DEF 14A 1 tm223611-1_def14a.htm DEF 14A tm223611-1_def14a - none - 25.2344614s
 
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
CF INDUSTRIES HOLDINGS, INC.
(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
 

 
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Proxy Statement
2022 Annual Meeting of
Shareholders
 

 
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4 Parkway North
Deerfield, Illinois 60015
Tel: 847.405.2400
cfindustries.com
March 30, 2022
To Our Shareholders:
On behalf of your board of directors, it is our privilege to invite you to attend the 2022 annual meeting of shareholders of CF Industries Holdings, Inc. The annual meeting will be held on Wednesday, May 11, 2022, in a virtual meeting format only, via the Internet. At the annual meeting, shareholders will vote on the matters set forth in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement and any other business matters properly brought before the annual meeting. Whether or not you are able to attend the annual meeting, we encourage you to read the enclosed materials and submit your proxy.
CF Industries’ 2021 Performance
By almost every measure, 2021 was one of CF Industries’ most successful years ever. We leveraged our investments in operational excellence and capacity growth over the previous decade to capitalize on the opportunities that developed during the year, and generate strong returns. Throughout the year, we experienced strong global nitrogen demand, constrained nitrogen supply due to lower global industry operating rates, and favorable energy spreads that increased the margin opportunities for the company. These dynamics became much more pronounced in the second half of the year and, in particular, during the fourth quarter of 2021 when global nitrogen prices and energy spreads reached record highs.
For 2021, the company reported net earnings attributable to common stockholders of $917 million, or $4.24 per diluted share, and EBITDA(1) of approximately $2.2 billion. Net earnings and EBITDA reflect pre-tax non-cash impairment charges of $521 million related to our U.K. operations. Net cash from operations was approximately $2.9 billion and free cash flow(2) was approximately $2.2 billion, both company records. We want to recognize and thank the entire CF Industries team for their hard work and dedication in bringing about these impressive results, particularly given all of the challenges that 2021 presented.
Strong operational performance underpinned these financial results. We continue to operate safely with our full year recordable incident rate at 0.32 incidents per 200,000 work hours, significantly better than industry averages. This is especially impressive as we had our highest level ever of maintenance activities during the year, including seven ammonia plant turnarounds. This included two turnarounds deferred from the year before due to the COVID-19 pandemic, as well as one turnaround that was planned for 2022 but brought forward into 2021 to reduce the risk of an unplanned outage during the 2022 spring application season.
The company also navigated two severe weather events in North America (Winter Storm Uri and Hurricane Ida) that disrupted production across the industry. Our team’s ability to restart our plants safely and more quickly than our peers speaks to the skill of our people and the strength we have built into our manufacturing network.
 

 
We made the difficult but necessary decision to take our ammonia plants offline in the United Kingdom in September due to the excessively high cost of natural gas that made ammonia production unprofitable. We were able to restart one of the plants shortly thereafter supported by restructured CO2 supply contracts. CO2 is a natural byproduct of the ammonia production process, and it is used in a number of applications in the U.K. including food and beverage, nuclear power, and hospitals. We continue to evaluate the situation in the U.K. and are working through numerous scenarios to develop a longer-term solution there.
Our strong cash flow from operations in 2021 enabled us to make meaningful progress on several priorities for the company. We returned $800 million to shareholders through share repurchases and dividends, repaid $500 million in long-term debt, and increased the cash on our balance sheet by nearly $1 billion Our actions to strengthen our balance sheet have been recognized by upgrades to investment grade credit ratings from S&P Global Ratings and Fitch Ratings.
Governance of CF Industries
As we look ahead to the future, we remain committed to implementing sound corporate governance practices that enhance the effectiveness of our board of directors and management team for the benefit of shareholders and our other stakeholders.
We believe the board’s structure and composition are integral to our ability to be effective for shareholders and other stakeholders and a valued resource for management. Our director nominees consist of ten independent directors and the CEO. Our Chairman of the Board is independent and separate from the Chief Executive Officer.
The eleven director nominees represent a broad range of experience and skills. The Chairman of the Board and chair of the governance committee lead an active process to regularly assess Board performance, composition and attributes in succession planning and Board refresh. In 2021, we were fortunate to add two new independent directors as a result of this process: Deborah DeHaas, former vice chairman and managing partner of the Center for Board Effectiveness at Deloitte, and Jesus Madrazo, founder and chairman of Kompali Farms and former executive vice president, public affairs and sustainability of Bayer’s Crop Science division. Over half of the director nominees have joined the Board since 2017 and the director nominees as a group are 55% diverse (gender or racial/ethnic background).
Our committee structure provides a deep level of engagement with management and oversight of company activities. We work to continually identify areas of focus and emerging importance to stakeholders. For example, the board’s Compensation and Management Development Committee has oversight over inclusion, diversity and equity matters as well as employee well-being initiatives. Our Environmental Sustainability and Community Committee was created in 2020 to oversee the company’s clean energy initiatives, progress toward net-zero carbon emissions, community involvement efforts, and overall accountability for meeting the company’s environmental, social and governance (ESG) objectives. Finally, we align executive compensation not just to financial performance, but also on performance against ESG goals including employee safety and sustainability goals.
The Path Ahead
We believe that the Board and management team working together will help create strong shareholder value in both the near- and longer- term. We have a positive outlook on the near-term opportunities available to CF Industries and its shareholders due to strong global nitrogen industry fundamentals. We also remain focused on our long-term growth strategy, which is aligned with our commitment to have a positive impact on issues important to our many stakeholders.
The production of our core product, ammonia, has helped transform the world’s ability to feed itself.
 

 
Although the ammonia production process is energy intensive, several other energy-intensive industries concerned about their carbon emissions have identified ammonia as a potential source of clean energy that could help them reduce their carbon footprints. This is due both to ammonia’s hydrogen component, which is widely viewed as a scalable source of clean energy, and to the fact that ammonia does not emit carbon when used as an energy source.
CF Industries’ strategy is to leverage our unique capabilities to accelerate the world’s transition to clean energy. We are committed to decarbonizing our ammonia production network while collaborating with industry leaders to develop a global market for zero- and low-carbon ammonia as an energy source that can help other industries decarbonize their businesses as well.
In 2021, we made substantial progress on our clean energy initiatives. We started construction on North America’s first carbon-free green ammonia production capacity. We also announced two projects that, when complete, will reduce our CO2 emissions by up to 2.5 million tons annually, enabling the production of up to 1.25 million tons of net-zero carbon ammonia — ammonia produced conventionally with the CO2 byproduct captured and geologically sequestered.
We believe our clean energy initiatives go hand-in-hand with our comprehensive ESG goals. These include a dramatic reduction in carbon emissions across our global network with a commitment to achieve net-zero carbon emissions by 2050, with an intermediate goal of a 25% reduction in emissions intensity by 2030. In 2021, we added a new goal to reduce our Scope 3 greenhouse gas emissions, which we calculated and published for the first time, 10% by 2030. We also have set specific goals related to inclusion, diversity and equity, community involvement and nutrient stewardship.
In 2021, we exceeded our expectations on certain goals, such as identifying decarbonization projects, increasing representation of females and persons of color in senior leadership roles, and nutrient stewardship. We communicate our performance in these areas and other areas through our annual ESG and sustainability reporting, which are now available at https://sustainability.cfindustries.com. There, you can also access our submissions under the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) framework and the Task Force on Climate-related Financial Disclosures (TCFD).
CF Industries’ Future
As we entered 2022, global nitrogen industry fundamentals remained very favorable. The need to replenish global grains stocks and increased economic activity should continue to support robust global demand. High energy prices in Europe and Asia, as well as nitrogen export restrictions from key-producing countries such as China, Egypt, Russia and Turkey, are expected to challenge nitrogen supply availability. As a result, we believe CF Industries is well-positioned for the year ahead, despite the geopolitical tensions in the world and surging inflation as of this writing.
Our efforts have put CF Industries at the forefront of the emerging clean energy economy and the opportunities that we expect to develop for decarbonized ammonia. We believe this will underpin our ability to create shareholder value over the long-term.
 

 
Finally, we want to recognize the many contributions of Stephen A. Furbacher, who is retiring from the board of directors this year. Steve has been a member of the Board since 2007 and was chairman from 2014 through the end of 2021. His commitment, dedication and insight were critical in these years as the company navigated rapid growth followed by challenging industry conditions and development into an industry leader. Steve leaves behind many legacies: helping to shape and develop our industry-leading safety culture; evolving our strategy to become a leading clean energy company, and helping us to define our role within our communities as larger than just an employer. However, his greatest impact from his time leading the Board may well be the Board itself. Steve has been a tireless advocate for transforming the Board by broadening our collective skills, experiences and diversity. This purposeful effort will continue to serve the company and shareholders for years to come. We are grateful for the time we have worked with Steve and for his patient guidance and uncompromising standards, and we wish him all the best in his retirement.
Thank you for your continued trust in CF Industries. We look forward to discussing our performance and the opportunities ahead when we gather virtually for our annual meeting on May 11, 2022.
Sincerely,
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Stephen J. Hagge
Chairman of the Board of Directors
W. Anthony Will
President and Chief Executive Officer
(1)
EBITDA is defined as net earnings attributable to common stockholders plus interest expense — net, income taxes, and depreciation and amortization. See Appendix A for a reconciliation of EBITDA to the most directly comparable GAAP measure.
(2)
Free cash flow is defined as net cash from operating activities less capital expenditures and distributions to noncontrolling interest. See Appendix A for a reconciliation of free cash flow to the most directly comparable GAAP measure.
 

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4 Parkway North
Deerfield, Illinois 60015
Tel: 847.405.2400
cfindustries.com
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
Date and Time: Wednesday, May 11, 2022, at 10:00 a.m., Central time
Virtual Meeting: To support the health and well-being of our shareholders and other meeting participants, the 2022 Annual Meeting of Shareholders (the “Annual Meeting”) will be conducted virtually at www.virtualshareholdermeeting.com/CF2022
Items of Business: At the Annual Meeting, shareholders will be asked to:
1.
elect the eleven directors named in the accompanying Proxy Statement;
2.
consider and approve an advisory resolution regarding the compensation of our named executive officers;
3.
approve our new 2022 Equity and Incentive Plan;
4.
ratify the selection of KPMG LLP as our independent registered public accounting firm for 2022;
5.
act upon one shareholder proposal regarding the ownership threshold required to call a special meeting of shareholders, if properly presented at the Annual Meeting; and
6.
consider any other business properly brought before the Annual Meeting.
Record Date:
You may vote at the Annual Meeting if you were a shareholder of record of our company as of the close of business on March 18, 2022.
Meeting Details: Procedures for attending and participating in the virtual meeting and other information regarding the Annual Meeting can be found on
page 107. During the Annual Meeting, the list of our shareholders of record will be available for viewing by shareholders at www.virtualshareholdermeeting.com/CF2022. To view the list of shareholders, you will be required to enter the 16-digit control number on your Notice of Internet Availability of Proxy Materials or your proxy card.
Internet Availability of Proxy Materials:
Important Notice Regarding the Availability of Proxy Materials for the 2022 Annual Meeting of Shareholders to be held on Wednesday, May 11, 2022: Our Proxy Statement and 2021 Annual Report are available free of charge at www.proxyvote.com.
Your vote is important. Please vote your shares promptly so that your shares will be represented whether or not you attend the Annual Meeting. To vote your shares, you may use the Internet as described on your Notice of Internet Availability of Proxy Materials and proxy card, call the toll-free telephone number listed on your proxy card or complete, sign, date, and return your proxy card. Submitting your proxy now will not prevent you from voting your shares during the Annual Meeting, as your proxy is revocable at your option.
By order of the board of directors,
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Douglas C. Barnard
Senior Vice President, General Counsel, and Secretary
March 30, 2022

 
Table of Contents
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PROXY STATEMENT SUMMARY
This summary provides certain key information about CF Industries’ business and strategy and highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. This Proxy Statement and a form of proxy were first sent or made available to shareholders on or about March 30, 2022.
2022 ANNUAL MEETING OF SHAREHOLDERS INFORMATION
Date and Time:
Wednesday, May 11, 2022, at 10:00 a.m. Central time
Location:
www.virtualshareholdermeeting.com/CF2022
Record Date:
March 18, 2022
VOTING MATTERS
Shareholders will be asked to vote on the following matters at the Annual Meeting:
Proposals
Board
Recommendation
Page
Reference
1.
Election of Directors
The Board believes the director nominees provide us with the combined depth and breadth of skills, experience and qualities required to contribute to an effective and well-functioning Board.
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Vote FOR each director nominee
12
2.
Advisory Vote on Compensation of Named Executive Officers (“Say on Pay”)
CF Industries seeks a non-binding advisory vote from its shareholders to approve the compensation of the named executive officers as disclosed in this Proxy Statement. The Board values the opinions of our shareholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
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Vote FOR
41
3.
Approval of Our New 2022 Equity and Incentive Plan
The Board believes that our new 2022 Equity and Incentive Plan will enable CF Industries to continue to recruit, incentivize and retain qualified employees and non-employee directors and further align the interests of employees, directors and shareholders through stock-based compensation awards.
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Vote FOR
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4.
Ratification of Selection of Independent Registered Public Accounting Firm for 2022
The audit committee has selected KPMG LLP to serve as CF Industries’ independent registered public accounting firm for 2022, and this selection is being submitted to our shareholders for ratification. The audit committee and the Board believe that the continued retention of KPMG to serve as CF Industries’ independent registered public accounting firm is in the best interests of the company and its shareholders.
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Vote FOR
101
5.
Shareholder Proposal Regarding the Ownership Threshold Required to Call a Special Meeting of Shareholders, if Properly Presented at the Annual Meeting
The Board believes that the action requested by the proponent is unnecessary and not in the best interests of the company and its shareholders.
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Vote AGAINST
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1

 
OUR BUSINESS AND STRATEGY
At CF Industries, our mission is to provide clean energy to feed and fuel the world sustainably. With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network — the world’s largest — to enable green and blue hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities. Our nine manufacturing complexes in the United States, Canada, and the United Kingdom, an unparalleled storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. Our best-in-class operational capability and disciplined capital and corporate stewardship — supported by a culture rooted in our core values that we live each and every day — drive business results that create long-term value for all our stakeholders. Our strategy is reviewed and endorsed annually by the Board, and the Board plays an active role in overseeing the successful execution of our strategy.
For more information on our business, see “Item 1. — Business” and “Item 7. — Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Annual Report.
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Our Commitment to a Clean Energy Economy
We are taking significant steps to support a global hydrogen and clean fuel economy, through the production of green and blue ammonia. Since ammonia is one of the most efficient ways to transport and store hydrogen and is also a fuel in its own right, we believe that CF Industries, as the world’s largest producer of ammonia with an unparalleled manufacturing and distribution network and deep technical expertise, is uniquely positioned to fulfill anticipated demand for hydrogen and ammonia from green and blue sources. Our approach includes green ammonia production, which refers to ammonia produced through a carbon-free process, and blue ammonia production, which relates to ammonia produced by conventional processes but with CO2 removed through carbon capture and sequestration (CCS) and other certified carbon abatement projects.
We have announced a $100 million green ammonia project at our flagship Donaldsonville complex to produce approximately 20,000 tons per year of green ammonia. Construction and installation
 
2

 
began in the fourth quarter of 2021 and is expected to finish in 2023. We believe that, when completed, the Donaldsonville green ammonia project will be the largest of its kind in North America.
We have also announced steps to produce blue ammonia from our ammonia production network. In the fourth quarter of 2021, the Board authorized $285 million in capital projects that will enable the annual production of up to 1.25 million tons of blue ammonia from our existing network starting in 2024. The projects will involve constructing units at our Donaldsonville and Yazoo City complexes that dehydrate and compress CO2, a process essential for CO2 transport via pipeline to sequestration sites. Management expects that, once the units are in service and sequestration is initiated, we could sequester up to 2.5 million tons of CO2 per year.
We believe that execution of our strategy and development of the market for green and blue ammonia will provide significant growth opportunities and generate sustainable long-term value for all of our stakeholders.
Shareholder Returns
The global nitrogen industry is inherently cyclical, and our financial results can be significantly impacted by the pronounced effects of highly volatile commodity prices for our products as well as for natural gas, which is our principal feedstock. Additionally, we execute our strategy and evaluate our performance over a full cycle for our industry, which typically occurs over multiple years. As a result, we believe it is important to view total shareholder return over a longer time horizon than just one year. The following table shows the cumulative total shareholder return (“TSR”), assuming the reinvestment of dividends, for our common stock and a peer group index for the 1-, 3-, 5-, 7-, and 10-year periods ended December 31, 2021.
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Each of the peer group companies is or was a publicly traded manufacturer of agricultural chemical fertilizers. The companies comprising the peer group are:

Agrium, Inc.*

The Mosaic Company

LSB Industries, Inc.

Incitec Pivot Limited

OCI N.V.**

Potash Corporation of Saskatchewan Inc.*

Nutrien Ltd.*

CVR Partners LP

Yara International ASA
*
Agrium, Inc. (“Agrium”) and Potash Corporation of Saskatchewan Inc. (“Potash Corp”) are included in the peer group from December 31, 2011 through December 31, 2017. On January 2, 2018, Agrium and Potash Corp completed a merger of equals transaction to form Nutrien, Ltd. The cumulative investment in each of Agrium and Potash Corp, assuming
 
3

 
dividend reinvestments up to December 31, 2017, was converted into shares of Nutrien, Ltd. on January 2, 2018 using the exchange ratio in the merger of equals transaction consummated on that date. Nutrien, Ltd. is included in the peer group for the period from January 2, 2018 through December 31, 2021.
**
OCI N.V. has been excluded from the calculation of the 10-year total shareholder return because its shares had less than 10 years of trading history as of December 31, 2021.
For purposes of calculating the TSR of CF Industries and the peer group index for the 1-, 3-, 5-, 7-, and 10‑year periods ending December 31, 2021, the beginning stock price for each peer group company was established by its respective closing price on the last trading day immediately preceding January 1 of the first fiscal year of the applicable measurement period. The returns of the peer group companies were weighted according to their respective market capitalizations as of the date used to establish the beginning stock price. For Yara International ASA, Incitec Pivot Limited and OCI N.V., we used their respective home exchange stock prices, converted into U.S. dollars, for TSR calculation purposes.
2021 PERFORMANCE HIGHLIGHTS
Operating Results
Net Earnings
Attributable to
Common Stockholders
Earnings Per Diluted
Share
EBITDA(1)
Net Cash Provided by
Operating Activities
$917 Million
$4.24
$2.17 Billion
$2.87 Billion
Annual Incentive Plan Performance Metrics
Financial Metric
Environmental Metric
Process Safety Metric
Adjusted EBITDA(2)
List for Reduction of
GHG Emissions(3)
Behavioral Safety
Gate Threshold(4)
Timely Completion
Percentage(5)
$2.74 Billion
Achieved 54%
Achieved 99%
Achieved 99.6%
Target: $1.35 Billion
Target: 20%
Threshold: ≥ 95%
Target: 80%
When setting performance levels for the short-term incentive program, the compensation and management development committee considers the previous year’s financial performance, market trends and the company’s annual business plan. Going into 2021, rising energy costs in North America were projected to lead to higher realized natural gas costs for the company as energy feedstock prices rebounded from the lows of the global pandemic. The company also expected meaningfully lower production volumes in 2021, driven by a record number of planned maintenance activities due to the normal level of annual activity plus a significant number of maintenance activities that were deferred from 2020 to minimize the risk to our workforce of exposure to COVID-19. In addition, higher selling, general and administrative (“SG&A”) expenditures were anticipated for 2021 compared to 2020 as activities returned to pre-pandemic levels. These factors were expected to be partially offset by improved product prices across all products in 2021 compared to 2020, primarily driven by higher global energy prices and greater industrial demand.
Actual financial results in 2021 greatly exceeded the company’s forecasts, led by higher revenue from strong product pricing. Global nitrogen prices reached the highest levels in over a decade with a dramatic tightening of the global supply and demand balance driven by high crop prices, increased economic activity and lower global production due to high energy prices in Europe and Asia. Despite higher gas and energy costs as compared to the business plan, both in North America and, to a greater degree, in the United Kingdom, energy cost spreads between North
 
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America and high-cost regions grew, resulting in greater margins for the company overall compared to plan. Sales volume for 2021 declined compared to plan as our production levels were impacted by weather, including the impact of Winter Storm Uri in February and Hurricane Ida in October, and we pulled forward certain maintenance activity originally scheduled for 2022.
Additionally, the company continued to deliver on its strategic priorities and create long-term shareholder value.
Safety
As of December 31, 2021, the company’s 12-month rolling average recordable incident rate was 0.32 incidents per 200,000 work hours – an industry leading result
Operational Excellence
Long-term asset utilization over the last five years is approximately 14 percent higher than the average utilization rate of our North American competitors
Efficiency
SG&A costs as a percentage of sales remained among the lowest in both the chemicals and fertilizer industries in 2021
Return to Shareholders
Returned $799 million to shareholders in 2021 through $541 million in share repurchases and $258 million in dividend payments.
Clean Energy Commitment
We are taking significant steps to decarbonize our own production network and support a global hydrogen and clean fuel economy, through the production of green and blue ammonia
Comprehensive ESG Goals
In line with our commitment to the clean energy economy and our focus on sustainability, we have published comprehensive environmental, social and governance ("ESG") goals covering critical environmental, societal, and workforce imperatives
(1)      
EBITDA is defined as net earnings attributable to common stockholders plus interest expense-net, income taxes and depreciation and amortization. See Appendix A for a reconciliation of EBITDA to the most directly comparable GAAP measure.
(2)      
See “Compensation Discussion and Analysis — Compensation Discussion and Analysis: In Detail — Key Elements of NEO Compensation Program — Our Metrics Defined” for the definition of Adjusted EBITDA for purposes of our annual incentive plan.
(3)      
The development of a list of capital projects to reduce the company’s Scope 1 greenhouse gas (GHG) emissions footprint versus a 2019 baseline. The percentage target is the aggregate amount of the company’s GHG emissions that could be reduced through the implementation of the identified capital projects, as compared to the 2019 Scope 1 emissions baseline.
(4)      
The Process Safety Metric has a behavioral safety gate threshold. If at least 95% of the aggregated safety grades of all employees at manufacturing sites were a “B” or better for the year, the safety performance gating requirement would be achieved. If the safety performance gating requirement was not achieved, there would be no payout under the Process Safety Metric.
(5)      
The completion of scheduled safety critical equipment inspections on schedule and timely management of changes (MOCs).
 
5

 
OUR DIRECTOR NOMINEES
Our corporate governance and nominating committee regularly reviews the overall composition of the Board and its committees to assess whether each reflects the appropriate mix of experience, qualifications, attributes, and skills that are relevant to CF Industries’ current and future global strategy, business, and governance.
Nominee
Primary Occupation
Age
Director
Since
Independent
Other
Public
Boards
Committee
Memberships(1)
AC
CC
GC
EC
Javed Ahmed
Former CEO of Tate & Lyle PLC
62
2018
Yes
0
Robert C. Arzbaecher
Former Chairman and CEO of Actuant Corporation
62
2005
Yes
0
C
Deborah L. DeHaas
Former Vice Chairman and Managing Partner
Center for Board Effectiveness, Deloitte
62
2021
Yes
1
John W. Eaves
Executive Chairman of Arch Resources, Inc.
64
2017
Yes
1
C
Stephen J. Hagge
Former President and CEO of AptarGroup, Inc.
70
2010
Yes
1
Jesus Madrazo
Former EVP, Public Affairs and Sustainability of
Bayer AG, Crop Science division
52
2021
Yes
0
Anne P. Noonan
President and CEO of Summit Materials, Inc.
58
2015
Yes
1
C
Michael J. Toelle
Owner, T & T Farms
59
2017
Yes
0
Theresa E. Wagler
CFO and EVP of Steel Dynamics, Inc.
51
2014
Yes
0
C
Celso L. White
Former Global Chief Supply Chain Officer of
Molson Coors Brewing Company
60
2018
Yes
1
W. Anthony Will
President and CEO of CF Industries
56
2014
CEO
1
(1) AC = Audit Committee
CC = Compensation and Management Development Committee
EC = Environmental Sustainability and Community Committee
GC = Corporate Governance and Nominating Committee
C = Committee Chair
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CORPORATE GOVERNANCE HIGHLIGHTS
We are committed to implementing sound corporate governance practices that enhance the effectiveness of the Board and our management and that serve the interests of our shareholders. Highlights of our governance practices include:
Governance Practice
For More Information
Board Structure
and Governance

All of director nominees are independent, except for our chief executive officer (“CEO”). All of our standing Board committees are 100 percent independent.

We have an independent Chairman of the Board and separate CEO.

Our directors are elected annually based on a majority voting standard for uncontested elections. We have a resignation policy for incumbent directors who fail to receive a majority of votes cast.

Each of our directors attended 75% or more of the combined total meetings of the full Board and the committees on which he or she served during 2021.

Our non-employee directors meet in executive session, without management present, during each regularly scheduled Board meeting.

Annual Board and committee self-assessments and peer evaluations monitor the performance and effectiveness of the Board and its committees and directors.

The Chairman of the Board and chair of the governance committee lead an active process to regularly assess Board composition and attributes and consider succession planning.

We consider diversity of background, including experience and skills as well as personal characteristics such as race, gender and age, in identifying nominees for director and incorporate recruitment protocols in our candidate searches that seek to identify candidates with these diversity characteristics.

The Board plays an active role in reviewing and approving our strategy and in overseeing the successful execution of our strategy.

Diligent Board oversight of risk management is a cornerstone of our risk management program.

The Board has an integral role in oversight of sustainability and engages with senior management on a broad range of environmental, social, and governance topics, including climate change, human capital management and diversity and inclusion, and our related comprehensive ESG goals.
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P. 23-24
P. 12
P. 26
P. 24
P. 24
P. 12-14
P. 14-15
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P. 26-27
P. 27-29;30-32
Stock
Ownership

We have strong stock ownership guidelines for our executive officers and directors.

We prohibit hedging and pledging of our common stock by directors and executive officers.

We have a robust clawback policy covering incentive awards.
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P. 75
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Corporate
Responsibility

Our ethics program includes a strong Code of Corporate Conduct for all of our directors, officers and employees.

We discuss Corporate Responsibility on our website and in our sustainability reports, including our values and “Do It Right” culture, our commitment to our stakeholders and communities, and our strong corporate commitment to respect the dignity and human rights of others.

We provide disclosure of charitable contributions and corporate political contributions and trade associate dues in semi-annual reports.
P. 32
https://sustainability.
cfindustries.com
www.cfindustries.com/reports
Shareholder
Rights

Eligible shareholders can utilize the proxy access provisions of our bylaws to include their own nominees for director in our proxy materials along with Board-nominated candidates.

We do not have a shareholder rights plan, or poison pill. The Board has adopted a policy whereby any shareholder rights plan adopted without shareholder approval must be submitted to shareholders for ratification, or the plan must expire, within one year of such adoption.

One or more holders of our common stock representing at least 25% of the voting power of our common stock have the right to call a special meeting of shareholders.

All supermajority voting provisions have been eliminated from our certificate of incorporation and our bylaws.
P. 14; Bylaws
Bylaws
Charter and Bylaws
 
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SHAREHOLDER ENGAGEMENT
We believe that building positive relationships with our shareholders is critical to CF Industries’ success. We conduct shareholder outreach campaigns in the spring and in the fall to engage with shareholders to understand their perspectives on a variety of topics, such as our financial performance, environmental, social, and governance initiatives, executive compensation, human capital management, environmental sustainability, community relations, and related matters.
We also communicate with shareholders through a number of routine forums, including

quarterly earnings releases;

Securities and Exchange Commission (“SEC”) filings;

the annual report and proxy statement;

the annual shareholders meeting;

investor meetings, conferences and web communications; and

sustainability reporting, including our ESG Report and our Sustainability Report.
We relay shareholder feedback and trends on corporate governance and sustainability developments to the Board and its committees. Our engagement activities have resulted in valuable feedback that has contributed to our decision-making with respect to these matters. See “Corporate Governance — Shareholder Engagement” for a further discussion of our shareholder engagement activities.
 
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COMPENSATION PROGRAM HIGHLIGHTS
Our executive compensation practices are overseen and administered by the compensation and management development committee, which is comprised exclusively of independent directors. The committee is responsible for designing an executive compensation program — including approving any changes to it — that effectively incentivizes our executives to create long-term value for our shareholders.
Summary
More
Details
Compensation
Philosophy
Our compensation philosophy seeks to align the interests of our employees and our shareholders through focusing on the total compensation (base salary, short-term incentives, long-term incentives, and benefits) of our employees, including our executive officers. We seek to benefit from this strategy by attracting key talent, retaining strong performers, increasing productivity, and maximizing operational and financial results, while also implementing compensation programs that are cost effective, market competitive, and sustainable across business cycles. P. 52
Key Elements of
Compensation Program
Salary
Paid in line with individual performance and contribution to company goals and aligned to competitive market data
P. 53;57
Annual Cash
Incentives*
The amount of the actual incentive earned is determined based on our level of achievement of three performance metrics:

80%: level of achievement of Adjusted EBITDA** (Financial Metric)

10%: level of achievement of the development of a list of capital projects to reduce the company’s Scope 1 GHG emissions footprint versus a 2019 baseline (Environmental Metric)

10%: level of achievement of the completion of safety critical equipment inspections on schedule and timely management of changes, subject to first achieving a gating level of behavioral safety practices goals
(Process Safety Metric)
P. 53; 56-62
Long-Term Equity
Incentives
A specified cash value amount is split between two equity award types:

60%: performance restricted stock units (“PRSUs”) (3-year cliff vesting based on average return on net assets (“RONA”)** over three one-year periods, and a TSR modifier that can decrease or increase payout by up to 20%)

40%: restricted stock units (“RSUs”) (3-year ratable vesting)
P. 53; 63-69
Rigorous Benchmarking and
Incentive Target Setting
Bench-marking
Our total direct compensation is targeted at the 50th percentile of our Industry Reference Group, which is comprised of 17 companies in related industries, and the overall general industry market data. P. 55
Incentive Metrics
and Performance
Levels

We utilize performance metrics for our incentive compensation programs that align executive interests with those of our shareholders.

Executives are focused on achieving top performance across metrics that are directly tied to shareholder value creation and our core strategic objectives.

The compensation and management development committee considers the previous year’s financial performance, market trends and the company’s annual business plan when setting goals and targets for our incentive compensation programs.

The performance metrics and target performance levels reflect the inherent cyclicality of our business.
P. 53-56; 57-62; 63-67
Leading Compensation
Governance Practices
Our leading compensation governance practices include:
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Strong pay-for-performance alignment
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No employment agreements
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Robust clawback policy covering incentive awards
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No repriced stock options
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Stock ownership guidelines
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Minimal perquisites
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Performance metrics that align executive interests with interests of shareholders
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Executive officers are prohibited from hedging or pledging our stock
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A majority of compensation for CEO and other executive officers is performance-based, at risk, and paid in equity
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No new excise tax gross-ups after 2011 (CEO, chief financial officer and senior vice president, human resources have no such gross-up)
*
See “Compensation Discussion and Analysis — Compensation Discussion and Analysis: In Detail — 2022 Compensation Actions” for a discussion of changes to our performance metrics and weightings for 2022.
**
For the definitions of Adjusted EBITDA and RONA, see “Compensation Discussion and Analysis — Compensation Discussion and Analysis: In Detail — Key Elements of NEO Compensation Program — Our Metrics Defined.”
 
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2021 Target Total Compensation
The compensation and management development committee believes the majority of compensation should be composed of awards that are performance-based — with direct ties to the company and individual employee performance. The significant majority of the target compensation of each named executive officer (“NEO”) is at-risk based on company performance.
The following graphs illustrate the mix of total target direct compensation for our chief executive officer and for our other named executive officers for 2021:
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AIP:
Annual Incentive Plan (annual bonus), cash settled
LTIP:
Long-Term Incentive Plan, denominated in equity
Changes to AIP Performance Metrics and Weightings for 2022
The compensation and management development committee approved changes in the performance metrics and metrics for our annual incentive program for 2022. The annual incentive awards to our NEOs for 2022 will be determined based upon our level of achievement of the following performance metrics:

80% of each executive’s annual incentive payment opportunity is based upon our level of achievement of Adjusted EBITDA for 2022 (the “Adjusted EBITDA Metric”);

10% of each executive’s annual incentive payment opportunity is based upon our level of achievement of the completion of specified “Program Simplification” milestones (the “Strategic Initiative Metric”) related to an enterprise-wide project to increase automation and better integrate our processes, technology and reporting systems to strengthen and expand our capabilities for our long-term growth and sustainability; and

10% of each executive’s annual incentive payment opportunity is based upon our level of achievement of the completion of safety critical equipment inspections on schedule and timely management of changes, subject to first achieving a gating level of behavioral safety practices goals (the “Process Safety Metric”).
Our Adjusted EBITDA Metric, which has been a part of our annual incentive performance metrics since 2016, increased in weighting from 75% (in 2018, 2019 and 2020) to 80% in 2021 and will remain at 80% for 2022. The new Strategic Initiative Metric reflects the importance of an enterprise-wide strategic project to increase automation and better integrate our processes, technology and reporting systems to strengthen and expand our capabilities for our long-term growth and sustainability, and the extensive resources and employee effort that will be focused on the implementation. The Process Safety Metric, which was added to our annual incentive performance metrics in 2021 and maintains a behavioral safety practice goal that was since 2018 also part of our annual incentive performance metrics as a gating standard (“safety gate”), reflects our focus on safely operating our facilities in a way that benefits a broad set of stakeholders: employees, shareholders, customers and the communities in which we operate. The inclusion of
 
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the Strategic Initiative Metric and the Process Safety Metric with the safety gate component in our performance metrics for the annual incentive payment opportunity demonstrates our commitment to our “Do It Right” culture and further integrates strategic corporate goals into executive compensation. The performance levels and corresponding percentages of target opportunity earned with respect to the 2022 performance metrics established by the compensation and management development committee will be disclosed in the proxy statement for our 2023 annual meeting of shareholders.
For a further discussion of 2022 AIP performance metrics and weightings for 2022, see “Compensation Discussion and Analysis — Compensation Discussion and Analysis: In Detail — 2022 Compensation Actions.”
 
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PROPOSAL 1: ELECTION OF DIRECTORS
DIRECTOR NOMINEES
The Board has nominated the eleven individuals named in this Proxy Statement for election at the Annual Meeting. All of the director nominees are present directors of the company standing for re-election. Stephen A. Furbacher will retire from the Board effective as of the date of the Annual Meeting and will not stand for re-election. Each director elected at the Annual Meeting will serve until our next annual meeting and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or retirement.
Each nominee has consented to being named in this Proxy Statement and to serve if elected. If any nominee becomes unavailable to serve, an event that the Board does not presently expect, we will vote the shares represented by proxies for the election of directors for the election of such other person as the Board may recommend, unless the Board decides to reduce its total size.
If all eleven director nominees are elected, the Board will consist of eleven directors, each of whom other than our CEO will be “independent” under the listing standards of the New York Stock Exchange (the “NYSE”).
Majority Vote Standard for Election of Directors
Our directors are elected by a majority of the votes cast in uncontested elections, which means that, for a director nominee to be elected in an uncontested election, the number of shares voted “for” that director nominee must exceed the number of votes cast “against” that director nominee. In a contested election, directors are elected by receiving a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. A contested election is a situation in which the number of nominees for election exceeds the number of directors to be elected. Whether an election is contested is determined fourteen days in advance of the date we file our definitive proxy statement with the SEC.
Director Resignation Policy
In accordance with procedures set forth in the company’s corporate governance guidelines, any incumbent director (including the 11 nominees standing for re-election at the Annual Meeting) who fails to receive a majority of votes cast in an uncontested election will be required to tender his or her resignation for consideration by the company’s corporate governance and nominating committee. The corporate governance and nominating committee will consider the resignation and, within 45 days following the date of the applicable annual meeting, make a recommendation to the Board concerning the acceptance or rejection of the resignation. The Board will then take formal action on the corporate governance and nominating committee’s recommendation no later than 90 days following the date of the annual meeting. Following the Board’s decision on the committee’s recommendation, we will publicly disclose the Board’s decision, together with an explanation of the process by which the decision was made and, if applicable, the Board’s reason or reasons for rejecting the tendered resignation.
DIRECTOR SUCCESSION PLANNING AND NOMINATION PROCESS
The Board is responsible for nominating candidates for election to the Board and for filling vacancies on the Board that may occur between annual meetings of shareholders. The corporate governance and nominating committee is responsible for identifying, screening, and recommending candidates to the Board for Board membership.
Regular Assessment of Board Composition and Succession Planning
The chairman of the Board and chair of the corporate governance and nominating committee lead an active process to regularly review the overall composition of the Board and each Board committee
 
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and assess whether each reflects the appropriate mix of experience, qualifications, attributes, and skills that are relevant to CF Industries’ current and future global strategy, business, and governance. Board composition and succession planning is a standing item on the calendar for corporate governance and nominating committee meetings each year. The review process incorporates the results of the annual Board and committee performance and skills self-assessment processes described in “Corporate Governance — Leadership of the Board — Annual Board and Committee Self-Evaluations and Director Peer Evaluations” in assessing and determining whether any gaps in experience, qualifications, attributes, and skills exist and the characteristics and critical skills required of prospective candidates for election to the Board.
To maintain a Board with an appropriate mix of experience and qualifications and to permit time for orientation, the succession planning process generally considers the development of the Board over a time horizon extending for the next five years. In the case of an anticipated change in the composition of the Board, whether as a result of a retirement consistent with our general age-based retirement policy described below or otherwise, the Board generally prefers to recruit and add new directors such that there is time for the new directors to learn in detail our strategy, business, and governance sufficiently in advance of expected departures. The Board has also concluded that the appropriate number of directors is generally no fewer than eight and no more than twelve. The Board believes this range permits diversity of experience without hindering effective discussion or diminishing individual accountability. Therefore, the Board attempts to coordinate director additions and departures to maintain this size while allowing orientation time for new members as discussed above. Consistent with this process, the Board has added six new independent directors over the past five years, and five independent directors have retired over the past five years (including Mr. Furbacher, who will retire as of the date of the 2022 Annual Meeting). The gradual refreshment process over the last several years reflects the Board’s intention to allow orientation time for new directors while maintaining the benefit of departing directors’ experience. Similarly, this year the chairman of the Board role transitioned from Mr. Furbacher to Mr. Hagge on January 1, 2022 to provide sufficient overlap and continuity before Mr. Furbacher’s retirement at the 2022 Annual Meeting.
Identifying and Evaluating Candidates for Director
The corporate governance and nominating committee generally identifies potential nominees for election to the Board by engaging third party search firms that specialize in identifying director candidates. Current directors and executive officers may also notify the committee if they become aware of potential candidates, and the committee refers any such potential candidate to the third party search firm to first evaluate whether the potential candidate meets the criteria for Board membership discussed below. The committee will also consider candidates for election to the Board recommended by shareholders as described below.
Once a person has been identified by the corporate governance and nominating committee as a potential candidate, the committee may collect and review publicly available information regarding the person to assess whether the person should be considered further. If the corporate governance and nominating committee determines that the person warrants further consideration, the committee chair or another member of the committee will contact the person. Generally, if the person expresses a willingness to be considered and to serve on the Board, the corporate governance and nominating committee will request information from the person, review the person’s accomplishments and qualifications, including in light of any other candidates that the committee might be considering, and ask directors to conduct one or more interviews with the person. In certain instances, committee members may contact one or more references provided by the candidate or may contact other members of the business community or other persons who may have greater first-hand knowledge of the candidate’s accomplishments. The committee’s evaluation process will not vary based on whether or not a candidate is recommended by a shareholder, although, as stated below, the committee may take into consideration the number of shares held by the recommending shareholder and the length of time that such shares have been held.
 
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Recent Director Searches
As a result of our active succession planning and candidate evaluation processes, directors Ahmed, DeHaas, Eaves, Madrazo, Toelle and White were identified as candidates and added to the Board over the last five years. Each of these independent directors brings important skills and experience to our company that have further strengthened the Board and complemented the skills and experience of our other Board members. Each of these six individuals was recommended for consideration to the corporate governance and nominating committee by a third party search firm, and none of these six individuals was known to our chairman of the Board or CEO prior to the candidate evaluation process.
Shareholder Recommendations of Director Candidates
The corporate governance and nominating committee will consider director candidates recommended by shareholders. In considering candidates submitted by shareholders, the committee will take into consideration the needs of the Board and the qualifications of the candidate. To have a candidate considered by the corporate governance and nominating committee, a shareholder must submit the recommendation to the committee in writing and include the following information:

the name of the shareholder and evidence of the shareholder’s ownership of our stock, including the number of shares owned and the length of time of ownership; and

the name of the candidate, the candidate’s resume or a listing of his or her qualifications to be a director of CF Industries, and the candidate’s consent to be named as a director if selected by the committee and nominated by the Board.
The shareholder recommendation and information described above must be sent to the corporate governance and nominating committee c/o the corporate secretary at our principal executive offices at the address on the Notice of Annual Meeting of Shareholders accompanying this Proxy Statement and must be received by the corporate secretary not less than 120 days prior to the anniversary date of our most recent annual meeting of shareholders.
Proxy Access
Our bylaws allow eligible shareholders to include their own nominees for director in our proxy materials along with the Board-nominated candidates. Subject to applicable procedural and other requirements under our bylaws, the proxy access provisions of our bylaws permit any shareholder or group of up to 20 shareholders who have maintained continuous qualifying ownership of 3% or more of our outstanding common stock for at least the previous three years to nominate and include in our proxy materials director nominees constituting not more than 25% of the number of the directors in office at the time of the nomination. For further information in this regard, see the discussion under the heading “Annual Meeting Information — Deadlines for Submission of Future Shareholder Proposals, Shareholder Nominated Director Candidates and Other Business of Shareholders — Director Nominations for Inclusion in CF Industries’ Proxy Materials (Proxy Access).”
CRITERIA FOR BOARD MEMBERSHIP
Director Qualifications and Attributes
The corporate governance and nominating committee takes into consideration a number of factors and criteria in reviewing candidates for potential nomination to the Board. The corporate governance and nominating committee believes that the minimum qualifications for serving as a director of CF Industries are that a nominee demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board’s oversight of our business and affairs and have an impeccable record and reputation for honesty and ethical conduct in his or her professional and personal activities.
 
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In addition, the committee will examine a candidate’s specific experiences and skills, relevant industry background and knowledge, time availability in light of other commitments, age, potential conflicts of interest, material relationships with CF Industries, and independence from management and the company.
Diversity
Our corporate governance guidelines and corporate governance and nominating committee charter reflect the intention of the Board that the board of directors represent a diversity of backgrounds. In accordance with the corporate governance and nominating committee charter and our corporate governance guidelines, the corporate governance and nominating committee considers diversity in identifying nominees for director, including personal characteristics such as race, gender and age, and the experiences and skills relevant to the Board’s performance of its responsibilities in the oversight of the company. In furtherance of this objective, the corporate governance and nominating committee has determined that it will incorporate recruitment protocols that seek to identify candidates in any future director search who meet these diversity characteristics. As discussed above, six independent directors have joined the Board over the last five years. These directors’ experience and skills backgrounds include senior executive leadership (two sitting or retired chief executive officers, a retired managing partner of a big four accounting firm, a public affairs and sustainability executive and a global supply chain executive) and five directors with industry expertise. In terms of personal characteristics, these directors include one woman, an African American, a director of Hispanic origin who has dual citizenship in the United States and Mexico and a director of Asian origin who lives in the United Kingdom and has dual citizenship in the United States and the United Kingdom.
Retirement Age
As set forth in the company’s corporate governance guidelines, it is the general policy of the company that no director having attained the age of 74 years shall be nominated for re-election or reappointment to the Board. However, the Board may determine to waive this policy in individual cases.
Director Tenure
To ensure that the Board maintains an appropriate balance of experience, continuity, and an openness to new ideas and a willingness to critically re-examine the status quo, the corporate governance and nominating committee considers the issue of continuing director tenure in connection with each director nomination recommendation.
Two director nominees, comprising 18% of the nominees, have served 10 or more years on the Board, and three director nominees, comprising 27% of the nominees, have served between five and 10 years on the Board. These directors bring a wealth of experience and knowledge concerning CF Industries. The remaining six director nominees, comprising 55% of the nominees, have served less than five years on the Board and bring fresh perspective to Board deliberations.
Service on Other Public Company Boards
The company recognizes the substantial time commitments attendant to Board membership and expects that the members of the Board will be fully committed to devoting all such time as is necessary to fulfill their Board responsibilities, in terms of both preparation for and attendance and participation at meetings. Accordingly, directors should generally not serve on more than three other public company boards. A director who also serves as the chief executive officer or named executive officer of a public company generally should not serve on the board of more than one other public company.
In addition, in recognition of the enhanced time commitments associated with membership on a public company’s audit committee, the Board has adopted a policy that no member of the audit committee may serve simultaneously on the audit committees of more than two other public companies unless the Board determines that such simultaneous service would not impair the ability of such director to effectively serve on the company’s audit committee.
 
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Summary of Director Core Competencies
We consider the depth and diversity of experience on the Board a key strength. Our eleven director nominees offer a diverse set of qualifications and perspectives and possess a wealth of leadership and professional experience. The following table summarizes experiences and skills that we have identified as key to our current and future global strategy, business, and governance.
Accounting and Finance Expertise Environmental, Health & Safety Aspects of Operations
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8 of 11 nominees
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7 of 11 nominees
A strong understanding of accounting and finance is important for ensuring the integrity of our financial reporting and critically evaluating our performance. Safety and environmental stewardship are core values of ours. We take guidance from our directors who have served in executive or operating positions at industrial manufacturing companies.
Environmental Sustainability Human Capital Management
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8 of 11 nominees
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10 of 11 nominees
Insight and expertise in environmental sustainability and related matters help guide the company as it embraces a global hydrogen and clean fuel economy and pursues its ESG goals. Insight and experience regarding culture, talent development, compensation, recruiting and retention, and diversity and inclusion are critical given the importance of the company’s human capital.
Industry Focus Operations
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7 of 11 nominees
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8 of 11 nominees
Directors who are knowledgeable about the chemical, energy, and agriculture industries help guide the company in assessing the trends and external forces relevant to its strategy and operations. As a global manufacturing and distribution company, we benefit from the experience of our directors who have served in senior executive roles of global manufacturing companies.
Public Company Governance Risk Management
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8 of 11 nominees
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11 of 11 nominees
A deep understanding of the Board’s duties and responsibilities enhances board effectiveness and ensures independent oversight that is aligned with shareholder interests. Directors with significant risk management experience provide important oversight as we manage the risks inherent in our strategy and operations.
Senior Executive Leadership Strategy & Strategic Initiatives
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11 of 11 nominees
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10 of 11 nominees
We believe that directors who have served as CEOs or senior executives are in a position to challenge management and contribute practical insight into business strategy and operations. Experience with major strategic initiatives helps us identify, pursue and consummate the right major initiatives that achieve our strategic objectives and realize synergies and optimal growth.
Snapshot of Director Nominees
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BOARD RECOMMENDATION
In connection with the Annual Meeting and in accordance with the above guidelines, the corporate governance and nominating committee recommended that the Board nominate the eleven individuals named in this Proxy Statement for election to the Board. The Board believes these nominees provide CF Industries with the combined depth and breadth of skills, experience and qualities required to contribute to an effective and well-functioning Board. Our eleven director nominees offer a diverse set of qualifications and perspectives and possess a wealth of leadership and professional experience in areas relevant to our current and future global strategy, business, and governance.
The Board unanimously recommends that you vote FOR the election of the nominees presented in Proposal 1.
 
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DIRECTOR NOMINEE BIOGRAPHIES
The following biographical information about each of our director nominees highlights the particular experiences, qualifications, attributes, and skills possessed by each director nominee that led the Board to determine that he or she is qualified to serve as a public company director and that he or she should serve as member of the Board. All director nominee biographical information is as of March 30, 2022.
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Javed Ahmed
Javed Ahmed served as chief executive officer of Tate & Lyle PLC, a British-headquartered, global provider of solutions and ingredients for food, beverage and industrial markets with facilities and offices in over 30 locations worldwide whose products are sold or distributed in over 120 countries, from October 2009 until April 2018. Prior to this role, he spent 17 years with Benckiser NV (later Reckitt Benckiser Group plc), a leading consumer products group, in a number of senior roles. He began his career with The Procter & Gamble Company before spending five years with Bain & Co.
Qualifications
As the former chief executive officer of Tate & Lyle PLC, Mr. Ahmed brings public company governance, agriculture and food industry focus, human capital management, strategic initiative, environmental sustainability, risk management, environmental, health and safety aspects of operations, and accounting and financial expertise to the Board.
Other Public Company Directorships (within the past 5 years)

Tate & Lyle PLC (Oct. 2009 – Apr. 2018)
Age
62
Director Since
2018
CF Industries Committees

Compensation and management development

Corporate governance and nominating
Qualifications

Accounting and Finance

Agriculture and Food Industry

CEO

EHS Aspects of Operations

Environmental Sustainability

Human Capital

Public Company Governance

Risk Management

Strategic Initiatives
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Robert C. Arzbaecher
Robert C. Arzbaecher served as chief executive officer of Actuant Corporation, a diversified manufacturer and marketer of industrial products and systems with operations in more than 30 countries, from 2000 until January 2014 and as interim president and chief executive officer of Actuant from August 2015 until March 2016. He served as a director of Actuant from 2000 until January 2017 and as chairman of the board of Actuant from 2001 until March 2016. From 1992 until 2000, he held various financial positions with Applied Power, Inc., Actuant’s predecessor, the most recent of which was chief financial officer. Prior to 1992, Mr. Arzbaecher held various financial positions with Grabill Aerospace Industries Ltd., Farley Industries Inc., and Grant Thornton LLP, a public accounting firm. Mr. Arzbaecher is a certified public accountant and he is also a director of Fiduciary Management, Inc. mutual funds.
Qualifications
As the former chairman and chief executive officer of Actuant, Mr. Arzbaecher brings public company governance, human capital, operations, strategic initiative, and risk management expertise to the Board. As a certified public accountant who has served as a financial executive, he is an “audit committee financial expert” within the meaning of SEC rules.
Other Public Company Directorships (within the past 5 years)

Actuant Corporation (2000 – Jan. 2017) (Chairman from 2001 – Mar. 2016)
Age
62
Director Since
2005
CF Industries Committees

Audit

Environmental sustainability and community (Chair)
Qualifications

Accounting and Finance

CEO

Human Capital

Operations

Public Company Governance

Risk Management

Strategic Initiatives
 
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Deborah L. DeHaas
Deborah L. DeHaas retired from Deloitte as a vice chairman and the managing partner of the Center for Board Effectiveness in September 2020. She held numerous leadership roles at Deloitte during her 18 years of service to the firm, including as the firm’s first chief inclusion officer, as the regional managing partner for the midwest and central regions of Deloitte — in which role she led the quality, client satisfaction, growth, marketplace and talent initiatives for over 10,000 professionals in fourteen states — as the Chicago office managing partner, as a member of the Deloitte US board of directors, and as a member of the Deloitte US Executive Committee. Before joining Deloitte, Ms. DeHaas was a partner at Arthur Andersen LLP. She has served as the chief executive officer of Corporate Leadership Center since November 2020. She currently serves on the Board and Executive Committee of the Value Reporting Foundation Board (formerly known as the Sustainability Accounting Standards Board Foundation Board). She is also a trustee and chair of the audit committee at both Northwestern University and the University of Denver. Ms. DeHaas is also a member of the board of directors of Dover Corporation, a diversified global manufacturer and solutions provider, since February 2021.
Qualifications
With her roles and responsibilities at Deloitte, Corporate Leadership Center, and the Value Reporting Foundation Board, Ms. DeHaas brings substantial environmental sustainability, human capital management, public company governance, risk management, and strategic initiative experience to the Board. Ms. DeHaas is a certified public accountant and is an “audit committee financial expert” within the meaning of SEC rules.
Other Public Company Directorships (within the past 5 years)

Dover Corporation (Feb. 2021 – Present)
Age
62
Director Since
2021
CF Industries Committees

Audit

Environmental Sustainability and Community
Qualifications

Accounting and Finance

Environmental Sustainability

Human Capital

Public Company Governance

Senior Executive Leadership

Risk Management

Strategic Initiatives
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John W. Eaves
John W. Eaves is the executive chairman of Arch Resources, Inc. (formerly Arch Coal, Inc.), a top coal producer for the global steel and power generation industries, and served as president and chief executive officer of Arch Resources from 2012 to April 2020. He has been a member of its board of directors since 2006. Mr. Eaves has more than 30 years of experience in the coal industry. During his tenure with Arch Resources, he has held positions of president and chief operating officer; senior vice president of marketing; and vice president of marketing and president of Arch Coal Sales, the company’s marketing subsidiary. Mr. Eaves joined Arch Resources in 1987 after serving in various marketing-related positions at Diamond Shamrock Coal Company and Natomas Coal Company. He serves on the boards of the National Association of Manufacturers and the National Mining Association. On January 11, 2016, Arch Resources filed a voluntary petition for reorganization under the provisions of Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Missouri. On October 5, 2016, Arch Resources’s reorganization plan became effective and it emerged from Chapter 11.
Qualifications
As the executive chairman and former president and chief executive officer of Arch Resources, Mr. Eaves brings substantial energy industry, operations, strategic initiative, human capital management, environmental sustainability and environmental, health and safety of operations expertise to the Board. Mr. Eaves has extensive experience in risk management and accounting and finance expertise through his active supervision of those performing financial accounting and reporting at Arch Resources and he is an “audit committee financial expert” within the meaning of SEC rules.
Other Public Company Directorships (within the past 5 years)

Arch Resources, Inc. (2006 – Present)
Age
64
Director Since
2017
CF Industries Committees

Audit

Compensation and management development (Chair)

Environmental sustainability and community
Qualifications

Accounting and Finance

CEO

EHS Aspects of Operations

Energy Industry

Environmental Sustainability

Human Capital

Operations

Public Company Governance

Risk Management

Strategic Initiatives
 
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[MISSING IMAGE: ph_stephenjhagge-4clr.jpg]
Stephen J. Hagge
Stephen J. Hagge served as president and chief executive officer of AptarGroup, Inc., a leading global supplier of a broad range of innovative dispensing systems for the beauty, personal care, home care, prescription drug, consumer health care, injectables, food and beverage markets with manufacturing facilities in North America, Europe, Asia and Latin America, from 2012 until January 2017 and as special advisor to the chief executive officer of AptarGroup from February 2017 to March 2017. He served as chief operating officer of AptarGroup from 2008 to 2011, as chief financial officer of AptarGroup from 1993 to 2011 and as an executive vice president and secretary of AptarGroup from 1993 to 2011. Mr. Hagge served as a director of AptarGroup from 2001 to 2019 and as a director of Crown Holdings, Inc. since 2019. He is also a member of the board of directors of Transcendia Topco Holdings, Inc., a privately held specialty package company, since 2018.
Qualifications
Through his experience as a director, chief executive officer, chief financial officer, and chief operating officer of AptarGroup, Mr. Hagge brings substantial public company governance, operations, human capital management, strategic initiative, environmental, health and safety of operations, and risk management expertise to the Board. Mr. Hagge has served as a financial executive and is an “audit committee financial expert” within the meaning of SEC rules.
Other Public Company Directorships (within the past 5 years)

AptarGroup, Inc. (2001 – 2019)

Crown Holdings, Inc. (2019 – Present)
Age
70
Director Since
2010
Chairman of the Board and Lead Independent Director
CF Industries Committees

Audit

Compensation and management development
Qualifications

Accounting and Finance

CEO

EHS Aspects of Operations

Human Capital

Operations

Public Company Governance

Risk Management

Strategic Initiatives
[MISSING IMAGE: ph_jesusmadrazo-4clr.jpg]
Jesus Madrazo
Jesus Madrazo Yris is the former executive vice president of public affairs and sustainability of Bayer AG’s Crop Science division, having served in that capacity from August 2018 to November 2019. Prior to that role, Mr. Madrazo held numerous leadership positions during his 19 years of service at Monsanto Company, including as the executive vice president, operations, Europe, Middle East, Asia, Africa and global supply chain — in which role he had oversight of more than 9,000 employees and held responsibility for planning, production, manufacturing, procurement, engineering and customer care — as vice president of global corporate engagement, and as vice president of the International Row Crops Business. Mr. Madrazo is the founder and chairman of Kompali Farms, a large wine venture in Mexico renowned for its innovation in uniting technology and sustainability to deliver value to consumers while minimizing environmental impact. He also serves as a member of the boards of Reiter Affiliated Companies, a privately held company and the largest fresh multi-berry producer in the world, and Monte Xanic, a premium winery in Mexico.
Qualifications
As the former executive vice president of public affairs and sustainability of Bayer AG’s Crop Science division, as founder and chairman of Kompali Farms and with previous leadership roles at Monsanto Company, Mr. Madrazo brings agricultural industry, environmental sustainability, human capital, operations, and risk management expertise to the Board.
Other Public Company Directorships (within the past 5 years)

None
Age
52
Director Since
2021
CF Industries Committees

Corporate governance and nominating

Environmental sustainability and community
Qualifications

Agriculture Industry

Environmental Sustainability

Human Capital

Operations

Risk Management

Senior Executive Leadership
 
19

 
[MISSING IMAGE: ph_annepnoonan-4clr.jpg]
Anne P. Noonan
Anne P. Noonan has served as president and chief executive officer and as a director of Summit Materials, Inc., a leading vertically integrated construction materials company that supplies aggregates, cement, ready-mix concrete and asphalt paving mix in the United States and western Canada, since September 2020. From December 2016 to April 2020, Ms. Noonan served as president and chief executive officer of OMNOVA Solutions Inc., a global provider of emulsion polymers, specialty chemicals, and engineered surfaces for a variety of commercial, industrial, and residential end uses with manufacturing, technical, and other facilities located in North America, Europe, China, and Thailand. She served as OMNOVA’s president, performance chemicals from 2014 until December 2016. Ms. Noonan previously held several positions of increasing responsibility with Chemtura Corporation, a global specialty chemicals company, from 1987 through 2014, including most recently as senior vice president and president of Chemtura’s Industrial Engineered Products business and Corporate Development function.
Qualifications
As the president and chief executive officer of Summit Materials, former president and chief executive officer of OMNOVA Solutions and with previous executive operating positions at both OMNOVA Solutions and Chemtura, Ms. Noonan brings operations, chemical industry, environmental, health and safety of operations, environmental sustainability, human capital, public company governance, risk management and strategic initiative expertise to the Board.
Other Public Company Directorships (within the past 5 years)

Summit Materials, Inc. (Sept. 2020 – Present)

OMNOVA Solutions Inc. (Dec. 2016 – Apr. 2020)
Age
58
Director Since
2015
CF Industries Committees

Compensation and management development

Corporate governance and nominating (Chair)
Qualifications

CEO

Chemical Industry

EHS Aspects of Operations

Environmental Sustainability

Human Capital

Operations

Public Company Governance

Risk Management

Strategic Initiatives
[MISSING IMAGE: ph_michaeljtoelle-4clr.jpg]
Michael J. Toelle
Michael J. Toelle is the owner of T & T Farms, a diversified farming company. He has been a member of the board of Nationwide Mutual Insurance Company, one of the largest insurance and financial services companies in the world, since 2013. He is a former board chairman and former longtime board member of CHS Inc., a diversified global agribusiness cooperative. He also served as a board member for Cenex, Inc., before it merged with Harvest States Cooperatives to create CHS in 1998. Mr. Toelle is past chairman of the CHS Foundation and previously served as a director for the Agricultural Council of America and Country Partners Cooperative. Since June 2020, Mr. Toelle has served as a member of the board of directors of CIBO, a privately-owned science-based software company that applies science and technology to the scaling of environmentally and economically sustainable agriculture.
Qualifications
As the owner and operator of a major diversified farming company, a director of Nationwide Mutual Insurance Company and CIBO and former chairman and director of CHS, Mr. Toelle brings agricultural industry, accounting and financial, risk management and strategic initiative expertise to the Board.
Other Public Company Directorships (within the past 5 years)

None
Age
59
Director Since
2017
CF Industries Committees

Compensation and management development

Environmental sustainability and community
Qualifications

Accounting and Finance

Agriculture Industry

Risk Management

Senior Executive Leadership

Strategic Initiatives
 
20

 
[MISSING IMAGE: ph_theresaewagler-4clr.jpg]
Theresa E. Wagler
Theresa E. Wagler has served as chief financial officer and executive vice president of Steel Dynamics, Inc., one of the largest domestic steel producers and metals recyclers in the United States, since 2007 and 2009, respectively. She serves as Steel Dynamics’ principal accounting officer and also has oversight responsibility for company-wide safety, human resources, business development and strategy, and two operating joint ventures. She has held various positions of increasing responsibility since joining Steel Dynamics in 1998. Prior to joining Steel Dynamics, she served as assistant corporate controller for Fort Wayne National Bank and as a certified public accountant with Ernst & Young LLP.
Qualifications
With her roles and responsibilities at Steel Dynamics, Ms. Wagler brings substantial public company governance, accounting and finance, strategic initiative, risk management, human capital, operations, environmental, health and safety of operations and environmental sustainability expertise to the Board. Ms. Wagler is a certified public accountant and an “audit committee financial expert” within the meaning of SEC rules.
Other Public Company Directorships (within the past 5 years)

None
Age
51
Director Since
2014
CF Industries Committees

Audit (Chair)

Environmental sustainability and community
Qualifications

Accounting and Finance

CFO

EHS Aspects of Operations

Environmental Sustainability

Human Capital

Operations

Public Company Governance

Risk Management

Strategic Initiatives
[MISSING IMAGE: ph_celsolwhite-4clr.jpg]
Celso L. White
Celso L. White served as global chief supply chain officer at Molson Coors Brewing Company, one of the largest global brewers with breweries in the United States, Canada, Europe and India and worldwide distribution, from January 2013 to December 2019. From September 2010 to January 2013, he was vice president of international supply chain at Molson Coors. Prior to joining Molson Coors, he was Pepsi Cola’s vice president and general manager of Concentrate Operations, responsible for the Americas and parts of Asia, from 2004 to 2010. In January 2020, Mr. White co-founded Igniting Business Growth LLC, a consultancy business. Mr. White serves on the board of Colorado UpLift based in Denver, Colorado and is a member of the Bradley University Board of Trustees. He is also a member of the board of directors of Armada Acquisition Corp. I, a newly formed acquisition company concentrating in the FinTech industry, since 2021.
Qualifications
As the global chief supply chain officer at Molson Coors Brewing Company, Mr. White was responsible for all aspects of the supply chain from grain fields to finished product retailer distribution, including procurement; operations; planning; logistics and distribution; environmental health and safety; engineering; and technical innovation. Mr. White brings operational, agricultural industry, strategic initiative, risk management, human capital management, environmental sustainability and environmental, health and safety of operations expertise to the Board.
Other Public Company Directorships (within the past 5 years)

Armada Acquisition Corp. I (Aug. 2021 – Present)
Age
60
Director Since
2018
CF Industries Committees

Compensation and management development

Corporate governance and nominating
Qualifications

Agriculture Industry

EHS Aspects of Operations

Environmental Sustainability

Human Capital

Global Chief Supply Chain Officer

Operations

Risk Management

Strategic Initiatives
 
21

 
[MISSING IMAGE: ph_anthonywill-4clr.jpg]
W. Anthony Will
W. Anthony Will has served as our president and chief executive officer and as a member of the Board since January 2014. He was previously our senior vice president, manufacturing and distribution, from January 2012 to January 2014, our vice president, manufacturing and distribution, from March 2009 to December 2011, and our vice president, corporate development, from April 2007 to March 2009. Mr. Will also served from April 2010 to April 2018 in the officer positions with Terra Nitrogen GP Inc. (“TNGP”) comparable to those he held during that period with CF Industries. TNGP was our indirect, wholly-owned subsidiary and the sole general partner of Terra Nitrogen Company, L.P., a publicly-traded producer of nitrogen fertilizer products. In April 2018, we purchased all of the publicly traded common units of Terra Nitrogen Company, L.P. Mr. Will served as a director of TNGP from June 2010 until February 2016 and as chairman of the board of TNGP from January 2014 to February 2016. Before joining CF Industries, Mr. Will was a partner at Accenture Ltd., a global management consulting, technology services, and outsourcing company. Earlier in his career, he held positions as vice president, business development at Sears, Roebuck and Co. and vice president, strategy and corporate development at Fort James Corporation. Prior to that, Mr. Will was a manager with the Boston Consulting Group, a global management consulting firm. He is also a member of the board of directors of Olin Corporation, a global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition, since 2021.
Qualifications
As the president and chief executive officer of CF Industries and with his previous executive operations and corporate development positions, Mr. Will brings public company governance, operations, fertilizer and chemical industry, strategic initiative, environmental sustainability and environmental, health and safety of operations expertise to the Board. Mr. Will has extensive experience and expertise in risk management, accounting and finance and human capital management through his active supervision of those performing those functions at CF Industries.
Other Public Company Directorships (within the past 5 years)

Olin Corporation (Sept. 2021 – Present)
Age
56
Director Since
2014
CF Industries Committees

None
Qualifications

Accounting and Finance

CEO

EHS Aspects of Operations

Environmental Sustainability

Fertilizer / Chemical Industry

Human Capital

Operations

Public Company Governance

Risk Management

Strategic Initiatives
 
22

 
CORPORATE GOVERNANCE
CF Industries is committed to implementing sound corporate governance practices that enhance the effectiveness of the Board and our management and that serve the interests of our shareholders. Our corporate governance and nominating committee periodically reviews corporate governance developments and best practices along with our policies and business strategies. The committee advises the Board and management in an effort to strengthen existing governance practices and develop new policies that make CF Industries a better company. We are proud of the steps we have taken and the progress we have made to further strengthen our corporate governance practices and demonstrate our responsiveness to shareholder concerns.
CORPORATE GOVERNANCE GUIDELINES
The Board has adopted corporate governance guidelines to document its overall corporate governance philosophy. According to these guidelines, the business and affairs of CF Industries shall be managed by or under the direction of the Board. The Board’s goal is to build long-term value for our shareholders and assure the vitality of the company for our customers and employees and the other individuals and organizations who depend on us. A copy of our corporate governance guidelines is available to shareholders at our corporate website, www.cfindustries.com, or by writing to our corporate secretary at the address of our principal executive offices on the Notice of Annual Meeting of Shareholders accompanying this Proxy Statement.
DIRECTOR INDEPENDENCE
The experience and diversity of our directors has been, and continues to be, critical to our success. Our corporate governance guidelines require that the Board be composed of at least a majority of directors who qualify as independent directors under the listing standards of the NYSE. Additionally, in accordance with NYSE listing standards, the members of our audit, compensation, and corporate governance and nominating committees must be independent. The Board has made an affirmative determination that all of our non-employee directors who served in 2021 or are currently serving as directors, including all of our non-employee director nominees, have no material relationship with CF Industries or any of its subsidiaries (other than, as applicable, being a director and shareholder of CF Industries) and, accordingly, meet the applicable requirements for “independence” set forth in the NYSE’s listing standards.
LEADERSHIP OF THE BOARD
Separate Independent Board Chairman and Chief Executive Officer
The Board has determined that the most effective leadership structure is to maintain an independent Board chair role separate from the chief executive officer. In making this determination, the Board considered a number of factors, including (1) that separating these positions allows our Board chairman to focus on the Board’s role of providing advice to, and independent oversight of, management and (2) the time and effort our chief executive officer needs to devote to the management and operation of CF Industries and the development and implementation of our business strategies. Although our governance documents provide the Board with the flexibility to select the leadership structure in the way that it deems best for CF Industries at any given point in time, the Board intends to continue to maintain an independent Board chair separate from the chief executive officer. In addition, according to our corporate governance guidelines, if the chairman of the Board is not an independent director, our independent directors will designate one of their number to serve as a lead independent director. Otherwise, if the chairman of the Board is an independent director, he or she will serve as the lead independent director.
Stephen J. Hagge became our Board chairman effective January 1, 2022. Mr. Hagge succeeds Stephen A. Furbacher, who served as our lead independent director beginning in 2010 and as Board chairman from May 2014 through December 2021. Mr. Hagge was selected by the directors to
 
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serve as chairman because of his contributions to the leadership of the Board. Because Mr. Hagge is an independent director, he also serves as our lead independent director. The lead independent director’s duties include (i) coordinating the activities of the independent directors, (ii) coordinating the agenda for and moderating sessions of the independent directors, and (iii) facilitating communications between the other members of the Board. Unless otherwise provided in a short-term succession plan approved by the Board:

in the event that our chief executive officer should unexpectedly become unable to perform his or her duties, the chairman of the Board (if the chairman is an independent director or else the lead independent director) shall allocate the duties of the chief executive officer among our other senior officers; and

in the event that the chairman of the Board should unexpectedly become unable to perform his or her duties, the chief executive officer (if the chairman of the Board is an independent director or else the lead independent director) shall temporarily assume the duties of the chairman of the Board,
in each case, until the Board has the opportunity to consider the situation and take action.
Executive Sessions
At each regularly scheduled meeting, the Board conducts executive sessions, which are discussions that involve only the non-employee directors. Our corporate governance guidelines state that the lead independent director or, in such director’s absence, another independent director designated by the lead independent director will preside at the executive sessions of the Board.
Annual Board and Committee Self-Evaluations and Director Peer Evaluations
Our corporate governance and nominating committee sponsors an annual self-assessment of the Board’s performance and the performance of each committee of the Board as well as director peer evaluations. The assessment includes a review of any areas in which the Board believes the Board can make a better contribution to CF Industries. In addition, the chair of the corporate governance and nominating committee sponsors an annual self-assessment of director skills and experience. The assessment asks each director to rank the importance of various business experiences, qualifications, attributes, and skills to our current and future global strategy, business, and governance and to rate the director’s own competency level in each of these skills. The results of the assessments are discussed with the full Board and each committee. The corporate governance and nominating committee considers the results of these self-evaluation processes as applicable in assessing and determining the characteristics and critical skills required of prospective candidates for election to the Board and making recommendations to the Board with respect to assignments of Board members to various committees.
COMMITTEES OF THE BOARD
The Board has established four separate standing committees: the audit committee, the compensation and management development committee, the corporate governance and nominating committee and the environmental sustainability and community committee. The Board has adopted written charters for each of these committees, and copies of these charters are available to shareholders at our corporate website, www.cfindustries.com, or by writing to our corporate secretary at the address of our principal executive offices on the Notice of Annual Meeting of Shareholders accompanying this Proxy Statement.
Audit Committee. Our audit committee is a separately designated standing committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The committee currently consists of Theresa E. Wagler (chair), Robert C. Arzbaecher, Deborah L. DeHaas, John W. Eaves, Stephen A. Furbacher and Stephen J. Hagge. The Board has affirmatively determined that all of the directors on the committee are independent under the corporate governance standards of the NYSE applicable to audit committee members.
 
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The Board has also determined that Ms. Wagler, Ms. DeHaas and Messrs. Arzbaecher, Eaves and Hagge are “audit committee financial experts,” as defined by the SEC. The audit committee assists the Board in fulfilling its oversight responsibility for (1) the integrity of our financial statements and financial reporting process and our systems of internal accounting and financial controls, (2) the performance of our internal audit function, (3) the annual independent integrated audit of our consolidated financial statements and internal control over financial reporting, and (4) our compliance with legal and regulatory requirements, including our disclosure controls and procedures. The duties and responsibilities of the audit committee include the engagement of our independent registered public accounting firm and the evaluation of our accounting firm’s qualifications, independence, and performance. The audit committee’s report to shareholders appears elsewhere in this Proxy Statement.
Compensation and Management Development Committee. Our compensation and management development committee currently consists of John W. Eaves (chair), Javed Ahmed, Stephen J. Hagge, Anne P. Noonan, Michael J. Toelle, and Celso L. White. The Board has affirmatively determined that all of the directors on the committee are independent under the corporate governance standards of the NYSE applicable to compensation committee members. The Board has also determined that all of the members of the committee qualify as “non-employee directors,” within the meaning of Rule 16b-3 promulgated under the Exchange Act, and “outside directors,” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The compensation and management development committee oversees our compensation and employee wellbeing plans and practices, including our executive compensation plans, director compensation plans, and incentive-compensation and equity-based plans. In addition, the compensation and management development committee supports the full Board with succession plans for the CEO, while overseeing and reviewing management’s development, retention and succession planning for other key executives and senior management as well as overseeing diversity, equity and inclusion initiatives within the company. The compensation and management development committee may delegate to subcommittees of two or more members such power and authority, other than any power or authority required by any law, regulation or listing standard to be exercised by the compensation and management development committee as a whole, as the compensation and management development committee deems appropriate. The compensation and management development committee’s report to shareholders appears elsewhere in this Proxy Statement under the heading “Compensation Committee Report.” Additional information regarding the processes and procedures of the compensation and management development committee in recommending and determining compensation for our directors and executive officers is set forth below under the heading “Compensation Discussion and Analysis.”
Corporate Governance and Nominating Committee. Our corporate governance and nominating committee currently consists of Anne P. Noonan (chair), Javed Ahmed, Stephen A. Furbacher, Jesus Madrazo, and Celso L. White. The Board has affirmatively determined that all of the directors on the committee are independent under the corporate governance standards of the NYSE. The corporate governance and nominating committee’s responsibilities include identifying and recommending to the Board individuals qualified to serve as directors and on committees of the Board; advising the directors with respect to the Board’s composition, procedures, and committees; developing and recommending to the Board a set of corporate governance principles; and overseeing the evaluation of the Board and the president and chief executive officer.
Environmental Sustainability and Community Committee. Our environmental sustainability and community committee currently consists of Robert C. Arzbaecher (chair), John W. Eaves, Jesus Madrazo, Michael J. Toelle and Theresa E. Wagler. The Board has affirmatively determined that all of the directors on the committee are independent under the corporate governance standards of the NYSE. The purpose of the environmental sustainability and community committee is to assist the Board in fulfilling its oversight responsibility with respect to the strategies, goals, objectives, policies and practices, and related risks that pertain to energy, emissions and climate change, food security, product stewardship, public advocacy, community engagement, and charitable contributions (“ESC Committee Matters”). The environmental sustainability and community committee’s responsibilities include considering, reviewing and monitoring the
 
25

 
company’s general strategy and objectives relating to ESC Committee Matters; assessing the effectiveness of and advising the Board on the company’s programs and initiatives related to ESC Committee Matters; reviewing and discussing current and emerging trends with respect to ESC Committee Matters; and discussing and reviewing with management the company’s identification, assessment and management of risks associated with ESC Committee Matters. The environmental sustainability and community committee also reviews the goals established from time to time with respect to ESC Committee Matters, assesses the company’s sustainability performance and progress towards its goals and strategic objectives, and oversees the company’s external reporting on ESC Committee Matters, including our ESG Report and Sustainability Report.
ATTENDANCE OF DIRECTORS AT MEETINGS
Directors are expected to attend meetings of the Board and the committees on which they serve, as well as our annual meeting of shareholders. A director who is unable to attend a meeting (which it is understood will occur on occasion) is expected to notify the chairman of the Board or the chair of the appropriate committee in advance of such meeting.
During 2021, the Board held nine meetings, our audit committee held eight meetings, our compensation and management development committee held six meetings, our corporate governance and nominating committee held seven meetings and our environmental sustainability and community committee held five meetings. Each of our directors attended 75% or more of the combined total meetings of the full Board and the committees on which he or she served during 2021. All eleven of our directors then in office attended the 2021 annual meeting, which was held virtually on May 4, 2021.
BOARD OVERSIGHT OF STRATEGY AND RISK MANAGEMENT
Shareholders elect the Board to oversee management and to serve shareholders’ long-term interests. Management is responsible for delivering on our strategy, creating our culture, establishing accountability, and managing risk. The Board and its committees work closely with management to balance and align strategy, risk, sustainability, and other areas while considering feedback from shareholders. Essential to the Board’s oversight role is a transparent and active dialogue between the Board and its committees and management. To support that dialogue, the Board and its committees have access to, receive presentations from, and conduct regular meetings with our executive officers, other internal business and function leaders and subject matter experts, as well as external experts and advisors.
Board Oversight of Strategy
One of the Board’s primary responsibilities is reviewing and approving the strategy established by management and overseeing the successful execution of our strategy. Throughout the year, the Board and its committees provide oversight and guidance to management regarding our strategy, operating plans, and overall performance. While elements of strategy are embedded in every regularly-scheduled meeting of the Board, the Board also dedicates at least one full day meeting each year to focus on our long-term business strategic planning. At all of these reviews, the Board engages with our executive officers and other business leaders regarding business objectives, the competitive landscape, economic trends, political and regulatory developments and sustainability matters. At meetings occurring throughout the year, the Board also assesses strategic initiatives, our budget and capital allocation plans, and performance for alignment to our strategy.
Board Oversight of Risk Management
Our management is responsible for establishing and maintaining systems to assess and manage the company’s risk exposure, and the Board provides oversight in connection with those efforts. In fulfilling its risk oversight role, the Board focuses on the adequacy of our risk management process and the effectiveness of our overall risk management system. In addition, the Board routinely assesses policies and procedures in critical areas to ensure that the responsibilities and
 
26

 
authority delegated to senior management are appropriate from an operational and risk management perspective. The Board also receives regular reports from senior management addressing financial and operational risk exposure, including monthly scorecards and quarterly dashboards that include financial metrics and safety and environmental statistics.
Our management has established an enterprise risk management (“ERM”) program that includes an annual assessment process designed to identify risks that could affect us and the achievement of our objectives; to understand, assess, and prioritize those risks; and to facilitate the implementation of risk management strategies and processes across the company that are responsive to the company’s risk profile, business strategies, and specific material risk exposures. The ERM program seeks to integrate consideration of risk and risk management into business decision-making throughout the company, including through the implementation of policies and procedures intended to ensure that necessary information with respect to material risks is transmitted to senior executives and, as appropriate, to the Board or relevant committees. Each year, the Board reviews and discusses with the key members of management responsible for management of risk the guidelines and policies governing the ERM process, the key risks identified in the ERM process, the likelihood of occurrence and the potential impact assigned to those risks by management, and the risk mitigation strategies in each instance.
The standing committees assist the Board in its oversight role with respect to risks relating to the committees’ respective areas of responsibility.

The audit committee oversees the integrity of CF Industries’ financial statements, the effectiveness of the internal control environment, the external auditors and the internal audit function. In addition, the audit committee receives regular reports on the efficacy of our information security and technology risks (including cybersecurity) and related policies and procedures from our chief information officer and other members of senior management who are tasked with monitoring cybersecurity risks.

The compensation and management development committee reviews risks associated with the design and implementation of our compensation plans and arrangements (see “Compensation Discussion and Analysis — Compensation Discussion and Analysis: In Detail — Other Compensation Governance Practices and Considerations — Compensation and Benefits Risk Analysis,” below). In addition, the compensation and management development committee supports the full Board with succession plans for the CEO, while overseeing and reviewing management’s development, retention and succession planning for other key executives and senior management.

The nominating and corporate governance committee reviews risks related to our governance structures and processes, including Board succession planning.

The environmental sustainability and community committee, among other things, assists the Board with the oversight of our strategy and processes to identify, assess, and address the risks and opportunities to our company associated with energy, emissions and climate change, food security, product stewardship, public advocacy, community engagement, and charitable contributions.
All Board members are invited to attend every committee meeting, and Board members who do not attend a committee meeting receive information about committee activities and deliberations.
OUR APPROACH TO HUMAN CAPITAL MANAGEMENT
Our long-term success depends on our people. We are dedicated to creating a workplace where employees are proud to work and grow and everyone feels empowered to do their best work. We do this by investing in extensive recruitment, training and professional development opportunities for our employees and fostering diversity and inclusion in CF Industries’ culture. In addition, we have an effective succession management process to safeguard the long-term achievement of our strategy.
 
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Culture, Inclusion and Diversity
Doing the right thing is the cornerstone of our culture and is a significant factor in our success. Our culture is rooted in our core values — We Do It Right, We Do It Well, We Execute as a Team and We Take a Long-Term View — which you can read more about on our website at www.cfindustries.com.
Our core values and their underlying principles reflect our commitment to a diverse and inclusive culture, treating one another with respect. We have developed a long-term Inclusion and Diversity (I&D) strategy to provide direction to our ongoing efforts to strengthen our culture of inclusive leadership. Our strategy focuses on three key areas: employee education and skill development, representation, and belonging. As part of the education and skill development pillar of our I&D strategy, we introduced curated training for enterprise learning and targeted audiences. Across the company, all employees complete training to learn to recognize and address the effects of unconscious bias by challenging assumptions; encouraging diversity of experience, opinion, and expression; and supporting a workplace culture that actively strives to be more inclusive. Leaders in the organization also receive training in inclusive leadership, completing a three-part course that includes an instructor-led session. During 2021, we launched our Inclusion Council to champion the company’s I&D strategy and the Inclusion Resource Group to drive I&D programming that fosters a diverse, equitable and inclusive workplace.
In order to continue to improve the inclusiveness and diversity of our company and culture, our comprehensive ESG goals announced in 2020 include goals to increase the representation of females and persons of color in senior leadership roles and to implement a program designed to increase the hiring and promotion of minority and female candidates. As of December 31, 2021, we had exceeded our representation goal with approximately 38% of senior leadership roles held by females and persons of color.
In addition, to increase our I&D transparency, in 2021 we published our first Inclusion, Diversity & Equity Report and made our most recently filed U.S. Federal Employer Information Report EEO-1 available on our website www.cfindustries.com. We are on a journey to build a culture of belonging where it is safe to be yourself — a workplace where everyone feels welcomed, valued, empowered and inspired to do their best work. We believe we have made significant progress in these efforts while also recognizing that there is much work to do to create new opportunities and growth for employees from traditionally underrepresented groups.
Workforce Health & Safety
Operating in a safe and responsible manner is a core value and an integral part of what sets CF Industries apart to all our stakeholders. Our safety culture permeates our business in three key ways:

Engaged culture that empowers consistent behaviors that drive toward excellence.

Robust systems and processes that provide a clear, repeatable direction toward excellence.

Superior performance that aligns effective and efficient environmental, health, and safety activities with operations.
Our commitment to safety is unwavering, and we have demonstrated that our focus on this priority is yielding positive results. We believe that focusing on leading indicators — such as our Process Safety Metric and the behavioral safety practices we have incorporated into our annual incentive plan — to drive and measure activities that prevent and control safety incidents, results in our industry-leading safety record.
Board Oversight of COVID-19 Response
The Board has been highly engaged with management on the company’s response to the COVID-19 pandemic. Discussions with the Board and committees have included, among other topics:

the impact of the pandemic on industry fundamentals, including the cost of natural gas and product supply and demand;
 
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our strategy and the pandemic’s implications for our execution of that strategy, including potential effects on our customers, suppliers and third party service providers;

the designation of our business operations as part of the critical infrastructure by the United States and as an essential business in the United Kingdom and Canada due to the use of fertilizer products in crop production to support the global food supply chain;

business continuity and the protocols and policies put in place to protect ongoing operations;

safety precautions instituted to protect the health and well-being of all of our employees, including the manufacturing workers who operate our manufacturing complexes and distribution facilities;

the transition of the majority of our non-operational personnel at our sites who work in administrative and operational support functions to remote work and our ability to operate effectively with such functions being carried out remotely;

financial and other well-being measures taken to support our employees;

information security and technology controls to manage the remote work environment;

the company’s controls to maintain the integrity of financial reporting; and

the company’s return to work procedures and continued adjustments in response to new coronavirus variants and evolving government guidelines.
Additionally, throughout the pandemic, our management has provided the Board with regular strategic, financial and operational updates.
Talent Development
A core aspect of our culture is our commitment to identifying and developing talent to help employees accelerate growth and achieve their career goals. We invest in extensive assessment, training and professional development opportunities for our employees through a robust set of formal and informal programs, including targeted job movements, key experiences, and training with an emphasis on creating a culture of inclusion. At CF Industries, leadership is the quality that drives our values and sets us apart. To help foster leadership, the company has developed a set of leadership competencies that provide a common language for how to demonstrate leadership at every level of the organization. We view training and development programs as being a key part of succession planning, allowing us to grow a stronger company, today and in the future.
Board Oversight of Human Capital Management and Succession Planning
The Board plays a critical role in the oversight of talent and culture at CF Industries. The Board and the compensation and management development committee engage with senior management and human resources executives across a broad range of human capital management topics, including culture, succession planning and development, compensation, recruiting and retention, and diversity and inclusion.
The Board plays an integral oversight role in talent development by recognizing the importance of succession planning for the CEO and other key executives at CF Industries. To assist the Board, the chief executive officer prepares and distributes to the Board an annual report on succession planning for all senior officers of the company with an assessment of senior managers and their potential to succeed the chief executive officer and other senior management positions. In addition, the chief executive officer prepares, on a continuing basis, a short-term succession plan which delineates a temporary delegation of authority to certain officers of the company, if all or a portion of the senior officers should unexpectedly become unable to perform their duties.
 
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BEYOND THE BOARDROOM
On-Site Visits to Nitrogen Manufacturing Facilities
In 2021, due to the COVID-19 pandemic and related measures to contain the virus, the majority of our Board and committee meetings were held virtually through video conferencing or in-person with limited non-executive attendees. In a typical year, most Board and committee meetings are held on-site at our headquarters or near other CF Industries facilities. Over the last several years, the Board has visited our nitrogen manufacturing facilities in Verdigris, Oklahoma; Yazoo City, Mississippi; Port Neal, Iowa; Donaldsonville, Louisiana; and Ince, United Kingdom. Locating the Board and committee meetings on-site or near our headquarters or manufacturing locations allows our directors to deepen their understanding of the company and interact with on-site employees.
Director Orientation
All new members of the Board participate in the company’s new director orientation program led by members of senior management. The new director orientation program enables new members of the Board to quickly become active, knowledgeable and effective Board members. Orientation includes a visit to the company’s corporate headquarters for a personal comprehensive briefing by senior management on our business, financial position, strategic plans, significant financial, accounting and risk management issues, compensation practices, corporate governance and key policies and our principal officers and internal and independent auditors as well as the roles and responsibilities of our directors. In addition, within a few months of joining the Board, new directors visit one of our nitrogen manufacturing facilities to see our operations in person and learn about our manufacturing processes.
Continuing Education
All directors are encouraged to participate in outside continuing education programs to increase their knowledge and understanding of the duties and responsibilities of directors and the company, regulatory developments and best practices. The Board materials for every corporate governance and nominating committee meeting include a schedule and summary of upcoming relevant continuing education programs, sponsored by leading universities or other organizations, with any associated expenses to be reimbursed by the company. Directors who have participated in such programs share their lessons and insights with other members of the Board. The company also provides continuing director education through individual speakers who make relevant presentations in connection with Board meetings, for our directors to stay current and knowledgeable about the company’s industry, market and overall environment. The company’s senior management also monitors pertinent developments in business, corporate governance and issues pertaining to the company and the industries in which it participates and regularly shares articles, reports and current events with directors. The corporate governance and nominating committee reviews the director education process to ensure the continuing education provided remains relevant and helpful.
Individual Discussions and Mentoring Management
Outside of regularly scheduled Board and committee meetings, our directors have discussions with each other, including with our CEO. Directors have access to management at any time and are encouraged to have small group or individual meetings, as necessary. Additionally, high-potential employees join members of the Board for dinners prior to on-site Board and committee meetings. These dinners are designed to give directors the opportunity to engage with employees directly and afford employees an opportunity to ask questions and get to know our directors.
SUSTAINABILITY AT CF INDUSTRIES
We believe we have an important role to play in solving some of the world’s greatest challenges, such as providing clean energy to the world, feeding a growing global population and protecting the
 
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environment. We also believe that our ability to integrate sustainable business practices into our strategy and operations is integral to delivering long-term value. That is why sustainability is an inherent part of how we run our business and part of our commitment to the communities where we live and work.
Sustainability Focus
CF Industries is a leader in an industry whose mission is fundamental to human survival: putting food on the world’s table. By providing plant nutrients to farmers, we feed the crops that feed the world and produce building blocks for a better life. We are proud of the role the company plays in fulfilling this increasingly challenging mission. As a company, we are also addressing issues such as energy efficiency, resource use, and economic growth. We are taking significant steps to support a global hydrogen and clean fuel economy through the production of green and blue ammonia. Ammonia, which is composed of three-parts hydrogen and one-part nitrogen, is a highly efficient transport and storage mechanism for hydrogen as well as a fuel in its own right. We believe that CF Industries, as the world’s largest producer of ammonia with an unparalleled manufacturing and distribution network and deep technical expertise, is uniquely positioned to fulfill anticipated demand for hydrogen and ammonia from green and blue sources.
Our approach includes green ammonia production, which refers to ammonia produced through a carbon-free process, and blue ammonia production, which relates to ammonia produced by conventional processes but with CO2 removed through carbon capture and sequestration (CCS) and other certified carbon abatement projects. We have announced a $100 million green ammonia project at our flagship Donaldsonville complex to produce approximately 20,000 tons per year of green ammonia. Construction and installation began in the fourth quarter of 2021 and is expected to finish in 2023. We believe that when completed, the Donaldsonville green ammonia project will be the largest of its kind in North America.
Additionally, we plan to conduct preliminary studies covering areas such as blue ammonia supply and supply chain infrastructure, CO2 transportation and storage, expected environmental impacts, and blue ammonia economics and marketing opportunities in Japan and in other countries. Concurrently, we are taking steps to produce blue ammonia from our ammonia production network. In the fourth quarter of 2021, the Board authorized $285 million in capital projects that will enable the annual production of up to 1.25 million tons of blue ammonia from our existing network starting in 2024. The projects will involve constructing units at our Donaldsonville and Yazoo City complexes that dehydrate and compress CO2, a process essential for CO2 transport via pipeline to sequestration sites. Management expects that, once the units are in service and sequestration is initiated, we could sequester up to 2.5 million tons of CO2 per year.
Comprehensive Environmental, Social, and Governance (ESG) Goals
In line with our commitment to the clean energy economy and our focus on sustainability, we have published comprehensive environmental, social and governance goals covering critical environmental, societal, and workforce imperatives. These goals include a 25% reduction in CO2 equivalent emissions intensity by 2030 and net-zero carbon emissions by 2050. Additionally, our 2021 executive compensation is tied directly to ESG goals, as discussed in “Compensation Discussion and Analysis — Compensation Discussion and Analysis: In Detail — Review and Approval of 2021 Cash Compensation.” You can read more about our comprehensive ESG goals at our corporate website, www.cfindustries.com.
Sustainability Reporting
We prepare annual sustainability reports, each of which is posted on our corporate website, www.cfindustries.com. Our sustainability reports are presented annually to the environmental sustainability and community committee. In response to increased interest from the investment community and our commitment to transparency, our sustainability reporting includes a Sustainability Report and an ESG Report, which includes a GRI Index in accordance with the
 
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Global Reporting Initiative (GRI) Standards, in which we report on a comprehensive basis and cover nearly all GRI indicators, a SASB Index using the Sustainability Accounting Standards Board (SASB) framework for the chemicals industry, and, for the second year, a TCFD Index utilizing the Task Force on Climate-related Financial Disclosures (TCFD) disclosure recommendations. Additionally, we remain committed to make the UN Global Compact and its principles part of the strategy, culture and day-to-day operations of our company and to engage in collaborative projects that advance the UN Sustainable Development Goals (SDGs). We continue to increase the level of transparency and detail of our sustainability reporting and have recently disclosed our estimated Scope 3 GHG emissions and announced a Scope 3 GHG emissions reduction target. We have recently joined the World Business Council for Sustainable Development (WBCSD) and are working with both the International Fertilizer Association and the WBCSD to support the development of a science-based fertilizer sectoral decarbonization approach. Our sustainability reports are published in tandem with our annual report to better align the timing of our sustainability reporting with our financial reporting and to further integrate our business and sustainability strategies.
CORPORATE RESPONSIBILITY
Corporate responsibility and sustainability are inherent to our values and our “Do It Right” culture and an intrinsic part of our commitment to the communities in which we live and work.
Code of Corporate Conduct
Our commitment to ethical behavior is captured in our code of corporate conduct, which was adopted by the Board. The code is applicable to all of our directors, officers, and employees, all of whom must acknowledge receiving and reading the code annually. We provide annual code of corporate conduct and anti-corruption training to all employees.
A copy of our code of corporate conduct is available at our corporate website, www.cfindustries.com, or by writing to our corporate secretary at the address of our principal executive offices on the Notice of Annual Meeting of Shareholders accompanying this Proxy Statement. We intend to disclose on our corporate website any amendment to any provision of the code that relates to any element of the definition of “code of ethics” enumerated in Item 406(b) of Regulation S-K under the Exchange Act, and any waiver from any such provision granted to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.
Political Contributions Report
We prepare a semiannual Political Contributions Report listing CF Industries’ political contributions. Each Political Contributions Report is posted on our corporate website, www.cfindustries.com, and presented to the environmental sustainability and community committee. Additionally, the Political Contributions Reports set forth the United States trade associations and other similar non-profit organizations to which the company annually pays dues of $20,000 or more and identify the portion of such dues that is used for advocacy and/or political activities by those associations and other organizations. The most recent Political Contributions Report and our code of corporate conduct, containing our corporate policies related to political activities and contributions, lobbying and related matters, are currently available on our corporate website.
Charitable Contributions Report
We also prepare a semiannual Charitable Contributions Report listing CF Industries’ charitable contributions that exceed $20,000. Each Charitable Contributions Report is posted on our corporate website, www.cfindustries.com. Most of our philanthropic and social outreach initiatives are locally based. This enables each of our facilities to address the unique needs and opportunities in their respective communities. During 2021 we enhanced our efforts by organizing our corporate
 
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giving philosophy around four key pillars: environmental sustainability, STEM education and awareness, healthy food access and local community advancement. These pillars serve as our guidepost for our charitable giving philosophy. In addition, we implemented a volunteer time off (VTO) program that provides paid time off for employees to volunteer in their communities with organizations that are part of the company’s giving campaign.
SHAREHOLDER ENGAGEMENT
We believe that building positive relationships with our shareholders is critical to CF Industries’ success. We value the views of, and regularly communicate with, our shareholders on a variety of topics, such as our financial performance, environmental, social, and governance initiatives, executive compensation, human capital management, environmental sustainability, community relations, and related matters. Management shares the feedback received from shareholders with the Board. Our chairman, our committee chairs, and other members of the Board may also be available to participate in meetings with shareholders as appropriate. Requests for such a meeting are considered on a case-by-case basis. Our engagement activities have resulted in valuable feedback that has contributed to our decision-making with respect to these matters.
We conduct shareholder outreach campaigns in the spring and in the fall. Our engagements in the spring are primarily focused on ballot items up for a shareholder vote at our annual meeting. Our engagements in the fall generally focus on voting outcomes from our prior annual meeting — including direct shareholder feedback on how they voted on ballot items — as well as our environmental, social, and governance activities and initiatives. The fall engagement also presents an opportunity to discuss with shareholders developments in their methodologies and analyses and potential future areas of focus.
[MISSING IMAGE: tm223611d1-pc_shareholder4c.jpg]
In both the spring of 2021 leading up to our 2021 annual meeting and during the fall of 2021 following our 2021 annual meeting, we contacted shareholders comprising approximately 75% of our outstanding shares to invite them to engage with us. Combined, we engaged with shareholders representing approximately 29% of our outstanding shares, discussing with these shareholders the ballot items and voting outcomes from our 2021 annual meeting as well as general governance, compensation, corporate responsibility and sustainability matters.
COMMUNICATIONS WITH DIRECTORS
The Board has established a process to receive communications from shareholders and other interested parties. Shareholders and other interested parties may contact any member (or all
 
33

 
members) of the Board, any Board committee, or any chair of any such committee by mail. To communicate with the Board, any individual director, or any group or committee of directors, correspondence should be addressed to the Board or any such individual director or group or committee of directors by either name or title. All such correspondence should be sent c/o the corporate secretary to our principal executive offices at the address on the Notice of Annual Meeting of Shareholders accompanying this Proxy Statement.
All communications received as set forth in the preceding paragraph will be opened by the office of our general counsel for the sole purpose of determining whether the contents represent a message to one or more of our directors and then forwarded promptly to each addressee. In the case of communications to the Board or any group or committee of directors, the office of the general counsel will distribute copies of the contents to each director who is a member of the Board or of the group or committee to which the envelope or correspondence is addressed.
DIRECTOR COMPENSATION
Non-employee directors receive compensation, including fees and reimbursements of expenses, for their service and dedication to the company. We recognize the substantial time and effort required to serve as a director of a large public company like ours. We believe that compensation for non-employee directors should be competitive and should encourage increased ownership of CF Industries stock through the payment of a portion of director compensation in shares of our stock. In order to further align the interests of our directors with the interests of our shareholders, our non-employee directors are required to achieve and maintain stock ownership with a market value equal to five times their annual cash retainer.
Our compensation and management development committee is responsible for reviewing director compensation and making recommendations to the Board. The committee reviews the compensation of our non-employee directors annually. In connection with its annual review of the compensation of our non-employee directors, the committee also authorizes its compensation consultant, Exequity LLP (“Exequity”), to work with our human resources department to compare the compensation of our non-employee directors with compensation paid to comparable directors at peer companies and the overall market based on the then most recent National Association of Corporate Directors survey on director compensation. See “Compensation Discussion and Analysis — Compensation Discussion and Analysis: In Detail — Other Compensation Governance Practices and Considerations — Role of the Compensation Consultant.” Based on this review, in May 2021 the compensation and management development committee recommended to the Board, and the Board approved, an increase of $5,000 in the amount of the annual cash retainers paid to all non-employee directors and the chairman of the Board, an increase of $2,500 in the additional annual cash retainer amounts paid to the chairs of the Board committees and an increase of $20,000 in the value of the annual restricted stock grant to non-employee directors, in each case to the amounts set forth below.
Annual Cash Retainer
All non-employee directors are entitled to an annual cash retainer of $105,000 ($185,000 in the case of the chairman of the Board), payable quarterly. We do not pay meeting fees to our directors. Each new non-employee director will receive, upon joining the Board between annual meetings of shareholders, a full quarterly cash retainer, payable in advance (but without duplication), and will thereafter receive quarterly cash retainer payments along with the other non-employee directors. The chairs of the Board committees receive additional annual cash retainers in the following amounts, payable quarterly:
Audit committee chair
$22,500
Compensation and management development committee chair
$17,500
Corporate governance and nominating committee chair
$17,500
Environmental sustainability and community committee chair
$17,500
 
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Annual Restricted Stock Grant
Each non-employee director will receive, upon joining the Board between annual meetings of stockholders, a restricted stock grant with a fair market value of $150,000 ($250,000 in the case of the chairman of the Board), rounded to the nearest whole share. Thereafter, each continuing non-employee director will receive an annual restricted stock grant with a fair market value of $150,000 ($250,000 in the case of the chairman of the Board), rounded to the nearest whole share, on the date of each annual meeting of the shareholders. Assuming continuing service as a non-employee director, all shares of restricted stock will vest on the earlier of (x) the date of the first annual meeting of shareholders following the date of grant or (y) the first anniversary of the date of grant.
2021 Total Director Compensation
The following table sets forth cash and non-cash compensation with respect to the year ended December 31, 2021, for our non-employee directors. Mr. Will receives no additional compensation for his service as a director.
Name
Fees Earned
or Paid
in Cash(1)
($)
Stock
Awards(2)
($)
All Other
Compensation(3)
($)
Total
($)
Javed Ahmed
103,750
150,001
4,139
257,890
Robert C. Arzbaecher
120,625
150,001
4,139
274,765
William Davisson(4)
25,000
26,418
51,418
Deborah L. DeHaas(5)
78,750
150,001
2,721
231,472
John W. Eaves
103,750
150,001
4,139
257,890
Stephen A. Furbacher(6)
183,750
249,986
7,043
440,778
Stephen J. Hagge
120,625
150,001
4,139
274,765
Jesus Madrazo(5)
78,750
150,000
1,958
230,708
Anne P. Noonan
120,625
150,001
4,139
274,765
Michael J. Toelle
103,750
150,001
4,139
257,890
Theresa E. Wagler
125,625
150,001
4,139
279,765
Celso L. White
103,750
150,001
4,139
257,890
(1)
Amounts in this column represent the annual cash retainers that our non-employee directors earned during 2021.
(2)
Amounts in this column represent the grant date fair value computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 of the restricted stock awards that we granted to the non-employee directors during 2021 pursuant to our 2014 Equity and Incentive Plan. Our assumptions with respect to the FASB ASC Topic 718 valuation of these equity awards are described in the footnotes to our audited financial statements as of and for the year ended December 31, 2021. Additional information with respect to these restricted stock awards is set forth above under the heading “Annual Restricted Stock Grant.” Outstanding unvested restricted stock awards as of December 31, 2021 were as follows: 3,023 shares for each of directors Ahmed, Arzbaecher, DeHaas, Eaves, Hagge, Noonan, Toelle, Wagler and White, 5,038 shares for our former chairman Mr. Furbacher and 3,263 shares for Mr. Madrazo.
(3)
Amounts in this column represent dividends on restricted stock. Amounts in this column for Mr. Davisson also includes a $25,000 donation to a charity designated by Mr. Davisson in connection with his retirement from the Board and in recognition of his many years of service.
(4)
Mr. Davisson retired from the Board effective as of the 2021 annual meeting of shareholders.
(5)
Ms. DeHaas was elected to the Board on May 4, 2021, and Mr. Madrazo was elected to the Board on July 19, 2021.
(6)
Mr. Furbacher will retire from the Board effective as of the date of the Annual Meeting and will not stand for re-election.
 
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COMMON STOCK OWNERSHIP
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of March 18, 2022, concerning the beneficial ownership of each person known to us to beneficially own more than 5% of our common stock. The information in the table and the related notes is based on statements filed by the respective beneficial owners with the SEC pursuant to Sections 13(d) and 13(g) under the Exchange Act.
Name and Address of Beneficial Owner
Amount and Nature of
Beneficial Ownership(1)
Percent of
Class(2)
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
21,036,924(3)
10.1%
FMR LLC
245 Summer Street
Boston, Massachusetts 02210
15,032,791(4)
7.2%
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, Maryland 21202
14,349,469(5)
6.9%
The Vanguard Group
100 Vanguard Blvd.
Malvern, Pennsylvania 19355
25,652,876(6)
12.3%
 
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(1)
Unless otherwise indicated, beneficial ownership consists of sole power to vote or direct the vote and sole power to dispose or direct the disposition of the shares listed.
(2)
Unless otherwise indicated, percentages calculated based upon common stock outstanding as of March 18, 2022 and beneficial ownership of common stock as set forth in the statements on Schedule 13G filed by the respective beneficial owners with the SEC.
(3)
Based solely on a Schedule 13G (Amendment No. 14), dated March 11, 2022 and filed with the SEC on March 11, 2022, by BlackRock, Inc. (“BlackRock”), which discloses that BlackRock has sole power to vote or to direct the vote of 19,316,027 shares of common stock and sole power to dispose or to direct the disposition of 21,036,924 shares of common stock.
(4)
Based solely on a Schedule 13G, dated February 8, 2022 and filed with the SEC on February 9, 2022, by FMR LLC (“FMR”) and Abigail P. Johnson, a Director, the Chairman, and the Chief Executive Officer of FMR, which discloses that FMR has sole power to vote or to direct the vote of 2,071,886 shares of common stock and sole power to dispose or to direct the disposition of 15,032,791 shares of common stock.
(5)
Based solely on a Schedule 13G (Amendment No. 6), dated February 14, 2022 and filed with the SEC on February 14, 2022, by T. Rowe Price Associates, Inc. (“T. Rowe Price”), which discloses that T. Rowe Price has sole power to vote or to direct the vote of 7,120,407 shares of common stock and sole power to dispose or to direct the disposition of 14,349,469 shares of common stock.
(6)
Based solely on a Schedule 13G (Amendment No. 12), dated February 9, 2022 and filed with the SEC on February 9, 2022, by The Vanguard Group (“Vanguard”), which discloses that Vanguard has shared power to vote or to direct the vote of 345,249 shares of common stock, sole power to dispose or to direct the disposition of 24,767,932 shares of common stock, and shared power to dispose or to direct the disposition of 884,944 shares of common stock.
 
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COMMON STOCK OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth information, as of March 18, 2022, concerning the beneficial ownership of our common stock by:

each director or director nominee and each of our named executive officers; and

all directors and executive officers as a group.
Amount and Nature of
Beneficial Ownership(1)
Name of Beneficial Owner
Shares of
Common Stock
Owned
Directly or
Indirectly(2)
Shares of
Common Stock
that can be
Acquired within
60 Days(3)
Total Shares of
Common Stock
Percent of
Class
Javed Ahmed
13,955
13,955
*
Robert C. Arzbaecher(4)
98,179
98,179
*
Deborah L. DeHaas
3,023
3,023
*
John W. Eaves
18,126
18,126
*
Stephen A. Furbacher
44,123
44,123
*
Stephen J. Hagge
47,194
47,194
*
Jesus Madrazo
3,263
3,263
*
Anne P. Noonan
27,842
27,842
*
Michael J. Toelle
18,126
18,126
*
Theresa E. Wagler
27,254
27,254
*
Celso L. White
14,219
14,219
*
W. Anthony Will(5)
324,772
324,772
*
Christopher D. Bohn
97,363
97,363
*
Douglas C. Barnard
6,130
32,155
38,285
*
Bert A. Frost
37,912
37,912
*
Susan L. Menzel
15,731
15,731
*
All directors and executive officers as a group (19 persons)
843,050
32,155
875,205
*
*
Less than 1%
(1)
Unless otherwise indicated, beneficial ownership consists of sole power to vote or direct the vote and sole power to dispose or direct the disposition of the shares listed, either individually or jointly or in common with the individual’s spouse, subject to community property laws where applicable.
(2)
The shares indicated include 3,023 shares for each of directors Ahmed, Arzbaecher, DeHaas, Eaves, Hagge, Noonan, Toelle, Wagler and White, 5,038 shares for Mr. Furbacher and 3,263 shares for Mr. Madrazo, in each case granted under our 2014 Equity and Incentive Plan, that have not yet vested. These shares of restricted stock can be voted during the vesting period. The table does not include restricted stock units or performance vesting restricted stock units granted to our executive officers under our 2014 Equity and Incentive Plan, as these awards cannot be voted during the vesting period.
(3)
The shares indicated in this column represent shares underlying stock options granted under an equity and incentive plan that have already vested or that will vest within 60 days. The shares underlying these stock options cannot be voted.
(4)
The shares indicated include 18,565 shares held by the Arzbaecher Family Foundation.
(5)
Mr. Will also holds 29,504 additional “phantom” shares as a deemed investment under our Supplemental Benefit and Deferral Plan (a non-qualified benefits restoration and deferred compensation plan). These phantom shares cannot be voted.
 
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POLICY REGARDING RELATED PERSON
TRANSACTIONS
We recognize that transactions with related persons can present potential or actual conflicts of interest and create the appearance that our decisions are based on considerations other than the best interests of the company and its shareholders. Accordingly, as a general matter, it is our preference to avoid such transactions.
Nevertheless, we recognize that there are situations where related person transactions may be in, or not inconsistent with, the best interests of the company and its shareholders, including but not limited to situations where we may obtain products or services of a nature, quantity, or quality, or on other terms, that are not readily available from alternative sources, or when we provide products or services to related persons on an arm’s length basis on terms comparable to those provided to unrelated third parties or to employees generally.
In order to deal with the potential conflicts inherent in such transactions, our audit committee has adopted a written policy regarding related person transactions. For the purposes of this policy, a “related person transaction” is a transaction, arrangement, or relationship (or any series of similar transactions, arrangements, or relationships) in which the company was, is, or will be a participant and the amount involved exceeds $120,000, and in which any related person had, has, or will have a direct or indirect material interest, other than (a) transactions where the rates or charges involved in the transaction are determined by competitive bids, or the transaction involves the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority; (b) transactions involving services as a bank depositary of funds, transfer agent, registrar, or trustee under a trust indenture, or similar services; (c) transactions in which the interest of the related person derives solely from his or her service as a director of another entity that is a party to the transaction; or (d) transactions in which the interest of the related person derives solely from his or her ownership of less than 10% of the equity interest in another entity (other than a general partnership interest) which is a party to the transaction.
In addition, under our policy regarding related person transactions, transactions involving the purchase of products or services (other than personal or professional services) from an entity for which a director of the company or an immediate family member of a director serves as an executive officer are not considered to involve a material interest on the part of such director (and therefore are not considered related person transactions) if (i) the director did not participate in the decision on the part of the company to enter into such transactions, (ii) the transactions are made in the ordinary course of business and on substantially the same terms as those prevailing at the time for transactions with other unrelated third parties, and (iii) the amount paid in all transactions with any such entity in a twelve-month period is less than the greater of $500,000 or 1% of such entity’s consolidated gross revenues for the most recently completed fiscal year for which data is publicly available.
For purposes of the policy, a “related person” means:

any person who is, or at any time since the beginning of our last fiscal year was, a director or executive officer of the company or a nominee to become a director of the company;

any person who is known to be the beneficial owner of more than 5% of any class of our voting securities;

any immediate family member of any of the foregoing persons; and

any firm, corporation, or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest.
 
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Under our policy regarding related person transactions, except as described below with respect to certain commercial transactions in the ordinary course of business, any proposed transaction with a related person may be consummated or amended only if approved through the following process:

The general counsel will assess whether the proposed transaction is a related person transaction for purposes of the policy.

If the general counsel determines that the proposed transaction is a related person transaction, the proposed transaction must be submitted to the audit committee for consideration at the next committee meeting or, in those instances in which the general counsel, in consultation with the chief executive officer or the chief financial officer, determines that it is not practicable or desirable for us to wait until the next committee meeting, to the chair of the audit committee (who has been delegated authority to act between committee meetings).

The audit committee, or where submitted to the chair of the committee, the chair, will consider all of the relevant facts and circumstances available to the committee or the chair, including (if applicable) but not limited to: (i) the benefits to the company; (ii) the impact on a director’s independence in the event the related person is a director, an immediate family member of a director, or an entity in which a director is a partner, shareholder, or executive officer; (iii) the availability of other suppliers or customers for comparable products or services; (iv) the terms of the transaction; and (v) the terms available to unrelated third parties or to employees generally.

The audit committee (or the audit committee chair) will approve only those related person transactions that are in, or are not inconsistent with, the best interests of the company and its shareholders, as the committee (or the audit committee chair) determines in good faith.

The audit committee or the audit committee chair, as applicable, will convey the decision to the general counsel, who shall convey the decision to the appropriate persons within the company.
At the audit committee’s first meeting of each fiscal year, the committee will review any previously approved related person transactions that remain ongoing and have a remaining term of more than six months or remaining amounts payable to or receivable from the company of more than $120,000. Based on all relevant facts and circumstances, taking into consideration the company’s contractual obligations, the committee will determine if it is in the best interests of the company and its shareholders to continue, modify, or terminate the related person transaction.
FMR and certain of its direct and indirect subsidiaries (collectively, “Fidelity”) own in the aggregate more than 5% of our outstanding common stock and, therefore, are considered related persons under our policy regarding related person transactions. We have agreements in place with Fidelity for Fidelity to provide administrative and trustee services for the company’s 401(k) plan, deferred compensation plan, and health savings accounts (HSAs). During 2021, Fidelity earned approximately $265,000 from us and approximately $95,000 from plan participants for these services. At its first meeting in each of 2021 and 2022, the audit committee reviewed and approved the transactions with, and ongoing administrative services from, Fidelity in accordance with our policy.
Our policy regarding related person transactions provides that no member of the audit committee will participate in any review, consideration, or approval of any related person transaction with respect to which such member or any of his or her immediate family members is the related person.
 
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PROPOSAL 2: ADVISORY VOTE ON
COMPENSATION OF NAMED EXECUTIVE
OFFICERS (“SAY ON PAY”)
Pursuant to Section 14A of the Exchange Act, our shareholders are entitled to an advisory (non-binding) vote to approve the compensation of our named executive officers as disclosed in this Proxy Statement, including in the Compensation Discussion and Analysis (CD&A) beginning on page 44 and the Executive Compensation tables and accompanying narrative discussion beginning on page 77. This proposal is commonly referred to as a “Say on Pay” proposal.
The Board and the compensation and management development committee believe that the compensation of the named executive officers is appropriate for the company and in the best interests of our shareholders over the long term. As discussed in more detail in the CD&A beginning on page 44, our compensation programs are intended to:

align the interests of our officers with those of our shareholders,

permit the company to remain competitive in the market for highly qualified management personnel,

provide appropriate incentives for attainment of both our short-term and long-term goals and

retain strong performers.
Accordingly, we are asking you to vote, on an advisory basis, FOR the adoption of the following resolution:
“RESOLVED, that the shareholders of CF Industries Holdings, Inc. approve the compensation of the CF Industries Holdings, Inc.’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion.”
Because the vote on the “Say on Pay” proposal is advisory, it is not binding on the company. Although the advisory vote is non-binding, the Board and the compensation and management development committee value the opinions of our shareholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
We currently hold an advisory vote on a “Say on Pay” proposal every year. Therefore, the next advisory vote on a “Say on Pay” proposal will be held at our 2023 annual meeting. Shareholders have an opportunity to cast an advisory vote on the frequency of “Say on Pay” proposals at least every six years. We currently expect that the next advisory vote on the frequency of the “Say on Pay” proposals will occur at the 2023 annual meeting of shareholders.
Board Recommendation
The Board unanimously recommends that you vote, on an advisory basis, FOR the Say on Pay proposal.
 
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EXECUTIVE OFFICERS
Set forth below is certain biographical information for our executive officers other than Mr. Will (whose biographical information appears above under the heading “Director Nominee Biographies”). All of the executive officers of the company serve at the discretion of the Board. Each of our executive officers during the period from April 2010 to April 2018 also served in the officer positions with Terra Nitrogen GP Inc. (“TNGP”) comparable to those he or she held with CF Industries during that period. TNGP was our indirect, wholly-owned subsidiary and the sole general partner of Terra Nitrogen Company, L.P., a publicly-traded producer of nitrogen fertilizer products. In April 2018, we purchased all of the publicly traded common units of Terra Nitrogen Company, L.P. In the biographical information set forth below, the ages of our executive officers are as of March 30, 2022.
Douglas C. Barnard (age 63) has served as our senior vice president, general counsel, and secretary since January 2012 and was previously our vice president, general counsel, and secretary from January 2004 to December 2011. Mr. Barnard served as a director of TNGP from June 2010 to April 2018 and as chairman of the board of TNGP from February 2016 to April 2018. Prior to joining CF Industries in January 2004, Mr. Barnard had been an executive vice president and general counsel of Bcom3 Group, Inc., an advertising and marketing communication services group. Earlier in his career, Mr. Barnard was a partner in the law firm of Kirkland & Ellis LLP and, prior to that, was vice president, general counsel, and secretary of LifeStyle Furnishings International Ltd., a manufacturer and distributor of residential furniture and decorative fabrics. He holds a B.S. degree from the Massachusetts Institute of Technology (“M.I.T”), a J.D. degree from the University of Minnesota, and an M.B.A. degree from the University of Chicago. Mr. Barnard has also taught as a lecturer at the University of Chicago Law School, and serves as a member of the M.I.T Corporation Development Committee.
Christopher D. Bohn (age 54) has served as our senior vice president and chief financial officer since September 2019. He was previously our senior vice president, manufacturing and distribution, from May 2016 to September 2019, our senior vice president, manufacturing, from January 2016 to May 2016, our senior vice president, supply chain, from January 2015 to December 2015, our vice president, supply chain, from January 2014 to December 2014, our vice president, corporate planning, from October 2010 to January 2014 and our director, corporate planning and analysis, from September 2009 to October 2010. Mr. Bohn served as a director of TNGP from February 2016 to April 2018. Prior to joining CF Industries, Mr. Bohn served as chief financial officer for Hess Print Solutions from August 2007 to September 2009. Earlier in his career, Mr. Bohn was vice president global financial planning and analysis for Merisant Worldwide, Inc. He holds a B.S. degree in finance from Indiana University and an M.M. degree (M.B.A.) from the Kellogg Graduate School of Management at Northwestern University.
Linda M. Dempsey (age 58) has served as our vice president, public affairs, since March 2020. Prior to joining CF Industries, Ms. Dempsey served from September 2012 to February 2020 as vice president, international economic affairs, for the National Association of Manufacturers, where she represented the manufacturing sector on international trade, investment, intellectual property and regulatory policies, legislation and agreements. Prior to the National Association of Manufacturers, Ms. Dempsey served as vice president of the Emergency Committee for American Trade from December 2000 to August 2012. Ms. Dempsey holds a B.A. in political science from The Pennsylvania State University and a J.D. degree from Boalt Hall School of Law, University of California at Berkeley.
Bert A. Frost (age 57) has served as our senior vice president, sales, market development, and supply chain, since May 2016. He was previously our senior vice president, sales, distribution, and market development, from May 2014 to May 2016, our senior vice president, sales and market development, from January 2012 to May 2014, and our vice president, sales and market development, from January 2009 to December 2011. Before joining CF Industries in November 2008, Mr. Frost spent over 13 years with Archer Daniels Midland Company, where he served most recently as Managing Director — International Fertilizer/Inputs from June 2008 to
 
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November 2008 and Director — Fertilizer, Logistics and Ports Divisions, ADM — Brazil from April 2000 to June 2008. Earlier in his career, Mr. Frost held positions of increasing responsibility at Archer Daniels Midland and Koch Industries, Inc. He holds a B.S. degree from Kansas State University and he is a graduate of the Harvard Business School’s Advanced Management Program.
Richard A. Hoker (age 57) has served as our vice president and corporate controller since November 2007. Mr. Hoker served as a director of TNGP from January 2014 to April 2018 and previously served as a director of TNGP from September 2010 to August 2011. Before joining CF Industries, Mr. Hoker spent over 11 years with Sara Lee Corporation, where he served most recently as vice president and controller from January 2007 to November 2007 and principal accounting officer from July 2007 to November 2007. Prior to being named controller, Mr. Hoker held other financial management positions of increasing responsibility at Sara Lee. Prior to joining Sara Lee, Mr. Hoker was a member of the financial advisory services consulting group at Coopers & Lybrand LLP in Chicago (now PricewaterhouseCoopers) and previously led teams in the firm’s audit practice. Mr. Hoker holds a B.S. degree in accounting from DePaul University and an M.B.A. degree in finance and accounting from the University of Chicago. He is a certified public accountant.
Ashraf K. Malik (age 56) has served as our senior vice president, manufacturing and distribution, since September 2019. He was previously our vice president, site operations, from January 2012 to September 2019. Prior to joining CF Industries, Mr. Malik served as director of manufacturing for GrowHow UK Ltd from 2007 to 2012. Earlier in his career, Mr. Malik held positions of increasing responsibility in engineering and plant operations management at Terra Industries Inc. and ICI Plc. Mr. Malik holds a BSc degree in engineering from City, University of London.
Susan L. Menzel (age 56) has served as our senior vice president, human resources, since October 2017. Prior to joining CF Industries, Ms. Menzel served as executive vice president, human resources, for CNO Financial Group, Inc., a holding company for a group of insurance companies operating throughout the United States, from May 2005 to October 2017. Prior to CNO Financial Group, she served as senior vice president, human resources for APAC Customer Services, Inc., and in roles of increasing responsibility for Sears, Roebuck & Co. and Montgomery Ward & Co., Incorporated. Ms. Menzel holds a bachelor’s degree in business administration and economics from Augustana College.
 
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis discussion provides you with a detailed description of our compensation program for our named executive officers (NEOs) for 2021. It also provides an overview of our compensation philosophy and our policies and programs, which are designed to achieve our compensation objectives.
NAMED EXECUTIVE OFFICERS
Our NEOs for 2021 were:
Name
Title
W. Anthony Will President and Chief Executive Officer
Christopher D. Bohn
Senior Vice President and Chief Financial Officer
Douglas C. Barnard Senior Vice President, General Counsel, and Secretary
Bert A. Frost Senior Vice President, Sales, Market Development, and Supply Chain
Susan L. Menzel Senior Vice President, Human Resources
TABLE OF CONTENTS
45
45
46
47
50
50
51
52
52
52
53
55
56
63
70
71
73
73
 
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OVERVIEW OF OUR BUSINESS AND STRATEGY
Business Overview and Corporate Strategy
At CF Industries, our mission is to provide clean energy to feed and fuel the world sustainably. With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network — the world’s largest — to enable green and blue hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities. Our nine manufacturing complexes in the United States, Canada, and the United Kingdom, an unparalleled storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. Our best-in-class operational capability and disciplined capital and corporate stewardship — supported by a culture rooted in our core values that we live each and every day — drive business results that create long-term value for all our stakeholders. Our strategy is reviewed and endorsed annually by the Board, and the Board plays an active role in overseeing the successful execution of our strategy.
For more information on our business, see “Item 1. — Business” and “Item 7. — Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Annual Report.
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Our Commitment to a Clean Energy Economy
We are taking significant steps to support a global hydrogen and clean fuel economy, through the production of green and blue ammonia. Since ammonia is one of the most efficient ways to transport and store hydrogen and is also a fuel in its own right, we believe that CF Industries, as the world’s largest producer of ammonia with an unparalleled manufacturing and distribution network and deep technical expertise, is uniquely positioned to fulfill anticipated demand for hydrogen and ammonia from green and blue sources. Our approach includes green ammonia production, which refers to ammonia produced through a carbon-free process, and blue ammonia production, which relates to ammonia produced by conventional processes but with CO2 removed through carbon capture and sequestration (CCS) and other certified carbon abatement projects.
We have announced a $100 million green ammonia project at our flagship Donaldsonville complex to produce approximately 20,000 tons per year of green ammonia. Construction and installation
 
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began in the fourth quarter of 2021 and is expected to finish in 2023. We believe that, when completed, the Donaldsonville green ammonia project will be the largest of its kind in North America.
We have also announced steps to produce blue ammonia from our ammonia production network. In the fourth quarter of 2021, the Board authorized $285 million in capital projects that will enable the annual production of up to 1.25 million tons of blue ammonia from our existing network starting in 2024. The projects will involve constructing units at our Donaldsonville and Yazoo City complexes that dehydrate and compress CO2, a process essential for CO2 transport via pipeline to sequestration sites. Management expects that, once the units are in service and sequestration is initiated, we could sequester up to 2.5 million tons of CO2 per year.
We believe that execution of our strategy and development of the market for green and blue ammonia will provide significant growth opportunities and generate sustainable long-term value for all of our stakeholders.
Our Approach to Human Capital Management
Our long-term success depends on our people. We are dedicated to creating a workplace where employees are proud to work and grow and everyone feels empowered to do their best work. We do this by investing in extensive recruitment, training and professional development opportunities for our employees and fostering diversity and inclusion in CF Industries’ culture. In addition, we have an effective succession management process to safeguard the long-term achievement of our strategy.
Culture, Inclusion and Diversity
Doing the right thing is the cornerstone of our culture and is a significant factor in our success. Our culture is rooted in our core values — We Do It Right, We Do It Well, We Execute as a Team and We Take a Long-Term View — which you can read more about on our website at www.cfindustries.com.
Our core values and their underlying principles reflect our commitment to a diverse and inclusive culture, treating one another with respect. We have developed a long-term Inclusion and Diversity (I&D) strategy to provide direction to our ongoing efforts to strengthen our culture of inclusive leadership. Our strategy focuses on three key areas: employee education and skill development, representation, and belonging. As part of the education and skill development pillar of our I&D strategy, we introduced curated training for enterprise learning and targeted audiences. Across the company, all employees complete training to learn to recognize and address the effects of unconscious bias by challenging assumptions; encouraging diversity of experience, opinion, and expression; and supporting a workplace culture that actively strives to be more inclusive. Leaders in the organization also receive training in inclusive leadership, completing a three-part course that includes an instructor-led session. During 2021, we launched our Inclusion Council to champion the company’s I&D strategy and the Inclusion Resource Group to drive I&D programming that fosters a diverse, equitable and inclusive workplace.
In order to continue to improve the inclusiveness and diversity of our company and culture, our comprehensive ESG goals announced in 2020 include goals to increase the representation of females and persons of color in senior leadership roles and to implement a program designed to increase the hiring and promotion of minority and female candidates. As of December 31, 2021, we had exceeded our representation goal with approximately 38% of senior leadership roles held by females and persons of color.
In addition, to increase our I&D transparency, in 2021 we published our first Inclusion, Diversity & Equity Report and made our most recently filed U.S. Federal Employer Information Report EEO-1 available on our website www.cfindustries.com. We are on a journey to build a culture of belonging where it is safe to be yourself — a workplace where everyone feels welcomed, valued, empowered and inspired to do their best work. We believe we have made significant progress in
 
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these efforts while also recognizing that there is much work to do to create new opportunities and growth for employees from traditionally underrepresented groups.
Workforce Health & Safety
Operating in a safe and responsible manner is a core value and an integral part of what sets CF Industries apart to all our stakeholders. Our safety culture permeates our business in three key ways:

Engaged culture that empowers consistent behaviors that drive toward excellence.

Robust systems and processes that provide a clear, repeatable direction toward excellence.

Superior performance that aligns effective and efficient environmental, health, and safety activities with operations.
Our commitment to safety is unwavering, and we have demonstrated that our focus on this priority is yielding positive results. We believe that focusing on leading indicators — such as the behavioral safety practices we have incorporated into our annual incentive plan — to drive and measure activities that prevent and control safety incidents, results in our industry-leading safety record.
Talent Development
A core aspect of our culture is our commitment to identifying and developing talent to help employees accelerate growth and achieve their career goals. We invest in extensive assessment, training and professional development opportunities for our employees through a robust set of formal and informal programs, including targeted job movements, key experiences, and training with an emphasis on creating a culture of inclusion. At CF Industries, leadership is the quality that drives our values and sets us apart. To help foster leadership, the company has developed a set of leadership competencies that provide a common language for how to demonstrate leadership at every level of the organization. We view training and development programs as being a key part of succession planning, allowing us to grow a stronger company, today and in the future.
2021 Performance Highlights
Operating Results
Net Earnings
Attributable to Common
Stockholders
Earnings Per
Diluted Share
EBITDA(1)
Net Cash Provided by
Operating Activities
$917 Million
$4.24
$2.17 Billion
$2.87 Billion
Annual Incentive Plan Performance Metrics
Financial Metric
Environmental
Metric
Process Safety Metric
Adjusted EBITDA(2)
List for Reduction
of GHG Emissions(3)
Behavioral Safety
Gate Threshold(4)
Timely Completion
Percentage(5)
$2.74 Billion
Achieved 54%
Achieved 99%
Achieved 99.6%
Target: $1.35 Billion
Target: 20%
Threshold: ≥ 95%
Target: 80%
The compensation and management development committee considers the previous year’s financial performance, market trends and the company’s annual business plan when setting goals and targets for our incentive compensation programs at the end of each calendar year. Management prepares the company’s annual business plan and reviews it in detail with the Board. Management prepares the annual business plan through a rigorous process utilizing a combination of factors, including management’s view of current industry conditions, recent historical performance, internal forecasts, as well as external public market indicators. Going into 2021, rising energy costs in
 
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North America were projected to lead to higher realized natural gas costs for the company as energy feedstock prices rebounded from the lows of the global pandemic. The company also expected meaningfully lower production volumes in 2021, driven by a record number of planned maintenance activities due to the normal level of annual activity plus a significant number of maintenance activities that were deferred from 2020 to minimize the risk to our workforce of exposure to COVID-19. In addition, higher selling, general and administrative (“SG&A”) expenditures were anticipated for 2021 compared to 2020 as activities returned to pre-pandemic levels. These factors were expected to be partially offset by improved product prices across all products in 2021 compared to 2020, primarily driven by higher global energy prices and greater industrial demand.
Actual financial results in 2021 greatly exceeded the company’s forecasts, led by higher revenue from strong product pricing. Global nitrogen prices reached the highest levels in over a decade with a dramatic tightening of the global supply and demand balance driven by high crop prices, increased economic activity and lower global production due to high energy prices in Europe and Asia. Despite higher gas and energy costs as compared to the business plan, both in North America and, to a greater degree, in the United Kingdom, energy cost spreads between North America and high-cost regions grew, resulting in greater margins for the company overall compared to plan. Sales volume for 2021 declined compared to plan as our production levels were impacted by weather, including the impact of Winter Storm Uri in February and Hurricane Ida in October, and we pulled forward certain maintenance activity originally scheduled for 2022.
Additionally, the company continued to deliver on its strategic priorities and create long-term shareholder value.
Safety
As of December 31, 2021, the company’s 12-month rolling average recordable incident rate was 0.32 incidents per 200,000 work hours — an industry leading result
Operational Excellence
Long-term asset utilization over the last five years is approximately 14 percent higher than the average utilization rate of our North American competitors
Efficiency
SG&A costs as a percentage of sales remained among the lowest in both the chemicals and fertilizer industries in 2021
Return to Shareholders
Returned $799 million to shareholders in 2021 through $541 million in share repurchases and $258 million in dividend payments
Clean Energy Commitment
We are taking significant steps to decarbonize our own production network and support a global hydrogen and clean fuel economy, through the production of green and blue ammonia
Comprehensive ESG Goals
In line with our commitment to the clean energy economy and our focus on sustainability, we have published comprehensive environmental, social and governance (“ESG”) goals covering critical environmental, societal, and workforce imperatives
(1)
EBITDA is defined as net earnings attributable to common stockholders plus interest expense-net, income taxes and depreciation and amortization. See Appendix A for a reconciliation of EBITDA to the most directly comparable GAAP measure.
(2)
See “— Compensation Discussion and Analysis: In Detail — Key Elements of NEO Compensation Program — Our Metrics Defined” for the definition of Adjusted EBITDA for purposes of our annual incentive plan.
(3)
The development of a list of capital projects to reduce the company’s Scope 1 greenhouse gas (GHG) emissions footprint versus a 2019 baseline. The percentage target is the aggregate amount of the company’s GHG emissions that could be reduced through the implementation of the identified capital projects, as compared to the 2019 Scope 1 emissions baseline.
(4)
The Process Safety Metric has a behavioral safety gate threshold. If at least 95% of the aggregated safety grades of all employees at manufacturing sites were a “B” or better for the year, the safety performance gating requirement would be achieved. If the safety performance gating requirement was not achieved, there would be no payout under the Process Safety Metric.
(5)
The completion of scheduled safety critical equipment inspections on schedule and timely management of changes (MOCs).
 
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Shareholder Returns
The global nitrogen industry is inherently cyclical, and our financial results can be significantly impacted by the pronounced effects of highly volatile commodity prices for our products as well as for natural gas, which is our principal feedstock. Additionally, we execute our strategy and evaluate our performance over a full cycle for our industry, which typically occurs over multiple years. As a result, we believe it is important to view total shareholder return over a longer time horizon than just one year. The following table shows the cumulative total shareholder return (“TSR”), assuming the reinvestment of dividends, for our common stock and a peer group index for the 1-, 3-, 5-, 7-, and 10-year periods ended December 31, 2021.
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Each of the peer group companies is or was a publicly traded manufacturer of agricultural chemical fertilizers. The companies comprising the peer group are:

Agrium, Inc.*

The Mosaic Company

LSB Industries, Inc.

Incitec Pivot Limited

OCI N.V.**

Potash Corporation of Saskatchewan Inc.*

Nutrien Ltd.*

CVR Partners LP

Yara International ASA
*
Agrium, Inc. (“Agrium”) and Potash Corporation of Saskatchewan Inc. (“Potash Corp”) are included in the peer group from December 31, 2011 through December 31, 2017. On January 2, 2018, Agrium and Potash Corp completed a merger of equals transaction to form Nutrien, Ltd. The cumulative investment in each of Agrium and Potash Corp, assuming dividend reinvestments up to December 31, 2017, was converted into shares of Nutrien, Ltd. on January 2, 2018 using the exchange ratio in the merger of equals transaction consummated on that date. Nutrien, Ltd. is included in the peer group for the period from January 2, 2018 through December 31, 2021.
**
OCI N.V. has been excluded from the calculation of the 10-year total shareholder return because its shares had less than 10-years of trading history as of December 31, 2021.
For purposes of calculating the TSR of CF Industries and the peer group index for the 1-, 3-, 5-, 7-, and 10-year periods ending December 31, 2021, the beginning stock price for each peer group company was established by its respective closing price on the last trading day immediately preceding January 1 of the first fiscal year of the applicable measurement period. The returns of the peer group companies were weighted according to their respective market capitalizations as of the date used to establish the beginning stock price. For Yara International ASA, Incitec Pivot Limited and OCI N.V., we used their respective home exchange stock prices, converted into U.S. dollars, for TSR calculation purposes.
 
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COMPENSATION PROGRAM OVERVIEW
Compensation Program Highlights
Our executive compensation practices are overseen and administered by the compensation and management development committee, which is comprised exclusively of independent directors. The committee is responsible for designing an executive compensation program — including approving any changes to it — that effectively incentivizes our executives to create long-term value for our shareholders.
Summary
More
Details
Compensation
Philosophy
Our compensation philosophy seeks to align the interests of our employees and our shareholders through focusing on the total compensation (base salary, short-term incentives, long-term incentives, and benefits) of our employees, including our executive officers. We seek to benefit from this strategy by attracting key talent, retaining strong performers, increasing productivity, and maximizing operational and financial results, while also implementing compensation programs that are cost effective, market competitive, and sustainable across business cycles. P. 52
Key Elements of
Compensation Program
Salary
Paid in line with individual performance and contribution to company goals and aligned to competitive market data
P. 53;57
Annual Cash Incentives*
The amount of the actual incentive earned is determined based on our level of achievement of three performance metrics:

80%: level of achievement of Adjusted EBITDA** (Financial Metric)

10%: level of achievement of the development of a list of capital projects to reduce the company’s Scope 1 GHG emissions footprint versus a 2019 baseline (Environmental Metric)

10%: level of achievement of the completion of safety critical equipment inspections on schedule and timely management of changes, subject to first achieving a gating level of behavioral safety practices goals (Process Safety Metric)
P. 53;
56-62
Long-Term Equity Incentives
A specified cash value amount is split between two equity award types:

60%: performance vesting restricted stock units (“PRSUs”) (3-year cliff vesting based on average return on net assets (“RONA”)** over three one-year periods, and a TSR modifier that can decrease or increase payout by up to 20%)

40%: restricted stock units (“RSUs”) (3-year ratable vesting)
P. 53;
63-69
Rigorous Benchmarking and
Incentive Target Setting
Bench-marking
Our total direct compensation is targeted at the 50th percentile of our Industry Reference Group, which is comprised of 17 companies in related industries, and the overall general industry market data. P. 55
Incentive Metrics and Performance Levels

We utilize performance metrics for our incentive compensation programs that align executive interests with those of our shareholders.

Executives are focused on achieving top performance across metrics that are directly tied to shareholder value creation and our core strategic objectives.

The compensation and management development committee considers the previous year’s financial performance, market trends and the company’s annual business plan when setting goals and targets for our incentive compensation programs.

The performance metrics and target performance levels reflect the inherent cyclicality of our business.
P. 53-56;
57-62;
63-67
Leading Compensation
Governance Practices
Our leading compensation governance practices include:
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Strong pay-for-performance alignment
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No employment agreements
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Robust clawback policy covering incentive awards
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No repriced stock options
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Stock ownership guidelines
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Minimal perquisites
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Performance metrics that align executive interests with interests of shareholders
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Executive officers are prohibited from hedging or pledging our stock
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A majority of compensation for CEO and other executive officers is performance-based, at risk, and paid in equity
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No new excise tax gross-ups after 2011 (CEO, chief financial officer and senior vice president, human resources, have no such gross-up)
*
See “— Compensation Discussion and Analysis: In Detail — 2022 Compensation Actions” below for a discussion of changes to our performance metrics and weightings for 2022.
**
For the definitions of Adjusted EBITDA and RONA, see “— Compensation Discussion and Analysis: In Detail — Key Elements of NEO Compensation Program — Our Metrics Defined.”
 
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2021 Target Total Compensation
The compensation and management development committee believes the majority of compensation should be composed of awards that are performance-based — with direct ties to the company and individual employee performance. The significant majority of each NEO’s target compensation is at-risk based on company performance.
2021 Target Total Direct Compensation Mix
The following graphs illustrate the mix of total target direct compensation for our chief executive officer and for the other NEOs for 2021:
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AIP: Annual Incentive Plan (annual bonus), cash settled
LTIP: Long-Term Incentive Plan, denominated in equity
2021 CEO Target Total Compensation
The compensation and management development committee approved our CEO’s base salary and target values of his annual incentive award and long-term incentive award for 2021. The base salary and target annual incentive approved for 2021 were unchanged from those in effect for 2020 due to base salary and target annual incentive compensation continuing to be in line with our Industry Reference Group (described in greater detail below) and the overall general industry survey data. The CEO’s target annual incentive level of 135% of base salary for 2021 is unchanged from the last five years. With respect to the CEO’s long-term incentive award, in order to further align pay delivery with long-term performance and to reflect trends in executive compensation generally, the compensation and management development committee increased our CEO’s long-term incentive award for 2021. This new amount is in line with our Industry Reference Group and the overall general industry survey data. The committee believes the minimal changes over several years underscore that our executive compensation program is appropriately aligned with performance and that salaries and the target value for incentive awards are appropriately benchmarked.
Pay Element
2021
2020
% Change
Salary
$1,250,000
$1,250,000
0%
Target Annual Incentive
$1,687,500
$1,687,500
0%
Target Long-Term Incentive
$6,300,000
$6,000,000
5%
   Total
$9,237,500
$8,937,500
3%
 
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Shareholder Engagement
The Board recognizes the importance of executive compensation decisions to our shareholders. The annual say-on-pay advisory vote provides our shareholders with the opportunity to:

Evaluate our executive compensation philosophy, policies and practices;

Evaluate the alignment of the compensation of our NEOs with our results; and

Cast an advisory vote to approve the compensation of our NEOs.
At the 2021 annual meeting of shareholders, the say-on-pay advisory vote received majority support, with approximately 93% of the votes cast in favor of our executive compensation policies, practices and determinations. The Board encourages an open and constructive dialogue with shareholders on compensation to ensure alignment on policies and practices.
We invite all shareholders to provide feedback to us on our compensation programs. As discussed in “Proposal 1: Election of Directors — Corporate Governance Shareholder Engagement,” we extended engagement requests to shareholders representing 75% of outstanding shares during both our spring and fall outreach campaigns. Shareholders who provided feedback on our compensation programs generally reported that executive compensation at CF Industries was reasonable and well-aligned to performance. No consistent or prevalent concerns were raised from our engagements.
We will continue to regularly review (along with our outside compensation consultant) our executive compensation programs to ensure alignment with our compensation philosophy, and we are committed to continuing our dialogue with shareholders so that we can be proactive in responding to emerging industry trends and be responsive to shareholder concerns.
COMPENSATION DISCUSSION AND ANALYSIS: IN DETAIL
Compensation Philosophy
Our compensation and management development committee has adopted a compensation philosophy that seeks to align the interests of our employees and our shareholders through focusing on the total compensation (base salary, short-term incentives, long-term incentives, and benefits) of our employees, including our NEOs. We seek to benefit from this strategy by attracting key talent, retaining strong performers, increasing productivity, and maximizing operational and financial results, while also implementing compensation programs that are cost effective, market competitive, and sustainable across business cycles.
Our executive compensation program is designed to reward executives for their contributions to our short-term and long-term results. Annual cash incentive compensation is based on the achievement of annual performance goals while the majority of executives’ long-term incentive opportunity is based on performance against criteria that are correlated with both annual and long-term shareholder value.
Our goal is to provide direct compensation to our NEOs that is market competitive with other comparable companies. To obtain a general understanding of current compensation practices, the compensation and management development committee received in 2021 a market assessment from its independent outside compensation consultant, Exequity LLP (“Exequity”), that was derived from published survey compensation data, which Exequity adjusted for variations in revenue among the included companies. To further gauge the competitiveness of our total compensation offering, we also compare ourselves against our Industry Reference Group, which is a group of 17 similar companies in related industries. Additional information regarding this group of companies is set forth below under the heading “Use of Industry Reference Group.”
Incentive opportunities are structured in a way that recognizes our cyclicality and emphasis on a team-based culture.
 
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Key Elements of NEO Compensation Program
Component
Key Characteristics and Rationale
Salary

We seek to pay salaries in line with individual performance and contribution to company goals.

In the aggregate, base salaries of our NEOs are targeted at the median of the peer group companies in our Industry Reference Group and the overall general industry market data from the outside compensation consultant’s market assessment. Individual performance and potential, relative criticality of the individual position in relation to achievement of the company’s goals, and business affordability are also considered in determining base salaries.

To maintain our desired market position, we conduct annual salary reviews.
Short-Term
Incentives

Variable compensation component that provides executive officers and other employees with the opportunity to earn additional annual cash compensation beyond base salary.

The role of short-term incentives is to reward and encourage the achievement of annual financial results and other specified corporate performance goals.

Short-term incentives are also targeted at the market median, and achievement of these awards depends on attaining corporate performance goals.

Adjusted EBITDA has been a cornerstone of our annual short-term incentive program, comprising a 50% weighting of the performance metric in 2016, a 75% weighting in 2017 — 2020, and an 80% weighting in 2021.

The 2021 short-term incentive program also included an environmental metric and a process safety metric, each comprising 10%.
Long-Term
Incentives

Variable compensation component that focuses on enterprise value creation and employee retention. Long-term incentives are provided through annual stock-based awards.

Participation is extended to executive officers and other key employees. Eligibility guidelines with award ranges reflecting position responsibility levels and competitive market practices are updated annually. The guidelines allow for individual variation in long-term incentives based on performance level, potential contribution, and value to the business.

In general, long-term incentives for our executive officers are targeted at the market median with the opportunity to receive above market awards for excellent performance.

Long-term incentive awards granted to our NEOs in connection with setting target compensation are based on a specified cash value, which amount since 2018 has been split among two different award types — 60% PRSUs and 40% RSUs.

PRSUs awards are subject to three-year vesting criteria based on:

Average return on net assets (RONA) over three one-year periods

A modifier pursuant to which the number of shares earned based on RONA performance may be increased or decreased by up to 20% based on our three-year TSR performance against a threshold, target, and maximum level of performance
 
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Compensation Metrics Tie to Business Strategy
The compensation and management development committee selects performance metrics for our incentive compensation programs that align executive interests with those of our shareholders. Executives are focused on achieving top performance across metrics that are directly tied to shareholder value creation and our core strategic objectives, as indicated below:
Annual Incentives
Metric
Alignment
Adjusted EBITDA Adjusted EBITDA is the primary metric by which we measure our profitability and by which investors measure our performance
List for Reduction of Scope 1 GHG Emissions Demonstrates our continued commitment to improving energy efficiency and reducing GHG emission intensity and aligns with our announced long-term corporate ESG goals.
Timely Completion Percentage for Inspections and MOCs, subject to Behavioral Safety Practices Underscores our focus on safely operating our facilities, our commitment to CF Industries’ “Do It Right” culture, and our constant efforts to drive workplace safety. Operating in a safe and responsible manner is a core value and an integral part of what sets CF Industries apart to all our stakeholders.
Long-Term Incentives
Metric
Alignment
Return on Net Assets (RONA)
RONA is typically correlated with long-term TSR performance and is viewed as an indicator of the results of management’s operating decisions
Total Shareholder Return Explicitly links executive incentives with shareholder value creation
Our Metrics Defined
As described above, our annual incentive plan uses Adjusted EBITDA as its primary performance metric and our long-term incentive program uses average return on net assets, or RONA, for the PRSU three-year performance criteria.

EBITDA is defined as net earnings attributable to common stockholders plus interest expense (income)-net, income tax provision (benefit) and depreciation and amortization.

Adjusted EBITDA is defined under the annual incentive plan as EBITDA as adjusted for certain items, including: (i) unrealized mark to market losses (gains) on hedges; (ii) unrealized and realized losses (gains) associated with foreign exchange on intercompany loan activity or foreign denominated intercompany payables and receivables; (iii) acquisition or disposition related transaction costs or fees; (iv) integration costs for acquisitions; (v) losses (gains) or costs on the disposition or formation of joint ventures; (vi) restructuring, exit, impairments, system implementation, or process reengineering costs or similar types of costs; (vii) non-capitalized expansion project costs; (viii) losses (gains) recognized due to the acquisition or disposal of a business or group of assets, that represents a major portion of the business; (ix) losses (gains) associated with regulatory changes (e.g. regulatory tax code changes); and (x) losses (profits) associated with divestitures (acquisitions) completed during the year.
 
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Average Return on Net Assets (RONA) is determined by reference to the ratio (expressed as a percentage) of Adjusted EBITDA divided by average operational assets. The “average operational assets” denominator of this metric is determined under the long-term incentive program essentially as the simple average of the beginning and year-end values for total assets as adjusted for certain items, including: (i) cash and cash equivalents; (ii) restricted cash; (iii) short-term investments; (iv) investments in marketable equity securities; (v) prepaid income taxes; (vi) total current liabilities; (vii) long-term deferred income taxes; (viii) other noncurrent liabilities; (ix) assets associated with major capital projects (as approved by the compensation and management development committee); (x) net assets associated with acquisitions and divestitures completed during the year; (xi) asset or liability changes associated with regulatory changes (e.g. regulatory tax code changes); (xii) short-term debt or notes payable included in current liabilities; and (xiii) short-term lease liabilities.
The Compensation Process