DEF 14A 1 unvr-def14a_20210506.htm DEF 14A unvr-def14a_20210506.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

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Soliciting Material Pursuant to §240.14a-12

 

UNIVAR Solutions INC.

(Name of Registrant as Specified In Its Charter)

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2021 Annual Meeting Notice and Proxy Statement May 6, 2021 Univar Solutions innovate. Grow. Together.

 

 


 

 

 

A message from our

President and CEO

Dear Fellow Stockholders:

In the 1990s, the Broadway musical RENT famously asked the question, “How do you measure a year?” For all of us, when we think about the year that was 2020, the answer to that question is complicated.  

For Univar Solutions, the headline numbers would suggest a difficult year. Our one-year total shareholder return was down 22%. Year over year results, as measured by revenues and Adjusted EBITDA, were also down versus 2019. From the perspective of these measurements, we fell short of the expectations that we had set for ourselves. And, because we believe in pay-for-performance, the incentives paid to our executives for last year’s performance are correlative with the results achieved. Each of our named executive officers received a short-term incentive payment equal to no greater than 15% of target – the formulaic result of the Company having missed the Adjusted EBITDA goal set for 2020 and achieving only the threshold goal for working capital as a percentage of sales. Further, since neither the Adjusted EBITDA nor the ROIC threshold targets in the long-term incentive plan were met, no performance-based restricted stock units were earned for the 2020 performance period. In this way, our compensation programs operated exactly as intended, which is to ensure strong linkage between realized pay and the outcomes we have delivered to all of you.

However, other measurements would suggest a banner year. As measured by Lost Time Injuries, 2020 will go down as our safest year ever. We are extremely proud of the resilience that our people and our business showed in the face of great adversity and at a time when keeping our people and communities healthy, fed, clean and safe was an absolute priority. In a year when liquidity concerns were heightened, we improved our Net Free Cash Flow, maintained solid liquidity, and reduced our net debt. We did this, with the strength of our supplier and customer relationships, by tightly and quickly managing our cost structure, and by executing on our portfolio management strategy, which included selling some of our non-core businesses. Further, we figured out how to continue executing on our business system migration plans, which previously had been designed around the ability to travel and conduct large-group, in-person training. Not progressing these plans was not an option for us because we understand how important it is (to ourselves and to you) for us to enable the net synergies articulated from our 2019 acquisition of Nexeo Solutions. Relatedly, the circumstances of the year did not prevent us from delivering on the acquisition-related net synergies that had been planned for the year and indeed we delivered $46 million in value capture. Finally, last year we launched our Streamline 2022 (S22) program, which is our plan to reduce leverage below 3.0x by the end of this year, maximize our net free cash flow conversion, and improve Adjusted EBITDA margins to 9% by the end of 2022. We believe this provides clear line-of-sight, as well as a rallying cry, to where we are headed. We are optimistic about the progress being made on our plan to reduce leverage, maximize cash flow and target new capital allocation opportunities.

How will history measure the year that was 2020? Only time will tell but I imagine that as we get some distance from the acute pain caused by the myriad of circumstances the year presented, the silver linings will emerge. For Univar Solutions the silver lining was the reinvigoration of our purpose, which resonated with all of you as well as all of us. We keep people healthy, fed, clean, and safe. It’s that simple. Last March, when the world started shutting down as a result of the COVID-19 pandemic, we were finding ways to keep running. It was daunting but also inspiring. As a company, we are honored to have served society during such a challenging time – it will always be an impactful part of our history and it has given our employees new forms of pride and engagement, which we believe will have a positive multiplier effect in countless ways. All things considered, 525,600 minutes of purpose is not a bad way to measure a year.

Sincerely,

 

David C. Jukes

President and Chief Executive Officer

 


 

 

 

A message from our

Board Chair

Dear Fellow Stockholders:

By almost any measure, 2020 was a challenging year for many companies. I am pleased that at Univar Solutions, David Jukes, his management team, and the organization-at-large stayed focused on the Company’s strategy, results, people, shareholders and myriad of other stakeholders to deliver solid performance in extraordinary times. Through their work, the Company is poised (from a portfolio, strategy, and execution standpoint) to continue its work on an agenda that includes growth, strong cash flow, and an improved balance sheet in 2021 and beyond.

In addition, since the Company’s initial public offering in 2015, the Company has continuously enhanced its corporate governance structure and practices, which is reflective of its maturation and evolution. In particular, over the course of the last year, the Company took action in a number of important areas, as follows:

•The Company continues to separate the CEO and Chairman roles, with my evolution from Lead Director to Independent Board Chair following Stephen D. Newlin’s term as Executive Chair;

•The size of the Board was reduced from 12 to 10 directors following the retirement of two directors in line with the Board’s retirement policy;

•Rhonda Germany was appointed as the Chair of the Governance and Corporate Responsibility Committee, the scope of which has been expanded to include oversight of ESG matters;

•After reviewing and revising its Corporate Governance Guidelines, the Company further limited the number of public boards upon which a director is permitted to serve (absent approval) from six to four;  

•Following stockholder engagement, the Company has strengthened its Clawback Policy to include the ability to clawback incentive compensation in the event of misconduct; and

•At this year’s Annual Meeting, the Company’s stockholders will have the opportunity to vote on eliminating the 'supermajority' voting requirements in the Company’s Certificate of Incorporation.

Overall, I am pleased with the progress made in 2020 and believe that our Board has a diverse and valuable set of experiences, skills and perspectives that will be brought to bear as the Company executes on its strategic plans.  

In the coming year, the Company looks forward to putting the Nexeo integration in the rear-view-mirror, making progress against the S22 objectives, and otherwise continuing to work on its plans to improve margins, reduce debt, increase market share, and achieve overall growth. Equally important, the Company will continue to realize its purpose of keeping people healthy, fed, clean, and safe.

Thank you for your support.

Sincerely,

 

Christopher D. Pappas

Chair of the Board

 

 


 

Notice of Annual Meeting of Stockholders

To be Held MAY 6, 2021

To the Stockholders of Univar Solutions Inc.:

The Annual Meeting of Stockholders (the “Annual Meeting”) of Univar Solutions Inc. (“Univar Solutions” or the “Company”) will be held on Thursday, May 6, 2021, at 8:30 a.m. Central Time, in a virtual-only format, for the following purposes (which are more fully explained in this Proxy Statement):

 

(i)

elect the directors named in this Proxy Statement for a one-year term;

 

(ii)

vote to approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers described in this Proxy Statement;

 

(iii)

ratify the Audit Committee’s selection of Ernst & Young LLP (“Ernst & Young”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021;

 

(iv)

approve an amendment to the Company’s Amended and Restated Certificate of Incorporation (as amended prior to the date hereof, the “Certificate of Incorporation”) to eliminate all of its supermajority voting requirements; and

 

(v)

transact any other business properly brought before the meeting.

Due to the continued public health impact of the coronavirus (COVID-19) pandemic, and to support the health, safety, and well-being of our stockholders, employees, directors, and their respective families, the Company will hold the Annual Meeting in a virtual meeting format only. In future years, once the public health impact of COVID-19 begins to normalize, the Company will assess whether to offer full in-person meetings consistent with past practice.

The Notice of the Annual Meeting of Stockholders and Proxy Statement contains details about the business to be conducted at the meeting. You may also read the Notice of the Annual Meeting of Stockholders and Proxy Statement on Univar Solutions’ website at www.univarsolutions.com/investors or at www.proxypush.com/UNVR.

Only stockholders of record and beneficial owners of shares of our common stock as of the close of business on March 9, 2021 may attend and participate in the Annual Meeting. To assure that your shares are represented at the meeting, the Board of Directors of the Company (the “Board”) urges you to vote your shares by proxy, telephone or Internet. To participate in the Annual Meeting, you must register using the control number found on your proxy card, voting instruction form or notice you previously received (“control number”), at www.proxydocs.com/UNVR. If you are a beneficial owner of shares held in the name of a broker, bank, or other nominee, you will also need to provide the registered name on your account and the name of your broker, bank or other nominee as part of the registration process. Upon completing your registration, you will receive further instructions by email, including unique links that will allow you to access the Annual Meeting, vote online and view the list of registered stockholders as of the Record Date (the “Stockholder List”) during the Annual Meeting, as well as to submit questions prior to and during the Annual Meeting. If you plan to attend the Annual Meeting, we encourage you to register for the meeting and access the virtual platform prior to the start time of the meeting to allow time to log-in and test your device’s audio system. You may begin to log into the virtual platform beginning at 8:15 a.m. Central Time on May 6, 2021.

Proxy materials or a Notice of Internet Availability of Proxy Materials (the “Notice”) are being first released or mailed to stockholders on March 24, 2021. In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), the Company may furnish proxy materials by providing Internet access to those documents, instead of mailing a printed copy of the Company’s proxy materials to each stockholder of record. The Notice contains instructions on how to access our proxy materials and vote online, or alternatively, request a paper copy of the proxy materials and a proxy card. This Notice of Annual Meeting, the Company’s 2020 Annual Report and this Proxy Statement were posted in an easily readable and printable format on the Company’s website, www.univarsolutions.com/investors, on or about March 24, 2021.

By Order of the Board of Directors of Univar Solutions Inc.,

 

Noelle J. Perkins

Senior Vice President, General Counsel, Secretary and Chief Risk Officer

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 6, 2021.

 

The Notice of Annual Meeting, Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2020 are available at www.univarsolutions.com/investors or at www.proxypush.com/UNVR. The Notice of Annual Meeting of Stockholders, this Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 are being mailed to, or can be accessed online by, shareholders on or about March 24, 2021.

 

 

 

 

 

 

 

 


 

 

 

Sustainability

Our business is more than distributing chemicals and ingredients; we help keep society healthy, fed, clean and safe. The products we distribute help maintain the essential infrastructure of society, including helping to provide clean drinking water, wastewater treatment and health care facility sanitization, and are used within food, pharmaceutical, and medical device manufacturing, utilities processing and in the production of other basic societal necessities. Driven to add value for the triple bottom line of people, planet and profit, we are focused on becoming a world leader in sustainable chemical distribution.  

Progress Against Our Global Sustainability Goals

Sustainability at Univar Solutions is part of who we are, lived through the ‘Our Home, Our Responsibility’ mindset. Our journey to a more sustainable future continues to grow in pace and scope as we further our efforts across the material environmental, social and governance issues that we are addressing. Our vision on sustainability is to deliver sustainable solutions for the global challenges of today and tomorrow that help create value for our stakeholders, society and environment. While achieving this is a greater challenge than can be summarized into just six goals, we see our global sustainability goals as markers on our journey, providing tangible updates on our progress along the way.

The latest updates on these goals are highlighted below:

 

(1)2019 progress shown against 2016 baseline data.

(2) Reduction calculated on our 2019 global energy intensity against equivalent data in 2016. Based on average U.S. home annual electricity consumption (EIA, 2019).

(3)Reduction calculated on our 2019 global emissions intensity against equivalent data in 2016. Based on emissions from average U.S. passenger vehicle (EPA, 2018).

(4) Packaging recovery and reuse based on average weight of an unfilled IBC (Schuetz, 2017).

(5) TCIR is the U.S. Occupational Safety & Health Administration (OSHA) method for calculating rates of recordable injuries per 200,000 hours worked.
(6) Significant spill identified as a release from primary containment (>200Lbs/90Kg).  

 


 

Communicating Our Commitments

Ensuring our efforts are addressing the most important issues that we face, with input from our stakeholders along the journey, is key to making meaningful progress. Transparency on our progress and position plays an important part in this process. Materials and documents to promote transparency and help keep our stakeholders updated are available on our website, www.univarsolutions.com. Information on our website is not a part of this Proxy Statement or incorporated into any other filings we make with the SEC. These include:  

 

 

Sustainability Report: Our global report, aligned with the well-recognized GRI and SASB Standards, provides a comprehensive overview on our progress against our goals.

 

Sustainability Policy: We maintain a Global Sustainability Policy, which sets out our position on targeting and addressing the most material issues we face across the triple bottom line of people, planet and profit, as well as our commitments to meaningful reporting and transparency.

 

Environmental, Health & Safety Policy: The global Environmental, Health & Safety Policy sets out the core principles which we hold ourselves to in the protection of the environment and the health and safety of employees and supply chain.  

 

Code of Conduct: We maintain a Code Handbook that is applicable to all of our directors, officers and employees, and we expect all of our business partners to act in a manner consistent with the Code Handbook. The Code Handbook sets forth our policies and expectations on a number of topics, including conflicts of interest, compliance with laws, human rights, use of our assets and business conduct, sustainability and fair competition.

 

Position Statement on Diversity, Equity & Inclusion and Human Rights: Our position statement clearly sets our commitments, in line with our values, to foster a safe, collaborative, supporting and respectful environment that values diverse perspectives, mitigates unconscious bias and enables a culture where employees are able to bring their authentic self to work, and to conduct our business with dignity and respect for every person we impact. 

 

Highlights of Recent Progress

 

Despite the disruption and challenges faced globally due to the COVID-19 pandemic, our commitments to deliver on our global goals has remained consistent. Throughout 2020:

 

 

We once again improved on our global safety record, driving down our incident rate, helping keep our people and stakeholders safe across our operations globally.  

 

As a result of the COVID-19 pandemic, our people transitioned to remote work, travelled less and reduced their environmental footprint while engaging with our customers and suppliers more frequently through digital solutions.

 

In our latest sustainability reporting, we brought together the history of our legacy organizations into one integrated report allowing us to move forward with a common focus. This, combined with our efforts to increase transparency and comparability of our reporting through alignment with the Sustainability Accounting Standards Board (SASB) and United Nations Sustainable Development Goals (SDGs), demonstrates a marked improvement in our reporting value.

 

We made significant progress with the first publication of our partial scope 3 emissions. This marks the beginning of our path towards a more holistic outlook on the impacts associated with our upstream and downstream indirect emissions. As we progress, we will look to further map out the impacts of our business beyond our gates to the broader value chain, using this in our plans to set future goals in line with the Science Based Targets initiative (SBTi) expectations.

 

We achieved external assurance on our scope 1 and 2 emissions as well as safety and release metrics, providing additional transparency and reliability on our reporting.  

 

Our teams contributed to the safe handling behaviors and release prevention that has enabled us to reduce significant releases twenty three percent (23%) below our 2016 baseline.

 

We had a total of seven Employee Resource Networks, including the Ability Network (focused on employees with visible and invisible disabilities), the Black African American Leadership Network, the Canada Indigenous Network, the Hispanic or Latinx Network, the

 


 

LGBT+ Network, the Veterans Network and the Women’s Inclusion Network. Through these groups we have expanded the opportunity for colleagues of all backgrounds to champion diversity, support social advocacy and to further develop our people.

 

We also became signatories of CEO Action for Diversity & Inclusion, the largest CEO-led coalition to advance diversity, equity and inclusion, publicly endorsed the Business Coalition for the Equality Act in the USA, increased our score on the Human Rights Campaign (HRC) Corporate Equality Index from an 85 in 2019 to a 100 in 2020, and achieved a score of 100 on the HRC Equidad MX, certifying us as a Best Place to Work for LGBTQ Equality.

 

 

 

 


 

Table of Contents

 

 

 

 

 

 

 


 

 

Proxy Statement Summary

Below is a summary of certain information set forth in this Proxy Statement. As it is only a summary, please refer to the complete Proxy Statement and Univar Solutions’ 2020 Annual Report before you vote. Your vote is important.

 

Annual Meeting Information

 

Meeting Date

Thursday, May 6, 2021

Meeting Time

8:30 a.m. (Central Time)

Meeting Place

Virtual meeting: www.proxydocs.com/UNVR

Record Date

March 9, 2021

 

Voting Instructions for Registered Stockholders

 

Via the Internet

Telephone - U.S. or Canada

Mail

www.proxypush.com/UNVR

By following the instructions on the
notice or proxy card

By calling 1-866-895-6933

By completing, signing and returning
the proxy card in the postage-paid
envelope provided

 

Stockholders holding through a broker, bank, or other nominee should please follow the directions from their broker, bank or other nominee.

 

Agenda for the Annual Meeting and Voting Recommendation

 

Proposal

Board’s Recommendation

Election of 10 directors, each to serve a term of one year

FOR

Non-binding advisory vote to approve the compensation of the Company’s

named executive officers

FOR

Ratification of Ernst & Young as the Company’s independent

registered public accounting firm for 2021

FOR

Approval of amendment to the Certificate of Incorporation to eliminate supermajority voting requirements

FOR

 

 

 

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

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Proposal 1: Election of Directors

(Item 1 on the Proxy Card)

Who are this year’s nominees?

The Board currently consists of 10 members. See “What is the composition of the Board and how often are members elected?” on page 18.The Board has nominated the following individuals as directors for election at the Annual Meeting:

 

Ms. Joan Braca

 

Mr. Mark J. Byrne

 

Mr. Daniel P. Doheny

 

Mr. Richard P. Fox

 

Ms. Rhonda Germany

 

Mr. David C. Jukes

 

Mr. Stephen D. Newlin

 

Mr. Christopher D. Pappas

 

Mr. Kerry J. Preete

 

Mr. Robert L. Wood

If elected, the Company expects that Messrs. Byrne, Doheny, Fox, Jukes, Newlin, Pappas, Preete, and Wood and Mmes. Braca and Germany will serve as directors and hold office until the 2022 Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified.

There are no family relationships among any of the director nominees and executive officers of the Company. See “What relationships and policies does the Company have with respect to transactions with related persons?” on page 23.

 

 

 

 

 

 

 

 

 

 

The Board recommends that you vote “FOR” the election of these nominees.

 

 

 

 

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Proposal 1: Election of Directors

 

 

 

 

 

Ms. Joan Braca

Age: 48

Director Since: 2018

Term Ends: 2021

Committees Served:
Compensation; Governance &
Corporate Responsibility

Biography:

Ms. Braca was appointed to the Univar Board in February 2018. Since August 2019, she has served as the CEO of Johnson Matthey’s Clean Air sector. Prior to that, she worked from 2012 to 2019 at Tate & Lyle PLC as President of its Specialty Food Ingredients business and also head of its Asia Pacific division. Ms. Braca spent 18 years in various positions of increasing responsibility, in the United States, Europe and Asia, with Dow Chemical and the Rohm and Haas Company. She has a diverse background with experience in engineering, manufacturing, sales management and over a decade in general management. During her career she has worked in several locations including the United Kingdom, Singapore, China, Sweden and the United States. She holds a bachelor’s degree in mechanical engineering from Lehigh University and a master’s degree in finance from Temple University.

Qualifications:

Ms. Braca has a diverse background with experience in engineering, manufacturing, sales management and over a decade in general management.

 

 

 

 

Mr. Mark J. Byrne

Age: 64

Director Since: 2014

Term Ends: 2021

Committees Served: Compensation

Biography:

Mr. Byrne joined the Company in December 2010 and has served as a member of the Board since 2014. He was formerly a consultant to the Company until 2015. He served as the Chairman of Commodities from February 2014 through January 2015. From February 2013 to January 2014, he was the Executive Chairman of Univar Basic Chemical Solutions (BCS). From December 2010 to September 2011, he served as Chief Operating Officer of the Company. Prior to joining the Company, Mr. Byrne served as the President and Chief Executive Officer of BCS, a company he co-founded in 1995. Under Mr. Byrne’s leadership, BCS grew to become a company with global operations and nearly $900 million in 2009 sales revenue. Prior to BCS, Mr. Byrne began his career in 1980 at AlliedSignal (now Honeywell) where he held roles in several functional areas, culminating as President of AlliedSignal’s Fluorine Products division. Mr. Byrne holds a bachelor’s degree in economics and finance and a master’s degree in business administration from Fairleigh Dickinson University.

Qualifications:

Mr. Byrne has broad managerial and operational experience in chemical distribution and basic chemicals markets - Univar Solutions’ principal areas of business. He also brings to the Board his deep experience with BCS, which was acquired by the Company in 2010.

 

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

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Proposal 1: Election of Directors

 

Mr. Daniel P. Doheny

Age: 58

Director Since: 2016

Term Ends: 2021

Committees Served:
Audit (Chair); Governance & Corporate Responsibility

 

Biography:

Mr. Doheny has been a director since May 2016. From 2000 to 2019, Mr. Doheny was with Reyes Holdings, LLC, the 12th largest privately held company in the United States. From 2014 to 2019, he served as Executive Chairman of Reyes’ Great Lakes Coca-Cola distribution business and successfully led the company’s acquisitions and integration of the distribution of Coca-Cola products. From 2000 to 2014, Mr. Doheny served as EVP and Chief Financial Officer and was responsible for all financial aspects of the business, including acquisitions, financing, internal controls and reporting, capital investments, and budgeting. He also played a key role in strategy development, information technology and human resources. Prior to joining Reyes, Mr. Doheny spent more than 16 years with KPMG LLP in Chicago, IL, and Montvale, NJ, including six years as an audit partner. He was the founder of the KPMG Audit Committee Institute, advising public boards of directors around the world. Mr. Doheny holds a bachelor’s degree in accountancy from the University of Illinois and is a certified public accountant.

Qualifications:

Mr. Doheny’s executive and board experience in distribution provides him with valuable leadership and distributor industry knowledge. Mr. Doheny’s extensive experience and knowledge in finance and accounting, and his experience leading a finance function qualify him to serve on the Board and its Audit Committee.

 

 

 

 

Mr. Richard P. Fox

Age: 73

Director Since: 2007

Term Ends: 2021

Committees Served: Audit; Governance & Corporate Responsibility

 

Biography:

Mr. Fox has been a director since October 2007. Since 2001, Mr. Fox has served as a consultant and outside board member to companies in varying industries. From 2000 to 2001, he was President and Chief Operating Officer of CyberSafe Corporation, a provider of e-security solutions and services. Prior to joining CyberSafe, Mr. Fox was Chief Financial Officer and a member of the board of directors of Wall Data, Incorporated, a software company. Mr. Fox spent 28 years at Ernst & Young LLP, last serving as Managing Partner of its Seattle office. He serves on the boards of directors of LiveRamp, Frontdoor Inc., and Pinnacle West Capital Corporation. Mr. Fox previously served on the boards of HonorHealth, Premera Blue Cross, Pendrell Corporation, Orbitz Worldwide Inc., aQuantive, Inc., Shurgard Storage Centers Inc., PopCap Games, Inc. and Flow International Corporation. In addition, previously Mr. Fox was on the board of visitors of the Fuqua School of Business at Duke University. Mr. Fox received a bachelor’s degree in business administration from Ohio University and a master’s degree from the Fuqua School of Business at Duke University. He is a certified public accountant.

 

Qualifications:

As a result of his extensive accounting and financial management experience, Mr. Fox has a deep understanding of financial reporting processes, internal accounting and financial controls, independent auditor engagements, and other audit committee and board functions.

 

 

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Proposal 1: Election of Directors

 

 

 

Ms. Rhonda Germany

Age: 64

Director Since: 2017

Term Ends: 2021

Committees Served: Audit;

Governance & Corporate Responsibility (Chair)

 

 

Biography:

Ms. Germany was appointed to the Board in August 2017. From 2002 until her retirement in 2017, she served as Corporate Vice President, Chief Strategy & Marketing Officer for Honeywell. Prior to that, she served in various positions with Booz Allen Hamilton, including Vice President, Partner and board member. She also held management roles with ChemSystems Inc. and Union Carbide. Ms. Germany currently serves on the board of two public companies, Aegion Corporation and Integra LifeSciences. She also serves on the board of two private companies, Hypertherm Corporation and Zapata Computing, Inc. She holds a bachelor’s degree in chemical engineering from the University of Michigan and a master’s of business administration from the University of Connecticut.

 

Qualifications:

Ms. Germany’s experience as a senior officer of a major U.S. company with international operations provides her an understanding of Univar Solutions’ operations. Her experience as a board member of another public company with international business provides her with the knowledge and understanding of board functions.

 

 

Mr. David C. Jukes

Age: 61

Director Since: 2018

Term Ends: 2021

Committees Served: None

Biography:

Mr. Jukes was appointed President and Chief Executive Officer in May 2018. He joined the Company in 2002 and served as President and Chief Operating Officer from May 2017 to May 2018. Additionally, Mr. Jukes held the Executive Vice President and President of Univar USA positions from June 2016 to May 2017, and President of Latin America (LATAM) from September 2015 to May 2017. From 2011 to 2016, Mr. Jukes served as President of Univar EMEA. Mr. Jukes is a 35-year veteran of the chemical distribution industry with a distinguished background of achievements. His passion for growth and proven record of success can be seen through his leadership and business acumen. Prior to joining the Company, Mr. Jukes was Senior Vice President of Global Sales, Marketing and Industry Relations, for Omnexus, a plastics industry consortium e-commerce platform. In 1991 he joined Ellis & Everard, a chemical distribution company in the UK, ultimately becoming Vice President of Corporate Development for their Polymers division. He currently serves on the board of DCC plc, a £12.3 billion international sales, marketing and support services group that is headquartered in Dublin, Ireland, and is publicly traded in the UK. Mr. Jukes is a graduate of the London School of Business.

Qualifications:

Mr. Jukes’ success as a divisional President, along with his commercial track record in the chemical distribution sector and long tenure with the Company, brings a unique insight to the Company’s Board of Directors.

 

 

 

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

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Proposal 1: Election of Directors

 

 

 

Mr. Stephen D. Newlin

Age: 68

Director Since: 2014

Term Ends: 2021

Committees Served: None

Biography:

Mr. Newlin was appointed to the Board in 2014 and joined the Company in 2016. He served as Board Chair from 2016 to 2020 and as President and Chief Executive Officer of the Company from 2016 to 2018. He previously served as Chairman, President and Chief Executive Officer of PolyOne Corporation from 2006 to 2014, and Executive Chairman of the board of PolyOne until 2016. From 2003 to 2006, Mr. Newlin was President, Industrial sector at Ecolab, Inc. He previously spent 24 years at Nalco Chemical Company in positions of increasing responsibility, including President and Director from 1998 to 2001, and President, Chief Operating Officer, and Vice Chairman from 2000 to 2001. Mr. Newlin currently serves on the Advisory Board for Pritzker Private Capital and on the board of directors of Hexion Holdings Corporation and Oshkosh Corporation, where he serves as the Chairman of that board. Previously, Mr. Newlin was on the board of The Chemours Company, Valspar, Black Hills Corporation, PolyOne, and Nalco. Mr. Newlin holds a bachelor’s degree in civil engineering and an honorary doctorate in public service from the South Dakota School of Mines & Technology and has completed the Tuck Executive Program at Dartmouth College and the Harvard Business School’s Advanced Management Program. He also served as a commissioned officer in the U.S. Public Health Service, earning an accelerated promotion.

Qualifications:

Mr. Newlin’s extensive experience as an executive and chief executive of multinational companies permits him to bring to the Company a deep insight of the management of all elements of a global business. His service on other public company boards and his keen understanding of international business and regulatory issues are also great assets for Univar Solutions.

 

 

 

 

Mr. Christopher D.
Pappas

Age: 65

Director Since: 2015

Term Ends: 2021

Board Chair

Committees Served:
Compensation; Governance & Corporate Responsibility

Biography:

Mr. Pappas is the Board Chair. He was the CEO of Trinseo, a leading global materials company, from 2010 until his retirement in 2019. Before Trinseo, Mr. Pappas was an executive at NOVA Chemicals Corporation, a developer and manufacturer of chemicals, plastic resins, and end-products, where he assumed executive roles with increasingly global responsibilities, including President and Chief Executive Officer from May 2009 to November 2009. Mr. Pappas also serves on the board of FirstEnergy Corporation, a diversified energy company dedicated to safety, reliability and operational excellence. Previously, he served on the boards of directors for Trinseo S.A., Methanex Corporation, NOVA Chemicals Corporation, and Allegheny Energy, Inc. Mr. Pappas holds a bachelor’s degree in civil engineering from the Georgia Institute of Technology and a master’s degree from the Wharton School of the University of Pennsylvania.

 

Qualifications:

Mr. Pappas’ executive and board experience has equipped him with leadership skills and the knowledge of board processes and functions. Additionally, Mr. Pappas’ general corporate decision-making and senior executive experience with a commodity-based business provides a useful background for understanding the operations of Univar Solutions.

 

 

 

 

8

  

 


Proposal 1: Election of Directors

 

Mr. Kerry J. Preete

Age: 60

Director Since: 2018

Term Ends: 2021

Committees Served:
Compensation

 

Biography:

Mr. Preete was appointed to the Board in May 2018. From 2010 until his retirement in 2019, he served as the Executive Vice President and Chief Strategy Officer at Monsanto Company, where he had been for over 30 years in roles of increasing responsibility, including President of the Global Crop Protection Chemicals business and Executive Leader of the U.S. markets businesses. He currently serves on the board of directors of Corteva, Inc. He also serves on the board of Avient Corporation and is the Chair of their compensation committee and a member of their nominating and governance committee. Mr. Preete holds a bachelor of commerce degree from the University of Saskatchewan and a master’s of business administration from Washington University in St. Louis.

Qualifications:

Mr. Preete’s experience as a seasoned executive at a global leading enterprise brings an astute perspective on running an innovative company. Additionally, his experience as a board member of a another multi-regional and publicly traded company brings a global business acumen, which proves to be a valued asset to the Company’s Board.

 

 

 

 

Mr. Robert L. Wood

Age: 66

Director Since: 2016

Term Ends: 2021

Committees Served:
Audit; Compensation (Chair)

Biography:

Mr. Wood has been a director since October 2016. From 2004 to 2008, Mr. Wood was Chairman, President and CEO of Chemtura Corporation, a global specialty chemicals company listed on the New York Stock Exchange and Euronext Paris. He spent 27 years in a variety of sales, marketing and management roles within the Dow Chemical organization and ultimately became the Business Group President of the Thermosets and Dow Automotive Group. In this role, Mr. Wood was named to Dow’s Corporate Operating Board, which was charged with setting corporate strategy and establishing corporate policies. Prior to that, Mr. Wood was the Global Vice President of Polyurethanes and Global Vice President of Engineered Plastics. Mr. Wood currently serves on the board of Praxair and MRC Global Inc. He is a member of the United States Olympic & Paralympic Committee. He previously served on the board of the Jarden Corporation. He holds a bachelor’s degree from the University of Michigan.

Qualifications:

Mr. Wood’s deep experience in the chemical industry and his managerial experience is valuable for all aspects of the operations of the Company. His role as a director of other public companies provides valuable corporate governance insight to the Board.

 

 

What if a nominee is unwilling or unable to serve?

That is not expected to occur. If it does, proxies will be voted for a substitute nominated by the Board.

 

Director Skills, Qualifications and Demographic Backgrounds

 

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

9

 

 


Proposal 1: Election of Directors

 

 

Compensation of Directors

Non-employee directors receive compensation for Board service, which is designed to fairly and competitively compensate them for their Board responsibilities and align their interests with the long-term interests of stockholders. The Compensation Committee has the primary responsibility to review and consider any revisions to directors’ compensation. With the assistance of the Company’s external compensation advisor, the Compensation Committee reviews the competitiveness of directors’ compensation compared to peer companies.

 

10

  

 


Proposal 1: Election of Directors

 

During fiscal year 2020, non-employee directors were entitled to the following compensation:

 

Fiscal Year 2020 Director Compensation

 

 

 

 

 

 

Annual Cash Retainer(1)(3)

 

$

100,000

 

Annual Equity Award(2)(3)

 

$

120,000

 

Board Chair Retainer(4)

 

$

150,000

 

Lead Director Retainer(4)

 

$

25,000

 

Audit Committee Chair Retainer

 

$

20,000

 

Compensation Committee Chair Retainer

 

$

15,000

 

Governance & Corporate Responsibility Committee Chair Retainer

 

$

15,000

 

 

(1)

Directors may also elect to convert all or a portion of their Annual Cash Retainers into unrestricted shares of common stock.

(2)

Restricted stock is granted annually on the date of the Company’s Annual Meeting of Stockholders. Unless otherwise determined by the Compensation Committee, these awards vest on the first anniversary of the grant date.

(3)

Directors may elect to defer their annual cash retainer and/or the annual equity award to deferred share units that are settled upon the earlier of (i) termination of service or (ii) a change in control.

(4)

The Board Chair Retainer and the Lead Director Retainer, as applicable, are in addition to the Annual Cash Retainer.

The above fees assume service for a full year. Directors who serve for less than the full year are entitled to receive a pro-rated portion of the applicable payment. The Company does not pay meeting fees but does pay for or reimburse directors for reasonable travel expenses related to attending Board, Committee and Company business meetings.

The following table shows information concerning the compensation in fiscal year 2020 for non-employee directors:

 

  Name

 

Fees Earned

or Paid in

Cash(1)

$

 

Stock

Awards (2)

$

 

Change in

Pension Value

and Non

Qualified

Deferred

Compensation

Earnings

$

 

All Other

Compensation

$

 

Total

$

 

 

 

 

 

 

 

 

 

 

 

  Joan Braca(5)

 

100,000

 

120,002

 

 

 

 

 

220,002

  Mark J. Byrne

 

100,000

 

120,002

 

 

 

13,837

(3)

233,839

  Daniel P. Doheny

 

113,333

 

120,002

 

 

 

 

 

233,335

  Richard P. Fox

 

106,667

 

120,002

 

122,588

(4)

 

 

349,257

  Rhonda Germany(5)

 

102,500

 

120,002

 

 

 

 

 

222,502

  Edward Mooney(6)

 

33,333

 

 

 

 

 

 

 

33,333

  Stephen D. Newlin

 

150,000

(7)

120,002

 

 

 

 

 

270,002

  Christopher D. Pappas

 

220,833

(8)

120,002

 

 

 

 

 

340,835

  Kerry J. Preete(5)

 

100,000

 

120,002

 

 

 

 

 

220,002

  William Stavropoulos(6)(9)

 

 

 

33,333

 

 

 

 

 

33,333

  Robert L. Wood(5)

 

115,000

 

120,002

 

 

 

 

 

235,002

 

(1)

Represents the director retainer fees earned in 2020.

(2)

The amounts in this column represent the grant date fair value of restricted stock awarded (rounded up to the nearest full share) for the annual director retainer grant.

(3)

Mr. Byrne was also an employee of the Company through January 31, 2015. As part of his termination arrangement from the Company, Mr. Byrne participates in the active employee medical insurance programs; the annual cost of employer contributions for this insurance is $13,837. In addition, Mr. Byrne has 98,787 vested stock options outstanding and unexercised.

(4)

Mr. Fox’s defined benefit increased by $122,588 to a total present value of $752,001 as of December 31, 2020. These values are based on Mr. Fox’s defined benefit pension plan arrangement, which guarantees a frozen monthly benefit of $6,815 to Mr. Fox from age 80 until his death, and thereafter to a surviving spouse. If Mr. Fox does not reach age 80, then no benefit will be paid. Mr. Fox may retire at any time and be eligible for this benefit. The increase in present value is primarily due to a decrease in the discount rate from 3.21% to 2.43% as of December 31, 2020, as well as an increase due to the passage of time.

(5)

Messrs. Preete and Wood and Mmes. Braca and Germany elected to defer their annual equity award to deferred share units that are settled upon the earlier of (i) termination of service or (ii) a change in control.

(6)

Messrs. Mooney and Stavropoulos retired from the Board in May 2020.

(7)

In 2020, Mr. Newlin served as Board Chair until May 7, 2020 and received a pro‐rated portion of the Board Chair Retainer for such service in addition to the Annual Cash Retainer.

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

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Proposal 1: Election of Directors

 

(8)

In 2020, Mr. Pappas served as: (i) Lead Director until May 7, 2020, after which he served as Board Chair, and received a pro‐rated portion of the Lead Director Retainer and the Board Chair Retainer for such service in addition to his Annual Cash Retainer; and (ii) Chair of the Governance & Corporate Responsibility Committee from January 1, 2020 to October 29, 2020 and received a pro‐rated portion of the Governance & Corporate Responsibility Committee Chair Retainer for such service.

(9)

Mr. Stavropoulos elected to receive his cash retainer in the form of shares of Univar Solutions common stock.

 

The following table shows the number of shares of our common stock subject to outstanding restricted stock (RS), restricted stock units (RSUs), deferred stock units (DSUs), stock options and performance-based restricted stock units (PRSUs), which each of our non-employee directors held as of December 31, 2020:

 

  Name

Aggregate number of Shares Subject to RS/RSUs

Aggregate Number of Shares

Subject to DSUs

Aggregate Number of Shares

Subject to Stock Options

Aggregate Number of Shares

Subject to PRSUs

 

 

 

 

 

  Joan Braca

8,627

19,929

 

 

                   Mark J. Byrne

8,627

 

98,787

 

  Daniel P. Doheny

8,627

 

 

 

  Richard P. Fox

8,627

 

 

 

  Rhonda Germany

8,627

9,865

 

 

  Stephen D. Newlin

46,094

 

578,180

112,408

  Christopher D. Pappas

8,627

8,933

 

 

  Kerry J. Preete

8,627

9,865

 

 

  Robert L. Wood

8,627

9,865

 

 

 

The Company believes that it is in the best interest of the Company and its stockholders to align the financial interests of its directors and senior executive officers with those of stockholders. The Company has stock ownership requirements to assure that the compensation for directors and officers aligns with the performance of the Company and its shareholder value. Non-employee directors are expected to own a number of shares of the Company’s common stock having a value equal to five times the annual cash retainer payable to such non-employee director (inclusive of any additional amounts payable with respect to service as lead director or a Chair of a committee). In general, non-employee directors have five years from their joining the Board to establish this level of ownership. The following forms of equity are counted in determining compliance with this policy:

 

Shares of the Company’s common stock owned outright or beneficially;

 

Restricted stock or restricted stock units even while unvested;

 

Performance-based restricted stock units that have been earned; and

 

Deferred share units even while unvested.

As of the date of this Proxy Statement, all non-employee directors have met or exceeded these shareholding requirements or are within their attainment period.

The Company has entered into indemnification agreements with each of its directors. Under those agreements, the Company agrees to indemnify each of these individuals against claims arising out of events or occurrences related to that individual’s service, as legally permitted. The Company also maintains Director and Officer Liability Insurance that benefits the directors.

 

 

 

 

12

  

 


 

 

 

Proposal 2: Vote, on a Non-Binding Advisory Basis, to Approve the Compensation of the Company’s Named Executive Officers

(Item 2 on the Proxy Card)

As required by Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Board is providing the Company’s stockholders with the opportunity to vote, on a non-binding advisory basis, on a resolution approving the compensation of the Company’s named executive officers as disclosed in this Proxy Statement (typically referred to as a “say-on-pay” vote). The language of this resolution is as follows:

“RESOLVED, that stockholders approve, on a non-binding advisory basis, the compensation paid to the named executive officers of Univar Solutions Inc., as disclosed in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the “Compensation Discussion and Analysis,” compensation tables and related disclosures.”

In considering their vote, stockholders may wish to review with care the information on the Company’s compensation policies and decisions regarding the named executive officers presented in the “Executive Compensation” section of this Proxy Statement starting on page 33, which includes, without limitation, the “Compensation Discussion and Analysis” starting on page 34, the “Compensation Committee Report” on page 54, as well as the “Executive Compensation Tables” starting on page 55.

Although the advisory say-on-pay vote is non-binding, the Compensation Committee and the Board will consider the outcome of the vote in making future executive compensation determinations. The Company anticipates seeking another advisory vote on the frequency of the advisory vote on executive compensation at the 2022 Annual Meeting.

The vote, on a non-binding advisory basis, to approve the compensation of the Company’s named executive officers as disclosed in this Proxy Statement, will be determined by the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the meeting.

 

 

 

 

 

The Board recommends that you vote “FOR” the approval, on a non-binding advisory basis, of the resolution approving the compensation of the Company’s named executive officers. 

 

 

 

 

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

13

 

 


 

 

 

Proposal 3: Ratification of Independent Registered Public Accounting Firm

(Item 3 on the Proxy Card)

What am I voting on?

The Audit Committee of the Board selected the independent registered public accounting firm of Ernst & Young as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. Although stockholder ratification of the appointment is not required, the Board has decided to ascertain the position of the stockholders on the appointment. The Audit Committee will reconsider the appointment if the appointment of Ernst & Young is not ratified by the stockholders.

Will representatives of Ernst & Young be present at the Annual Meeting?

Representatives of Ernst & Young will be present at the Annual Meeting and will have the opportunity to make a statement if they desire and are expected to be available to respond to appropriate questions from stockholders.

What vote is required to approve this proposal?

Approval of this proposal requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting.

What fees did the Company pay to Ernst & Young for audit and other services for the years ended December 31, 2020 and 2019?

Ernst & Young served as the Company’s independent registered public accounting firm for the years ended December 31, 2020 and 2019. The following table presents fees for professional services rendered by Ernst & Young in 2020 and 2019, for the audit of the Company’s annual financial statements and statutory audits for 2020 and 2019, and fees billed for audit-related services, tax services and all other services rendered by Ernst & Young for 2020 and 2019.

 

 

 

2020

($)

 

 

2019

($)

 

 

 

 

 

 

 

 

 

 

  Audit fees (1)

 

 

6,589,975

 

 

 

6,655,900

 

  Audit-related fees (2)

 

 

48,252

 

 

 

530,095

 

  Audit and audit-related fees

 

 

6,638,227

 

 

 

7,185,995

 

  Tax fees (3)

 

 

101,204

 

 

 

346,666

 

  All other fees (4)

 

 

 

 

 

2,560,998

 

  Total fees

 

 

6,739,431

 

 

 

10,093,659

 

 

(1)

Audit fees for 2020 and 2019 include fees for the annual audit of our consolidated financial statements, statutory audits and reviews of the condensed consolidated financial statements included in the Company’s quarterly reports. In 2019, these fees also include audit procedures related to the acquisition of Nexeo Solutions.

 

(2)

Audit-related fees for 2020 and 2019 include fees related to employee benefit plan audits, certain Company offering documents and a subscription to Ernst & Young’s accounting research tool. In 2019, these include fees related to the Nexeo Solutions acquisition.

 

(3)

Tax fees for 2020 include fees related to general tax consultations.  Tax fees for 2019 include fees for tax items primarily related to the acquisition of Nexeo Solutions.

 

(4)

Fees relate to divestiture advisory services for the disposition of the Company’s Environmental Sciences business in 2019.

To safeguard the continued independence of the independent auditor, the Audit Committee has adopted a policy regarding pre-approval of audit and non-audit services from the Company’s independent auditor (the “Pre-Approval Policy”). The Pre-Approval Policy is part of the Audit Committee Charter, which can be found at the Company’s website at www.univarsolutions.com/investors. The Pre-Approval Policy is intended to prevent the independent auditor from providing services to the Company that are prohibited under Section 10A(g) of the Exchange Act and to help ensure the auditor’s continued independence. The Pre-Approval Policy requires all audit, audit-related, tax and other permissible non-audit services performed by the independent auditor to be pre-approved by the Audit Committee (or its Chair under delegated authority for

 

14

  

 


Proposal 3: Ratification of Independent Registered Public Accounting Firm

 

services that will not exceed $250,000 and is conditioned upon reporting to the full Audit Committee at its next scheduled meeting). All of the services performed by Ernst & Young during the years ended December 31, 2020 and December 31, 2019 were performed in accordance with the Pre-Approval Policy.

What factors did the Audit Committee consider in determining to retain Ernst & Young for 2021?

In determining to retain Ernst & Young for 2021, the Audit Committee considered:

 

applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”), including its oversight of Ernst & Young and its requirements for independence and audit partner rotation;

 

the benefits of Ernst & Young’s tenure of over 10 years, including favorable impact on audit quality, efficient fee structures and avoidance of costs and disruption, as well as the potential independence risks posed by a long-tenured independent auditor;

 

matters relating to Ernst & Young’s independence, including a review of audit and non-audit fees and written disclosures from Ernst & Young;

 

Ernst & Young’s technical qualifications, international capacity, audit quality and performance as assessed by the Audit Committee’s 2020 evaluation of Ernst & Young;

 

the annual PCAOB report on Ernst & Young and the assessments of the Company’s internal auditor and other members of management;

 

the quality and candor of Ernst & Young’s communications with both the Audit Committee and the Company’s management; and

 

Ernst & Young’s demonstration of independent judgment, objectivity and professional skepticism.

 

 

 

The Board recommends that you vote “FOR” the ratification of the appointment of Ernst & Young as the Company’s independent registered public accounting firm for 2021.

 

 

 

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

15

 


 

 

 

 

Proposal 4: Approval of the Amendment to the Certificate of Incorporation to Eliminate Supermajority Voting Requirements

(Item 4 on the Proxy Card)

Background of Proposal

We are asking stockholders to approve the amendment to the Certificate of Incorporation to eliminate the requirement of the approval of at least seventy-five percent (75%) in voting power of all outstanding shares of the Company entitled to vote in an election of directors (“Supermajority Voting Requirement”) in order for stockholders to (i) remove a director from office; or (ii) make certain amendments to the Company’s Certificate of Incorporation and Bylaws (the “Supermajority Voting Removal Proposal”).  

The following provisions in the Certificate of Incorporation currently include the Supermajority Voting Requirement:

 

Article Fifth, Section (d) of the Certificate of Incorporation includes a Supermajority Voting Requirement to remove a director from office.

 

Article Tenth of the Certificate of Incorporation includes a Supermajority Voting Requirement to amend the following provisions in the Certificate of Incorporation:

- Article Fifth regarding the management of the Company, including, without limitation, authority to fix the size of the Board, removal of directors, authority to fill director vacancies and newly created directorships and director term length, the limitation of director liability, and director indemnification;

- Article Sixth regarding stockholder action by written consent;

- Article Seventh regarding special meetings of the Company’s stockholders;

- Article Eight related to competition and allocation of corporate opportunities for certain Sponsors (as defined in the Certificate of Incorporation);

- Article Ninth regarding the application of Section 203 of the Delaware General Corporation Law;

- Article Tenth related to amendments to the Certificate of Incorporation;

- Article Eleventh related to amendments to the Bylaws; and

- Article Twelfth related to forum and personal jurisdiction.

 

Article ELEVENTH of the Certificate of Incorporation includes a Supermajority Voting Requirement to amend the Bylaws.

The Company established the Supermajority Voting Requirement at the time of the Company’s initial public offering, when the three largest stockholders of the Company owned approximately two-thirds of the Company’s outstanding shares, to protect the interests of all stockholders by ensuring that fundamental changes to the Certificate of Incorporation have the support of a broad consensus of stockholders, thereby reducing the Company’s vulnerability to coercive tactics (including in connection with hostile takeovers) and promoting corporate governance stability. While our Board continues to believe that these are important benefits, the Board has also considered that the Supermajority Voting Requirement may have the effect of reducing the accountability of directors to stockholders, and recognizes the benefit of providing stockholders an opportunity to participate in corporate governance, especially as the Company’s shares are less centrally held by a small group of stockholders. The Board is engaged in an ongoing review of the Company’s corporate governance principles. After receiving the advice of management and outside advisors, engaging in discussions with stockholders and considering the relative weight of the

 

16

  

 

 


Proposal 4: Approval of the Amendment to the Certificate of Incorporation to Eliminate Supermajority Voting Requirements

 

arguments in favor of and against maintaining the Supermajority Voting Requirement, following the recommendation of the Governance & Corporate Responsibility Committee, the Board has determined the Supermajority Voting Removal Proposal to be advisable and in the best interests of the Company and its stockholders, and recommends that the stockholders adopt the Supermajority Voting Removal Proposal.

If approved, the Company’s Certificate of Incorporation would be amended to replace all Supermajority Voting Requirements with a majority of the outstanding voting shares standard.  

Vote Required and Effectiveness

The affirmative vote of the holders of at least seventy-five percent (75%) of all outstanding shares of the Company entitled to vote as of the Record Date is required to adopt the Supermajority Voting Removal Proposal. The proposed amendment would become effective upon the filing of a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware, which we would file promptly following the 2021 Annual Meeting if our stockholders approve the proposed amendment.

Text of the Proposal

The proposed amendment to the Certificate of Incorporation, with deletions indicated by strike-outs and additions indicated by double underlining, is contained in Appendix A to this Proxy Statement. The description of the Supermajority Voting Removal Proposal set forth above is qualified in its entirety by reference to the text attached as Appendix A to this Proxy Statement.

 

 

 

 

 

 

The Board recommends that you vote “FOR” the amendment to the Certificate of Incorporation to eliminate Supermajority Voting Requirements as set forth above.

 

 

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

17

 


 

 

 

Governance of the Company

The business and affairs of the Company are supervised by the Board. The Board believes that good corporate governance is a critical factor in achieving business success and in fulfilling the Board’s responsibilities to stockholders. The Board believes that its corporate governance practices align management and stockholder interests. Highlights of the Company’s corporate governance practices are described below.

What is the composition of the Board and how often are members elected?

Prior to the 2018 Annual Meeting of Stockholders, our Board was segmented into three classes with three-year terms. At the 2018 Annual Meeting of Stockholders, stockholders approved an amendment to the Certificate of Incorporation to phase out the classified board structure and move to annual election of directors starting at the 2019 Annual Meeting of Stockholders. The conversion to a declassified board was phased in as each class of directors came up for election and starting at the Annual Meeting , all of our directors will be elected on an annual basis. The Board currently consists of 10 members.

What is the Board’s leadership structure?

Our Board is currently led by an independent Chairman, Mr. Christopher D. Pappas. In 2018, the Company announced the separation of the Chief Executive Officer and Board Chair roles and in May 2020 appointed Mr. Pappas, who previously served as the Company’s Independent Lead Director, as the independent Board Chair, succeeding Mr. Newlin who served as Non-Executive Chair of the Board from January 2020 to May 2020. Our Board does not have a policy mandating separation of the role of the Chief Executive Officer and Board Chair, but if in the future our Board chooses to combine the role of Chairman and Chief Executive Officer, a Lead Director will be appointed annually by the independent Directors. Our Board believes that Board independence and oversight of management are effectively maintained through a strong independent Chair or Lead Director and through the Board’s composition, committee system and policy of having regular executive sessions of non-management directors, as further described in this Proxy Statement. The Board has also adopted a number of governance practices, as further described in this Proxy Statement, that promote effective independent oversight. Having an independent Chair or Lead Director enables the Chair to focus on corporate governance matters and the Chief Executive Officer to focus on the Company’s business. It also fosters an open dialogue and constructive feedback among the independent directors and management.

What is the Board’s involvement in risk oversight?

The Board maintains oversight of the Company’s enterprise risk management and the Company’s top enterprise risks and corresponding mitigation plans are presented to the Board semiannually. The Company has a Risk Steering Committee, chaired by the Company’s Chief Risk Officer and comprised of various members of executive and senior management, which regularly identifies and monitors top enterprise risks to the Company and oversees mitigation plans for the top enterprise risks facing the Company. Further, management notifies the Board of, among other things, any instances of significant threatened or actual litigation, significant governmental or regulatory inquiry or proceeding, and any events or occurrences that could materially impact the Company’s reputation or that may have significant operational, financial or legal impacts.

The Board’s committees also oversee the management of risks that are within the committees’ areas of focus. The Compensation Committee oversees the management of risks relating to the Company’s executive compensation policies (including the design of incentive structures, holding periods and clawbacks to mitigate risks), including the compensation risk assessment set forth in the section of the Proxy Statement titled “Compensation Discussion and Analysis.” The Audit Committee oversees the management of accounting, auditing, external reporting and internal control risks. The Audit Committee is also responsible for overseeing cybersecurity risk, including policies and procedures for assessing and managing that risk. The Governance & Corporate Responsibility Committee oversees risk associated with the corporate governance of the Company and environmental, health, safety, sustainability and corporate social responsibility risks. Each of the Compensation Committee, Governance & Corporate Responsibility Committee and Board plays a role in succession planning oversight. The entire Board also reviews the Company’s safety performance and risks associated with safety.

The Board also receives information relating to the culture of the Company through a number of channels, including updates from the Chief People Officer on the Company’s diversity and inclusion data and metrics and analyses of the result of our annual employee engagement survey, as well as updates from the general counsel on any significant compliance, discrimination or harassment complaints.

 

18

  

 

 


Governance of the Company

 

What are the committees of the Board and how often did the Board and its committees meet in 2020?

The Board has standing Audit, Compensation and Governance & Corporate Responsibility Committees. All of the charters for the committees are available on the Company’s website at www.univarsolutions.com/investors. In 2020, the Board met eight times, the Audit Committee met seven times, the Governance & Corporate Responsibility Committee met five times, and the Compensation Committee met nine times. Every director attended 75% or more of the meetings of the Board and those Committees of which he or she was a member (held during the period he or she served as a director). Information relating to each of the Committees of the Board as of the date of this Proxy Statement is provided below.

Committee Composition

 

 

Audit

Committee

Compensation Committee

Governance & Corporate

Responsibility Committee

  Joan Braca

 

M

M

  Mark J. Byrne

 

M

 

  Daniel P. Doheny*

C

 

M

  Richard P. Fox*

M

 

M

  Rhonda Germany

M

 

C

  Christopher D. Pappas

 

M

M

  Kerry J. Preete

 

M

 

  Robert L. Wood*

M

C

 

 

  C: Chair

  M: Member

  * Denotes that Mr. Doheny, Mr. Fox, and Mr. Wood are financial experts in the Audit Committee.

 

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

19

 


Governance of the Company

 

Audit Committee

 

Committee Name and Members

Representative Functions of the Audit Committee

Audit:

Daniel P. Doheny, Chair

Richard P. Fox

Rhonda Germany

Robert L. Wood

Number of Meetings in 2020: Seven

      directly responsible for the appointment or replacement, compensation, retention and oversight of the work of the independent auditor;

      pre-approve all auditing and permitted non-audit services performed by the independent auditor;

      assist the Board in monitoring the integrity of the Company’s financial statements, the independent auditor’s qualifications and independence, the performance of the independent auditor, the Company’s internal audit function and the Company’s compliance with its Code Handbook;

      annually review an independent auditor’s report describing, among other things, the auditing firm’s internal quality-control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the auditing firm;

      discuss and review the annual audited or quarterly unaudited financial statements with management and the independent auditor, review and approve financial information before submission to the SEC and monitor the Company’s Sarbanes-Oxley internal control compliance on an annual basis;

      discuss earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies;

 

      discuss policies with respect to risk assessment and risk management;

      meet separately, periodically, with management, the internal auditors and the independent auditor;

      review and approve the risk-based internal audit plan, as well as the appointment, compensation, replacement or dismissal of the vice president of internal audit;

      review with the independent auditors any audit problems or difficulties with management’s responses;

      set clear hiring policies for employees or former employees of the independent auditors;

      prepare any report or other disclosure by the Audit Committee required to be included in any proxy statement under the rules of the SEC;

      oversee the Company’s cybersecurity risk, including the policies and procedures for assessing and managing that risk; and

      handle such other matters as delegated to the Audit Committee by the Board.

 

The Audit Committee operates under a written charter adopted by the Board that is available through the Company’s website at www.univarsolutions.com/investors. While the Audit Committee has the responsibilities and powers set forth in its charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete, accurate and prepared in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor.

The Board has determined that Messrs. Doheny, Fox and Wood and Ms. Germany are independent within the meaning of applicable SEC regulations and the listing standards of the NYSE and that Messrs. Doheny, Fox and Wood are qualified as audit committee financial experts within the meaning of Section 407 of the Sarbanes-Oxley Act and applicable SEC regulations. The Board has also determined that each

 

20

  

 


Governance of the Company

 

member of the Audit Committee is financially literate within the meaning of the NYSE listing standards. Mr. Fox’s service on the audit committees of three other companies has been determined by the Board not to impair his ability to serve on the Company’s Audit Committee.

Compensation Committee

 

Committee Name and Members

Representative Functions of the Compensation Committee

Compensation:

Robert L. Wood, Chair

Joan Braca

Mark J. Byrne

Christopher D. Pappas

Kerry J. Preete

Number of Meetings in 2020: Nine

      make recommendations to the Board as to the Company’s overall compensation philosophy and oversee the development and implementation of compensation programs;

      establish the total compensation package provided to the Chief Executive Officer, other executive officers and other officers reporting directly to the Chief Executive Officer;

      develop and recommend to the Board compensation for Board members and recommend the amount of stock in Univar Solutions that directors should hold;

      oversee Univar Solutions’ general incentive compensation plans and equity-based plans;

      help ensure the Company’s compensation policies do not encourage excessive risk-taking;

      produce a Compensation Committee report on executive compensation to be included in the Company’s annual proxy statement filed with the SEC, in accordance with the applicable rules and regulations of the SEC, NYSE and other regulatory bodies;

 

 

      oversee compliance with any applicable SEC rules and regulations regarding shareholder approval of executive compensation matters;

      retain consultants to advise the Compensation Committee on executive compensation policies and practices and review the independence of such consultants;

      administer all plans that require “disinterested administration” under Rule 16b-3 the Exchange Act, as amended; and

      handle such other matters as delegated to the Compensation Committee by the Board.

 

The Compensation Committee operates under a written charter adopted by the Board which is available through the Company’s website at www.univarsolutions.com/investors. Subject to applicable legal and NYSE requirements, the Compensation Committee may form, and delegate any of its responsibilities to, one or more subcommittees, each of which may take such actions as may be delegated by the Compensation Committee. The Compensation Committee may also, in its discretion and subject to applicable legal and NYSE requirements, establish thresholds below which approval for some activities and associated transactions can be delegated to management without direct Compensation Committee involvement (except that there shall be no delegation to management members of decisions that impact their own compensation).

The Board has determined that Ms. Braca and Messrs. Byrne, Pappas, Preete and Wood are independent within the meaning of applicable SEC regulations and the listing standards of the NYSE. In addition, all members of the Compensation Committee qualify as “non-employee” directors for purposes of Rule 16b-3 of the Exchange Act, as amended.

 

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Governance of the Company

 

Governance & Corporate Responsibility Committee

 

Committee Name and Members

Representative Functions of the Governance & Corporate Responsibility Committee

Governance & Corporate Responsibility:

 

Rhonda Germany (Chair)

Joan Braca

Daniel P. Doheny

Richard P. Fox

Christopher D. Pappas

Number of Meetings in 2020: Five

      develop and recommend criteria for selecting nominees for director and periodically review the criteria;

      identify and recommend to the Board candidates qualified and suitable to become members of the Board consistent with the Company’s Board criteria;

      identify and recommend Board members to serve on committees of the Board;

      oversee and provide guidance on the Company’s environmental, health, safety, sustainability and corporate social responsibility policies, objectives, programs, and practices;

      screen and recommend to the Board candidates for Board Chair and Chief Executive Officer;

      review and recommend to the Board ratification of all persons previously designated as officers of the Company;

      develop and recommend to the Board a set of corporate governance principles;

      establish procedures for the evaluation of the Board and management;

      review and oversee succession planning for the Chief Executive Officer of the Company and its subsidiaries with input from the Compensation Committee as appropriate; and

      handle such other matters as delegated to the Governance & Corporate Responsibility Committee by the Board.

The Governance & Corporate Responsibility Committee operates under a written charter adopted by the Board, which is available through the Company’s website at www.univarsolutions.com/investors. The Board has determined that Mmes. Braca and Germany and Messrs. Doheny, Fox and Pappas are independent within the meaning of applicable SEC regulations and the listing standards of the NYSE.

How does the Board select nominees for the Board?

The Board and Governance & Corporate Responsibility Committee consider candidates for Board membership in accordance with criteria set forth in the Certificate of Incorporation, the Bylaws, the Company’s Corporate Governance Guidelines (the “Guidelines”) and the charter of the Governance & Corporate Responsibility Committee. The Governance & Corporate Responsibility Committee’s charter provides that it may retain a third-party executive search firm to identify candidates for the Board from time to time.

The Board’s and Governance & Corporate Responsibility Committee’s assessment of a proposed candidate will include considerations of diversity as described in How does the Governance & Corporate Responsibility Committee consider diversity in selecting directors?” below. The Governance & Corporate Responsibility Committee also considers the balance of management and independent directors and the need for committee independence in its evaluation of prospective nominees. In addition, while the Guidelines do not establish specific term limits, the Guidelines provide, without exemption or condition, that a person who is 75 years or older (including an incumbent director) may not stand or be nominated to stand for election at the next annual meeting of stockholders. The Governance & Corporate Responsibility Committee actively reviews board size and composition in order to continue to ensure continuity, stability and orderly transition. The Governance & Corporate Responsibility Committee will generally make a recommendation to the full Board as to the person(s) who should be nominated by the Board. The Board determines the nominee(s) after considering the recommendation and report of the Governance & Corporate Responsibility Committee.

The Board believes that each of the Company’s directors has met all the guidelines set forth in the Guidelines, which can be found at www.univarsolutions.com/investors. As noted in the director biographies, the Company’s directors have experience, qualifications and skills across a wide range of public and private companies, possessing a broad diversity of experience both individually and collectively.

 

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For a stockholder to submit a candidate for consideration by the Governance & Corporate Responsibility Committee for election to the Board, the stockholder must comply with the procedures set forth in the Bylaws, including delivering to the Companys Secretary (the Secretary) at 3075 Highland Parkway, Suite 200, Downers Grove, Illinois 60515, a notice complying with the requirements in the Bylaws. The Governance & Corporate Responsibility Committee will consider individuals recommended by stockholders in the same manner and to the same extent as it considers director nominees identified by other means. The Board and Governance & Corporate Responsibility Committee have not received director nominations from any stockholders in connection with the election of directors at the Annual Meeting. For the 2022 Annual Meeting, eligible stockholders may nominate directors for inclusion in the proxy no later than February 5, 2022, and no earlier than January 6, 2022, which dates are 90 days and 120 days, respectively, prior to May 6, 2022, the anniversary of the Annual Meeting; provided, that if the 2022 Annual Meeting is called for a date that is more than 30 days before or 70 days after such anniversary date, then notice by the stockholder to be timely must be delivered not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made.

How does the Governance & Corporate Responsibility Committee consider diversity in selecting directors?

The Board seeks a diverse group of candidates who possess the background, skills and expertise to make a significant contribution to the Board, to the Company and to its subsidiaries. Selection of an individual reflects demonstrated experience in an area helpful to the Board, including: high level leadership experience in business or administrative activities; specialized expertise in the chemical or distribution industries or other industries served by the Company; breadth of knowledge about issues affecting the Company and its subsidiaries; and the ability and willingness to contribute special competencies to Board activities. The Governance & Corporate Responsibility Committee also considers personal attributes including: demonstrated sound judgement, reputation and personal integrity; willingness to challenge conventional thinking, as appropriate, to produce the best outcome; loyalty to the Company and concern for its success and welfare and willingness to apply sound independent business judgment; awareness of a director’s vital role in the Company’s and its subsidiaries’ good corporate citizenship and corporate image; time available for meetings and consultation on Company matters; and a willingness to assume fiduciary responsibilities. The Governance & Corporate Responsibility Committee also considers the benefits of diversity in board composition, including with respect to experience, age, gender and ethnicity, among others.

How does the Board determine which directors are considered independent?

The Board currently consists of 10 directors. Each of the directors who served during 2020 and each nominee has been determined to be independent except for Mr. Stavropoulos who retired from the Board as of May 2020, Mr. Jukes, the Company’s President and Chief Executive Officer, and Mr. Newlin, who retired as an employee of the Company effective as of December 31, 2019. Pursuant to the Guidelines, the Board reviews director independence at least annually. The Board receives and considers a recommendation regarding independence from the Governance & Corporate Responsibility Committee, based upon applicable SEC regulations, the NYSE listing standards and all of the relevant facts and circumstances relating to the independence of each of the members of the Board. The Board also considers transactions, relationships and arrangements between each director or an immediate family member of the director and each of the Company and our senior management. By determining that a director is independent, the Board has concluded that the director is independent of management and free from any material relationship with the Company and its subsidiaries (whether directly or as a partner, stockholder or officer of an organization that has a relationship with the Company or its subsidiaries) that would interfere with the exercise of the director’s independent judgment as a member of the Board. The Board also determines whether directors who serve on a committee meet the particular independence requirements under applicable SEC regulations and NYSE listing standards for service on that committee.

For further information, please also read “What relationships and policies does the Company have with respect to transactions with related persons?

What relationships and policies does the Company have with respect to transactions with related persons?

The Company’s Code Handbook provides that all conflicts of interest should be avoided. The Company has also adopted a written policy regarding transactions with related persons (the “Related Party Policy”). Pursuant to the Related Party Policy, when the Company is a proposed participant in a transaction where a related person, as defined in Item 404 of SEC Regulation S-K, has or will have a direct or indirect material interest, then the related person must promptly disclose to the Chair of the Audit Committee and the General Counsel of the Company such proposed transaction and all relevant material facts. No related person transaction may be consummated or continue without the approval or ratification of the Audit Committee. It is the policy of the Company that directors interested in a related person transaction will recuse themselves from any such vote. The Audit Committee will consider all factors it deems relevant and will approve or ratify only

 

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Governance of the Company

 

those that are in the best interests of the Company and its stockholders. The Related Party Policy includes a list of related person transactions that the Board has deemed pre-approved or ratified by the Audit Committee under the terms of the Related Party Policy, such as ordinary course transactions involving the purchase or sale of products or services not exceeding $120,000 and certain charitable contributions not exceeding the greater of $100,000 or 2% of the charitable organization’s total annual receipts. In addition, our directors and executive officers are required to complete Director and Officer Questionnaires that, among other things, identify any potential related person transactions. Our Board determines, on an annual basis, which members of our Board are independent based upon applicable SEC regulations, the NYSE listing standards and all the relevant facts and circumstances relating to the independence of each of the members of the Board.

There were no related party transactions during fiscal year 2020 required to be reported in this Proxy Statement under the applicable SEC rules.

 

How does the Company engage with stockholders?

We maintain active, year-round engagement with our stockholders. During the past fiscal year, our directors and management met with many of our investors to discuss key corporate governance, executive compensation, corporate responsibility, culture and other important topics. These meetings enable two-way dialogue between our stockholders and our Board or management, and provide an opportunity for our leadership to hear our stockholders’ perspectives and understand any concerns or feedback they may have.

The Board considers stockholder feedback from these meetings, along with emerging best practices, market standards, and policies at other companies in its perspectives. The feedback we have received from our stockholder engagement activities has informed the Board’s decisions and deliberations as well as our disclosures. For example, stockholder feedback helped inform the Board’s determination that elimination of the supermajority voting provision in our Company charter, as proposed in Proposal 4, is appropriate for the Company and our stockholders. The feedback received from our stockholder engagement activities also contributed to a number of other enhancements to our corporate governance structure, such as enacting a retirement policy for directors where any director who is 75 or older cannot stand for reelection, declassifying the Board, appointing an Independent Chair, expansion of the Company’s Clawback Policy, among others.  

Our Board also considered stockholder input in reviewing the Company’s compensation plan design and metrics, as described in greater detail in the Compensation Discussion and Analysis section of this Proxy Statement, and in other key areas. For example, the Board took into account stockholder feedback in its determination to redesign the Company’s long-term incentive program for 2021. We recognize that improving transparency and disclosures on material environmental, social and governance (ESG) topics is important to our stakeholders, therefore in addition to making meaningful improvements on a range of sustainability issues through 2020, we have also continued to work on improving our disclosures to key ESG reporting platforms. Informed by our ongoing stakeholder engagement and up-to-date feedback from stockholders, we have worked to further improve our participation and disclosures to key reporting and assessment platforms including Sustainalytics, MSCI, ISS-oekom, CDP and EcoVadis. As well as making our CDP responses public, we have furthered alignment of our public sustainability reporting with stakeholder expectations through our Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB)-based sustainability reporting, externally assured for the first time in 2020.

 

How do stockholders or interested parties communicate with the Board?

Stockholders wishing to communicate with the Board should send such communication to the Company’s Secretary at 3075 Highland Parkway, Suite 200, Downers Grove, Illinois 60515. Pursuant to the Guidelines and the Company’s Director Communication Policy, the Secretary forwards stockholder communications to the Board to the Board Chair. Any responses or communications from the Board to any stockholder are also conveyed from the Board Chair to such stockholder through the Secretary. The Secretary generally does not forward complaints about service, new services suggestions, resumes and other forms of job inquiries, surveys, business solicitations, advertisements or inappropriate communications. Interested parties may direct correspondence to the Company’s headquarters address set forth in this Proxy Statement, including in the first paragraph of page one. In addition, see What are the Company’s practices on reporting of concerns regarding accounting?” below.

What are the Company’s practices on reporting of concerns regarding accounting?

The Company has established practices relating to the reporting of concerns regarding accounting and other ethics and compliance issues. Any person who has a concern about the conduct of the Company or any of its personnel, with respect to accounting, internal accounting controls, auditing matters or other ethics and compliance concerns, may (where permitted), in a confidential or anonymous manner, communicate that

 

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Governance of the Company

 

concern to Company management or bring it to the attention of the Chair of the Companys Audit Committee through the Companys Compliance and Ethics Alertline at 1-866-605-2999 or via web submission at www.univar.ethicspoint.com.

Who chairs the Company’s executive sessions?

Mr. Pappas is currently the independent Board Chair and chairs the executive sessions.

What are the Company’s corporate governance guidelines and ethics policies?

 

Board Committee Charters. The Audit, Compensation, and Governance & Corporate Responsibility Committees of the Board operate pursuant to written charters. All of the committee charters are available on the Company’s website at www.univarsolutions.com/investors.

 

Corporate Governance Guidelines. The Board has documented its corporate governance principles in the Guidelines, which were adopted to reflect certain best practices and requirements of the NYSE. The Guidelines are available on the Company’s website at www.univarsolutions.com/investors.

 

Code Handbook and Code of Ethics for the Chief Executive Officer and Senior Financial Officers. Univar Solutions’ Code Handbook emphasizes the Company’s commitment to the highest standards of business conduct and includes the Company’s policies and expectations on a number of topics, including conflicts of interest, compliance with laws, human rights, use of our assets and business conduct, sustainability and fair competition. The Code Handbook applies to all of our directors, officers and employees, and the Company expects all of its business partners to act in a manner consistent with the Code Handbook. The Code Handbook also sets forth information and procedures for employees to report suspected issues or violations. In addition, the Company’s executive and financial officers also adhere to the Company’s Code of Ethics for the Chief Executive Officer and Senior Financial Officers. Periodically, the directors, officers and certain management employees in the Company are required to complete a conflict of interest questionnaire and certify in writing that they have read and understand the Code Handbook. The Code Handbook and Code of Ethics for the Chief Executive Officer and Senior Financial Officers are available on the Company’s website at www.univarsolutions.com/investors or by contacting the Secretary of the Company to receive a written copy.

How does the Company address director education?

The Company is committed to offering the members of the Board the support and education they deem appropriate (given their individual backgrounds) to stay abreast of developments in corporate governance, the industries in which the Company participates, evolving trends and practices relevant to the Company or its strategic plans, and their committee assignments and responsibilities. The Board is subject to the Company’s Directors’ On-Boarding & Education Policy, the objectives of which are to (1) ensure that new directors are provided with a foundational understanding of the Company, including its industry, business, operations, competitors and current issues and strategies, and the responsibilities of Board members generally; and (2) provide directors with the knowledge and skills required to enable them to better perform their duties and to ensure the effective functioning of the Board. In 2020, the Company’s directors completed a total of more than 60 hours worth of training and education in a broad range of subject matters that are relevant to the service of our Board.

What are the Company’s practices or policies regarding hedging, pledging and margin accounts?

The Company’s Second Amended Policy on Trading in Securities prohibits all directors, officers and employees of the Company (and their immediate family members and other persons living in their households (“Company Associates”)) from (i) engaging in short sales of securities of the Company; (ii) engaging in transactions in puts, calls or other derivative securities (whether on an exchange or in any other organized market) with respect to the equity of the Company; and (iii) pledging (or hypothecating) shares of the Company’s common stock as collateral for a loan, including margin accounts. The policy also prohibits director and officers from engaging in hedging or monetization transactions (such as zero-cost collars and forward sale contracts) and strongly discourages all other employees and Company Associates from entering into such arrangements. Any Company Associate wishing to enter into such an arrangement must first pre-clear the proposed transaction with the General Counsel and the Chief Executive Officer.  

What other significant Board practices does the Company have?

 

Private Executive Sessions. The non-management members of the Board conduct executive session meetings during the majority of their quarterly meetings in which no member of management is present to discuss any matter selected by a member. Further, the Company’s independent directors conduct meetings periodically as required by SEC standards and the Guidelines.

 

Advance Materials. Information and data important to the directors’ understanding of the business or matters to be considered at a Board or Board committee meeting are, to the extent practical, distributed to the directors sufficiently in advance of the meeting to allow careful review prior to the meeting.

 

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Governance of the Company

 

 

Board and Committee Self-Evaluations. The Board conducts an annual self-evaluation, which is completed by each member of the Board. In addition, the Audit, Compensation and Governance & Corporate Responsibility Committees also conduct a similar annual self-evaluation, each of which is reviewed by the relevant committee Chair. The results of Board evaluations are reviewed by the Governance & Corporate Responsibility Committee and the Board may take action based on identified opportunities for improvement. If and as appropriate, the committee Chairs or the Board Chair will have individual discussions with directors to explore issues identified through the self-assessment process and otherwise. General governance issues are considered by the Governance & Corporate Responsibility Committee and may result in recommendations to the Board.

What access do the Board and Board committees have to management and to outside advisers?

 

Access to Management and Employees. Directors have full and unrestricted access to the management and employees of the Company. Additionally, key members of management attend Board meetings to present information about the results, plans and operations of the business within their areas of responsibility.

 

Access to Outside Advisers. The Board and its committees may retain counsel or consultants without obtaining the approval of any officer of the Company in advance or otherwise. The Audit Committee has the sole authority to retain and terminate the independent auditor. The Governance & Corporate Responsibility Committee has the authority to retain search firms to be used to identify director candidates. The Compensation Committee has the authority to retain compensation consultants for advice on executive compensation matters.

 

 

26

  

 


 

 

 

Stock Ownership Information

The tables below and the accompanying footnotes show information regarding the beneficial ownership of the Company’s common stock as of March 9, 2021, unless otherwise indicated. As of March 9, 2021, the Company had 169,479,019 shares of common stock outstanding.

The amounts and percentages of shares beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of (or to direct the disposition of) such security. A person is also deemed to be a beneficial owner of any securities that such person has a right to beneficially acquire within 60 days. Securities that can be acquired within 60 days are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s ownership percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Percentage computations are based on shares of common stock outstanding as of March 9, 2021.

What is the equity ownership of officers and directors?

The following table sets forth information with respect to the beneficial ownership of Univar Solutions common stock as of March 9, 2021 by each member of the Board; each of the Company’s named executive officers in the section titled “Executive Compensation,” and all directors and executive officers of the Company as a group.

 

  Name of Beneficial Owner

 

Shares of

Common Stock

Owned (1)

 

 

Percent

 

 

 

 

 

 

 

  Nicholas W. Alexos

 

 

331,744

 

 

*

  Joan Braca

 

 

36,517

 

 

*

  Mark J. Byrne

 

 

41,613

 

 

*

  Kimberly L. Dickens(2)

 

 

8,500

 

 

*

  Daniel P. Doheny

 

 

50,778

 

 

*

  Mark M. Fisher(2)

 

 

17,762

 

 

*

  Richard P. Fox

 

 

51,613

 

 

*

  Rhonda Germany

 

 

39,013

 

 

*

  Michael J. Hildebrand(2)

 

 

18,572

 

 

*

  David C. Jukes

 

 

197,659

 

 

*

  Carl J. Lukach(2)

 

 

139,965

 

 

*

  Jennifer A. McIntyre

 

 

50,578

 

 

*

  Stephen D. Newlin(3)

 

 

309,200

 

 

*

  Christopher D. Pappas(4)

 

 

175,773

 

 

*

  Kerry J. Preete

 

 

35,452

 

 

*

  Nicholas Powell

 

 

15,987

 

 

*

  Robert L. Wood

 

 

38,533

 

 

*

  All directors and executive officers as a group (17 persons)

 

 

1,559,259

 

 

*

 

(1)

Represents the following for each beneficial owner: (i) shares of common stock; (ii) restricted stock that vest within 60 days of March 9, 2021 in the amount of 8,627 for Messrs. Byrne, Doheny, Fox, Newlin and Pappas; and (iii) deferred stock units that vest within 60 days of March 9, 2021 in the amount of 8,627 for Mmes. Braca and Germany and Messrs. Preete and Wood.

 

(2)

Shares reported as beneficially owned by Messrs. Fisher, Hildebrand and Lukach and Ms. Dickens are as of their respective last day with the Company.

 

(3)

Mr. Newlin’s shares are held in the Stephen D. Newlin Revocable Trust.

 

(4)

Includes 90,088 shares of common stock held indirectly by Mr. Pappas in the Susan G. Pappas Revocable Trust controlled by his spouse.

Except as otherwise indicated in the footnotes to this table, each of the beneficial owners listed has, to the Company’s knowledge, sole voting and investment power with respect to the indicated shares of common stock. Unless otherwise indicated, the address for each individual listed above is c/o Univar Solutions Inc., 3075 Highland Parkway, Suite 200, Downers Grove, Illinois 60515.

 

 

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Stock Ownership Information

 

 

Who are the Company’s largest stockholders?

Based solely on the information filed with the SEC on Schedule 13G for the fiscal year ended December 31, 2020, the following table sets forth those stockholders who beneficially own more than five percent of Univar Solutions’ common stock:

 

  Name of Beneficial Owner

 

Shares of

Common Stock

Owned

 

 

Percent(1)

 

 

 

 

 

 

 

 

 

 

  EdgePoint Investment Group Inc.(2)

 

 

15,315,231

 

 

 

9.0

 

  The Vanguard Group(3)

 

 

14,775,306

 

 

 

8.7

 

  BlackRock, Inc.(4)

 

 

13,669,701

 

 

 

8.1

 

 

 

(1)

Based on 169,479,019 shares of our common stock outstanding on March 9, 2021.

 

(2)

This information is derived solely from Schedule 13G/A of EdgePoint Investment Group Inc. filed on February 9, 2021. According to the Schedule 13G, EdgePoint Investment Group has sole voting and dispositive power with respect to 11,126,613 of the reported shares and shared voting and dispositive power with respect to 4,188,618 of the reported shares. The address for EdgePoint Investment Group Inc. is 150 Bloor Street West, Suite 500, Toronto, Ontario M5S 2X9, Canada.

 

(3)

This information is derived solely from the Schedule 13G/A of The Vanguard Group filed February 8, 2021. According to the Schedule 13G/A, The Vanguard Group has shared voting power with respect to 117,092 of the reported shares, sole dispositive power with respect to 14,516,067 of the reported shares and shared dispositive power with respect to 259,239 of the reported shares. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA  19355.

 

(4)

This information is derived solely from Schedule 13G of BlackRock, Inc. filed February 2, 2021. According to the Schedule 13G, BlackRock, Inc. has sole voting and dispositive power with respect to all of the reported shares. The address for BlackRock, Inc. is 55 East 52nd Street New York, NY 10055.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the directors, executive officers and persons who own more than ten percent of the outstanding shares of Univar Solutions common stock to file with the SEC reports of their ownership and changes in their ownership of the Company’s common stock. Directors, executive officers and greater-than-ten percent stockholders are also required to furnish the Company with copies of all ownership reports they file with the SEC. To the Company’s knowledge based solely upon a review of the copies of such forms furnished to the Company and filings with the SEC, and on written representations from the reporting persons, the Company believes that all Section 16(a) filing requirements were met during 2020 except for the following: (i) Mr. Powell filed a Form 5 showing two late reported transactions reflecting the vesting of Tranche 1 and Tranche 2 of the 2018 performance-based restricted stock units that were deemed earned on February 6, 2019 and February 21, 2020, respectively; (ii) Ms. O’Hanlon filed late Form 3; and (iii) Mr. Alexos filed a Form 4 showing one late reported transaction reflecting a grant of restricted stock units.

Equity Compensation Plan Information

The following table contains information, as of December 31, 2020, about the amount of shares of the Company’s common stock to be issued upon the exercise of outstanding options and other rights granted under the 2020 Equity Plan, 2017 Equity Plan, 2015 Equity Plan and 2011 Equity Plan (each as defined herein).

 

 

# of Shares

of Common Stock

to be Issued

Upon Exercise of

Outstanding Options, Warrants

and Rights

 

 

Weighted Average

Exercise Price

of Outstanding

Stock Options ($)

 

 

# of Securities

Remaining Available

for Future Issuance

Under Equity

Compensation Plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Equity compensation plans approved by stockholders

 

 

4,244,780

 

 

 

23.79

 

 

 

6,550,388

 

  Equity Compensation plans not approved by stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

28

  

 


 

 

 

Audit Committee Report

Who serves on the Audit Committee of the Board of Directors?

The members of the Audit Committee, as of the date these proxy materials were first sent or made available to stockholders, are Rhonda Germany, Daniel P. Doheny, Richard P. Fox, and Robert L. Wood. The Board has determined that Ms. Germany, Mr. Doheny, Mr. Fox, and Mr. Wood are “independent” within the meaning of the applicable rules of both the NYSE and the SEC. The Board has also determined that each member of the Audit Committee is financially literate and that Mr. Doheny, Mr. Fox and Mr. Wood are “audit committee financial experts” within the meaning of the rules of the SEC.

What document governs the activities of the Audit Committee?

The Audit Committee operates under a written charter adopted by the Board. The Audit Committee’s responsibilities are set forth in this charter. The charter is available on the Company’s website at www.univarsolutions.com/investors. The Board and the Audit Committee review and assess the adequacy of the charter of the Audit Committee on an annual basis.

What are the responsibilities of the Audit Committee?

The Company’s Audit Committee is responsible, among other things, to:

 

directly responsible for the appointment or replacement, compensation, retention and oversight of the work of the independent auditor;

 

pre-approve all auditing and permitted non-audit services performed by the independent auditor; 

 

assist the Board in monitoring the integrity of the Company’s financial statements, the independent auditor’s qualifications and independence, the performance of the independent auditor, the Company’s internal audit function and the Company’s compliance with its Code Handbook;

 

annually review an independent auditor’s report describing, among other things, the auditing firm’s internal quality-control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the auditing firm;

 

discuss and review the annual audited or quarterly unaudited financial statements with management and the independent auditor, review and approve financial information before submission to the SEC and monitor the Company’s Sarbanes-Oxley internal control compliance on an annual basis;

 

discuss earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies;

 

discuss policies with respect to risk assessment and risk management;

 

meet separately, periodically, with management, the internal auditors and the independent auditor;

 

review and approve the risk-based internal audit plan, as well as the appointment, compensation, replacement or dismissal of the vice president of internal audit;

 

review with the independent auditor any audit problems or difficulties with management’s responses;

 

set clear hiring policies for employees or former employees of the independent auditor;

 

annually review the adequacy of the Audit Committee’s written charter;

 

prepare any report or other disclosure by the Audit Committee required to be included in any proxy statement under the rules of the SEC;

 

oversee the Company’s cybersecurity risk, including the policies and procedures for assessing and managing that risk;

 

handle such other matters as delegated to the Audit Committee by the Board;

 

report regularly to the full Board; and

 

self-evaluate the performance of the Audit Committee.

 

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Audit Committee Report

 

 

The Audit Committee met seven times during 2020. The Audit Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its tasks, including, without limitation, review and pre-approval of earnings releases and securities filings. The Audit Committee’s meetings include, whenever appropriate, private sessions with the independent auditor and with the internal auditors, in each case without the presence of the Company’s management.

The independent auditor is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and issuing a report thereon. Management is responsible for the Company’s financial reporting process including its system of internal control, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The Audit Committee’s responsibility is to monitor and review these processes. It is not the Audit Committee’s duty or responsibility to conduct audits or accounting reviews or procedures. The Audit Committee has relied, without independent verification, on management’s representation that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America and on the representations of the independent auditor included in its report on the Company’s financial statements.

What matters have members of the Audit Committee discussed with management and the independent auditor?

As part of its oversight of the Company’s financial statements, the Audit Committee reviews and discusses with both management and the Company’s independent auditor all annual and quarterly financial statements prior to their issuance. During 2020, management advised the Audit Committee that each set of financial statements reviewed had been prepared in accordance with accounting principles generally accepted in the United States of America and reviewed significant accounting and disclosure issues with the Audit Committee. These reviews include discussion with the independent auditor of matters required to be discussed by the applicable requirements of the PCAOB and the SEC. The Audit Committee has also discussed with the independent auditor matters relating to its independence, including a review of audit and non-audit fees and written disclosures from the independent auditor to the Audit Committee pursuant to applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence. The Audit Committee also considered whether non-audit services provided by the independent auditor are compatible with the independent auditor’s independence and conducted its annual performance evaluation of the independent auditor.

Has the Audit Committee made a recommendation regarding the audited financial statements for the year ended December 31, 2020?

Based on the Audit Committee’s discussion and review with management and the independent auditor and the Audit Committee’s review of the representations of management and the written disclosures and report of the independent auditor to the Board, the Audit Committee recommended to the Board that it include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the SEC. In addition, on March 10, 2021, the Audit Committee selected Ernst & Young LLP as the independent registered public accounting firm to audit Univar Solutions’ financial statements for the year ending December 31, 2021.

This report has been furnished by the members of the Audit Committee:

 

Daniel P. Doheny, Chair

Richard P. Fox

Rhonda Germany

Robert L. Wood

 

The information contained in the above Audit Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Exchange Act except to the extent that Univar Solutions specifically incorporates it by reference in such filing.

 

 

 

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Executive Officers

The following table sets forth information about the Company’s executive officers as of March 9, 2021:

 

Name

Age

Title

Positions Held Since January 1, 2016

David C. Jukes

61

President and Chief Executive

Officer

May 2018 to present serves as President and Chief Executive Officer. From May 2017 to May 2018, Mr. Jukes served as President and Chief Operating Officer of the Company. From June 2016 to May 2017, Mr. Jukes served as Executive Vice President and President of Univar Solutions USA, and President of Latin America (LATAM) from September 2015 to May 2017. From 2011 to 2016, Mr. Jukes served as President of Univar EMEA.

Nicholas W. Alexos

57

Executive Vice President and

Chief Financial Officer

January 2020 to present serves as Executive Vice President, Chief Financial Officer. Prior to Univar Solutions, Mr. Alexos served as Executive Vice President and Chief Financial Officer at Dentsply Sirona, Inc., a manufacturer of professional dental products and technologies (“Dentsply”), from November 2017 to August 2019. From October 2017 to November 2017, Mr. Alexos served as Executive Vice President and Chief Administrative Officer of Dentsply. Mr. Alexos also served as a Managing Director of Madison Dearborn Partners, LLC, a private equity investment firm, from 1993 to 2017.

Jorge Buckup

53

President, LATAM

November 2017 to present serves as President of the Company’s Latin America segment. Mr. Buckup joined Univar Solutions in February 2012 as Vice President of Finance of Univar Brazil and has served as Vice President of Finance of Latin America from 2017. Before joining Univar Solutions, Mr. Buckup was CFO for the joint venture between Dow/Mitsu in Brazil.

James Holcomb

54

Senior Vice President and President of North America Chemical Distribution

January 2021 to present serves as Senior Vice President and President of North America Chemical Distribution. Prior to Univar Solutions, Mr. Holcomb was Chief Operating Officer North America for Brenntag, a chemical distribution company, from 2017 until December 2020. From 2014 to 2016, Mr. Holcomb served as Brenntag’s President of Global Marketing. Mr. Holcomb joined Brenntag in 1993 and served in various roles of increasing responsibility until his departure.

 

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Executive Officers

 

Name

Age

Title

Positions Held Since January 1, 2016

Pat Jerding

48

Senior Vice President and Chief Information Officer

February 2020 to present serves as Senior Vice President and Chief Information Officer. From March 2019 to January 2020, Mr. Jerding served as Vice President and Chief Information Officer. Prior to Univar Solutions, Mr. Jerding served as Vice-President, Chief Information Officer of Nexeo Solutions, Inc., a global materials distributor for chemicals products, from December 2016 to March 2019. Mr. Jerding joined Nexeo Solutions in May 2011 as Director of Technology and was promoted to Vice President of Technology in 2015.

Jennifer A. McIntyre

56

Senior Vice President, Chief Streamline Officer, Head of North American Operations and Interim Chief People and Culture Officer

August 2020 to present serves as Senior Vice President, Chief Streamline Officer and Head of North American Operations. Since January 2021, she has also served as Interim Chief People and Culture Officer. From March 2019 to August 2020, Ms. McIntyre served as Senior Vice President and Chief Integration Officer and from January 2018 to February 2019, Ms. McIntyre served as Senior Vice President and Chief Supply Chain Operations Officer of the Company. Ms. McIntyre served as Vice President Supply Chain Operations, USA from December 2014 to December 2017.

Noelle J. Perkins

43

Senior Vice President, General

Counsel, Secretary and Chief

Risk Officer

November 2019 to present serves as Senior Vice President, General Counsel and Secretary. From March 2018 to October 2019, Ms. Perkins served as Deputy General Counsel and Assistant Secretary. Prior to Univar Solutions, Ms. Perkins served as Chief Counsel for the Oilseeds Processing segment of Archer Daniels Midland Company, a global agricultural processing and food ingredient public company, from August 2014 to March 2018.

Nicholas Powell

54

Senior Vice President, President Specialty Chemicals and Ingredients and Regional President Europe, Middle East and Africa and Asia Pacific

 

August 2020 to present serves as Senior Vice President, President Specialty Chemicals and Ingredients and Regional President Europe, Middle East and Africa and Asia Pacific. From February 2020 to August 2020, Mr. Powell served as Senior Vice President and President, EMEA & APAC and from January 2017 to January 2020, served as President of the Company’s Europe, Middle East, and Africa (EMEA) and Asia Pacific (APAC) business segments. Mr. Powell joined Univar Solutions in 2009, establishing Univar Solutions’ Middle East and Africa business. In 2014, Mr. Powell assumed leadership of EMEA’s Focused Industries, and in late 2015 assumed leadership of APAC operations.

 

 

 

 

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Executive Compensation

The Executive Compensation Section is organized as follows:

 

 

 

 

 

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Executive Compensation

 

 

 

 

Compensation Discussion and Analysis

Executive Summary

 

 

 

 

Throughout the COVID-19 pandemic, our priorities were protecting our people and ensuring the security of our supply chain. We acted quickly to fulfill our company purpose of keeping people fed, clean and safe.

 

The COVID-19 pandemic had a meaningful impact on the Univar Solutions business in 2020. Our stock price fell approximately 22% in 2020, and our financial performance did not meet the goals we set at the beginning of the year.

 

 

We launched Streamline 2022 (S22), a program designed to accelerate growth and increase margins. The program renews our focus on growing our chosen focused industries and local chemical distribution businesses, operational efficiency and cost reduction through the use of our digital capabilities and is already driving results.

 

 

Our compensation program continues to evolve. Following stockholder engagement after our 2020 say-on-pay vote and with their feedback in mind, we re-designed our long-term incentive program for 2021. We eliminated metric overlap and added Adjusted EPS, an ESG scorecard, and a relative Total Shareholder Return (TSR) modifier.

 

 

ESG is now an integral part of our long-term compensation program. We believe that employee safety, diversity & inclusion and climate change all have a long-term impact on our business, and beginning in 2021 our executives will be measured on progress towards our long-term goals.

 

 

We did not make any COVID-19 related adjustments to our compensation program. Despite the impact of the COVID-19 pandemic on the business, the Compensation Committee elected to keep the program intact as approved at the beginning of the year.

 

 

Payouts on our annual incentive program were well below target. Our NEOs, now all on a corporate-wide program rather than having some NEOs on business-unit specific plans, earned only 13.8% of their corporate performance targets.

 

 

Long-term incentives granted in 2018 earned only 26.5% of their 2020 target, and only 52% of their cumulative target. The pay-for-performance mechanisms in our pay plan effectively link realized compensation to delivered stockholder outcomes.

 

 

We believe our compensation program continues to focus executives on delivering long-term value. Our Streamline – Innovate – Grow strategy and the S22 program are the right path for the company, and we believe our compensation program closely ties executive compensation outcomes with the success of our strategy and stockholders.

 

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Our Company

Univar Solutions is a leading global chemical and ingredient distributor and provider of value-added services to customers across a wide range of diverse industries. Our nearly 9,500 employees purchase chemicals and ingredients from thousands of producers worldwide to warehouse, repackage, blend, dilute, transport and sell those products to more than 100,000 customer locations across approximately 125 countries. We operate an extensive worldwide chemical and ingredient distribution network, comprised of more than 600 facilities and serviced by hundreds of tractors, railcars, tankers and trailers operating daily through our facilities.

Chemical and ingredient producers rely on us to warehouse, repackage, transport, and sell their products as a way to expand their market access, enhance their geographic reach, lower their cost to serve, and grow their business. Customers who purchase products and services from us benefit from a lower total cost of ownership, as they are able to simplify their chemical sourcing process by outsourcing functions to us such as “just-in-time delivery,” product availability and selection, packaging, mixing, blending and technical expertise. They also rely on us for safe and secure delivery and off-loading of chemicals fully compliant with increasing local and federal regulations.

 

 

Our Executives

The Company’s Compensation Discussion and Analysis provides information regarding the Company’s compensation philosophies, plans and practices and the governance of those matters. This section also provides information about the material elements of compensation that were paid to or earned by the Company’s “named executive officers,” or “NEOs,” for fiscal year 2020 who are identified below:

 

 

Name

Position

David C. Jukes

President and Chief Executive Officer

Nicholas W. Alexos

Executive Vice President and Chief Financial Officer

Nicholas Powell

Senior Vice President, President Specialty Chemicals and Ingredients and Regional President Europe, Middle East and Africa and Asia Pacific

Jennifer A. McIntyre

Senior Vice President, Chief Streamline Officer, Head of North American Operations and Interim Chief People and Culture Officer

Carl J. Lukach

Former Chief Financial Officer; Former Executive Vice President, Corporate Development

Kimberly L. Dickens

Former Senior Vice President and Chief People Officer

Mark M. Fisher

Former Senior Vice President and President, USA and Canada

Michael J. Hildebrand

Former President, Canada and Global Agriculture and Environmental Sciences

 

Leadership Changes

Mr. Alexos joined the company on January 6, 2020. In connection with Mr. Alexos’ appointment, Mr. Carl J. Lukach ceased to serve as the Company’s Chief Financial Officer and continued to serve as Executive Vice President of Corporate Development until December 31, 2020.  

Mr. Hildebrand and the Company mutually agreed that his employment with the Company as President, Canada would be terminated, effective as of January 31, 2020. Mr. Fisher and the Company mutually agreed that his employment with the Company as Senior Vice President and President, USA and Canada would be terminated, effective as of August 7, 2020. Ms. Dickens and the Company mutually agreed that her employment with the Company as Senior Vice President and Chief People Officer would be terminated, effective as of January 18, 2021.

 

 

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Executive Compensation

 

 

Our Strategy

Our executive compensation program is designed to support our mission to Streamline. Innovate. Grow. We believe the metrics and goals that we implement in our short- and long-term compensation programs motivate progress against key value drivers that we believe will move our strategy forward and ultimately result in the creation of long-term value for our stockholders. The Company is focused on “Growing Together” by putting the customer at the center of all we do and working to take advantage of every opportunity to drive growth as we continue to execute our strategy. We believe we have the right people, products, tools and strategy to allow us to continue to deliver innovative solutions that customers and suppliers value as we realize our purpose to help keep our communities healthy, fed, clean and safe.  

 

2020 Company Performance

In 2020, the Company’s business transformation continued, and through execution against our strategic priorities, we focused on delivering value to stakeholders. In addition to our strong response to the COVID-19 pandemic, discussed below, the Company accomplished the following in the year 2020:

 

The Company executed its strategy and delivered solid margins and strong free cash flow in spite of a volatile global economy and an industrial slowdown creating softer demand for chemicals.

 

The Company captured new business through sales force effectiveness and invested in digital capabilities, creating an omni-channel selling approach designed to engage customers on their terms. This included expanding its e-commerce offerings by launching Shop.UnivarSolutions.com and ChemCentral.com, to help drive growth through a streamlined buying journey, self-service opportunities and a digitized end-to-end supply chain.

 

The Company continued the Nexeo integration where it generated a net cost synergy of $46 million, while making significant progress with the remaining integration projects that include network optimization, shared services, and ERP business system migration, which are all on track for completion during 2021.

 

The Company introduced the Streamline 2022 (S22) program, bringing additional transparency and clarity by announcing targets to reduce leverage below 3.0x by end of 2021 and improve Adjusted EBITDA run-rate margins to nine percent by end of 2022. The S22 program is designed to accelerate growth and increase margins through a focus on operational efficiency and cost reduction with a greater emphasis on, and the integration of, the Company's digital capabilities, as well as a global approach to certain of the Company's dedicated end market verticals.

 

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Executive Compensation

 

 

The Company organized its global market verticals and realigned management teams to bring a consistent global approach for those customers and suppliers who operate in the Consumer Solutions and Industrial Solutions markets.

 

The Company strengthened its global footprint by reaching an agreement with Zhuhai Techi Chem Silicone Industry Corporation to acquire the business to distribute innovative specialty silicone solutions used primarily for the coatings, adhesives, sealants, and elastomers (CASE) market.

 

The Company completed the divestiture of the Industrial Spill and Emergency Response businesses in September and the Canadian Agriculture Services business in November. This is in addition to exiting the Canadian agricultural distribution business. Proceeds of these transactions went toward paying down debt.

 

The Company’s Chief Executive Officer became a signatory to the CEO Action for Diversity & Inclusion™ (CEO Action) coalition, committing himself and Univar Solutions to advance diversity and inclusion in the workplace.

 

The Company publicly endorsed the Business Coalition for the Equality Act in the USA, increased our score on the Human Rights Campaign (HRC) Corporate Equality Index from an 85 in 2019 to a 100 in 2020, and achieved a score of 100 on the HRC Equidad MX, certifying us as a Best Place to Work for LGBTQ Equality.

 

The Company achieved a total case incident rate of 0.36, making it the safest year on record.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Executive Compensation

 

Our Response to COVID-19

COVID-19 impacted nearly every facet of our business and every one of our stakeholders. Through the crisis, our priorities were to our people and to fulfilling our critical link in the chemicals and ingredients supply chain.  

Our efforts to take care of our people began with five key steps:

 

Comprehensive contingency and continuity plans to cover a variety of scenarios, including natural disasters and other forms of crisis, were in place prior to COVID-19. These plans, designed to monitor and mitigate impacts on our operations, had been tested across our facilities, terminals, third party, and supplier networks in advance of COVID-19, and helped position us to respond quickly once we began to understand the scope of the pandemic. We continue to evolve our plans as new information becomes available.

 

Expanding work from home to more than 70% of our staff across sales, office-based, and administrative functions. This required doubling our global VPN capability, configuring laptops and desktops for remote work, enabling softphones on our customer solutions workstations, and establishing best practices quickly to guide our associates and managers.

 

Redefining facility operations was imperative to protect our front-line associates and drivers. By implementing new processes, procedures, and work schedules, and developing contingency plans for mission-critical staff members, we minimized exposures and provided rapid response to situations that could potentially threaten our ability to service our customers.

 

Increasing sanitation and hygiene practices at our office and branch locations was critical. At the early onset of the pandemic crisis, we expanded already robust janitorial and sanitation services, ensured cleaning products and supplies were available to execute our “clean as you go” processes, and strongly emphasized the focus on proper hygiene.

 

Supporting our people’s well-being by expanding the reach of our Employee Assistance Program offerings and publishing resources focused on financial resilience, childcare and mental health.

Simultaneously, we focused on the security of our supply chain network and minimizing any supply disruptions due to the rapidly spreading virus. Our Product Management and Network Planning teams worked tirelessly since the onset of the pandemic to meet the demands of our customers.

From a compensation perspective, we sought to minimize the impact of the crisis on our employees as much as possible. Though the majority of employees received no base salary increase in 2020, the Company did not implement salary reductions. Rather, employees in many locations were furloughed for short periods of time and in the USA there was a targeted reduction in force that was implemented in the second quarter.

2020 “Say on Pay” Vote Result, Stockholder Engagement and 2021 Compensation Changes

At the Company’s 2020 Annual Meeting, stockholders approved management’s proposal related to the compensation of the Company’s executive officers as disclosed in the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC. 81.3% of the total proposal votes supported the Company’s executive compensation program.

Following the 2020 Annual Meeting, the Company engaged with stockholders to understand the decline in say-on-pay vote support from 98.36% in 2019. As part of this effort, the company engaged with stockholders representing more than 80% of the common shares outstanding on a wide variety of topics, including executive compensation and corporate governance. Taking into account the feedback received in connection with our stockholder engagement efforts, we re-designed our long-term incentive program for 2021. The long-term incentive plan changes included removing Adjusted EBITDA, which is also used in our annual incentive plan, and adding Adjusted EPS; adding a relative TSR modifier; adding an ESG scorecard, focused on quantitatively assessing our performance on reducing emissions, providing a safe workplace to all employees, and fostering a culture of diversity and inclusion. These changes build on changes made in 2020, which included aligning all NEOs on corporate performance in our annual incentive plan. The Compensation Committee will continue to consider input from the Company’s stockholders as it evaluates and makes determinations regarding the Company’s executive compensation program. See “2021 Long-Term Incentive Plan Design” on page 52.

 

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Executive Compensation

 

Compensation Philosophy and Objectives

The Compensation Committee and management have designed compensation programs intended to create a performance culture and support the Company’s strategic initiatives of Streamline. Innovate. Grow. In particular, the compensation programs have the following objectives:

 

enable the Company to attract, retain and motivate high performing senior leaders;

 

link pay to performance and reward both annual and long-term Company performance while not encouraging excessive risk-taking;

 

ensure that senior leaders are invested in the Company so they are aligned with stockholders and share in their success;

 

establish market competitive compensation plans and programs to reward senior leaders; and

 

strategically align business and functional units within the Company and pay for performance by rewarding senior leaders, management and employees for driving profitable growth, managing working capital and generating healthy cash flows, all while recognizing and balancing unnecessary risks.

The Company provides compensation and benefit programs that reward performance, support its strategic initiatives and financial goals, and attract, retain and develop individuals with necessary expertise and experience to manage and lead the business for the best interest of its stockholders. The Company’s incentive programs are designed to encourage performance and results that will create value for the Company and its stockholders.

 

2020 Pay and Performance Alignment

The Company’s executive compensation programs are designed to link pay with performance. Our 2020 compensation results reflect our pay-for-performance philosophy of aligning executive compensation directly with our financial and share price performance.

As described more fully below, Adjusted EBITDA, Average Working Capital, and ROIC are key metrics in assessing performance under our incentive plans. For 2020, NEOs received incentive compensation payouts that were commensurate with the Company’s financial performance.

In addition, our executive team is further linked to stockholders through the delivery of a significant component of their total target compensation in stock-based compensation. In 2020, Univar Solutions’ TSR was down twenty-two percent (-22%). In 2020, the Company aligned its executive team to long-term performance by granting restricted stock units and stock options that vest over a three-year period and granting performance-based restricted stock unit awards that reward for the achievement of Adjusted EBITDA and Return on Invested Capital goals over a three-year performance period.

 

 

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Executive Compensation

 

Compensation Decision Making Process

Role of the Compensation Committee

The Compensation Committee is responsible for reviewing and approving the compensation and benefit plans of the Company’s executive officers, including its NEOs, authorizing and ratifying stock incentive compensation and other incentive arrangements, and authorizing related agreements. Specifically, as part of their oversight of the executive compensation programs, the Compensation Committee periodically, among other things:

 

reviews and approves compensation-related performance goals and other objectives of the Chief Executive Officer and recommends and approves Chief Executive Officer compensation elements;

 

reviews and approves the compensation of executive officers and the individuals reporting to the Chief Executive Officer;

 

reviews and evaluates executive officer performance and other related matters;

 

develops and recommends compensation for non-employee directors to the Board for approval;

 

reviews and establishes the peer group companies used as a reference to benchmark company performance and executive officer compensation;

 

oversees compliance with SEC guidelines and reviews and approves executive compensation policies, such as share ownership requirements and the Clawback Policy;

 

references tally sheets, which provide a comprehensive overview of the compensation and benefits for executive officers;

 

sets the specific performance targets for incentive awards to govern the compensation paid to the Company’s executive officers; and

 

retains independent consultants to advise the Compensation Committee and confirms with the consultant that total compensation paid to each executive officer is appropriate compared to market competitive benchmarks.

Role of the Independent External Advisor

In 2020, the Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”). The Compensation Committee considers analysis and advice from Meridian when making compensation decisions and recommendations for the Chief Executive Officer and other NEOs. When appropriate, Meridian obtains input from management to ensure their advice and recommendations reinforce the Company’s business strategy, principles and values. The Compensation Committee has assessed the independence of Meridian pursuant to the NYSE listing standards and SEC rules and has concluded there is no conflict of interest raised by Meridian’s work that would prevent Meridian from providing independent advice to the Compensation Committee.

During 2020, Meridian assisted the Compensation Committee as follows:

 

analyzing and recommending the peer group;

 

benchmarking compensation compared to peer companies and general industry data in order to assess base salary, annual incentive plan targets and long-term incentive targets with that of peers and the competitive market;

 

advising on the annual and long-term incentive program and design;

 

advising on Chief Executive Officer compensation;

 

advising on the treatment of executive compensation upon new hire and separation events; and

 

advising on current market trends and regulatory updates.

Competitive Market Pay Information

Our compensation programs are designed to be competitive with companies of comparable size and industry with whom we compete for executive talent. We review competitive market compensation data annually related to salary, annual incentives, long-term incentives and total target compensation. The Compensation Committee compares NEO compensation to the median of the market data as a reference point, and not as a specific benchmark for setting compensation. The market compensation data is used as one of several reference points for

 

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Executive Compensation

 

determining the form and amount of compensation. To determine actual compensation amounts, the Compensation Committee also considers additional factors such as the responsibilities, performance, contributions and experience of each NEO.

The Compensation Committee annually reviews and updates this peer group with input provided by its external advisor. The peer group for our Company was developed using specific selection criteria to screen for companies that are comparable in size, have similar business economics, and may be a potential source/destination of executive talent. Specific criteria included:

 

location;

 

industry profile (distribution and chemical businesses);

 

comparative size (based on revenue, profit margin and market capitalization);

 

go to market strategies and channels; and

 

availability of publicly disclosed information.

For purposes of making compensation decisions related to 2020 executive compensation, the compensation benchmarking peer group consisted of the following 18 companies(1):

 

Ashland Global Holdings Inc.

  

Huntsman Corporation

 

Stepan Company

Celanese Corporation

 

LKQ Corporation

  

The Mosaic Company

The Chemours Company

  

MRC Global Inc.

  

Trinseo S.A.

FMC Corporation

  

Olin Corporation

  

Watsco, Inc.

Genuine Parts Company

 

PolyOne Corporation

  

WESCO International, Inc.

HD Supply Holdings, Inc.

 

RPM International Inc.

  

W.W. Grainger, Inc.

 

(1)

In December 2019, the Compensation Committee approved the addition of The Mosaic Company and Trinseo S.A. to the peer group to replace Sherwin-Williams Co. and the Valspar Corp. following Sherwin-William’s acquisition of Valspar.

 

In July 2020, we made a change to the structure of our peer group. In order to more accurately assess appropriate pay given the different portions of our business, as well as to identify design differences between different types of companies, we split our peer group into two groups: a Chemical Manufacturers Peer Group, consisting of 12 chemical manufacturer companies, and a Distributors Peer Group, consisting of 14 distribution companies. In addition, we removed three current peers from the peer group (Huntsman Corporation, MCR Global Inc. and Stepan Company) and added 11 companies. The two compensation benchmarking peer groups consist of the following companies:

 

Chemical Manufacturers Peer Group (12 Peers)

Albemarle Corporation

Celanese Corporation

RPM International Inc.

Ashland Global Holdings Inc.

CF Industries Holdings, Inc.

The Chemours Company

Avient Corporation

FMC Corporation

The Mosaic Company

Axalta Coating Systems Ltd.

Olin Corporation

Trinseo S.A.

 

Distributors Peer Group (14 Peers)

Avnet, Inc.

Henry Schein, Inc.

US Foods Holding Corp.

Beacon Roofing Supply, Inc.

Insight Enterprises, Inc.

Watsco, Inc.

CDW Corporation

LKQ Corporation

WESCO International, Inc.

Genuine Parts Company

Patterson Companies, Inc.

W.W. Grainger, Inc.

HD Supply Holdings, Inc.

Performance Food Group Company

 

These two new peer groups will be used to inform 2021 executive compensation decisions.

 

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Executive Compensation

 

Risk Assessment

The Compensation Committee seeks to ensure that the executive compensation program does not encourage executives to take excessive risks that are inconsistent with the long-term success of the Company. The Company periodically reviews its executive and non-executive compensation programs, including pay mix and the metrics and design of its short-and long-term incentive programs. Our incentive compensation programs include risk-mitigating components such as:

 

multiple financial performance metrics;

 

robust performance measure selection and goal setting;

 

balanced mix of short-term and long-term incentives;

 

balanced mix of long-term incentive components -- including, but not limited to, time and performance-based restricted stock units;

 

maximum caps on both short-term and long-term incentive payouts

 

clawback provisions to recoup incentive compensation where appropriate; and

 

stock ownership requirements.

Based upon the review of executive and non-executive compensation programs, the Compensation Committee’s discussions and the risk mitigating factors identified above, the Compensation Committee has determined that none of the compensation programs encourage or create excessive risk-taking, and none are reasonably likely to have a material adverse effect on the Company.

Stock Ownership Requirements

The Company believes that it is in the best interests of the Company and its stockholders to align the financial interests of its directors and senior executive officers with those of stockholders. The Company has stock ownership requirements to assure that the compensation for directors and officers aligns with the performance of the Company and its stockholder value.

The following table provides the ownership requirements for senior executives, all of whom have met or are on track to meet the requirements within the required period of time.

 

  Position

 

Multiple of Base Pay

 

 

 

  Chief Executive Officer

 

6X

  Chief Financial Officer

 

4X

  Other Senior Executives

 

2X

 

Senior executives subject to this policy are required to achieve applicable ownership requirements within five (5) years of becoming subject to such requirement. The value of the equity for purposes of compliance with this policy is determined based on a 200-day trailing average of the stock price.

 

The following forms of equity are counted in determining compliance with this policy:

 

shares of the Company’s common stock owned outright or beneficially;

 

restricted stock or restricted stock units even while unvested;

 

performance-based restricted stock units that have been earned; and

 

deferred share units even while unvested.

Until the ownership requirements are met, the covered executive is prohibited from selling Company shares, except to satisfy tax obligations at the time the award vests. All current NEOs have either met their ownership requirement or are within their five-year attainment period.

 

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Executive Compensation

 

Clawback Policy

The Company has a policy for the reclamation of incentive compensation (the “Clawback Policy”) that covers employees of the Company or one of its subsidiaries who receive incentive compensation (“Employees”), including current or former named executive officers, Section 16 officers, any vice president in charge of a principal business unit or function and any other officer or person performing policy making functions (collectively, “Covered Individuals”). The Clawback Policy allows the Company to recover “excess” incentive compensation paid to Employees in the event that the Company concludes that a financial statement used as the basis for calculating incentive compensation is required to be restated to correct a material error. The Clawback Policy applies to Employees as follows:

 

With respect to Covered Individuals, the policy has a no-fault provision and therefore applies whether or not such person was involved in the cause of the restatement.

 

With respect to all other Employees, the policy applies when such person’s intentional or willful action or inaction caused, in whole or in part, the material error in the previously issued financial statement.

Excess incentive compensation refers to the difference between the amount of incentive compensation granted, issued, paid, earned or vested and the amount that should have been granted, issued, paid, earned or vested based on the restated and corrected financial restatement.

In addition, in the event of Misconduct by a Covered Individual or Employee, the Clawback Policy allows the Company to recoup any Incentive Compensation amounts paid, granted, issued, earned or vested relating to the Misconduct, as well as any Incentive Compensation that was paid, granted, issued, earned or vested after the Misconduct. “Misconduct” means engaging in intentional bad acts related to one’s employment with the Company or one of its subsidiaries including, but not limited to, fraud, felonious criminal activities, falsification of Company records, gross negligence, violent acts or threats of violence, or unethical conduct that causes substantial reputational harm to the Company or exposes the Company to substantial legal liability.

Stock Grant Dating Policy

The Company has adopted equity grant policies to ensure that granting practices remain neutral in regard to participant benefit. For example, annual grants will be deemed granted on the date of the Compensation Committee’s meeting where such annual grants are approved, and the date of this meeting is set during the prior year. The exercise price of stock option grants or the value price for other stock awards will be the closing stock price on that date.

For equity grants to participants outside of the annual grant process (i.e., in the event of new hire, promotion or other event), the triggering event is intended to be the employment start date or the promotion date. These equity grants are to be made the fifth business day of the month following the month during which the triggering event occurred. The exercise price for such stock option grants or the value price for other stock awards will also be the closing stock price on the fifth business day of the month following the month during which the triggering event occurred.

Limited Trading Windows; No Hedging or Pledging Transactions

Generally, executive officers and directors can trade Univar Solutions’ stock only when they do not have any material nonpublic information and there is not a trading blackout in place. In addition, executive officers are prohibited from engaging in hedging and pledging transactions. See “What are the Company’s practices or policies regarding hedging, pledging and margin accounts?” on page 25.

Elements of the Company’s Executive Compensation Program

During fiscal year 2020, the compensation program for executive officers, including NEOs, consisted of base salary, short-term incentive compensation, long-term incentive compensation and certain benefits.

 

|  ANNUAL MEETING NOTICE AND PROXY STATEMENT 2020  |  

43

 


Executive Compensation

 

Set forth below is a chart outlining each element of the 2020 executive compensation program, the objectives of each component, and certain key measures that may be used in determining each component.

 

Pay Component

 

Purpose and Key Features

 

Primary Metrics

Base Salary

 

     Compensates for expected day-to-day contribution

     Provides competitive pay to attract and retain executives

     Delivered in cash

 

     Individual performance

     Market pay rates

     Skills, experience and expertise

Annual Cash Incentives

 

     Short-term, at-risk compensation

     Focus on the achievement of annual operating plan financial objectives

     Maximum payout is capped at 200% of target

     Delivered in cash

 

     Corporate Adjusted EBITDA

     Corporate Average Working Capital

     Individual Performance Criteria

 

 

Equity Awards

 

     Long-term, at-risk compensation

     Aligns executives with the long-term interests of stockholders and creates an “ownership culture”

     Recognizes executive’s recent performance and potential future contributions

     Serves as a retention incentive

     Provides a total compensation opportunity with payouts varying based on operating and stock price performance

     Delivered in various equity forms (performance-based restricted stock units, restricted stock units and stock options)

 

     Three-year average Adjusted EBITDA performance

 

     Three-year average Return on Invested Capital performance

 

 

 

 

Executive officers are eligible to participate in benefit programs available to the broader employee population. Additional benefits specific to the executive compensation program include nonqualified retirement benefit plans, reimbursement of financial planning and physical examination expenses and change-in-control benefits.

A description of each component of compensation for the NEOs in 2020 is below, including a discussion of the factors considered in determining the applicable amount payable or achievable under each component.

 

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Executive Compensation

 

Determination of Named Executive Officer Compensation

Base Salary

Base salaries are set to attract and retain executive talent. The determination of each executive’s base salary considers individual performance and contribution, experience in the role, market rates of pay for comparable roles and internal equity. Each year, the Company’s Chief Executive Officer proposes base salary adjustments, if any, for all NEOs, excluding himself, based on performance, changes in responsibilities, market data and other relevant factors. His proposal is subject to review and approval, with or without modifications, by the Compensation Committee. Adjustments to the Chief Executive Officer’s salary are initiated and approved by the Compensation Committee directly.

Salary increases are discretionary, and among the NEOs, Mr. Powell, Ms. McIntyre and Ms. Dickens received an increase in base salary in 2020. Mr. Powell received an increase of 10.0% in April and an increase of 12.1% in August in recognition of his increased responsibilities. Ms. McIntyre received an increase in August in recognition of her increased responsibilities. Ms. Dickens received an increase in August in order to align her compensation with market compensation paid by peer companies for similar positions. The table below discloses the base salary for each NEO in 2020; the actual base salary earned by the NEOs in 2020 is reported in the Salary column of the Summary Compensation Table on page 55.

 

  Named Executive Officer

 

2019 Base Salary

(Effective December 31,

2019 or upon hiring)

 

2020 Base Salary

(Effective December 31,

2020 or upon separation)

 

Percent Change

 

 

 

 

 

 

 

  David C. Jukes

 

$1,000,000

 

$1,000,000

 

  Nicholas W. Alexos

 

$675,000

 

$675,000

 

  Nicholas Powell

 

£310,000

 

£382,117

 

23.3%

  Jennifer A. McIntyre

 

$390,000

 

$475,000

 

21.8%

  Carl J. Lukach

 

$573,015

 

$573,015

 

  Kimberly L. Dickens

 

$410,000

 

$435,000

 

6.1%

  Mark M. Fisher

 

$515,000

 

$515,000

 

  Michael J. Hildebrand

 

CAD 465,000