to the Grants of Plan-Based Awards table for a discussion of the assumptions used in these calculations. The performance share amounts in column (e) are calculated based on a payout equal to 100% of the target level for awards made in 2022, 2021 and 2020. Set forth below are the amounts that would have been included for performance share awards and total equity awards, if the grant date fair value had been based on the highest level of performance shares (for a payout equal to 200% of the target level).
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| NEO | 2022 Performance Share | 2021 Performance Share / Total | 2020 Performance Share / Total | |||||||||||||||||||||||||||||
Scott M. Sutton | $ | 7,950,968 | $ | 8,958,960 | / | $ | 8,958,960 | $ | 2,025,000 | / | $ | 2,025,000 | ||||||||||||||||||||
Todd A. Slater | $ | 1,658,282 | $ | 1,869,696 | / | $ | 1,869,696 | $ | 1,522,337 | / | $ | 1,540,069 | ||||||||||||||||||||
Dana C. O'Brien | $ | 999,362 | N/A | N/A | ||||||||||||||||||||||||||||
Damian Gumpel | $ | 1,109,182 | $ | 891,568 | / | $ | 1,586,608 | $ | 514,474 | / | $ | 527,773 | ||||||||||||||||||||
| Patrick M. Schumacher | $ | 1,109,182 | N/A | N/A | ||||||||||||||||||||||||||||
| Pat D. Dawson | $ | 1,658,282 | $ | 2,241,904 | / | $ | 2,241,904 | $ | 1,825,961 | / | $ | 1,846,592 | ||||||||||||||||||||
(3)Amounts listed in this column were determined by our committee under our STIP.
(4)Amounts reported in this column represent the total change in the present value of the pension benefits during the applicable year under all of our defined benefit pension plans. Pension values as of December 31, 2022 for Mr. Slater include amounts under the Qualified Plan, Supplemental Plan, and Senior Plan. Additionally, Mr. Dawson participates solely in a pension equity arrangement under the Qualified Plan, Mr. Gumpel participates solely in a cash balance arrangement under the Qualified Plan, and Messrs. Sutton and Schumacher and Ms. O’Brien are not eligible to participate in any of the defined benefit plans. Other than Mr. Slater, none of the NEO’s participate in the Supplemental or Senior Plans. Changes in the present value of pension benefits are determined using the assumptions we use for financial reporting purposes and represent changes in assumptions and the fact that each NEO is one year older, rather than any change in our NEO’s accrued pension benefit. Please see the note entitled “Pension Plans” in the notes to our audited financial statements included in our 2022 annual report on Form 10‑K for a discussion of these assumptions. The values shown in the table are due to the change of assumptions and the fact that each executive is one year older, as well as the Required NQ Plan Payments (as described on page 46 below). It is not driven by any change in the retirement benefit itself, except for Messrs. Dawson and Gumpel. The retirement benefits for Mr. Dawson reflects account balances based on a “pension equity” arrangement acquired from the Dow Employees’ Pension Plan (DEPP), which are then credited with interest until their assumed retirement date. As required by federal regulations, effective May 31, 2016 the rate of this credited interest changed from 8% to 6% for the DEPP pension equity account balances. The retirement benefits for Mr. Gumpel reflects an account balance based on a “personal pension account” (PPA) Cash Balance formula acquired from the DEPP, which is then credited with interest until his assumed retirement date. The credited interest rate is 150 basis points plus the discount rate on 6-month Treasury Bills for the month of September of the prior plan year. To determine the change in the present value of the pension benefits under these plans, for Mr. Slater, we used age 62, the first age at which unreduced pension benefits are payable under the applicable Plans. For Mr. Gumpel, an interest crediting rate of 4% was assumed for the accumulation of his PPA account balance arrangement to age 65 and the conversion of his account balance to a life annuity benefit. For Mr. Dawson, his account balance as of his retirement date of April 30, 2022 was converted to a life annuity benefit.
In accordance with the SEC regulations, the pension benefits in the Summary Compensation Table reflect benefits payable in the form of a single life annuity payable only during the life of the executive, and do not reflect any joint and survivorship benefit. For more information on these defined benefit plans, including the pension equity and cash balance arrangements, see the descriptions beginning on page 45.
(5)Amounts reported in this column for 2022 are comprised of the following items:
| Executive Officer | CEOP/Supplemental CEOP–Retirement Account (a) | Other Payments (b) | Total | |||||||||||||||||
Scott M. Sutton | $ | 241,256 | $ | — | $ | 241,256 | ||||||||||||||
Todd A. Slater | $ | 131,306 | $ | — | $ | 131,306 | ||||||||||||||
Dana C. O'Brien | $ | 63,000 | $ | — | $ | 63,000 | ||||||||||||||
Damian Gumpel | $ | 105,540 | $ | 9,664 | $ | 115,204 | ||||||||||||||
Patrick M. Schumacher | $ | 50,400 | $ | — | $ | 50,400 | ||||||||||||||
| Pat D. Dawson | $ | 103,289 | $ | 21,385 | $ | 124,674 | ||||||||||||||
____________________
(a)The amounts shown represent Olin’s contributions of a total of 7.5% of eligible compensation to the Retirement Account portion of the CEOP and the Supplemental CEOP in addition to the company’s match of a portion of eligible compensation that the participant contributes to each plan.
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(b)The value for Mr. Gumpel represents the phantom dividends and interest accrued and paid in cash for the restricted stock unit award granted April 1, 2019 which vested on April 1, 2022.
The value represented in this column for Mr. Dawson represents the payout of accrued but unused vacation in connection with his retirement from Olin as an executive officer on April 30, 2022.
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| Grants of Plan-Based Awards | ||
Name (a) | Grant Date (b) | Compensation Committee Meeting Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Option Awards: Number of Securities Underlying Options (3) (#) (i) | Exercise or Base Price of Option Awards ($/Share) (3) (j) | Grant Date Fair Value of Stock and Option Awards (4) (k) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (#) (f) | Target (#) (g) | Maximum (#) (h) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Scott M. Sutton | 02/22/2022 | 02/22/2022 | $ | — | $ | 1,385,000 | $ | 2,770,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | — | 72,400 | 144,800 | $ | 3,975,484 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | 172,700 | $ | 49.71 | $ | 3,657,786 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Todd A. Slater | 02/22/2022 | 02/22/2022 | $ | — | $ | 550,000 | $ | 1,100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | — | 15,100 | 30,200 | $ | 829,141 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | 36,000 | $ | 49.71 | $ | 762,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dana C. O'Brien | 02/22/2022 | 02/22/2022 | $ | — | $ | 450,000 | $ | 900,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | — | 9,100 | 18,200 | $ | 499,681 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | 21,600 | $ | 49.71 | $ | 457,488 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Damian Gumpel | 02/22/2022 | 02/22/2022 | $ | — | $ | 400,000 | $ | 800,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | — | 10,100 | 20,200 | $ | 554,591 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | 24,000 | $ | 49.71 | $ | 508,320 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Patrick M. Schumacher | 02/22/2022 | 02/22/2022 | $ | — | $ | 400,000 | $ | 800,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | — | 10,100 | 20,200 | $ | 554,591 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | 24,000 | $ | 49.71 | $ | 508,320 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pat D. Dawson | 02/22/2022 | 02/22/2022 | $ | — | $ | 196,667 | $ | 393,334 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | — | 15,100 | 30,200 | $ | 829,141 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 02/22/2022 | 02/22/2022 | 36,000 | $ | 49.71 | $ | 762,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
____________________
(1)Amounts in these columns represent the potential annual cash incentives established under our STIP in early 2022. Actual amounts were determined and paid in early 2023, and are included under column (g) in the Summary Compensation Table. We discuss our annual incentive program under the heading “Compensation Discussion and Analysis—What We Pay and Why: Elements of Compensation.”
(2)For all NEOs, numbers in these columns represent awards of performance shares under our Performance Share Program described below. The amounts in column (h) represent 200% of the target amounts, the maximum payout of the performance shares.
(3)Numbers in these columns for all NEOs represent nonqualified stock options granted under our LTIP, vesting in three equal annual installments, beginning on the first anniversary of the grant date. The market closing price on the grant date was $49.29, while the options were granted with an option exercise price equal to the average of the high and low sales price of our common stock on the grant date ($49.71). Option awards are awarded with an effective date at least 10 business days after our annual earnings release (February 22, 2022 for 2022 grants). The effective date of the option grants has always occurred on or after the meeting date, and we have never engaged in “back dating” practices.
(4)Amounts in this column assume payment of performance shares at the target level and value options using the Black-Scholes value, in each case calculated for financial statement reporting purposes in accordance with ASC Topic 718. Please see the note entitled “Stock-Based Compensation” in the notes to our audited financial statements included in our 2022 annual report on Form 10-K for additional discussion of the assumptions underlying these calculations.
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| Stock Options | ||
Annually, our committee grants options to purchase shares of our common stock to a group of key employees, including our executive officers. Stock option awards are typically granted annually under our LTIP and vest in three equal annual installments, contingent on the recipient’s continued employment. All options are granted with an exercise price equal to the fair market value of our stock on the date of grant and have an exercise term of 10 years from the grant date, which may be shortened in the event of the recipient’s termination of employment. Our plans and our policies do not permit any “back dating” of options.
| Performance Shares | ||
Each NEO and certain other key employees received a target number of performance shares in early 2022, which vest at the end of 2024. The total number of performance shares that vest may vary between 0% and 200% of the target number, with half of the performance shares based on TSR over a three-year period compared to the TSR of the companies in the Performance Share Comparison Group and the remaining half based on our net income performance compared to the net income goal set by our committee for the same three-year period. The chart included in the discussion of performance share awards above sets forth this relationship in more detail. Vested performance shares are paid approximately half in cash and half in stock. No dividends or dividend equivalents are paid on unvested performance shares.
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| Outstanding Equity Awards at Fiscal Year-End | ||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Option Exercise Price ($) (d) | Option Expiration Date (e) | Number of Shares or Units of Stock That Have Not Vested (#) (f) (4) | Market Value of Shares or Units of Stock That Have Not Vested ($) (g) (4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (h) (6) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (i) (6) | ||||||||||||||||||||||||||||||||||||||||||||||||
Scott M. Sutton | — | — | $ | — | — | — | $ | — | 72,400 | $ | 3,832,856 | |||||||||||||||||||||||||||||||||||||||||||||
| — | — | $ | — | — | — | $ | — | 103,500 | $ | 5,479,290 | ||||||||||||||||||||||||||||||||||||||||||||||
| — | — | $ | — | — | 500,000 | $ | 26,470,000 | (7) | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| — | 172,700 | (1) | $ | 49.71 | 02/22/2032 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| 102,767 | 205,533 | (2) | $ | 28.99 | 02/15/2031 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
Todd A. Slater | — | — | $ | — | — | — | $ | — | 15,100 | $ | 799,394 | |||||||||||||||||||||||||||||||||||||||||||||
| — | — | $ | — | — | — | $ | — | 21,600 | $ | 1,143,504 | ||||||||||||||||||||||||||||||||||||||||||||||
| — | — | $ | — | — | 1,040 | $ | 55,058 | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| — | 36,000 | (1) | $ | 49.71 | 02/22/2032 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| 21,400 | 42,800 | (2) | $ | 28.99 | 02/15/2031 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| 109,067 | 54,533 | (3) | $ | 17.33 | 02/18/2030 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| 94,100 | — | $ | 26.26 | 02/19/2029 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 54,000 | — | $ | 32.94 | 02/16/2028 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 86,000 | — | $ | 29.75 | 02/10/2027 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 92,250 | — | $ | 13.14 | 02/11/2026 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 38,250 | — | $ | 27.40 | 02/12/2025 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 16,000 | — | $ | 27.65 | 05/04/2024 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 9,000 | — | $ | 25.57 | 02/09/2024 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Dana C. O’Brien | — | — | $ | — | — | — | $ | — | 9,100 | $ | 481,754 | |||||||||||||||||||||||||||||||||||||||||||||
| — | 21,600 | (1) | $ | 49.71 | 02/22/2032 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| 11,667 | 23,333 | (4) | $ | 58.59 | 11/29/2031 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
Damian Gumpel | — | — | $ | — | — | — | $ | — | 10,100 | $ | 534,694 | |||||||||||||||||||||||||||||||||||||||||||||
| — | — | $ | — | — | — | $ | — | 10,300 | $ | 545,282 | ||||||||||||||||||||||||||||||||||||||||||||||
| — | — | $ | — | — | 12,780 | $ | 676,573 | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| — | 24,000 | (1) | $ | 49.71 | 02/22/2032 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| 10,267 | 20,533 | (2) | $ | 28.99 | 02/15/2031 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| 36,867 | 18,433 | (3) | $ | 17.33 | 02/18/2030 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| 7,500 | — | $ | 26.26 | 02/19/2029 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 5,000 | — | $ | 32.94 | 02/16/2028 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 7,600 | — | $ | 29.75 | 02/10/2027 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 8,800 | — | $ | 13.14 | 02/11/2026 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Patrick M. Schumacher | — | — | $ | — | — | — | $ | — | 10,100 | $ | 534,694 | |||||||||||||||||||||||||||||||||||||||||||||
| — | 24,000 | (1) | $ | 49.71 | 02/22/2032 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| 8,334 | 16,666 | (4) | $ | 58.59 | 11/29/2031 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||
| Pat D. Dawson | — | — | $ | — | — | — | $ | — | 15,100 | $ | 799,394 | |||||||||||||||||||||||||||||||||||||||||||||
| — | — | $ | — | — | — | $ | — | 25,900 | $ | 1,371,146 | ||||||||||||||||||||||||||||||||||||||||||||||
| — | — | $ | — | — | 1,210 | $ | 64,057 | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 25,700 | — | $ | 28.99 | 02/15/2031 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 113,000 | — | $ | 26.26 | 02/19/2029 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 69,000 | — | $ | 32.94 | 02/16/2028 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 139,000 | — | $ | 29.75 | 02/10/2027 | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||
____________________
(1)The options vest in three annual equal installments beginning February 22, 2023.
(2)The options vest in three annual equal installments beginning February 15, 2022, so the first installment has vested.
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(3)The options vest in three annual equal installments beginning February 18, 2021, so the first two installments have vested.
(4)The options vest in three annual equal installments beginning November 29, 2022, so the first installment has vested.
(5)Represents the entire value of all unvested restricted stock based on the December 31, 2022, closing price of our common stock of $52.94.
(6)Represents the entire value of all unvested performance share awards based on the December 31, 2022 closing price of our common stock of $52.94. Vested shares will be paid approximately half in cash and half in stock.
(7)For Mr. Sutton’s award, represents achievement during 2021 of the maximum value (200% of target) of the performance share award granted in conjunction with his employment, valued based on the December 31, 2022, closing price of our common stock of $52.94, which is subject only to satisfaction of the remaining time-based vesting condition applicable to his award.
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| Option Exercises and Stock Vested | ||
| Option Awards | Stock Awards | |||||||||||||||||||||||||
Name (a) | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c)(1) | Number of Shares Acquired on Vesting (#) (d)(2) | Value Realized on Vesting ($) (e)(3) | ||||||||||||||||||||||
Scott M. Sutton | — | $ | — | — | $ | — | ||||||||||||||||||||
Todd A. Slater | — | $ | — | 15,659 | $ | 778,409 | ||||||||||||||||||||
| Dana C. O'Brien | — | $ | — | — | $ | — | ||||||||||||||||||||
Damian Gumpel | — | $ | — | 4,063 | $ | 275,698 | ||||||||||||||||||||
| Patrick M. Schumacher | — | $ | — | — | $ | — | ||||||||||||||||||||
| Pat D. Dawson | 65,433 | $ | 3,170,883 | 18,817 | $ | 935,393 | ||||||||||||||||||||
____________________
(1)The amounts in column (c) above represent the difference between the closing market price of the underlying shares on the exercise date and the option exercise price, multiplied by the number of shares subject to the option exercise.
(2)The shares listed in column (d) above represent performance shares paid in February 2022 (vested based on our performance for the three years ended December 31, 2021), under a performance award made in early 2019. In addition, for Mr. Gumpel, the shares listed in column (d) above also includes a restricted stock award granted April 1, 2019 which vested on April 1, 2022 (net shares delivered after 1,187 shares withheld for taxes were 2,813).
(3)Performance shares are paid approximately half in cash and half in stock. The cash portion of the performance shares payment was based on the fair market value of the shares as of December 31, 2021 ($57.57), and dollar amounts listed in column (e) above for the stock portion of the payment of performance shares are based on the average of the high and low sales price for our common stock as of February 22, 2022, the date the shares were issued ($49.71).
| Pension Benefits | ||
The following table shows the present value of the benefits under our defined benefit plans as of December 31, 2022, for Messrs. Slater, Gumpel and Dawson. Messrs. Sutton and Schumacher and Ms. O’Brien do not participate in any defined benefit plan. Please see the item entitled “Pension Plan Assumptions” included in the “Pension Plans” footnote in the notes to our audited financial statements included in our 2022 annual report on Form 10-K for a discussion of these assumptions.
Name (a) | Plan Name (b) | Number of Years Credited Service (#) (c)(1) | Present Value of Accumulated Benefit ($) (d)(2)(3) | Payments During Last Fiscal Year ($) (e) | ||||||||||||||||||||||
Todd A. Slater (4) | Qualified Plan | 5.00 | $ | 152,224 | $ | — | ||||||||||||||||||||
| Supplemental Plan | 5.00 | $ | 23,414 | $ | — | |||||||||||||||||||||
| Senior Plan | 2.58 | $ | — | $ | — | |||||||||||||||||||||
Damian Gumpel | Qualified Plan | 6.30 | $ | 50,366 | $ | — | ||||||||||||||||||||
| Pat D. Dawson | Qualified Plan | 35.10 | $ | 2,224,163 | $ | — | ||||||||||||||||||||
____________________
(1)The amounts in the DEPP for Messrs. Dawson and Gumpel were rolled into the Qualified Plan at the time of the Acquisition and their benefit accruals were frozen at that time. For Mr. Slater, benefit accruals were frozen under all three plans effective December 31, 2007. Employment after that date continues to count toward meeting service and age requirements for vesting and early retirement. Participation in the Qualified Plan generally began when the executive was hired. All of the participating NEOs have met the requirements for vesting.
(2)The present values are calculated using (i) for Mr. Slater, the executive’s average compensation (salary and annual
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incentive, and specific inclusions and exclusions) for the three highest years out of the last 10 years of employment through December 31, 2007, his years of creditable service as of December 31, 2007 and an assumed retirement date of age 62 at which time he may receive an unreduced benefit, (ii) for Mr. Gumpel, his DEPP account balance as of December 31, 2015, credited with annual interest until an assumed retirement date of age 65 at which time he may receive his most valuable benefit, and (iii) Mr. Dawson, DEPP account balances as of October 5, 2015, credited with 8% annual interest until May 31, 2016, and 6% from June 1, 2016 through his April 30, 2022 retirement date. The assumptions we used for financial reporting as of December 31, 2022, including a 5.5% single effective rate (in lieu of a discount rate) for the Qualified Plan, a 5.4% single effective rate for the Supplemental Plan, a 3.875% single effective rate for the Senior Plan, and the PRI-2012 Blue Collar Mortality Tables for Annuitants and Employees, with the Social Security Administration—2021 Intermediate Cost Projections Mortality Improvement Scale.
(3)Amounts in this column assume that benefits are paid in the form of an annuity during the executive’s lifetime. The executive may instead elect payment of benefits under any of the available payment forms under these plans, including payments for the executive’s life (which we sometimes refer to as a “single life annuity”) or payments continuing after the executive’s death for the life of his or her spouse (which we refer to as a “joint and survivorship benefit”). Under the Qualified Plan and the Supplemental Plan, benefit payments are reduced from the single life annuity based on actuarial calculations if the executive elects a different payment form. The Senior Plan generally provides a 50% joint and survivorship benefit without any actuarial reduction, and also provides the executive with an additional amount equal to the amount of the actuarial reduction of benefits payable from the Qualified Plan and the Supplemental Plan for a 50% joint and survivorship benefit election. For the legacy DEPP benefits the qualified joint & survivor annuity for married participants is a 50% joint & survivorship benefit.
(4) All accrued benefits under the Supplemental Plan and Senior Plan were paid out in connection with the required payments made in 2015 to participants in connection with our October 2015 acquisition of the U.S. chlor alkali and vinyl, global chlorinated organics and global epoxy business of Dow (such acquisition, the Acquisition; such payments, the Required NQ Plan Payments). At the time of the Acquisition, Mr. Slater had not reached retirement age, so he has a residual benefit under these plans.
| Freeze of Qualified Plan, Supplemental Plan and Senior Plan | ||
As part of our ongoing evaluation of benefit plans, in 2005, we amended the Qualified Plan to close participation, so that salaried employees hired on or after January 1, 2005, are not eligible for the Qualified Plan. Benefits accrued by most salaried participants in the Qualified Plan, Supplemental Plan and Senior Plan were “frozen” effective December 31, 2007, and benefits for former Dow employees were assumed by the Qualified Plan and frozen on October 5, 2015, but continue to accrue interest. Participants accrued benefits until the applicable freeze date, which was based on applicable years of service and eligible compensation through that date. Service after the applicable freeze date will count toward meeting the eligibility requirements for commencing a pension benefit (including vesting and early retirement) under these plans, but not toward the calculation of the pension benefit amount. Compensation earned after the date the plan was frozen will similarly not count toward the determination of the pension benefit amounts under these plans.
As described above, previously accrued benefits under the Supplemental and Senior plans were required to be paid as part of the Required NQ Plan Payments in connection with the Acquisition. Mr. Slater, who was not yet retirement eligible at the time of the Acquisition, may become eligible upon early retirement for an early retirement benefit (offset by the value of the accrued benefit paid as part of the Required NQ Plan Payments). In addition, in connection with the Acquisition, the Qualified Plan is now responsible for certain Dow‑related frozen benefits described below for which the Qualified Plan received certain assets from the applicable Dow pension plans. We describe the terms of our retirement plans in more detail in the narrative discussion below.
| Qualified Plan | ||
As part of our benefits program, we offered a defined benefit retirement plan to salaried employees hired before January 1, 2005 through our Qualified Plan. Benefits under the Qualified Plan are calculated based on the average cash compensation (salary and annual incentive) for the highest three years out of the last 10 years the individual was employed by Olin, through December 31, 2007. The law requires that in determining eligible compensation, the Qualified Plan ignores compensation in excess of a legally‑imposed cap (which for 2007, the last year of benefit accruals, was $225,000). An employee’s benefit is generally 1.5% of his or her average compensation during the relevant period multiplied by the number of years of service, less a percentage of his or her primary Social Security benefit based on years of service (not to exceed 50% of such Social Security benefit). Participants who are at least age 55 with at least 10
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years of service when they leave Olin may elect to receive a benefit immediately that is reduced by 4% for each year the participant is younger than age 62 at the time benefit payments begin. Participants who leave Olin before age 55 (with 10 or more years of service) may elect to receive an actuarially reduced benefit with payments beginning at age 55 or later. Participants who leave Olin before age 65 with at least five years of service (but less than 10 years of service) receive a vested retirement benefit beginning the month after their 65th birthday. Benefits from the Qualified Plan generally are paid as an annuity with the form of payment (e.g. joint and survivorship benefit, guaranteed period, etc.) selected by the participant, subject to any applicable actuarial reductions. None of the NEOs other than Mr. Slater are eligible for this legacy Olin pension benefit; but, Mr. Dawson participated in the Pension Equity arrangement and Mr. Gumpel participates in the Cash Balance arrangement, as described below.
In conjunction with the Acquisition, the Qualified Plan assumed responsibility for certain Dow‑related frozen benefits. Specifically, nearly all frozen benefits transferred to the Qualified Plan are associated with two benefit formulae—Pension Equity and Cash Balance—eligibility for which is typically determined by the individual participant’s hire date at Dow. The Pension Equity benefit, in which Mr. Dawson participated, provides a frozen account balance that grows with interest until retirement (which can commence upon separation from Olin), at which time it is converted into a monthly pension benefit. The Cash Balance benefit, in which Mr. Gumpel participates, also provides a frozen account balance that grows with interest (at a different rate) until separation from Olin, at which point the participant can elect an immediate annuity, a deferred annuity or a lump sum.
In lieu of benefits that had been provided under the Qualified Plan, at the time participation was frozen in 2005, the CEOP was amended to add a Defined Contribution Retirement Account to help ensure that our benefits program would remain competitive. Depending on the participant’s age, we generally contribute 5% or 7.5% of eligible compensation to that Defined Contribution Retirement Account.
| Supplemental and Senior Plans | ||
The Supplemental and Senior Plans are frozen unfunded, nonqualified deferred compensation plans for select management employees and those at specified compensation levels.
The Supplemental Plan both restores benefits limited by the Code and provides benefits on certain compensation excluded from coverage under the Qualified Plan. The formula used to calculate pension benefits under the Supplemental Plan is the same as under the Qualified Plan, without the Code limitations on benefits and eligible compensation, reduced by the amount payable under the Qualified Plan. Early retirement benefits have similar eligibility and use the same reduction factors as the Qualified Plan.
Under the Senior Plan, participating employees who were Section 16(b) Officers selected by our committee prior to the freeze date receive pension benefits generally equal to 3% of the executive’s average eligible compensation (not subject to the Code and other Qualified Plan limits) multiplied by the number of years of participation in the Senior Plan, plus 1.5% of the executive’s average compensation for years of service in the Qualified Plan and Supplemental Plan, less years of service in the Senior Plan, reduced by the pension benefits accrued under the Qualified Plan and the Supplemental Plan. Senior Plan benefits are further reduced by 50% of the employee’s primary Social Security benefit. The Senior Plan provides a joint and survivorship benefit to an executive’s surviving spouse, generally equal to 50% of the executive’s benefits from the Senior Plan. In addition, the Senior Plan pension benefits are increased by the amount of the actuarial reduction to benefits under the Qualified and Supplemental Plans if the executive elects the 50% joint and survivorship option under those plans.
As noted above, previously accrued benefits in the Supplemental and Senior Plans were required to be paid to participants as part of the Required NQ Plan Payments in connection with the Acquisition. At the time of the Acquisition, Mr. Slater had not reached retirement age and so he has a residual benefit under these plans for his early retirement allowance. None of the other NEO’s participate in these plans.
| Nonqualified Deferred Compensation | ||
The following table sets forth information with respect to our Supplemental CEOP for each of our NEOs for 2022:
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| Name (a) | Executive Contributions in Last FY ($) (b)(1) | Registrant Contributions in Last FY ($) (c)(2) | Aggregate Earnings in Last FY ($) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (f) | |||||||||||||||||||||||||||
| Scott M. Sutton | $ | 53,200 | $ | 209,231 | $ | 3,382 | $ | — | $ | 346,348 | ||||||||||||||||||||||
| Todd A. Slater | $ | 34,500 | $ | 99,281 | $ | (84,862) | $ | — | $ | 1,447,514 | ||||||||||||||||||||||
| Dana C. O'Brien | $ | 17,700 | $ | 30,975 | $ | 261 | $ | — | $ | 48,936 | ||||||||||||||||||||||
| Damian Gumpel | $ | 17,150 | $ | 73,515 | $ | (15,504) | $ | — | $ | 376,047 | ||||||||||||||||||||||
| Patrick M. Schumacher | $ | — | $ | 18,375 | $ | 92 | $ | — | $ | 18,467 | ||||||||||||||||||||||
| Pat D. Dawson | $ | — | $ | 72,823 | $ | 178,878 | $ | (1,635,482) | $ | — | ||||||||||||||||||||||
_____________
(1)Amounts in this column are included in the executives’ salaries listed in column (c) of the Summary Compensation Table.
(2)Amounts in this column are included in the amounts listed in column (i) of the Summary Compensation Table and represent company matching contributions and retirement account contributions to the participants’ Supplemental CEOP.
In addition to our CEOP, discussed under the heading “What We Pay and Why: Elements of Compensation—Retirement Benefits,” our Supplemental CEOP provides deferral and company matching opportunities to employees eligible to participate in the CEOP whose contributions are limited under the Code because their base pay exceeds the Code’s compensation limit ($305,000 for 2022). These employees can make pre‑tax contributions to the Supplemental CEOP after their eligible compensation reaches the Code limit. For these purposes, eligible compensation generally includes base compensation but excludes incentive compensation. Employees who contribute to the Supplemental CEOP receive matching contribution credits from Olin at the same level Olin matches CEOP contributions. In addition, Olin provides the same retirement contribution credits to the Supplemental CEOP as under the CEOP (5% or 7.5%, depending on the employee’s age) on the amount of the excess eligible compensation. For these purposes, eligible compensation generally includes base compensation and short‑term incentive compensation but excludes long‑term incentive compensation.
Employees may elect to have their contributions to the Supplemental CEOP invested in phantom shares of Olin common stock or phantom units in an interest‑bearing fund. Dividends are credited to the phantom stock account based on the dividend rate paid on shares of our common stock. Interest is credited to the phantom interest‑bearing fund at a rate determined quarterly equal to (i) the Federal Reserve A1/P1 Composite rate for 90‑day commercial paper at the end of the last quarter plus 10 basis points, or (ii) such other rate as our board or committee (or any delegate thereof) selects in advance from time to time. Distributions are paid in cash, in a lump sum or in annual installments for up to 15 years after retirement, at the employee’s election. The shares of phantom stock are valued at the average daily closing price of our common stock on the NYSE for the month before the distribution. Distributions from the interest‑bearing fund equal the dollar value of the participant’s account (principal and interest). If a participant in the Supplemental CEOP is a specified employee as defined in Code Section 409A, benefit payments payable upon termination of employment generally may not be paid in the first six months after retirement.
| Potential Payments Upon Termination or Change in Control | ||
The following tables show estimated compensation payable to each NEO who was employed on December 31, 2022, upon various triggering events (assuming the event occurred on December 31, 2022). Mr. Dawson was not employed on December 31, 2022 due to his retirement on April 30, 2022. Under retirement provisions within our Executive Severance Plans, there were no potential payments due to Mr. Dawson in connection with his retirement. Actual amounts can only be determined upon the triggering event.
| Named Executive Officer | Quit/Early Retirement (2) | Termination by Olin Without Cause (3) | Termination by Olin for Cause (4) | Change in Control (5) | ||||||||||||||||||||||
Scott M. Sutton (1) | ||||||||||||||||||||||||||
| Compensation: | ||||||||||||||||||||||||||
| Severance (6) | $ | — | $ | 3,835,000 | N/A | $ | 8,735,000 | |||||||||||||||||||
| Equity Awards (7) | $ | 7,397,253 | $ | 33,867,254 | N/A | $ | 2,461,287 | |||||||||||||||||||
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| Acceleration of Unvested Equity Awards (8) | N/A | N/A | N/A | $ | 41,262,482 | |||||||||||||||||||||
| Benefits and Perquisites: (9) | ||||||||||||||||||||||||||
| Supplemental CEOP | $ | 346,348 | $ | 346,348 | $ | 346,348 | $ | 346,348 | ||||||||||||||||||
| Life Insurance Premiums | $ | — | $ | 1,968 | $ | — | $ | 5,904 | ||||||||||||||||||
| Outplacement Services | $ | — | $ | 40,000 | $ | — | $ | 40,000 | ||||||||||||||||||
| TOTAL | $ | 7,743,601 | $ | 38,090,570 | $ | 346,348 | $ | 52,851,021 | ||||||||||||||||||
Todd A. Slater (1) | ||||||||||||||||||||||||||
| Compensation: | ||||||||||||||||||||||||||
| Severance (6) | $ | — | $ | 1,750,000 | N/A | $ | 1,833,997 | |||||||||||||||||||
| Equity Awards (7) | $ | 19,341,697 | $ | 19,341,697 | N/A | $ | 18,256,692 | |||||||||||||||||||
| Acceleration of Unvested Equity Awards (8) | N/A | N/A | N/A | $ | 5,081,216 | |||||||||||||||||||||
| Benefits and Perquisites: (9) | ||||||||||||||||||||||||||
| Senior and Supplemental Plans (10) | $ | 58,451 | $ | 58,451 | $ | 44,594 | $ | 121,816 | ||||||||||||||||||
| Qualified Plan (10) | $ | 169,691 | $ | 169,691 | $ | 169,691 | $ | 169,691 | ||||||||||||||||||
| Supplemental CEOP | $ | 1,447,515 | $ | 1,447,515 | $ | 1,447,515 | $ | 1,447,515 | ||||||||||||||||||
| Life Insurance Premiums | $ | — | $ | 1,281 | $ | — | $ | 2,562 | ||||||||||||||||||
| Outplacement Services | $ | — | $ | 40,000 | $ | — | $ | 40,000 | ||||||||||||||||||
| TOTAL | $ | 21,017,354 | $ | 22,808,635 | $ | 1,661,800 | $ | 26,953,489 | ||||||||||||||||||
Dana C. O'Brien (1) | ||||||||||||||||||||||||||
| Compensation: | ||||||||||||||||||||||||||
| Severance (6) | $ | — | $ | 1,500,000 | N/A | $ | 2,462,946 | |||||||||||||||||||
| Equity Awards (7) | $ | 158,979 | $ | 158,979 | N/A | $ | — | |||||||||||||||||||
| Acceleration of Unvested Equity Awards (8) | N/A | N/A | N/A | $ | 551,522 | |||||||||||||||||||||
| Benefits and Perquisites: (9) | ||||||||||||||||||||||||||
| Supplemental CEOP | $ | 48,936 | $ | 48,936 | $ | 48,936 | $ | 48,936 | ||||||||||||||||||
| Life Insurance Premiums | $ | — | $ | 1,084 | $ | — | $ | 2,168 | ||||||||||||||||||
| Outplacement Services | $ | — | $ | 40,000 | $ | — | $ | 40,000 | ||||||||||||||||||
| TOTAL | $ | 207,915 | $ | 1,748,999 | $ | 48,936 | $ | 3,105,572 | ||||||||||||||||||
Damian Gumpel (1) | ||||||||||||||||||||||||||
| Compensation: | ||||||||||||||||||||||||||
| Severance (6) | $ | — | $ | 1,350,000 | N/A | $ | 2,300,000 | |||||||||||||||||||
| Equity Awards (7) | $ | 3,689,434 | $ | 3,689,434 | N/A | $ | 3,106,352 | |||||||||||||||||||
| Acceleration of Unvested Equity Awards (8) | N/A | N/A | N/A | $ | 2,982,234 | |||||||||||||||||||||
| Benefits and Perquisites: (9) | ||||||||||||||||||||||||||
| Qualified Plan (10) | $ | 51,547 | $ | 51,547 | $ | 51,547 | $ | 51,547 | ||||||||||||||||||
| Supplemental CEOP | $ | 376,047 | $ | 376,047 | $ | 376,047 | $ | 376,047 | ||||||||||||||||||
| Life Insurance Premiums | $ | — | $ | 1,084 | $ | — | $ | 2,168 | ||||||||||||||||||
| Outplacement Services | $ | — | $ | 40,000 | $ | — | $ | 40,000 | ||||||||||||||||||
| TOTAL | $ | 4,117,028 | $ | 5,508,112 | $ | 427,594 | $ | 8,858,348 | ||||||||||||||||||
Patrick M. Schumacher (1) | ||||||||||||||||||||||||||
| Compensation: | ||||||||||||||||||||||||||
| Severance (6) | $ | — | $ | 1,350,000 | N/A | $ | 1,758,725 | |||||||||||||||||||
| Equity Awards (7) | $ | 176,450 | $ | 176,450 | N/A | $ | — | |||||||||||||||||||
| Acceleration of Unvested Equity Awards (8) | N/A | N/A | N/A | $ | 612,214 | |||||||||||||||||||||
| Benefits and Perquisites: (9) | ||||||||||||||||||||||||||
| Supplemental CEOP | $ | 18,467 | $ | 18,467 | $ | 18,467 | $ | 18,467 | ||||||||||||||||||
| Life Insurance Premiums | $ | — | $ | 994 | $ | — | $ | 1,988 | ||||||||||||||||||
| Outplacement Services | $ | — | $ | 40,000 | $ | — | $ | 40,000 | ||||||||||||||||||
| TOTAL | $ | 194,917 | $ | 1,585,911 | $ | 18,467 | $ | 2,431,394 | ||||||||||||||||||
____________________
(1)Amounts in the tables assume an annual salary at the level in effect on December 31, 2022.
(2)Mr. Slater is not yet eligible for normal retirement but is eligible for early retirement and amounts reported under the “Quit/Early Retirement” column reflect amounts he would receive upon early retirement. Mr. Gumpel is eligible to receive benefits based on his account balances at termination, so all amounts reflect immediate commencement of benefits. Messrs. Sutton and Schumacher and Ms. O’Brien are not eligible to receive benefits under the Qualified Plan.
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(3)As of December 31, 2022, under the Plans then in effect, an executive whose employment terminates in connection with the sale of a business unit generally receives the benefits in this column, except that the executive’s stock options may be exercised for two years beyond the date of the termination (rather than one year), unless the employee is eligible for retirement in which case the executive’s stock options would be exercisable through the original term of the option.
(4)Olin generally may terminate an executive for “cause” if the executive (i) willfully fails to perform his or her duties; (ii) engages in gross misconduct that significantly injures Olin financially; (iii) commits a felony or fraud in the course of his or her employment; or (iv) willfully breaches Olin’s Code of Conduct.
(5)Amounts for Messrs. Slater and Schumacher and Ms. O’Brien represent the amounts they would receive on the “best net after-tax” payment approach contemplated by the Olin Corporation Change in Control Severance Plan for Section 16(b) Officers (CIC Severance Plan) described in more detail below. Without the reduction, the amounts for Messrs. Slater and Schumacher and Ms. O’Brien would have increased by $1,116,003, $541,275, and $87,054, respectively. A portion of the amounts for Messrs. Slater and Schumacher and Ms. O’Brien constitute “excess parachute payments” under Section 280G of the Code, subject to a 20% excise tax payable by the officer. Benefits listed for the Senior Plan and Supplemental Plan (collectively, the “defined benefit plans”) and the Supplemental CEOP would be payable immediately upon a change in control (as defined under these plans). However, because our NEOs are specified employees as defined in Code Section 409A, benefits may not be paid in the first six months after retirement but will be paid in a lump sum as soon as practicable thereafter. The benefits reported represent the present value of the benefits under the defined benefit plans on December 31, 2022 and the market value of the phantom investments in the Supplemental CEOP account. Footnote 8 describes the treatment of equity awards upon a change in control.
(6)For our NEOs, severance payments for a termination without “cause” equal salary plus the participant’s target bonus opportunity under the STIP. For terminations occurring during or after the second quarter of the calendar year of the qualifying termination, the participant will be entitled to receive a payout of their current year bonus, determined by multiplying the average actual payout (as a percentage of the annual STIP target) for all participants in the STIP in the same organization unit by a fraction, the numerator of which is the number of full weeks in the calendar year prior to the qualifying termination and the denominator of which is 52. In the event of a change in control, our NEOs’ severance payments would be determined in the same manner as described above, except that under the CIC Severance Plan, Mr. Sutton would receive three times the calculated severance value and the other NEOs would receive a multiple of two times the calculated severance value.
(7)For performance shares vested as of December 31, 2022, but not paid as of that date, the amount of the vested performance share award is included. All unvested performance shares vest on a change in control and are paid in cash at the target level. An executive whose employment terminates for “cause” or without our consent does not receive any unvested performance share awards. Generally, we have assumed payouts at the target amount of unvested performance shares. For Mr. Sutton, the value in the column labeled “Termination by Olin without Cause” also includes the maximum aggregate payout of unvested performance shares based on actual achievement of the performance metrics applicable to his performance share awards as of December 31, 2022. Under the performance share program, an executive whose employment terminates as the result of disability or retirement receives a pro rata share of unvested performance share awards (based on actual Olin performance for the full performance period and the number of months worked in the performance cycle) payable in cash at the time it would otherwise be payable. In the event of an executive’s death before performance shares have vested, his or her estate receives a pro rata share of his target award in cash. Our committee determines the amount, if any, of unvested performance awards to be paid and the form of payment (cash or stock or a combination) for an executive whose employment terminates for any other reason. Upon the executive’s death, all unvested options vest automatically and his or her estate or heirs could exercise those options within the term of the option.
(8)Amounts in this line represent a cash payout of all stock options and performance shares that were not vested as of December 31, 2022. Under equity plans and severance plans (a) all performance share awards vest at target level and are paid upon a change in control (as defined for these awards), and (b) all restricted stock awards and options remain outstanding and accelerate and vest upon a change in control only if the acquirer does not assume or replace those equity awards or there is a termination of employment without “cause” or a constructive termination within three years after the change in control. Constructive termination occurs when the executive terminates his or her employment (after appropriate notice and an opportunity to cure) because (i) the executive is required to relocate by more than fifty miles; (ii) the executive’s salary is reduced or is not increased on a basis consistent with the salary system for executive officers in place before the change in control; (iii) the employer fails to maintain the executive’s incentive compensation plans or health, welfare and retirement plans on substantially the terms in effect
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prior to the change in control; or (iv) the executive is assigned duties inconsistent with the executive’s position prior to the change in control, or (v) the employer takes actions that result in a diminution of the executive’s responsibilities or a substantial reduction in resources to carry out his duties.
(9)Accrued unused vacation for the current year is paid to all salaried employees who leave Olin and is therefore not included in this table. Medical benefits are provided to all salaried employees hired prior to November 23, 2009, who are eligible for early retirement. Under our severance policy, Mr. Sutton and our other NEOs would be eligible for healthcare coverage while receiving severance payments in the event of a termination without “cause.” In the event of a change in control, Mr. Sutton would be eligible for healthcare coverage for 36 months at an estimated cost of $52,000 and our other NEOs would be eligible for healthcare coverage for 24 months at an estimated cost of $35,000.
(10)An executive may elect payment of benefits in any of the available payment forms under the defined benefit plans. Under the Supplemental Plan applicable only to Mr. Slater and the Qualified Plan, benefit payments are reduced on an actuarial basis, if the executive elects a form of payment other than a lifetime annuity. The Qualified Plan and Supplemental Plan benefits above assume payment in the form of a joint and survivorship benefit. The executive may also elect to receive benefits from the Senior Plan and the Supplemental Plan in the form of a lump sum. Any amount payable upon termination of employment is paid six months after termination to comply with Code limitations. Except with respect to a change in control, the benefits reported for the Senior Plan and Supplemental Plan include six months of payments in recognition of the deferral of the commencement of benefits required by Code Section 409A.
In the event of a change in control, each executive participating in the relevant plan receives a cash payment in an amount equal to the cost to purchase an annuity that pays benefits to the executive in an amount such that the annuity payments (together with the monthly payment to the executive from the Qualified Plan) provide the executive with the monthly after tax benefit he or she would have received under the plans. The amounts in the table represent this lump sum cash payment. As noted above, Messrs. Sutton and Schumacher and Ms. O’Brien are not eligible to participate in these Plans.
The benefit amounts reported in each of the columns above assume a 50% joint and survivorship benefit. If the participating executive instead elects annual payments for his or her lifetime, he or she would receive an annual amount from each of the defined benefit pension plans as follows:
| Annual Payments Assuming Election for Life of Executive | |||||||||||||||||||||||||||||
Quit/Early Retirement (2) | Normal Retirement | Termination Without Cause (3) | Termination for Cause (4) | Change in Control (5) | |||||||||||||||||||||||||
Todd A. Slater | |||||||||||||||||||||||||||||
| Qualified Plan | $ | 14,680 | $ | 14,680 | $ | 12,866 | $ | 14,680 | $ | 12,866 | |||||||||||||||||||
| Supplemental Plan | $ | 2,826 | $ | — | $ | 2,826 | $ | 2,826 | $ | 2,826 | |||||||||||||||||||
| Senior Plan | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Damian Gumpel | |||||||||||||||||||||||||||||
| Qualified Plan | $ | 3,529 | $ | 10,672 | $ | 3,529 | $ | 3,529 | $ | 3,529 | |||||||||||||||||||
| Payments Upon Disability | ||
If the employment of a NEO terminates in connection with a disability, the NEO would receive disability benefits equal to 60% of salary until the executive is no longer disabled or elects to take early retirement or reaches the age of 65 (except in the case of an employee who is over age 61 at the time the disability occurs). If the disability occurs after age 61, the maximum benefit duration extends from 12-60 months depending on the executive’s age. All NEOs have elected the 60% level of coverage.
| Executive Severance Plans | ||
Executive Severance Plans. We have two Executive Severance Plans, both of which cover any officer of Olin who is subject to the reporting rules under Section 16 of the Exchange Act, including all of our NEOs: the Olin Corporation Severance Plan for Section 16(b) Officers (Severance Plan) and the Olin Corporation Change in Control Severance Plan
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for Section 16(b) Officers (CIC Severance Plan). We refer to the Severance Plan and CIC Severance Plan as the Executive Severance Plans.
The Severance Plan provides payments and benefits to our NEOs and other covered executives in the event of certain qualifying terminations of their employment (other than in connection with a change in control of Olin) and the CIC Severance Plan provides payments and benefits to the covered executives in the event of certain qualifying terminations of their employment following a change in control of Olin.
Under the Severance Plan, if the executive’s employment is terminated by Olin without “cause” (other than in connection with a change in control of Olin), the executive will receive, in lieu of severance benefits under any other Olin severance plans or programs:
(1)an amount equal to the sum of (i) the executive’s annual salary and (ii) the executive’s target annual cash incentive opportunity for the year of termination, payable in twelve equal monthly installments;
(2)if the termination occurs in the last three quarters of the year, a pro-rated annual cash incentive payment for the year of termination based on Olin’s actual performance and payable at such time such incentive payments are payable to other employees of Olin;
(3)the continuation of medical, dental and life insurance benefits for the executive and his or her dependents for a period of twelve months at active employee rates under the applicable Olin plans or programs; and
(4)outplacement services for a period of up to twelve months.
Payments and benefits under the CIC Severance Plan are “double trigger”, which means they are paid only if (i) there is a change in control of Olin and (ii) the executive’s employment is terminated by Olin without “cause” or the executive resigns for “good reason,” in either case, upon or within two years following the change in control. If this occurs, the executive will receive, in lieu of severance benefits under any other Olin severance plans or programs:
(1)an amount equal to two times (or three times in the case of Mr. Sutton) the sum of (i) the executive’s annual salary and (ii) the executive’s target annual cash incentive opportunity for the year of termination, payable in a lump sum;
(2)if the termination occurs in the last three quarters of the year, a pro-rated annual cash incentive payment for the year of termination based on the executive’s target annual cash incentive opportunity for the year of termination, payable in a lump sum;
(3)the continuation of medical, dental and life insurance benefits for the executive and his or her dependents for a period of twenty-four months (or thirty-six months in the case of Mr. Sutton) at active employee rates under the applicable Olin plans or programs; and
(4)outplacement services for a period of up to twelve months.
Such severance payments and benefits under the Executive Severance Plans are not available if the executive’s employment is terminated for “cause” by Olin or terminates due to death or “disability”. Except as provided under the CIC Severance Plan for resignations due to “good reason,” an executive is not eligible for severance payments and benefits due to voluntary termination of employment by the executive.
The provisions of our equity plans similarly require a “double trigger” (change in control and termination without “cause” or for “good reason” within two years of the change in control) for early vesting of all equity awards, other than performance shares and awards the acquirer fails to assume or replace. Performance shares vest automatically upon a change in control with or without a termination of employment and are paid at target levels. If the other equity awards (options and restricted stock awards) are not assumed by the acquirer or replaced with equivalent benefits, these equity awards also vest upon the change in control, with or without termination of employment.
The Executive Severance Plans contain an extensive definition of “change in control”, but generally a change in control occurs if:
(1)a person or entity acquires beneficial ownership (as defined in the Exchange Act) of 20% or more of our common stock unless (a) the acquiring party is Olin, our subsidiaries or our benefit plans, an underwriter
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holding the shares temporarily for an offering, or a group that includes the executive who is a participant in the CIC severance plan or an entity that such executive controls, (b) the percentage increase occurs solely because the total number of shares outstanding is reduced by Olin repurchasing its stock or (c) the acquisition is directly from Olin;
(2)a majority of our board members change (other than new members elected or nominated by at least 2/3 of the then-current board, unless such new member became a director pursuant to an actual or threatened proxy contest or similar dispute);
(3)we (or any of our subsidiaries) sell all or substantially all assets, or merge or engage in a similar transaction, unless, immediately following such transaction, (a) our shareholders own a majority of the voting interest of Olin or its successor (in approximately the same ratios as before the transaction) and (b) neither of the events described in items (1) or (2) above has occurred for Olin or its successor; provided that a transaction that would otherwise constitute a change in control under this item (3) will not be considered a change in control if: (i) at least a majority of our board members immediately before the transaction remain as board members after the transaction, (ii) at least 75% of our executive officers immediately before the transaction remain as executive officers after the transaction, and our board members at the time of approval of the transaction determine in good faith that such executive officers are expected to remain as executive officers for a significant period after the transaction, and (iii) 2/3 of such board members determine that the transaction shall not be deemed to be a change in control; or
(4)our shareholders approve a plan of complete liquidation or dissolution of Olin.
All payments and other benefits under the Executive Severance Plans are subject to the executive’s execution and non-revocation of, and continued compliance with, a separation release agreement. The separation release agreement includes a general release of all claims against Olin and the executive’s compliance with restrictive covenants provided under the Executive Severance Plans, including ongoing non-disparagement requirements with respect to Olin and certain non-competition and non-solicitation covenants during the executive’s severance period. The executive, regardless of the circumstances of the executive’s termination of employment, would also be prohibited from disclosing our trade secrets and other confidential information.
If payments and benefits under the CIC Severance Plan to an executive would constitute an “excess parachute payment” under Code Section 280G and subject the executive to golden parachute excise taxes under Code Section 4999, the CIC Severance Plan utilizes a “best net after-tax” payment approach which reduces the executive’s payments and benefits to an amount that results in the greatest after-tax benefit for the executive, taking into account any such excise tax and any applicable federal, state and local taxes. The Executive Severance Plans and our equity plans do not provide for any excise tax gross-up benefit to any executive.
| Treatment of Equity Awards Under Plans | ||
Retirement. When an employee retires:
•vested stock options may be exercised for the remaining option term;
•vested but unpaid performance shares will be paid as specified in the performance share program; and
•the retired employee receives a pro rata payout in cash of any unvested performance share award at such time it would otherwise be paid.
Our committee has discretion to waive vesting periods for stock options, restricted stock and restricted stock units.
Change in Control. As noted above, our various equity plans provide that options and restricted stock awards vest upon a change in control (as defined in the Executive Severance Plans) only if there is also a termination of employment or constructive termination, or the acquiring company fails to assume these awards or substitute equivalent awards. Outstanding performance shares vest and are paid upon a change in control. The plans do not include excise tax gross-up provisions.
| Pension Plans | ||
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Qualified Plan. The Qualified Plan provides that if, within three years after a change in control (as defined in the Qualified Plan), any corporate action is taken or filing made in contemplation of events such as a plan termination or merger or other transfer of assets or liabilities of the plan, and such event later takes place, plan benefits automatically increase to absorb any surplus plan assets. Under the Qualified Plan, a change in control occurs if:
•a person or entity acquires control of 20% or more of our common stock;
•a majority of our board members change in a two-year period (other than new members nominated by at least 2/3 of the then-current board);
•all or substantially all of our business is sold through a merger or other transaction unless Olin is the surviving corporation or our shareholders own a majority of the voting interest of the new company; or
•our shareholders approve a sale of all or substantially all of our assets or the dissolution of Olin.
Supplemental Plan and Senior Plan. In the event of a change in control (defined in a manner compliant with Code Section 409A), we must pay a cash amount sufficient to purchase an annuity that provides the monthly after tax benefit the employee would have received under the Supplemental Plan and the Senior Plan. Those payments would be based on benefits accrued as of the change in control. Benefits were frozen at the end of 2007, although continued employment counts toward years of service for vesting and early retirement eligibility. As described above, payments of amounts accrued through October 5, 2015, were made under these two plans in 2015, and only a residual benefit for an early retirement allowance for Mr. Slater remains payable in the future.
DIRECTOR COMPENSATION
In 2022, our compensation package for non-employee directors consisted of:
•an annual retainer of $140,000, of which at least $40,000 must be taken in shares of common stock or, at the director’s election, credited as phantom stock units in the director’s deferred stock account;
•phantom stock units with an aggregate fair market value equal to $115,000 on the valuation date, rounded to the nearest 100 shares which are credited to the director’s deferred stock account;
•a $30,000 annual cash fee for the Lead Director;
•a $15,000 annual cash fee for the chairs of the Directors and Corporate Governance Committee, a $20,000 annual fee for the chair of the Compensation Committee, and a $25,000 annual fee for the chair of the Audit Committee;
•participation in a charitable gift program, where we make a 50% matching contribution (up to a total of $5,000 per year) for the director’s gifts to charities that meet the requirements of Code Section 501(c)(3); and
Fair market value for determining the number of shares included in all phantom stock unit and common stock awards described above is equal to the average of the high and low sales price of our common stock on May 1 of the applicable year or the first day in May on which the NYSE is open for trading.
Each of Olin’s non-employee directors participates in the Directors Plan, under which the common stock and phantom stock unit amounts are paid. In addition to the phantom stock units which must be deferred, a director may elect to defer other portions of his or her compensation (cash and/or shares of common stock) as phantom stock units.
The following table shows all cash, stock retainers and compensation earned or received at the director’s election in the form of common stock or phantom stock units, and other compensation earned or paid to each of our non-employee directors during 2022. Each of the directors listed below served for the entire year except for Mr. Ferguson who resigned from our Board on November 9, 2022.
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Name (a) | Fees Earned or Paid in Cash (1) ($) (b) | Stock Awards (2) ($) (c) | All Other Compensation (3) ($) (d) | Total ($) (e) | ||||||||||||||||||||||
| Heidi S. Alderman | $ | 100,000 | $ | 157,927 | $ | — | $ | 257,927 | ||||||||||||||||||
| Beverley A. Babcock | $ | 125,000 | $ | 157,927 | $ | 2,500 | $ | 285,427 | ||||||||||||||||||
| C. Robert Bunch | $ | 120,081 | $ | 157,927 | $ | 5,000 | $ | 283,008 | ||||||||||||||||||
| Matthew S. Darnall | $ | 100,038 | $ | 157,927 | $ | — | $ | 257,965 | ||||||||||||||||||
| Scott D. Ferguson | $ | 100,000 | $ | 117,900 | $ | — | $ | 217,900 | ||||||||||||||||||
| Earl L. Shipp | $ | 100,000 | $ | 157,927 | $ | — | $ | 257,927 | ||||||||||||||||||
| William H. Weideman | $ | 130,000 | $ | 157,927 | $ | — | $ | 287,927 | ||||||||||||||||||
| W. Anthony Will | $ | 100,038 | $ | 157,927 | $ | — | $ | 257,965 | ||||||||||||||||||
| Carol A. Williams | $ | 115,000 | $ | 157,927 | $ | 5,000 | $ | 277,927 | ||||||||||||||||||
____________________
(1)In 2022, Messrs. Bunch, Darnall, and Will elected to receive all or a portion of their compensation in common stock and/or deferred phantom stock units credited to their respective deferred stock accounts under the Directors Plan. The fair value of their compensation received in the form of common stock or phantom stock units is included in this column calculated in accordance with ASC Topic 718. Mr. Bunch elected to receive his $100,000 annual cash retainer and his $20,000 Compensation Committee chair fee in common stock; and Messrs. Darnall and Will, elected to defer all of their compensation as phantom stock units in their respective deferred stock accounts.
(2)This column represents the grant date fair value of 2022 stock awards to directors calculated in accordance with ASC Topic 718. Mr. Ferguson waived the $40,000 annual retainer stock grant.
(3)Consists of amounts we contributed in 2022 to charities on behalf of directors under our matching charitable gifts program available to all employees and directors, as follows:
| Name | Charitable Gift Matching Contributions | |||||||
| Beverley A. Babcock | $ | 2,500 | ||||||
| C. Robert Bunch | $ | 5,000 | ||||||
| Carol A. Williams | $ | 5,000 | ||||||
The Compensation Committee of our Board is responsible for reviewing and establishing the compensation of our non-employee directors that is externally competitive and designed to align the interests of the directors with our shareholders. In discharging this responsibility, the Compensation Committee considers recommendations from Exequity. All stock-based compensation for our directors is governed by the Directors Plan. The annual stock grant, retainer stock grant and cash retainer are paid for the 12-month period running from May 1 to April 30, with payments made on or about May 1 or the first day in May on which the NYSE is open for trading.
Under the Directors Plan, directors may choose to receive common stock instead of cash for any portion of their compensation. Directors may also elect to defer payments (cash or stock). We credit their deferred accounts with quarterly interest (on the cash portion) and with dividend equivalents (on the phantom stock portion). Phantom stock units are paid out in shares of our common stock or, at the director’s election, in cash upon the director leaving our Board, or at one or more later dates selected by the director. We also pay the balance of any deferred account to the director if there is a change in control—generally if:
•a person or group acquires 40% or more of our assets, 30% or more of our stock, or a majority of the market value or voting power of our stock, or
•a majority of our board members are not endorsed by the directors in office at the time of election.
We have stock ownership guidelines for our non-employee directors where each such director is expected to own shares of our common stock with a market value of at least five times the amount of the annual retainer, within five years
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after the director joins our board. With the exception of Mr. Darnall, who joined our Board on September 30, 2021, all of our other current non-employee directors met these guidelines and are in compliance with these guidelines as of the date of this Proxy Statement.
COMPENSATION COMMITTEE REPORT
The compensation committee has reviewed and discussed the Compensation Discussion and Analysis with management and, based on the review and discussions, recommends that it be included in Olin’s 2022 annual report on Form 10-K and Proxy Statement for the 2023 annual meeting of shareholders.
C. Robert Bunch, Chairman Heidi S. Alderman W. Anthony Will | |||||
| February 22, 2023 | |||||
PAY RATIO DISCLOSURE
As required by applicable law and SEC regulation, we calculated a reasonable estimate of the ratio of the combined annual total compensation of Scott M. Sutton, our Chairman, President and CEO, compared to that of our median employee in 2022.
Based on the information described below, for 2022, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 122 to 1. | ||
We identified our median employee for the 2022 pay ratio analysis using the methodology and the material assumptions, adjustments, and estimates described below.
Employee Population and Compensation
As of December 31, 2022, our global employee population consisted of 7,873 individuals working at Olin and its consolidated subsidiaries. This includes 6,647 United States (U.S.) employees.
Given the geographical distribution of our employee population, we use a variety of pay elements to structure the compensation arrangements of our employees.
•Salary and overtime pay—the fixed portion of compensation, paid without regard to financial or operational performance.
•Short-term incentive/variable compensation plans—the variable portion of compensation, paid with regard to financial, operational, and individual performance.
•Other benefit programs, such as health insurance and retirement plan contributions, depending on the practices and laws of the country of employment, and for certain employees, equity awards.
Adjustment and Assumptions
In determining the median employee in 2022, we applied the allowed “de minimis” exception to exclude 377 employees in the following countries: China (137); Brazil (116); South Korea (35); Australia (28); Netherlands (20); Mexico (10); Japan (7); Hong Kong (5); Taiwan (5); Russia (3); Singapore (3); Thailand (3); India (3); Denmark (1); and Turkey (1). If we excluded any employees from a country using this de minimis exception, all employees from that country were excluded.
We selected gross earnings (unreduced by any pre-tax medical or other benefits in the U.S.) as the appropriate measure of compensation and applied the same measure for employees in non-U.S. countries. This approach allowed us to include all elements of compensation while simplifying the process of gathering the relevant information. It also allowed us to reasonably compare compensation for North American employees and that of employees in multiple international locations. We obtained the information for our non-North American-based employees from information maintained by a third party payroll processing provider in each country.
We considered gross earnings for all of our employees (other than those non-U.S. employees excluded under the
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“de minimis” exemption described above), during the 12-month period ended December 31, 2022—our fiscal year. We did not make cost-of-living adjustments and did not annualize compensation of employees hired during 2022.
In calculating employee compensation of non-U.S. employees, we averaged the month-end exchange rates for each month in 2022 and applied this average exchange rate to the relevant foreign currencies to convert compensation to U.S. dollars.
Median Employee
Using the methodology described, we determined that the “median employee” for the 12-month period ended December 31, 2022, was a full-time, hourly Machine Adjuster in the Winchester division, working in the U.S. As noted above, we used 2022 gross earnings to identify this employee as our median employee.
For the 12-month period ended December 31, 2022, the median employee had gross earnings (wages and overtime pay) of approximately $81,423. We determined the annual total compensation of this “median employee” by calculating the elements of 2022 compensation in accordance with the requirements that apply to the Summary Compensation Table for our NEOs on page 38. This resulted in annual total compensation of $87,876.
For the annual total compensation of our CEO, we used the amount reported in the “Total” column (column (j)) of our Summary Compensation Table on page 38.
PAY VERSUS PERFORMANCE
The following table shows the total compensation for our NEOs as set forth in the Summary Compensation Table (SCT), the compensation actually paid (CAP) to our NEOs, Olin’s total shareholder return (TSR), the TSR of our peer group, our Net Income (Loss), and our Adjusted EBITDA . The CAP is calculated in accordance with Item 402(v) of Regulation S-K and is subject the adjustments contained therein which may differ materially from our NEOs cash compensation as paid by Olin. Dollar amounts in the table below for Net Income (Loss) and Adjusted EBITDA are shown in millions.
| Year | SCT Total for First CEO (1) ($) | SCT Total for Second CEO (1) ($) | Average SCT Total for Other NEOs (2) ($) | CAP to First CEO (3) ($) | CAP to Second CEO (3) ($) | Average CAP to Other NEOs (3) (4) ($) | TSR (5) ($) | Peer Group TSR (5) ($) | Net Income (Loss) ($ in millions) | Adjusted EBITDA ($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | $ | N/A | $ | $ | N/A | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | $ | N/A | $ | $ | N/A | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
___________________
(1)Our First CEO for the years presented represents Mr. Sutton. Mr. Sutton became President and CEO of Olin on September 1, 2020. Our Second CEO represents John E. Fischer who was Chairman, President, and CEO prior to Mr. Sutton.
(2)The Other NEOs for each applicable year are as follows:
2022: Todd A. Slater, Dana C. O’Brien, Patrick M. Schumacher, Damian Gumpel, and Pat D. Dawson
2021: Todd A. Slater, Pat D. Dawson, James A. Varilek, and Damian Gumpel
2020: Todd A. Slater, Pat D. Dawson, James A. Varilek, and Brett A. Flaugher
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(3)The following adjustments were made to the SCT total in order to calculate CAP. Amounts presented for Other NEOs reflect an average for the Other NEOs for that applicable year:
| Pension Adjustments | Equity Award Adjustments (i) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year | Executives | SCT Total ($) | Deduct Change in Pension Value and Nonqualified Deferred Compensation Earnings from SCT ($) | Deduct Stock Awards from SCT ($) | Deduct Option Awards from SCT ($) | Add Year End Value of Awards Granted in Current Year ($) | Add Change in Value of Awards Granted in Prior Years ($) | Add Change in Value of Awards Granted in Prior Years which Vested in Current Year ($) | Deduct Awards Which Failed to Meet Vesting Conditions (4) ($) | Add Accrued Dividends and Interest ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | First CEO | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other NEOs | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | First CEO | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other NEOs | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | First CEO | $ | $ | $ | ( | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Second CEO | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other NEOs | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
(i)Our valuation assumptions used to calculate the fair value of equity awards reflect changes in our stock price and related volatility, changes to the length of the awards solely due to the passage of time, and updates to market driven assumptions such as the risk-free interest rate.
(4)CAP for 2022 reflects the retirement of Mr. Dawson effective April 30, 2022 which resulted in the cancellation of his outstanding and unvested stock option awards and pro-ration of his outstanding and unvested performance share awards. Excluding the impact of Mr. Dawson’s retirement, the Average CAP in 2022 would have been $2,033,866.
(5)TSR is determined based on the value of an initial fixed investment of $100. Our peer group reflects the performance of the S&P 1500 Commodity Chemicals Index.
Relationship Between Compensation Actually Paid and Performance Measures
The table above displays a high correlation between compensation actually paid to our NEOs (as adjusted for continuing NEOs) and Olin’s performance, which is consistent with our compensation philosophy described in our Compensation Discussion and Analysis on page 28. As shown above, Olin’s cumulative TSR has exceeded the cumulative peer group TSR during the past three years. Compensation actually paid to our NEOs (as adjusted for continuing NEOs) tracks closely with TSR and moves directionally with our performance indicating the strong relationship between the two metrics. Compensation actually paid also directionally reflects changes in our net income and Adjusted EBITDA; during the years when Olin’s performance increased, so did our compensation actually paid and vice versa.
Required Tabular Disclosure of Most Important Measures to Determine Compensation Actually Paid
| Most Important Performance Measures | ||
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ITEM 2—PROPOSAL TO CONDUCT AN ADVISORY VOTE TO
APPROVE THE COMPENSATION FOR NAMED EXECUTIVE OFFICERS
Following the advisory vote on the frequency of a shareholder vote on executive compensation at our 2017 annual meeting, our Board decided to continue with the annual advisory vote by shareholders to approve the compensation for our NEOs.
You are being asked to cast an advisory vote on approval of the compensation of our NEOs at the 2023 annual meeting. This proposal, commonly known as a “say-on-pay” proposal, is required under Section 14A of the Exchange Act. The proposal gives you the opportunity, on an advisory vote basis, to approve or not approve the compensation of our NEOs through the following resolution:
“RESOLVED, that the compensation paid to the Olin named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative disclosure set forth in the proxy statement for Olin’s 2023 annual meeting, is hereby APPROVED.”
Because your vote is advisory, it will not be binding on our Board and it will not directly affect or otherwise limit any existing compensation or award arrangement of any of our NEOs. Our Compensation Committee does intend to take into account the outcome of the vote when considering future executive compensation arrangements.
| Vote Required for Approval | ||
Approval of this proposal requires that more votes be cast FOR this proposal than are cast AGAINST this proposal. Abstentions and broker non-votes, if any, will not be included in determining the number of votes cast on this proposal and will not have any effect on the result of the vote.
Our Board recommends a vote FOR approval of this resolution.
ITEM 3—PROPOSAL TO CONDUCT AN ADVISORY VOTE ON THE FREQUENCY OF A SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION
As required under Section 14A of the Exchange Act, in addition to the advisory “say-on-pay” vote (Item 2 above), we are asking shareholders whether they would prefer to hold that advisory vote every year, every two years or every three years.
This proposal gives you the opportunity to inform us as to how often you wish Olin to include a proposal on executive compensation (similar to the proposal in Item 2), in this proxy statement. The final vote will not be binding on us and is advisory in nature.
“RESOLVED, that the shareholders wish Olin to include an advisory vote on the compensation of Olin’s named executive officers pursuant to Section 14A of the Securities Exchange Act every:
☐ one year
☐ two years
☐ three years
☐ abstain.”
| Vote Required for Approval | ||
The voting frequency (that is, every one year, two years, or three years) receiving the greatest number of votes
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cast will be the frequency recommended, on an advisory basis, by the shareholders. Abstentions and broker non-votes will not be counted as votes cast and thus will not have any effect on the result of the vote.
Our Board recommends that you vote to hold an advisory vote on executive compensation every year.
ITEM 4—PROPOSAL TO RATIFY THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG was our independent registered public accounting firm for 2022 and 2021. A summary of the KPMG fees by year follows:
| Fees ($ in thousands) | ||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
| Nature of Service | $ | % | $ | % | ||||||||||||||||||||||
| Audit Fees (1) | $4,160 | 100% | $3,980 | 100% | ||||||||||||||||||||||
| Audit Related Fees | — | — | — | — | ||||||||||||||||||||||
| Tax Fees | ||||||||||||||||||||||||||
| Tax Compliance | — | — | — | — | ||||||||||||||||||||||
| Tax Consultation and Planning | — | — | — | — | ||||||||||||||||||||||
| All Other Fees | — | — | — | — | ||||||||||||||||||||||
| $4,160 | 100% | $3,980 | 100% | |||||||||||||||||||||||
____________________
(1)Includes costs associated with the annual audit, including quarterly financial reviews, services required under Section 404 of the Sarbanes-Oxley Act, statutory audits, comfort letters, attest services, consents.
Our Audit Committee has a policy that all audit services by any independent registered public accounting firm and all non-audit services performed by our independent registered public accounting firm are subject to pre-approval by our Audit Committee. The policy includes specific procedures for approval of such services. Excerpts from this policy follow:
Olin’s Audit Committee is solely responsible for pre-approving all audit services by any independent registered public accounting firm and all non-audit services performed by Olin’s independent registered public accounting firm. The process for such approval is as follows:
•The annual budget for all such services will be submitted to our Committee for approval in the first quarter of each year. The budget submission will include details of actual expenditures for each audit and non-audit service for the prior year versus the prior year budget and estimated spending for services in the current year. The budget will also provide for certain specific services that will be pre-approved within a limited dollar range per service. These pre-approved services are also subject to an annual spending cap.
•At each subsequent Audit Committee meeting, the budget will be updated for changes in estimated spending involving previously approved services. The budget will also be updated to include any new services identified by operations management that need to be submitted for approval.
•Any services not detailed in the budget or on the list of specific pre-approved services must be approved by our Committee. In the event that approval is needed for a service in advance of a regularly scheduled Audit Committee meeting, our Committee chair is authorized to approve the service and report such approval to the other Committee members at the next regularly scheduled Committee meeting.
In 2022, our Audit Committee pre-approved all audit and non-audit services.
Who has our Audit Committee selected as Olin’s independent registered public accounting firm for 2023?
Olin’s Audit Committee is solely responsible for hiring and compensating Olin’s independent registered public accounting firm. After considering KPMG’s 2022 performance and the fees proposed for their preliminary audit plan for 2023, our Committee has selected KPMG as our independent registered public accounting firm for 2023.
Is a shareholder vote required to approve Olin’s independent registered public accounting firm?
Neither Virginia law nor Olin’s Bylaws require Olin to submit this matter to the shareholders at our annual meeting.
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However, our Board and Audit Committee chose to submit it to the shareholders to ascertain their views.
Will I have an opportunity to hear from KPMG and ask them questions?
We expect representatives of KPMG to be present at our annual meeting. They will have an opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.
| Vote Required for Ratification | ||
To ratify the appointment of KPMG as Olin’s independent registered public accounting firm for 2023 the votes cast FOR this proposal must exceed the votes cast AGAINST this proposal. Abstentions and broker non-votes, if any, will not be included in determining the number of votes cast on this proposal and will not have any effect on the result of the vote.
If the shareholders’ ratification vote does not support our Audit Committee’s decision to appoint KPMG as Olin’s independent registered public accounting firm for 2023, our Audit Committee will take the vote into consideration in making next year’s selection.
Our Board recommends a vote FOR ratification of the appointment of KPMG as our independent registered public accounting firm for 2023.
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