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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to § 240.14a-12 |
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act rules 14a6(i)(1) and 0-11 |
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NOTICE OF THE 2024 ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
Notice is hereby given that the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Delek US Holdings, Inc. (the “Company,” “Delek,” “we,” “us,” or “our”) will be held on May 2, 2024 at 11:30 a.m., Central Time, for the following purposes:
Items of Business:
| (1) | To elect ten directors of the Company to serve until the 2025 Annual Meeting of Stockholders or until their respective successors are appointed, elected and qualified; |
| (2) | To adopt the advisory resolution approving the Company’s executive compensation program for our named executive officers as described in the Proxy Statement; |
| (3) | To adopt the proposed amendment to the Second Amended and Restated Certificate of Incorporation to incorporate new Delaware law provisions regarding officer exculpation; |
| (4) | To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 2024 fiscal year; and |
| (5) | To transact any other business properly brought before the Annual Meeting. |
We will once again conduct our Annual Meeting virtually. You may attend the meeting, submit questions, and vote your shares by visiting
www.virtualshareholdermeeting.com/DK2024 as described in the accompanying Proxy Statement.
Additional information concerning the matters to be voted upon at the Annual Meeting is set forth in the Company’s proxy materials, including the 2023 Annual Report, Proxy Statement, and proxy card or voting instruction form. If you have any questions or need assistance, please contact our Investor Relations department at (615) 767-4344.
Who Can Vote:
Only stockholders of record at the close of business on March 8, 2024 are entitled to receive notice of and vote at the Annual Meeting and at any postponement(s) or adjournment(s) thereof. A list of these stockholders will be open for examination by any stockholder for any purpose germane to the Annual Meeting for ten (10) days prior to the Annual Meeting at our corporate headquarters.
If you were a stockholder at the close of business on March 8, 2024, it is important that you vote your shares as soon as possible using one of the methods set forth on the proxy card or voting instruction form or by signing and returning your proxy card.
Your vote is important and you are encouraged to vote your shares as soon as possible, even if you plan to participate in and vote at the Annual Meeting.
| By Order of the Board of Directors,
Denise McWatters Executive Vice President, General Counsel and Corporate Secretary Delek US Holdings, Inc. March 22, 2024 |
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ADDITIONAL INFORMATION
The proxy materials for the Annual Meeting are expected to be mailed on or about March 22, 2024, to all stockholders of record as of the record date of March 8, 2024. The proxy materials include the Notice of the 2024 Annual Meeting of Stockholders, this Proxy Statement, a proxy card, and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report”). Copies of these documents are also available on the Investor Relations page of our website at www.delekus.com. You may also obtain these materials at the SEC website at www.sec.gov. For additional questions, assistance in submitting proxies or voting shares, or to request additional copies of the Proxy Statement or the enclosed proxy card, please contact our Investor Relations department at (615) 767-4344.
The Company’s 2023 Annual Report is not proxy soliciting material. Except to the extent specifically referenced herein, information contained or referenced on our website is not incorporated by reference into, and does not form a part of, this Proxy Statement.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 2, 2024
Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”), the Company’s proxy materials are available over the Internet at ir.delekus.com/sec-filings.
This Notice of the 2024 Annual Meeting of Stockholders, the accompanying Proxy Statement, the Company’s 2023 Annual Report, and form of proxy card, and any amendments thereto, are available free of charge at https://ir.delekus.com/proxy-materials.
Stockholders may obtain a paper or email copy of these materials at no charge at https://ir.delekus.com/proxy-materials or by writing to the Corporate Secretary at the Company’s corporate headquarters located at 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027. Upon payment of a reasonable fee, stockholders may also obtain a copy of the exhibits to our 2023 Annual Report.
For information on how to attend, vote and participate at the Annual Meeting, any control/identification numbers needed and instructions on how to access or request a proxy card, please contact our Investor Relations department at (615) 767-4344 requesting such information.
THE BOARD UNANIMOUSLY RECOMMENDS VOTING “FOR” EACH OF THE PROPOSALS IN THE PROXY STATEMENT, USING THE ENCLOSED PROXY CARD.
Additionally, if you have any questions or require assistance in authorizing a proxy or voting your shares of our Common Stock or in obtaining any of the above materials, please contact our Investor Relations department at (615) 767-4344. We are not aware of any other business, or any other nominees for election as directors, that may properly be brought before the Annual Meeting.
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PROXY STATEMENT
SUMMARY
This summary highlights information contained elsewhere in this Proxy Statement. This is only a summary and
may not contain all of the information that is important to you. For more complete information, please review
this Proxy Statement in its entirety, as well as our 2023 Annual Report. The 2023 Annual Report is not proxy
soliciting material.
2024 Meeting Information
This Proxy Statement is first being furnished to stockholders on or about March 22, 2024 in connection with the solicitation by the Board of Directors (the “Board”) of Delek US Holdings, Inc. (“we,” “us,” “our” or the “Company”) of proxies to be voted at the 2024 Annual Meeting of Stockholders (the “Annual Meeting”), and at any adjournment or postponement of such meeting.
| Record Date |
March 8, 2024 | |
| Meeting Date |
May 2, 2024 | |
| Meeting Time |
11:30 a.m., Central Time | |
| Meeting Location |
Online at www.virtualshareholdermeeting.com/DK2024 | |
Matters to Be Voted Upon
| BOARD RECOMMENDATION |
PAGE REFERENCE | |||
| Proposal 1. Election of Ten Directors |
FOR each Company nominee named herein |
28 | ||
| Proposal 2. Advisory Resolution on Executive Compensation |
FOR | 78 | ||
| Proposal 3. Approve the Amendment to our Second Amended and Restated Certificate of Incorporation | FOR | 87 | ||
| Proposal 4. Ratify the Appointment of Auditors |
FOR | 89 |
Stockholders will also transact any other business that may properly come before the Annual Meeting or any adjournment or postponement thereof.
How to Vote
Your vote is important. Even if you plan to attend the Annual Meeting, to ensure that your shares are represented and voted at the Annual Meeting, we encourage you to submit your proxy card or voting instructions form as soon as possible or to vote by Internet or phone prior to the Annual Meeting by following the instructions on your proxy card (though holders in “street name” should follow the instructions given to them by their bank, broker or other nominee to vote their shares). Internet and phone voting will close at 11:59 p.m. Eastern Time on May 1, 2024.
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VOTING ELIGIBILITY
Only stockholders as of the close of business on March 8, 2024 (the “Record Date”) are eligible to vote at the Annual Meeting or by proxy and each such stockholder shall have one vote for each share of Common Stock held on the Record Date.
VOTING METHODS
BEFORE THE MEETING
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BY INTERNET Go to www.proxyvote.com for voting instructions or scan the QR code on your Important Notice Regarding the Availability of Proxy Materials or proxy card with your smartphone, then cast your vote electronically by 11:59 p.m. (Eastern Daylight Time) on May 1, 2024. | |
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BY TELEPHONE You may call 1-800-690-6903 on a touch-tone telephone and follow the instructions provided by the recorded message to vote your shares by telephone by 11:59 p.m. (Eastern Daylight Time) on May 1, 2024. | |
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BY MAIL You may promptly mail your completed and executed proxy card in the postage-paid envelope, which must be received by the Company on or prior to May 1, 2024. | |
DURING THE MEETING
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VIRTUAL MEETING Go to www.virtualshareholdermeeting.com/DK2024 and follow the posted instructions. You will need the 16-digit control number included on your Notice of Internet Availability, your proxy card, or the voting instructions that accompany your proxy materials. |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Proxy Statement which are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties such as those described in our Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent filings with the SEC. Such risks and uncertainties include inherent risks and uncertainties relating to our internal models or the projections in this Proxy Statement; negative changes in economic and industry conditions in the United States or other countries including those due to the war between Ukraine and Russia and the war between Israel and Hamas; disruptions to our refining operations; litigation and other judicial proceedings affecting the Company; restrictions on our liquidity or business operations resulting from our debt agreements; infringement of our technology or the assertion that our technology infringes the rights of other parties; risks and uncertainties associated with our information technology systems, including the potential for breaches of security and evolving regulations regarding privacy and data protection; societal, legislative, and regulatory measures to address climate change and greenhouse gases emissions (“GHG”); increases in the prices of commodity components; potential for significant adverse changes in governing regulations; changes in tax laws and regulations in the United States; termination or interruption of relationships with our suppliers, or failure of such suppliers to perform; fluctuations in interest rates; concentration of a substantial portion of our revenues among four refining facilities; volatility in the market price of our common stock; failure to comply with applicable environmental laws; changes in key personnel; work stoppage or transportation risks; price and product competition; availability of labor and commodities; and other factors referenced in the 2023 Annual Report and other materials filed with the SEC. All subsequent forward-looking statements attributable to the Company or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Actual results will likely differ, and may differ materially, from anticipated results. Financial estimates are subject to change and are not intended to be relied upon as predictions of future operating results, and the Company assumes no obligation to update or disclose revisions to those estimates.
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2024 PROXY STATEMENT | 3 | |
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This Proxy Statement and our 2023 Annual Report are also available at ir.delekus.com/proxy-materials
QUESTIONS AND ANSWERS
Why am I receiving these proxy materials?
This Proxy Statement and enclosed form of proxy (first made available to stockholders on or about March 22, 2024) are furnished in connection with the solicitation by our Board of proxies for use at the Annual Meeting or at any postponement or adjournment thereof.
How do I attend the Annual Meeting?
The Annual Meeting will be a virtual meeting of stockholders, which we believe provides expanded access to the meeting, improves communications and provides cost and time savings for our stockholders and the Company. If you are a stockholder as of the Record Date, March 8, 2024, a proxy for a record stockholder or a beneficial owner of the Company’s common stock, $0.01 par value (“Common Stock”), with evidence of ownership, you will be able to attend the Annual Meeting and vote and submit questions during the Annual Meeting via a live webcast by visiting www.virtualshareholdermeeting.com/DK2024 and entering the 16-digit control number included in our notice of Internet availability of the proxy materials, on your proxy card, or in the instructions that accompanied your proxy materials. We intend to answer all questions submitted during the meeting which are pertinent to the Company and the meeting matters, as time permits. The Annual Meeting will convene at 11:30 a.m., Central Time, on May 2, 2024.
Who is entitled to vote?
Holders of record of our Common Stock, at the close of business on the Record Date are entitled to vote at the Annual Meeting. On the Record Date, 64,019,267 shares of Common Stock were issued and outstanding. The Common Stock is our only outstanding class of voting securities. Each outstanding share of Common Stock is entitled to one vote for all matters before the Annual Meeting. If you virtually attend the Annual Meeting, which is the only way to attend the Annual Meeting, you may vote your shares online. Votes submitted and received as provided below on or before 11:59 p.m. Eastern Time on May 1, 2024 will be counted. Only votes submitted online at the virtual Annual Meeting will be counted after that time.
How do I vote?
If you were a stockholder of record at the close of business on March 8, 2024, you can vote your shares by any one of the following methods:
VOTING METHODS
BEFORE THE MEETING
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BY INTERNET Go to www.proxyvote.com for voting instructions or scan the QR code on your Important Notice Regarding the Availability of Proxy Materials or proxy card with your smartphone, then cast your vote electronically by 11:59 p.m. (Eastern Daylight Time) on May 1, 2024. | |
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BY TELEPHONE You may call 1-800-690-6903 on a touch-tone telephone and follow the instructions provided by the recorded message to vote your shares by telephone by 11:59 p.m. (Eastern Daylight Time) on May 1, 2024. | |
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BY MAIL You may promptly mail your completed and executed proxy card in the postage–paid envelope, which must be received by the Company on or prior to May 1, 2024. | |
| DURING THE MEETING | ||
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VIRTUAL MEETING Go to www.virtualshareholdermeeting.com /DK2024 and follow the posted instructions. You will need the 16–digit control number included on your Notice of Internet Availability, your proxy card, or the voting instructions that accompany your proxy materials. | |
Even if you currently plan to virtually attend the Annual Meeting, we recommend that you submit your proxy by one of the methods described above so that your shares will be represented and your vote will be counted if you later decide not to virtually attend and vote online at the Annual Meeting. If you hold your shares in street name, you may virtually attend and vote your shares online at the Annual
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 4 | |
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Meeting only if you have obtained a legal proxy from your brokerage firm, bank, trustee or other nominee giving you the right to vote the shares at the Annual Meeting.
How does the Board recommend that I vote?
The Board recommends that you vote: (1) “FOR” each of the ten nominees to the Board named in this Proxy Statement; (2) “FOR” the advisory resolution approving the executive compensation program for our named executive officers; (3) “FOR” the amendment to our Second Amended and Restated Certificate of Incorporation to incorporate new Delaware law provisions regarding officer exculpation; and (4) “FOR” the ratification of the appointment of Ernst & Young LLP (“Ernst & Young”) as our independent registered public accounting firm for the 2024 fiscal year.
How do I vote my shares if they are held in street name?
If your shares are registered directly in your name with our transfer agent, Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company), you are a “stockholder of record” (or “registered stockholder”) of those shares, and these proxy materials have been provided directly to you by the Company. If your shares are held in the name of a brokerage, bank, trust or other nominee as a custodian, you are a “beneficial owner” of shares held in “street name.” If your shares are held in street name, these proxy materials are being forwarded to you by your brokerage, bank, trust or other nominee as custodian (the “record holder”), along with voting instructions. As the beneficial owner, you have the right to direct your record holder how to vote your shares by using the voting instructions card, and the record holder is required to vote your shares in accordance with your instructions.
How will voting on any other business be conducted?
Although we do not know of any business to be considered at the Annual Meeting other than the proposals described in this Proxy Statement, if any other business is presented at the Annual Meeting, your signed proxy card gives authority to each of Avigal Soreq, our President and Chief Executive Officer, and Reuven Spiegel, our Executive Vice President and Chief Financial Officer, to vote your shares on such matters at their discretion.
Can I revoke or change my vote?
Yes. You may revoke or change your proxy, including a proxy submitted via internet or telephone as described in
this Proxy Statement by: (a) notifying our Corporate Secretary in writing on or before May 2, 2024; (b) submitting a later-dated but still timely proxy card by mail on or before May 2, 2024; or (c) virtually attending and voting online at the Annual Meeting. If you are a beneficial owner with your shares held in street name, you must follow the instructions of your broker, bank, trust or other nominee who is the registered stockholder of your shares to revoke a proxy. The latest-dated, timely, properly completed voting instructions that you submit will count as your vote. If a vote has been recorded for your shares and you submit a proxy card that is not properly signed and dated, the previously recorded vote will stand.
What if I submit my proxy but I do not specify how I want my shares voted?
If you submit a proxy but do not specify how you want your shares to be voted, the proxy holder will vote your shares in accordance with the recommendations of the Board of Directors for the four proposals described in this Proxy Statement. If other matters requiring the vote of stockholders properly come before the Annual Meeting, it is the intention of the persons named on the proxy card to vote proxies held by them in accordance with their best judgment.
What does it mean if I get more than one proxy card?
If your shares are registered in more than one name or in more than one account, you will receive more than one card. Please complete and return all of the proxy cards you receive to ensure that ALL of your shares are voted.
Who is soliciting my vote?
Your vote is being solicited by our Board of Directors. Certain of our officers, directors, and employees, none of whom will receive additional compensation therefor, may solicit proxies by telephone or other personal communication. The Company may also engage a third party proxy solicitor. We will bear the cost of the solicitation of the proxies, including postage, printing and handling, and will reimburse the reasonable expenses of brokerage firms and others for forwarding material to beneficial owners of shares of Common Stock.
Who will count the vote?
Broadridge Financial Solutions, Inc. (“Broadridge”) will serve as master tabulator and a representative of Broadridge will act as the inspector of the elections.
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What is a “quorum”?
A “quorum” is the presence of the holders of a majority of the outstanding shares entitled to vote either virtually attending or represented by proxy at the Annual Meeting. There must be a quorum for the Annual Meeting to be lawfully conducted. Proxies received but marked as abstentions, withheld votes and broker non-votes will be included in the calculation of the number of shares considered to be present at the Annual Meeting.
What are the voting requirements to approve each proposal?
Delek has implemented majority voting in uncontested elections of directors. Accordingly, Delek’s Fifth Amended and Restated Bylaws (the “Bylaws”) provide that in an uncontested election of directors, a nominee for director shall be elected if the number of votes cast “for” a nominee’s election exceeds the number of votes cast “against” that nominee’s election at a meeting at which a quorum is present in person or represented by proxy. To approve the advisory resolution approving the executive compensation program for our named executive officers, and the proposal to ratify the appointment of Ernst & Young as our independent registered public accounting firm for the fiscal year ending December 31, 2024, a majority of shares of Common Stock represented at the Annual Meeting and entitled to vote thereon must vote in favor of each proposal. To approve the proposal to amend our Second Amended and Restated Certificate of Incorporation, a majority of the outstanding shares of Common Stock entitled to vote thereon must vote in favor of the proposal.
What is the effect of abstentions, withheld votes and broker non-votes?
Abstentions and instructions to withhold authority to vote will be treated as shares that are present and entitled to vote for purposes of determining whether a quorum exists. Shares that are not voted in the election of directors, including broker non-votes, will have no direct effect in the election of directors. Those shares, however, are taken into account in determining whether a sufficient number of shares are present to establish a quorum. Abstentions have the same effect as a vote “against” Proposals 2 and 4. Broker non-votes will have no effect on the outcome of Proposals 2 and 4. Abstentions and broker non-votes will have the same effect as votes against Proposal 3.
“Broker non-votes” are shares held by brokers or nominees which are present by virtually attending the Annual Meeting or represented by proxy, but which are not voted on a
particular matter because instructions have not been received from the beneficial owner. Under New York Stock Exchange (“NYSE”) rules, NYSE-member brokers who hold shares of Common Stock in street name for their customers and have transmitted our proxy solicitation materials to their customers, but do not receive voting instructions from such customers, will be permitted to vote on discretionary items.
| • | Non-Discretionary Items. The election of directors, the approval of the advisory resolution approving the executive compensation program for our named executive officers and the approval of the amendment to our Second Amended and Restated Certificate of Incorporation are considered non-discretionary items and may not be voted on by brokers, banks, or other nominees who have not received specific voting instructions from beneficial owners. |
| • | Discretionary Items. The ratification of the appointment of Ernst & Young LLP as independent auditors is a discretionary item. Generally, brokers, banks and other nominees that do not receive voting instructions from beneficial owners may be able vote on this Proposal in their discretion. |
Can I change the number of copies of the Annual Meeting materials that I receive?
Yes. The Company will generally deliver one copy of its proxy materials to each address where multiple record holders of our Common Stock reside, unless we have received instructions to the contrary, a process commonly referred to as “householding.” If you are a registered stockholder and would like to have separate copies of the proxy materials mailed to you in the future, or you would like to have a single copy of the proxy materials mailed to you in the future, please contact your bank, broker, or other nominee record holder, or you can notify the Company by sending a written request. Written requests for additional information or additional proxy materials should be directed to our Corporate Secretary, Delek US Holdings, Inc., 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027, (615) 767-4344 or by sending an e-mail to Investor.Relations@delekus.com.
Who should I call if I have questions or need assistance voting my shares?
If you have any questions or need assistance in voting your shares, please call our Investor Relations department at (615) 767-4344.
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Why is the Annual Meeting being held in a virtual format this year?
We will once again conduct a virtual annual meeting, which we believe provides expanded access, improved communications and cost and time savings for our stockholders and the Company. The Annual Meeting is planned to be a completely virtual meeting of stockholders, and will be conducted exclusively by webcast at
www.virtualshareholdermeeting.com/DK2024.
How can I participate in the Annual Meeting?
You may virtually attend, submit questions and vote your shares during the Annual Meeting by visiting our Annual Meeting website at
www.virtualshareholdermeeting.com/DK2024.
Registered Stockholders
Stockholders of record as of the Record Date may attend the Annual Meeting online by visiting www.virtualshareholdermeeting.com/DK2024 and entering the 16-digit control number included in our notice of Internet availability of the proxy materials, on your proxy card, or in the instructions that accompanied your proxy materials. Please have your proxy card containing your control number available and follow the instructions to attend the virtual Annual Meeting.
Beneficial Stockholders
Stockholders whose shares are held through a broker, bank or other nominee as of the Record Date may attend the Annual Meeting online by visiting www.virtualshareholdermeeting.com/DK2024 and entering the 16-digit control number included in our notice of Internet availability of the proxy materials, on your proxy card, or in the instructions that accompanied your proxy materials. Please have your proxy card containing your control number available and follow the instructions to attend the virtual Annual Meeting. If you are a beneficial stockholder and you wish to vote your shares online during the virtual Annual Meeting, rather than submitting your voting instructions before the Annual Meeting, you will need to contact your bank, broker or other nominee to obtain a legal proxy form that you must submit in PDF or Image file format with your ballot when voting online during the Annual Meeting.
Even if you plan to virtually attend the Annual Meeting, we recommend that you also vote by proxy as described above so that your vote will be counted if you later decide not to virtually attend the Annual Meeting. The Annual
Meeting will begin promptly at 11:30 a.m., Central Time. Online check-in will begin at 11:00 a.m., Central Time, and you should allow ample time for the online check-in procedures.
In order to ensure that your shares are represented at the Annual Meeting, we strongly encourage you to vote your shares by proxy prior to the Annual Meeting, and further encourage you to submit your proxies electronically — by telephone or by Internet — by following the simple instructions on the enclosed proxy card. Your vote is important, and voting electronically should facilitate the timely receipt of your proxy despite any potential disruptions in mail service.
May stockholders ask questions at the Annual Meeting?
Yes. Stockholders who attend the Annual Meeting will have the ability to submit questions during the Annual Meeting by visiting our Annual Meeting website at www.virtualshareholdermeeting.com/DK2024. We intend to answer all questions submitted during the Annual Meeting which are pertinent to the Company and the Annual Meeting matters, as time permits. Detailed guidelines for submitting questions during the Annual Meeting are available on the Investor Relations page of our website at www.delekus.com.
What if I have technical difficulties or trouble accessing the Annual Meeting?
Beginning 15 minutes prior to the start of and during the Annual Meeting, we will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting or during the Annual Meeting time, please call the technical support number that will be posted on the virtual meeting login page.
Is it possible that the meeting format will be changed so that it is no longer virtual only?
We believe a virtual-only format provides expanded access, improves communications and provides cost and time savings for our stockholders and the Company. However, if it becomes necessary or advisable to change the format of the Annual Meeting as circumstances evolve, we will notify stockholders as soon as practicable.
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Do stockholders have any appraisal or dissenters’ rights on the matters to be voted on at the Annual Meeting?
No, stockholders of the Company will not have rights of appraisal or similar dissenters’ rights with respect to any of the matters identified in this Proxy Statement to be acted upon at the Annual Meeting.
How can I obtain additional information about the Company?
Copies of our Annual Report to Stockholders and Annual Report on Form 10-K for the year ended December 31, 2023, and our other annual, quarterly, and current reports,
and any amendments to those reports, are filed with the SEC and are available free of charge on our website, which is located at www.delekus.com. These reports and other information are filed electronically with the SEC and are available at the SEC’s website, www.sec.gov. Copies of these reports will be sent without charge to any stockholder requesting it in writing to our Corporate Secretary, Delek US Holdings, Inc., 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027. The investor relations page of our website contains our press releases, earnings releases, financial information and stock quotes, as well as links to our SEC filings. The information posted on our website is not incorporated into this Proxy Statement.
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CORPORATE GOVERNANCE
Composition of the Board
At the date of this Proxy Statement, the Board consists of ten total directors. Eight of the directors are independent.
The Board also maintains five standing committees as listed in the table below. The role and current composition of each of these standing committees is further described under “Committees of the Board of Directors” beginning on page 12.
In addition to the seven independent directors listed in the table below, the Board recently added Christine Benson Schwartzstein as its eighth independent member. Ms. Benson is not included in the table because she has not yet been appointed to any Board committees. Additional background information about these eight independent directors follows.
| Audit Committee |
Nominating Governance Committee |
Human Capital Compensation Committee |
Environmental, Committee |
Technology Committee | ||||||
| William J. Finnerty |
● | ● | ● | |||||||
| Richard J. Marcogliese |
● | ● | « | |||||||
| Leonardo Moreno |
● | ● | ||||||||
| Gary M. Sullivan, Jr. |
« | ● | ● | ● | ||||||
| Vasiliki (Vicky) Sutil |
● | « | ● | |||||||
| Laurie Z. Tolson |
● | ● | « | |||||||
| Shlomo Zohar |
● | « | ● |
« = Chair ● = Member
Board Diversity
The following graphic presents information about the ages and tenures of the members of our Board.
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Board Leadership
The Board is led by the Board’s Executive Chairman, Mr. Yemin. In accordance with our Bylaws and Corporate Governance Guidelines (our “Governance Guidelines”) and with advice from our Executive Chairman and Chief Executive Officer, the Governance Committee and the Board periodically evaluate our leadership structure, including whether the roles of Chief Executive Officer and Chair of the Board should be held by the same or different individuals. Our Bylaws allow the Board flexibility to determine from time to time whether the two roles should be combined or separated during the limited CEO transition period and based upon circumstances existing at such time. In March 2022 the Board approved the transition of Mr. Yemin to the role of Executive Chairman and the appointment of Avigal Soreq as the Company’s next CEO in June 2022. The Board believes Mr. Yemin’s appointment as Executive Chairman allows him to support the CEO transition and to lead the Board in overseeing strategy. In light of these factors, combined with Mr. Yemin’s leadership skills, extensive history with the Company and industry expertise, the Board believes his holding the role of Executive Chairman is in the best interest of the Company and its stockholders at this time. The Governance Committee and the Board will continue to periodically evaluate our leadership structure, including these roles, in the future.
Because the Executive Chairman of the Board is not an independent director, the Board considers it to be useful and appropriate to designate an independent director to serve in a lead capacity (the “Lead Independent Director”) to coordinate the activities of the other independent directors and to perform such other duties and responsibilities as the Board may determine from time to time.
In May 2023, Mr. Finnerty was appointed as the Board’s Lead Independent Director, replacing Mr. Zohar who had served as Lead Independent Director since February 2020. The Lead Independent Director is appointed annually by a majority of the independent directors on the Board and may be removed from or replaced in that position by a majority of the independent directors at any time.
The Lead Independent Director will chair all meetings of the Board at which the Executive Chairman is not present, including executive sessions of the independent directors, call additional meetings of the independent directors as deemed appropriate, and perform such other functions as
the Board may direct, including: (i) serving as principal liaison between the independent directors, on one hand, and the Executive Chairman and senior management, on the other hand; (ii) providing input from the Board and make recommendations to the Executive Chairman regarding Board meetings including with respect to meeting frequency, dates, locations, agendas, management participation and other matters; and (iii) consulting with the Executive Chairman regarding information submitted by our management that is necessary or appropriate for the Board’s deliberations. In addition, the Lead Independent Director has the authority to engage in direct communication, as appropriate, with our major stockholders, and engage outside counsel and consultants.
Director Independence
| At the date of this Proxy Statement and at all times during 2023, the Board was composed of a majority of |
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independent directors. The Board has affirmatively determined that Messrs. Finnerty, Marcogliese, Moreno, Sullivan, and Zohar and Mses. Benson, Sutil, and Tolson are each independent under the rules and regulations of the NYSE, the SEC and Company guidelines, and meet the requirements for non-employee directors under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). In reaching its determinations, the Board affirmatively determined that these individuals have no material relationship with us or our management, either directly or as a partner, stockholder, or officer of an organization that has a relationship or has engaged in transactions with us or with our management. The Board based this determination and its independence determinations on a review of all of the relevant facts and circumstances, including the responses of the directors to questions regarding their employment history, compensation, affiliations and other relationships including but not limited to familial, commercial, industrial, banking, consulting, legal, accounting, charitable, and other relationships.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 10 | |
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2023 Board Meetings
Board Meetings. The Board held 19 meetings during 2023 and each director attended at least 75% of all Board and committee meetings on which he or she served during the year. While we do not have a policy with regard to Board member attendance at annual meetings of our stockholders, all directors serving at the time of our 2023
Annual Meeting of Stockholders attended the annual meeting on May 3, 2023.
Executive Sessions. Our independent directors also met in executive sessions without management present during each quarterly meeting of the Board in 2023. Our Lead Independent Director presided over these executive sessions of independent directors. As discussed above, Mr. Zohar served as our Lead Independent Director until May 2023 when Mr. Finnerty was appointed as our Lead Independent Director. The Board intends to continue to conduct such executive sessions of independent directors as necessary or desirable in 2024, including in connection with each regular quarterly meeting. The Lead Independent Director will continue to preside at executive sessions of independent directors.
Director Experience and Skills Matrix
The Director Experience and Skills Matrix below illustrates key experience and skills that the Board has identified as important for its members. In addition to the unique skills identified in the matrix below, all of our directors are financially literate, satisfy the criteria set forth in our Governance Guidelines, and possess the characteristics that are essential for the proper and effective functioning of the Board, including:
| ● | The highest ethical standards, integrity and accountability; |
| ● | Leadership experience; |
| ● | Diverse experiences and backgrounds; |
| ● | Accountability; |
| ● | A commitment to compliance with legal and regulatory requirements; and |
| ● | Loyalty. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 11 | |
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Stockholder Engagement
The Company is committed to active stockholder engagement through a combination of investor conferences, non-deal roadshows, quarterly conference calls and ongoing dialogue with the analyst and investment community. Our ambition is to provide transparency and clearly articulate the strategic direction of the Company, along with key drivers that underpin financial performance. We strive to deliver sustainable, long-term value to our stakeholders by maintaining active dialogue and ensuring that our objectives are aligned.
Both the Board and our management team are committed to being prudent stewards of capital with a strong commitment to good corporate citizenship. We engage in ongoing efforts to address environmental, social and governance (“ESG”) matters that are important to our
stockholders. In 2021, we formalized the responsibilities of our Board committees for overseeing ESG matters. The Nominating and Corporate Governance Committee has general oversight responsibility for the Company’s ESG efforts. Specific areas overseen by the Nominating and Corporate Governance Committee include Board and committee diversity, stockholder rights, sustainability reporting, and ESG ratings. The Environmental, Health and Safety Committee and the Human Capital and Compensation Committee also have areas of oversight responsibility, subject to the overall oversight of the Nominating and Corporate Governance Committee. The Environmental, Health and Safety Committee reviews ESG matters relevant to the health and safety of employees, the Company’s climate impact, environmental risk assessments, and those portions of sustainability reports related to environmental, health and safety matters. The
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2024 PROXY STATEMENT | 12 | |
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Human Capital and Compensation Committee reviews employee diversity and inclusion, executive succession planning, and those portions of sustainability reports related to employment and compensation matters. The Audit Committee has responsibility for oversight of the inclusion of ESG disclosures in the Company’s financial statements and SEC disclosures. Overall, this alignment of committee responsibilities is intended to organize a comprehensive approach to addressing the most important ESG issues the Company faces.
Committees of the Board
The Board has five standing committees: the Audit Committee, the Human Capital and Compensation Committee, the Nominating and Corporate Governance Committee, the Environmental, Health and Safety Committee, and the Technology Committee. Although primary responsibilities may be assigned to one of these committees, the Board receives regular, detailed reports from each committee, engages in additional discussion and oversight regarding matters of particular concern or importance, and non-committee members regularly participate in meetings of each committee. At all times during 2023, all of the members of each of the Company’s standing committees were independent as defined by the rules and regulations of the NYSE, the SEC and Company guidelines. The Nominating and Corporate Governance Committee regularly reviews the membership on each of the Board’s five standing committees, and periodically considers whether rotation of committee members or chairs is in the best interests of the Company and its stockholders.
Audit Committee
| Audit Committee Members |
Independent | Financially Literate |
Audit Committee Financial Expert | |||
| Sullivan (Chair) |
✓ | ✓ | ✓ | |||
| Marcogliese |
✓ | ✓ | ✓ | |||
| Moreno |
✓ | ✓ | ||||
| Sutil |
✓ | ✓ | ||||
| Zohar |
✓ | ✓ | ✓ |
On January 1, 2023, the Audit Committee was comprised of Messrs. Sullivan (chair), Marcogliese, Moreno, and Zohar and Ms. Sutil. The Board has determined that (i) Messrs. Sullivan, Marcogliese, Moreno, and Zohar and Ms. Sutil each qualify as independent and financially literate under applicable SEC rules and regulations and the rules of the NYSE; and (ii) Messrs. Sullivan, Marcogliese,
and Zohar all qualify as an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K.
The Audit Committee met ten times during 2023. In performing its functions and to promote the independence of the audit, the Audit Committee consults separately and jointly with the independent auditors, our internal auditors, our Chief Executive Officer, our Chief Financial Officer, and other members of our management. Among other responsibilities, the Audit Committee is responsible for assisting Board oversight of:
| • | The quality and integrity of our financial statements; |
| • | The disclosure and financial reporting process carried out by management and the systems of internal accounting and financial controls developed and carried out by management; |
| • | The independent audit of our financial statements; |
| • | The independent registered public accounting firm’s appointment, qualifications, independence, performance and compensation; |
| • | The internal audit function; |
| • | Our compliance with legal and regulatory requirements including procedures for the internal and external reporting of financial accounting, internal control and other concerns as required by the Sarbanes Oxley Act (the “whistleblower hotline”); |
| • | The general administration of our related party transactions policy; and |
| • | ESG-related financial disclosures in our financial reports, including compliance with SEC required disclosures, and the related internal controls over financial reporting. |
Human Capital and Compensation Committee
On January 1, 2023, the Human Capital and Compensation Committee was comprised of Messrs. Finnerty (chair), Marcogliese, Sullivan, and Zohar and Ms. Tolson. In May 2023, the Board appointed Mr. Zohar as Chair of the Human Capital and Compensation Committee. The Board has determined that Messrs. Finnerty, Marcogliese, Sullivan, and Zohar and Ms. Tolson each qualify as independent under applicable SEC rules and regulations and the rules of the NYSE and as a “non-employee
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 13 | |
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director” for the purposes of Rule 16b-3 under the Exchange Act. The Human Capital and Compensation Committee met seven times in 2023. Under its charter, the Human Capital and Compensation Committee may delegate its authority to subcommittees, the chair of the committee, or to one or more officers of the Company to make grants of equity awards to non-named executive officers and non-Section 16 officers under our incentive or equity-based plans and only in accordance with the terms of such plans. The Human Capital and Compensation Committee is only permitted to delegate its authority when it deems such delegation to be appropriate and in the best interests of the Company.
As part of the governance and oversight process of the Company, the Human Capital and Compensation Committee supports the Board and works with management to ensure that compensation practices properly reflect management and Company philosophy, competitive practice and regulatory requirements. Among other responsibilities, the Human Capital and Compensation Committee is responsible for:
| • | Our compensation practices, including ensuring they reflect the Board’s and our philosophy, competitive practices and regulatory requirements and aligned with our strategic direction; |
| • | Evaluating the performance of our Chief Executive Officer and approving the compensation awarded to our executive officers; |
| • | Overseeing equity awards issued under our long-term incentive plans; |
| • | Periodically evaluating our compensation and benefits programs generally, including risks relating thereto; |
| • | ESG matters related to employees and compensation; and |
| • | Overseeing and reviewing the Company’s strategies, policies, and practices related to human capital management, including aspects of the Company’s ESG initiatives related to human capital management. |
Nominating and Corporate Governance Committee
On January 1, 2023, the Nominating and Corporate Governance Committee was comprised of Mses. Sutil (chair) and Tolson and Messrs. Finnerty and Sullivan. The Board has determined that Mses. Sutil and Tolson and
Messrs. Finnerty and Sullivan each qualify as independent under applicable SEC rules and regulations and the rules of the NYSE. The Nominating and Corporate Governance Committee met five times in 2023. Among other responsibilities, the Nominating and Corporate Governance Committee is responsible for:
| • | Assisting the Board in identifying and evaluating individuals qualified to become Board members and recommending to the Board the director nominees for each annual meeting of stockholders in accordance with the parameters set forth in our Governance Guidelines; |
| • | Overseeing our corporate governance policies and procedures applicable to the Governance Guidelines when required; |
| • | Reviewing the Governance Guidelines on an annual basis and recommending to the Board any changes deemed necessary or desirable; |
| • | Monitoring, overseeing and reviewing compliance with the Governance Guidelines and all other applicable policies of the Company as the Nominating and Corporate Governance Committee or the Board deems necessary or desirable; |
| • | Leading the Board and each of its committees in an annual assessment of their performance; and |
| • | General oversight of ESG matters, Board diversity, stockholder rights, sustainability reporting and ESG ratings. |
Environmental, Health and Safety Committee
On January 1, 2023, the Environmental, Health and Safety Committee was comprised of Messrs. Marcogliese (chair) and Finnerty and Ms. Sutil. The Environmental, Health and Safety Committee met four times in 2023. Among other responsibilities, the Environmental, Health and Safety Committee is responsible for:
| • | Overseeing management’s establishment and administration of our environmental, health and safety policies, programs, procedures and initiatives; |
| • | Receiving periodic reports from management regarding environmental, health and safety laws, rules and regulations applicable to the Company; |
| • | Evaluating risks relating to such policies, programs, procedures and initiatives; and |
| • | ESG matters related to environment, health and safety. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 14 | |
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Technology Committee
On January 1, 2023, the Technology Committee was comprised of Ms. Tolson (chair) and Messrs. Moreno, Sullivan, and Zohar. The Technology Committee met four times in 2023. Among other responsibilities, the Technology Committee is responsible for:
| • | Overseeing management’s establishment and administration of our policies, procedures, and initiatives with respect to digitalization, technology, cybersecurity, and information security; |
| • | Receiving periodic reports from management regarding our digitalization, technology, |
| cybersecurity, and information security initiatives and related regulations and key legislation and regulatory developments; |
| • | Reviewing with management the adequacy of our information security and compliance program and any major security incidents that have occurred and steps that have been taken to mitigate against reoccurrence; and |
| • | Evaluating risks relating to such policies, programs, procedures and initiatives. |
Risk Oversight
The Board considers oversight of risk management to be a responsibility of the entire Board as well as its committees.
The Board’s role in risk oversight includes receiving regular reports from its committees and members of senior management on areas of material risk to the Company, including operational, compliance, financial, liquidity, credit, legal and regulatory, strategic, commercial, cybersecurity, enterprise and reputational risks. The Board further understands, evaluates and oversees risk identification,
risk management and risk mitigation strategies, including cyber security risks.
The Board delegates to certain of its standing committees oversight of certain categories of risk. Those committees regularly report to the Board on matters relating to the specific areas of risk such committees oversee, and directors are encouraged to attend and participate, ex officio, in committee meetings, to ensure all directors engage in oversight of risks overseen by each committee. The roles of the standing committees in assisting the Board in its oversight of risk management are as follows:
| Audit Committee |
• Assists the Board in monitoring and assessing the Company’s financial, commercial, liquidity, credit, regulatory, and other risks and in developing guidelines and policies to govern processes for managing these risks.
• Discusses the Company’s policies with respect to risk assessment, as well as with respect to the specific risks the Audit Committee oversees.
• Regularly reports to the Board on its discussions and oversight.
| |
| Human Capital and Compensation Committee | • Assists the Board in monitoring the risks associated with the Company’s compensation policies and practices.
• Reviews the design and goals of the Company’s compensation programs and practices in the context of possible risks to the Company’s financial and reputational well-being.
• Reviews risks to the continuity of the Company’s management, including the retention, quality and diversity of employees required to achieve the Company’s purpose and strategy.
• Regularly reports to the Board on its discussions and oversight.
| |
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2024 PROXY STATEMENT | 15 | |
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| Nominating and Corporate Governance Committee |
• Assists the Board in monitoring the Company’s risks incident to its board and committee structures and governance structures and processes, including ESG risks.
• Discusses risk management in the context of general governance matters, Board succession planning and committee service by directors, among other topics.
• Regularly reports to the Board on its discussions and oversight.
| |
| Environmental, Health and Safety Committee | • Assists the Board in monitoring the risks associated with the Company’s compliance with environmental, health and safety regulations, including related ESG matters.
• Reviews the Company’s policies and procedures relating to EHS compliance.
• Regularly reports to the Board on its discussions and oversight.
| |
| Technology Committee | • Assists the Board in monitoring the risks associated with the Company’s technological developments, digitalization, and information security.
• Reviews regulations and key legislative and regulatory developments that could materially impact the Company’s information security risk exposure and evaluate the Company’s information technology systems, processes, policies, and controls to ensure compliance.
• Regularly reports to the Board on its discussions and oversight.
| |
| The Full Board | • Oversees the enterprise risk management (“ERM”) program and cyber risk management, including both operational and information security risks resulting from operating critical infrastructure and retail operations.
• Discusses findings of the ERM program, including cyber and ESG risks, and reviews the Company’s procedures related to the ERM program and risk management.
• Receives regular updates on these matters from the Chief Financial Officer, Chief Information Officer, Chief Information Security Officer, and other senior management team members.
• Review and assess industry risk through trade organizations and government agencies.
| |
Board Oversight of Cyber Risk
Cyber risks are monitored through our ERM program, which is overseen by the Board with our Chief Technology Officer having overall responsibility for financial, information technology, and cybersecurity. In overseeing cyber risk, the Board follows the principles identified by the National Association of Corporate Directors in the oversight of cybersecurity risks.
At each regular meeting of the Board, cybersecurity risks and Company programs are discussed with the Chief Technology Officer and others. Third parties are periodically engaged in the assessment of cybersecurity, including evaluating maturity under the National Institute for Security and Technology’s cybersecurity framework, testing informational and operational cyber defenses, and reviewing policies and procedures.
As discussed above, in 2021 the Board established the standing Technology Committee. One of the Technology Committee’s responsibilities is to review, assess, manage, and mitigate risks related to technological developments, digitalization, and information security. The Technology Committee also reviews assessments of the effectiveness of the Company’s information security and technology programs, procedures, and initiatives. The Technology Committee regularly receives reports from management regarding information security and cyber risk matters, including the Company’s contingency planning and information security training and compliance. The Technology Committee’s designated focus on these areas of the Company’s digitalization, information security and technology policies help ensure strategic alignment of the Company’s strategies with information security and risk management.
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2024 PROXY STATEMENT | 16 | |
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Additionally, in keeping with the Company’s commitment to provide the highest level of oversight of cybersecurity risks, we have a Chief Technology Officer who focuses all of their time to ensure the safety and security of our networks and systems. Our Chief Technology Officer oversees a team of security professionals within the Company and regularly updates the Board on any potential risks and threats to the Company. Our Chief Technology Officer, Chief Information Officer, and other senior leadership brief the Board on information security matters multiple times throughout the year.
|
Commitment to Diversity |
| Delek believes that a diverse workforce composed of individuals with a variety of personal and professional backgrounds and identities makes our company stronger.
More information on our commitment to diversity is available in our 2022-2023 Sustainability Report, available on our website.
|
Sustainability
The Company is committed to operating in a sustainable and environmentally responsible manner. We are committed to our employees and the communities in which we operate. We have demonstrated this during strong markets and industry downturns. Our employees are our greatest asset, and we are committed to supporting them and the local economies of their communities. In 2019, we produced our first Corporate Social Responsibility Report,
and in 2020 we produced our first Sustainability Report. In 2023 we produced our 2022-2023 Sustainability Report, which included goals and disclosures related to greenhouse gas (“GHG”) emissions, water consumption, safety initiatives, our diversity and inclusion commitments, and our response to the recommendations of the IFRS Foundation, which succeeded the Taskforce on Climate-Related Disclosures in monitoring the progress of companies’ climate-related disclosures.
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2024 PROXY STATEMENT | 17 | |
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In 2023 the Company continued to advance its strategic plan to incorporate sustainable technology into its portfolio. The Company is focused on projects relating to gas treating, carbon capture, and renewable fuels to reduce the carbon intensity of the company’s operations and products. The Company’s proposed project to implement carbon capture technology at the Big Spring Refinery has been selected by the Department of Energy’s Large Scale Carbon Capture Pilot Program as one of four projects eligible for federal funding under the Inflation Reduction Act. The project is expected to capture at least 90% of carbon dioxide emissions from the refinery’s fluid catalytic cracking unit (“FCCU”). The Company is currently in award
negotiations with the Department of Energy, and the project is eligible for up to $95 million of award funding.
In October 2022 the Board revised the Company’s Governance Guidelines to specify that the Board retains overall responsibility for the oversight of the Company’s ESG activities, including oversight of climate-related risks and opportunities, including broad emissions reduction targets and the Company’s sustainability reports. The Board has delegated oversight of certain ESG activities to its standing committees, as set forth in each committee’s respective charter, and from time to time the Board may refer specific issues to the committees at the Board’s discretion.
The following graphic shows how the Board has organized oversight of ESG responsibilities to its standing committees:
The primary responsibility for assisting the Board in overseeing ESG-related matters has been assigned to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee, which has been helping to guide these activities, is focused on elevating the Company’s ESG performance to that of a leader amongst its peers. The Human Capital and Compensation Committee also has responsibilities related to ESG-related matters, such as ensuring the consideration of executive compensation to the achievement of
ESG-related goals, executing our Diversity, Equity and Inclusion (“DEI”) programs, and certifying the full and proper disclosure of our EEO-1 report. The Environmental, Health and Safety Committee exercises direct oversight over a number of ESG-related matters such as the implementation of our first GHG reductions goals, the continual improvement of our workforce health and safety performance and an examination of water conservation, waste minimization, and air emission reduction efforts. The Audit Committee oversees certain ESG-related matters,
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2024 PROXY STATEMENT | 18 | |
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such as all financial reporting disclosures related to ESG, the Company’s legal and regulatory compliance, and any potential financial risk exposure related to ESG. Each committee reports its activities to our Board, which retains overall responsibility for incorporating ESG considerations into our strategic plans.
For example, our corporate governance and ERM programs are designed to help sustain our organization through a wide range of market and operating scenarios, and our community development efforts benefit the health and growth of the communities we serve. In addition, we are committed to supporting our employees through our health and safety policies and retention efforts. With the Board’s oversight, we have:
We believe these activities support our business and are integral to achieving the goals we have for the Company.
Nomination of Directors
In accordance with our Governance Guidelines and the charter of the Nominating and Corporate Governance Committee, the Nominating and Corporate Governance Committee seeks to identify individuals qualified to become directors and considers such factors as it deems appropriate, including the individual’s independence, education, experience, reputation, judgment, skill, integrity and industry knowledge. The Nominating and Corporate Governance Committee considers the individual’s contribution to the Board’s overall diversity in the foregoing factors, the degree to which the individual’s qualities and attributes complement those of other directors, and the extent to which the candidate would be a desirable addition to the Board and committees thereof. Directors should have experience in positions with a high degree of
responsibility; be leaders in the organizations with which they are affiliated; and have the time, energy, interest and willingness to serve as a member of the Board.
| We recognize the importance of diversity of viewpoints, industry and professional experiences, ethnicity, age, race, |
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backgrounds, education, skill sets and gender. With the appointment of Leonardo Moreno in March 2022, we met our pledge that in 2022 at least 30% of our Board will be female and/or racially diverse. Additionally, with the appointment of Christine Benson Schwartzstein in January 2024, we met our pledge that by the 2024 Annual Meeting at least 30% of our Board would be gender diverse.
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Board Diversity
In 2020, Delek pledged that by 2022 at least 30% of our Board would be female and/or racially diverse. With the appointment of Leonardo Moreno to our Board, we are proud to have met that goal.
In 2023, Delek committed that by the 2024 Annual Meeting at least 30% of our Board will be gender diverse. With the appointment of Christine Benson Schwartzstein to our Board, we are proud to have met that goal.
Among other criteria, the Nominating and Corporate Governance Committee seeks candidates who have business and/or professional knowledge and experience applicable to our industry and businesses and the goals and interests of our stockholders; are well regarded in their communities with a long-term, good reputation for the highest ethical standards; possess common sense and good judgment; have a positive record of accomplishment in present and prior positions; offer diverse viewpoints; have an excellent reputation for preparation, attendance, participation, interest and initiative on other boards on which they may serve; and have the time, energy, interest and willingness to become involved in our business and future.
The Nominating and Corporate Governance Committee annually and periodically assesses whether the Board and its committees possess the right diversity of skills and backgrounds for the current issues we face. Annually, the Nominating and Corporate Governance Committee will assess this composition in connection with the nomination of directors for re-election to the Board as well as during the annual Board and committee self-assessments. From time to time, the Nominating and Corporate Governance Committee utilizes the services of third parties to assist in identifying or evaluating director nominees. The Nominating and Corporate Governance Committee will also consider persons recommended by our stockholders and will evaluate each such person using the same criteria used to evaluate director candidates identified by the Nominating and Corporate Governance Committee. Stockholders wishing to make such recommendations may write to the
Board in care of our Corporate Secretary, Delek US Holdings, Inc., 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027. Persons making submissions should include the full name and address of the recommended person, a description of the proposed person’s qualifications and other relevant biographical information.
Director Qualifications and
Nomination Process
Annual Assessment of Size, Composition and Structure
The Board strives to maintain an appropriate balance of tenure, turnover, diversity, skills and experience. Our average director tenure is approximately seven years, representing an appropriate balance of tenures. The Board does not maintain term limits and in 2023 the Board amended the Company’s Governance Guidelines to remove the mandatory retirement age for directors, as the Board believes that continuity of service can provide stability and valuable insight.
The Board ensures refreshment and continued effectiveness through evaluation, nomination, and other policies, processes and practices. For example:
| • | The Nominating and Corporate Governance Committee annually reviews with the Board the qualifications for Board members and the composition of the Board as a whole. |
| • | The Nominating and Corporate Governance Committee annually reviews each director nominee’s continuation on the Board and makes recommendations to the full Board. |
| • | The Company’s Governance Guidelines provide that any director who changes the nature of the job he or she held when elected to the Board should volunteer to resign to give the Board the opportunity to review the appropriateness of continued Board membership under the circumstances. |
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| Board and Committee Self-Assessment Process | ||
| 1 Annual Self-Assessment | Each standing committee performs an annual self-assessment, and the Nominating and Corporate Governance Committee oversees an annual self-assessment of the full Board. | |
| 2 Board effectiveness review | The self-assessment includes a survey evaluating the functioning of the Board and its committees. | |
| 3 Presentation of results | The Chair of the Nominating and Corporate Governance Committee presents a summary of the results of the self-assessment to the Board and makes any appropriate recommendations regarding changes for consideration by the Board. | |
| 4 Incorporation of feedback | Any matters requiring further action are identified and action plans developed to address the matter. | |
Recent Board Refreshment
In 2022, the Board appointed Leonardo Moreno and Avigal Soreq to the Board. Mr. Moreno brings significant executive, renewables, technology, financial, global, and sustainability experience to the Board. Mr. Soreq brings significant energy, financial, global, accounting, and industry experience, in addition to his valued perspective as Chief Executive Officer and President of the Company and President of Delek Logistics and his previous role as Chief Executive Officer of El Al Airlines, an Israeli airline. Additionally, in January 2024 the Board appointed Christine Benson Schwartzstein to the Board. Ms. Benson brings significant risk management, capital markets, and green energies experience to the Board. These directors’ skills and perspectives further enhance our diversity and expertise in the boardroom. Their appointments were
informed by the Board’s continued focus on its composition, as well as insights provided through the Board’s annual self-evaluation process. Our current Board composition provides a diversity of thought and a broad range of skills and perspectives aligned with our strategy.
Identification and Consideration of New Nominees
The Board is responsible for nominating directors and filling vacancies that may occur between annual meetings, based upon the recommendation of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee process for identifying and recommending candidates includes:
| 1 Review | The Nominating and Corporate Governance Committee considers the Company’s current needs and long-term and strategic plans to determine the skills, experience and characteristics needed by our Board. | |
| 2 Identify | The Nominating and Corporate Governance Committee identifies candidates through the use of a search firm or the business and organizational contacts of directors and management. | |
| 3 Evaluate | In evaluating potential candidates for nomination to the Board, the Nominating and Corporate Governance Committee and the Board consider several factors: | |
| • all directors are expected to possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of the Company’s stockholders; | ||
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• candidates should possess skills and experience complementary to those of existing directors; and
• additionally, directors are expected to devote sufficient time and effort to their duties as a director. | ||
| 4 Recommend | The Nominating and Corporate Governance Committee recommends director candidates to the Board of Directors with the goal of creating a balance of knowledge, experience and diversity. | |
| Commitment to Board Diversity
The Nominating and Corporate Governance Committee believes that the Board should reflect a range of talents, ages, skills, experiences, diversity, and expertise sufficient to provide sound and prudent guidance with respect to the Company’s strategic and operational objectives. The Board has committed to seeking women and underrepresented groups, as well as candidates with diverse backgrounds, skills and experiences, as part of the search process for new directors. We have incorporated this commitment into our Governance Guidelines.
To show our commitment to diversity, in 2023 Delek committed that by the 2024 Annual Meeting at least 30% of our Board will be gender diverse.
We are proud to announce that with the appointment of Christine Benson Schwartzstein in January 2024 we have met that goal. |
Stockholder Nomination of Candidates
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. A stockholder wishing to recommend a candidate for nomination by the Nominating and Corporate Governance Committee should follow the procedures described under “Stockholder Proposals for 2025 Annual Meeting.” Stockholders wishing to make such recommendations may write to the Board in care of our Corporate Secretary, Delek US Holdings, Inc., 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027 no earlier than January 2, 2025, nor later than February 1, 2025. Persons making submissions should include the full name and address of the recommended person, a description of the proposed person’s qualifications and other relevant biographical information. In addition, the stockholder should provide such other information deemed relevant to the Nominating and Corporate Governance Committee’s evaluation. Candidates recommended by the Company’s stockholders are evaluated on the same basis as candidates recommended by the Company’s directors, management, third-party search firms or other sources.
Compensation Committee Interlocks and Insider Participation
Each of Messrs. Finnerty, Marcogliese, Sullivan, and Zohar and Ms. Tolson served on the Human Capital and Compensation Committee during the 2023 fiscal year, and
each of them qualified as independent under applicable SEC rules and regulations and the rules of the NYSE and as a “non-employee director” for the purposes of Rule 16b-3 under the Exchange Act during 2023. None of our executive officers currently serves (and did not serve during the 2023 fiscal year) as a member of the board of directors or compensation committee of another entity where an executive officer of such other entity serves as a member of our Board.
Governance Guidelines and Code of Business Conduct & Ethics
Our Governance Guidelines may be found on our website at www.delekus.com. The Governance Guidelines set out our and the Board’s guidelines on, among other things:
| • | The qualifications, independence and responsibilities of directors; |
| • | The process for selection of director candidates and qualifications thereof; |
| • | Board leadership and Board meetings; |
| • | Annual evaluation of the performance of the Board and its committees; |
| • | Director compensation and orientation; and |
| • | The functions of the Board and its committees and the expectations we have for directors. |
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We have also adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees, including the principal executive officer, principal financial officer and principal accounting officer. We will, within the time periods prescribed by the SEC and the NYSE, timely post on our website at www.delekus.com any amendments to this code. If we waive any material departure from a provision of our Code of Business Conduct and Ethics, we intend to post such waiver (to the extent applicable to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions) on this website.
Communications with the Board of Directors
Stockholders or other interested parties who wish to communicate with any of our directors, any committee chairperson or the Board may do so by writing to the director, committee chairperson or the Board in care of our Corporate Secretary, Delek US Holdings, Inc., 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027. Any such communications received will be forwarded directly to the director to whom it is addressed. If the communication is addressed to the Board generally and no particular director is named, the communication will be forwarded, depending on the subject matter, to the appropriate committee chairperson, to the Lead Independent Director, or to all members of the Board.
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DIRECTOR COMPENSATION
Non-Employee Director Compensation Process
The compensation paid to our non-employee directors is determined by the Board, upon recommendation of the Human Capital and Compensation Committee. This compensation is designed to attract and retain nationally-recognized, highly-qualified directors to lead the Company, to meaningfully align the interests of those directors with the interests of stockholders, and to be demonstrably fair to both the Company and its non-employee directors. In setting non-employee director compensation, the Human Capital and Compensation Committee and the Board consider these factors, as well as the significant amount of time that directors spend fulfilling their duties to the Company, the skill and experience required of the directors and other factors deemed appropriate by the Human Capital and Compensation Committee from time to time. The Human Capital and Compensation Committee and the Board relies upon various sources of information and advice including the advice of independent consultants,
comparative surveys, third party proprietary databases providing comparative information, the current economic conditions and industry environment in which the Company operates and the Human Capital and Compensation Committee members’ common sense, experience and judgment. Non-employee director compensation typically consists of both cash and equity components.
Non-Employee Director Compensation for 2023
The Human Capital and Compensation Committee and the Board reviewed data and analysis provided by its independent compensation consultant, Pay Governance, in conjunction with other factors and the objectives discussed above, and in October 2022 voted to approve a new compensation structure for non-employee directors, which was effective for fiscal year 2023.
The following table shows our non-employee director compensation for 2023, the cash portions of which were paid ratably each quarter:
| 2023 NON-EMPLOYEE DIRECTOR COMPENSATION | ||
| Annual Base Retainer Fee |
$115,000 | |
| Chair Fee: Audit Committee |
$15,000 | |
| Chair Fee: Human Capital and Compensation Committee |
$12,000 | |
| Chair Fees: Nominating and Corporate Governance Committee, Environmental, Health and Safety Committee, and Technology Committee |
$8,000 | |
| Annual Equity Award* |
$145,000 | |
| Lead Independent Director Fee |
$25,000 | |
| * | The annual equity award to non-employee directors is a RSU award that vests over one year. The number of RSUs is based on the closing price of the Company’s Common Stock on the date of grant. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 24 | |
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The following table sets forth a summary of the compensation paid to our non-employee directors during fiscal year 2023.
| 2023 Director Compensation | ||||||||||||
| Name (1) | Fees Earned or Paid in Cash (2) |
Stock Awards (3) |
Option Awards |
Changes in Nonqualified Deferred Compensation Earnings |
All Other Compensation |
Total | ||||||
| Christine Benson Schwartzstein (4) |
— | — | — | — | — | — | ||||||
| William J. Finnerty |
$135,643 | $144,997 | — | — | — | $280,640 | ||||||
| Richard J. Marcogliese |
$123,000 | $144,997 | — | — | — | $267,997 | ||||||
| Leonardo Moreno |
$115,000 | $144,997 | — | — | — | $259,997 | ||||||
| Gary M. Sullivan, Jr. |
$130,000 | $144,997 | — | — | — | $274,997 | ||||||
| Vasiliki (Vicky) Sutil |
$123,000 | $144,997 | — | — | — | $267,997 | ||||||
| Laurie Z. Tolson |
$123,000 | $144,997 | — | — | — | $267,997 | ||||||
| Shlomo Zohar |
$131,357 | $144,997 | — | — | — | $276,354 | ||||||
| (1) | As the only employee directors, Messrs. Yemin and Soreq did not receive any compensation in 2023 for their services as directors. |
| (2) | This column reports the amount of cash compensation earned in 2023 for Board and committee service. Amounts in this column include both annual cash retainers and fees for services on as chair of committees during 2023. |
| (3) | Amounts in this column represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes of 6,034 RSUs granted to each of Messrs. Finnerty, Marcogliese, Moreno, Sullivan, and Zohar and Mses. Sutil and Tolson on June 10, 2023. The grant date fair value of $24.03 per share for Messrs. Finnerty, Marcogliese, Moreno, Sullivan, and Zohar and Mses. Sutil and Tolson was equal to the closing stock price on the grant date. The RSUs vest quarterly over the course of one year. |
| (4) | Effective January 18, 2024, Christine Benson Schwartzstein was appointed as a director. Ms. Benson did not receive any compensation from the Company during 2023. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 25 | |
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PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meeting, ten directors are to be elected to hold office until the 2025 Annual Meeting and until their successors are duly elected and qualified or until their earlier termination of service. All director nominees are currently serving on our Board. The Board has determined that each of Messrs. Finnerty, Marcogliese, Moreno, Sullivan, and Zohar and Mses. Benson, Sutil, and Tolson qualifies as an independent director under applicable SEC rules and regulations and the rules of the NYSE.
We believe that each director nominee will be able to stand for election. All nominees have consented to be named and have indicated their intent to serve if elected. If any nominee becomes unable to stand for election, proxies in favor of that nominee will be voted in favor of any substitute nominee named by the Board. If you do not wish your shares to be voted for one or more of the nominees, you may so indicate when you vote by withholding your vote for the particular nominee. The persons named in the enclosed proxy card intend to vote the proxy for the election of each of the ten nominees, unless you indicate on the proxy card that your vote should be withheld from any of the nominees.
Biographies for each director nominee are set forth below. Except as listed in their biographies, no director has served as a director of a publicly traded company or a registered investment company in the past five years.
The Company’s Bylaws require majority voting in uncontested elections of directors. Accordingly, a nominee for director is only elected if the number of
votes cast “FOR” the nominee’s election exceeds the number of votes cast “AGAINST” that nominee’s election at a meeting at which a quorum is present in person or represented by proxy. Shares that are not voted in the election of directors, including abstentions and broker non-votes, have no direct effect in the election of directors. Those shares, however, are taken into account in determining whether a sufficient number of shares are present to establish a quorum.
The Board has adopted a director resignation policy (the “Policy”) in the event that an incumbent director fails to receive the required number of votes for re-election in an uncontested election. The Policy requires that a director who fails to receive the required number of votes for re-election in an uncontested election will tender his or her resignation to the Chair of the Board for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will consider the resignation and make a recommendation to the Board concerning its acceptance or rejection. In doing so, the Nominating and Corporate Governance Committee will consider all factors deemed relevant, including, but not limited to, the stated reason why stockholders voted against the director’s re-election, the director’s qualifications, and whether the director’s resignation would be in the best interests of the Company and its stockholders. The Board will then consider information, factors, and alternatives considered by the Nominating and Corporate Governance Committee in making its ultimate decision of whether to accept or reject the director’s resignation.
The Board of Directors recommends a vote “FOR” each of the following nominees:
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 26 | |
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| Ezra Uzi Yemin
Director since: 2001
Age: 55 |
Business Experience:
Mr. Yemin has served as the Chairman of our Board since December 2012. He was appointed Executive Chairman of the Board in June 2022. Mr. Yemin served as our Chief Executive Officer from June 2004 to June 2022, and as our President from April 2001 to June 2022. He also served as the Chairman of the Board of Directors and Chief Executive Officer of Delek Logistics GP, LLC, the general partner of Delek Logistics Partners, LP, from April 2012 to June 2022, and now serves as the Executive Chairman of the board of directors since June 2022.
Qualifications:
The Board believes that Mr. Yemin’s significant leadership experience with the Company as well as his extensive industry experience make him a valuable asset to the Board. | |
| Avigal Soreq
Director since: 2022
Age: 46 |
Business Experience:
Mr. Soreq joined the Company as Chief Executive Officer and President and as President of Delek Logistics in June 2022. Mr. Soreq was also appointed as one of our directors in June 2022. Previously, he served as Chief Executive Officer of El Al Airlines, an Israeli airline, from January 2021 until May 2022. Prior to that, Mr. Soreq served in several roles at the Company from December 2012 through 2020, including Chief Operating Officer, Chief Commercial Officer, Executive Vice President and Vice President. Mr. Soreq also served on the Board of Directors of Alon USA Energy, Inc. from 2015 to 2017. Before joining the Company, Mr. Soreq worked for SunPower Corporation (NASDAQ: SPWR), and previously as a senior finance and business consultant for Trabelsy & Co., and as a consultant in the corporate finance department for KPMG’s Tel-Aviv office. Mr. Soreq served in the Israeli Air Force in various roles between 1996 and 2004 and reached the rank of Major. Mr. Soreq is a certified public accountant in Israel.
Qualifications:
The Board believes that Mr. Soreq’s service on the Board provides it with important interaction with, and access to, management’s principal policy-maker that facilitates the Board’s development and implementation of Company policies. In addition, his extensive industry experience, leadership skills and knowledge of the Company make him well-qualified to serve on our Board. | |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 27 | |
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| Christine Benson Schwartzstein
Director since: 2024
Age: 43 |
Business Experience:
Ms. Benson has nearly 20 years of experience in natural resources risk management, capital markets, and investing. She is currently a director of Apollo Infrastructure Company LLC, which owns, operates and provides capital for infrastructure assets, as well as Talen Energy Corporation, an independent power producer and infrastructure company. Ms. Benson is also a director of Just Energy (U.S.) Corp., a leading independent distributor of electricity and natural gas in the United States. She previously served as a member of the Senior Advisory Board of Orion Infrastructure Capital, an infrastructure investment firm, until 2023 after serving as a Managing Director and Investment Principal from 2021 to 2022. Before joining Orion Infrastructure Capital, Ms. Benson spent 17 years in various roles at Goldman Sachs & Co. Most recently, she was a Managing Director in the Financing Group on the Structured Finance and Risk Management team in the Investment Banking Division; there she was responsible for the firm’s commodity structured finance efforts within Investment Banking. Prior to that, Ms. Benson was a Managing Director on the Energy Sales and Structuring teams in the Securities Division. She began her career at Goldman Sachs in 2004 as an analyst on the Energy team. Ms. Benson received an A.B. in Earth and Planetary Sciences, magna cum laude, from Harvard University in 2004.
Qualifications:
The Board believes that Ms. Benson’s extensive experience in risk management, capital markets, and green energies as well as her background in natural resources and investing will provide the Board with instrumental insights. | |
| William J. Finnerty
Director since: 2014
Age: 75
Committees:
• Nominating and Corporate Governance • Environmental, Health and Safety Human Capital and Compensation |
Business Experience:
Mr. Finnerty has served as our Lead Independent Director since May 2023, a position he previously held from November 2015 until February 2020. Mr. Finnerty has over 40 years of experience leading businesses in the petroleum and refining industry. From 2011 until 2012, he served as a member of the board of directors of CVR Energy Inc. (NYSE: CVI) where he chaired the environmental, health and safety committee and was a member of the nominating and corporate governance committee. Prior to retiring from Tesoro Corporation in 2010, he served as its executive vice president, strategy and corporate development and as its chief operating officer. Mr. Finnerty served on the board of directors of the National Petrochemical and Refiners Association (now known as the American Fuel & Petrochemical Manufacturers) from 2005 to 2010 and was its vice chairman from 2007 to 2010. Mr. Finnerty’s career began with Texaco, Inc. in 1970. Since then, he also held executive positions with Equiva Trading Company and Chevron Corporation (NYSE: CVX).
Qualifications:
The Board believes that Mr. Finnerty’s experience in all facets of the downstream sector with both integrated major oil companies and independent refiners, as well as his expertise in strategic considerations, provide significant value to the Company. | |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 28 | |
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| Richard J. Marcogliese
Director since: 2020
Age: 71
Committees:
• Environmental, Health and Safety, Chair • Audit • Human Capital and Compensation |
Business Experience:
Mr. Marcogliese has over 40 years of experience in the refining industry. He is currently the principal of iRefine, LLC, a privately —owned petroleum refining consulting company. From 2011 to 2019 Mr. Marcogliese served as an executive advisor of Pilko & Associates L.P., a private chemical and energy advisory company. Mr. Marcogliese has served as a director of Cenovus Energy, Inc. since 2016 and serves as the chair of the safety, sustainability and reserves committee and as a member of the audit committee. From 2000 to 2010, he worked for Valero Energy Corporation where he held increasingly senior positions, including serving as executive vice president and chief operating officer from 2007 to 2010. Prior to joining Valero, Mr. Marcogliese worked for ExxonMobil Corporation for over 25 years. Mr. Marcogliese also served as an operations advisor to NTR Partners III LLC, a private investment company, from 2013 to 2017, and to the chief executive officer of Philadelphia Energy Solutions, from 2012 to 2016. Mr. Marcogliese is a past chair of the Western States Petroleum Association. Mr. Marcogliese holds a Bachelor of Engineering degree in Chemical Engineering from the New York University School of Engineering and Science.
Qualifications:
The Board believes that Mr. Marcogliese’s vast experience in the refining industry and background in operations, consulting, and strategic planning provide the Board with invaluable insights as the Company continues to execute on our growth strategy. | |
| Leonardo Moreno
Director since: 2022
Age: 45
Committees:
• Audit • Technology |
Business Experience:
Mr. Moreno has over 15 years of experience in the energy industry. Since 2020 he has served as the President of AES Clean Energy, a division of The AES Corporation (NYSE: AES), a global power company leader in renewables and new technologies. Mr. Moreno has worked for The AES Corporation since 2006 in a variety of positions, including Senior Vice President, Corporate Strategy & Investments and Chief Commercial Officer from 2017 to 2020, Chief Financial Officer, Europe from 2015 to 2016, and other leadership roles related to strategy, finance, commercial, investments, mergers and acquisitions, and sustainability. He served as a director of AES Brasil Energia S.A. (AESB3:BZ) from 2018 to February 2022 and has served as an alternate director of AES Andes S.A. (AESANDES.SN) since 2018. Mr. Moreno also served as a Senior Auditor for Ernst & Young in Brazil from 2003 to 2005. Mr. Moreno holds a Bachelor of Arts in Business Administration from Universidade Federal de Minas Gerais, Brazil and has continued his education through executive business and leadership programs at the London Business School, Harvard Business School, Georgetown University and the University of Virginia.
Qualifications:
The Board believed that Mr. Moreno’s extensive experience in the renewable energy industry provides the Board with valuable expertise as the Company continues to pursue its commitment to clean energy. | |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 29 | |
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| Gary M. Sullivan, Jr.
Director since: 2015
Age: 77
Committees:
• Audit, Chair • Nominating and Corporate Governance • Human Capital and Compensation • Technology |
Business Experience:
Mr. Sullivan previously served as a member of the board of directors of Delek Logistics GP, LLC and the chair of its audit committee from 2012 until 2015. Mr. Sullivan is a certified public accountant, a certified global management accountant and has completed the National Association of Corporate Directors’ Cyber-Risk Oversight Program. Mr. Sullivan was a faculty member at Virginia Commonwealth University’s School of Business from 2012 to mid-2022 where he taught accounting and auditing. From 2009 to 2012, Mr. Sullivan was a private investor. From 1975 through 2009, Mr. Sullivan served in various roles with Deloitte & Touche LLP culminating in the role of senior client partner from 2004 through 2009 where he worked with public companies, including sponsors of master limited partnerships. Mr. Sullivan retired from the U.S. Navy as a Captain in 1990 after serving in various naval aviation and naval reserve intelligence assignments. Mr. Sullivan holds a Bachelor of Arts in economics from the University of Virginia and a Master of Business Administration from Tulane University. Additionally, Mr. Sullivan completed the Association of International Certified Professional Accountants Certificate in Fundamentals of ESG and Certificate in Cybersecurity Fundamentals for Finance Professionals.
Qualifications:
The Board believed that Mr. Sullivan’s experience as a certified public accountant and partner with Deloitte & Touche LLP provides the Board with valuable expertise in matters involving finance and accounting. | |
| Vasiliki (Vicky) Sutil
Director since: 2019
Age: 59
Committees:
• Nominating and Corporate Governance, Chair • Environmental, Health and Safety Audit |
Business Experience:
Ms. Sutil has over 30 years of experience in the petroleum and refining industry. Ms. Sutil has served on the board of Antero Resources Corporation (NYSE: AR) since 2019 and has chaired their ESG Committee since May 2020. From July 2017 to January 2020, she worked with SK E&P Company focused on strategic planning and from 2014 to 2016 Ms. Sutil worked with California Resources Corporation as Vice President of Commercial Analysis for CRC Marketing, Inc. From 2000 to 2014 she worked with Occidental Petroleum Corporation in various capacities including roles in Corporate Development, Mergers and Acquisitions and Financial Planning. Ms. Sutil has additional experience with ARCO Products Company and Mobil Oil Corporation working as a Project Engineer and Business Analyst in the Refining and Marketing Divisions. From 2010 to 2015 Ms. Sutil served as a member of the board of directors of Plains All American Pipeline, L.P. (NASDAQ: PAA) and from 2013 to 2015 Ms. Sutil served as a member of the board of directors of Plains GP Holdings. L.P. Ms. Sutil holds a Bachelor of Science Degree in Mechanical Engineering with an emphasis in Petroleum Engineering from the University of California, Berkeley and an MBA from Pepperdine University.
Qualifications:
The Board believed that Ms. Sutil’s varied experience in the refining and petroleum industry provides the Board with valuable expertise in energy industry matters. | |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 30 | |
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| Laurie Z. Tolson
Director since: 2021
Age: 63
Committees:
• Technology, Chair • Nominating and Corporate Governance • Human Capital and Compensation |
Business Experience:
Since March 2020, Ms. Tolson has been the chief executive officer of Tolson Consulting Company, where she advises companies on digital transformation strategies. Ms. Tolson has served on the board of directors for Landys & Gyr (SIX: LAND) since July 2021 and serves on the remuneration committee. Ms. Tolson served on the board of directors of Fenix Marine Services from 2020 to 2022 when it was sold. From 2017 to 2020, Ms. Tolson served as the chief digital officer of GE Transportation, a division of Wabtec Corporation, which manufactures equipment for the railroad, marine, mining, drilling and energy generation industries. Prior to that, Ms. Tolson worked at ABB Ltd. (NYSE: ABB), a publicly-traded manufacturer of electrification, industrial automation, and robotics and motion products. At ABB, Ms. Tolson served as executive vice president of research and development, product management and marketing from 2012 to 2016, and then as global head of the enterprise software group from 2016 to 2017. Ms. Tolson’s experience also includes five years as vice president, software, at Dell Inc., and 13 years as vice president, Java software group, at Sun Microsystems, Inc. Ms. Tolson attended Point Loma Nazarene University where she graduated with a Bachelor of Arts degree in business administration and economics and minor in computer science, and she holds an MBA from National University in La Jolla, California. Ms. Tolson has completed the National Association of Corporate Directors’ Cyber-Risk Oversight Program.
Qualifications:
The Board believes that Ms. Tolson’s many years of experience at the intersection of technology and the energy and transportation industries provide important expertise as the Board navigates technological developments in the petroleum industry. | |
| Shlomo Zohar
Director since: 2010
Age: 72
Committees:
• Human Capital and Compensation, Chair • Audit • Technology |
Business Experience:
Mr. Zohar has worked as an independent consultant in the financial services sector since 2006. Between 2006 and 2009, Mr. Zohar served as a member and chair of the boards of directors of Israel Discount Bank Ltd., Mercantile Discount Bank Ltd., Israel Discount Capital Markets & Investments Ltd. and Israel Credit Cards, Ltd. During this time, Mr. Zohar also served as a member and vice chair of the board of directors of Israel Discount Bank of New York and as a member of the board of directors of Discount Bancorp, Inc.
Qualifications:
The Board believes that Mr. Zohar’s financial industry experience provides the Board with valuable expertise in the Company’s financial and accounting matters. | |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 31 | |
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Executive Officers
As of the date of this Proxy Statement, we have five executive officers who lead the Company. Our executive officers are elected by the Board and serve at the discretion of the Board, rather than for specific terms of office.
|
| |
| EZRA UZI YEMIN Executive Chairman Age: 55 |
AVIGAL SOREQ Chief Executive Officer and President Age: 46 | |
|
| |
| REUVEN SPIEGEL Executive Vice President and Chief Financial Officer Age: 67 |
DENISE MCWATTERS Executive Vice President, General Counsel, and Corporate Secretary Age: 64 | |
|
JOSEPH ISRAEL Executive Vice President, Operations Age: 52 | ||
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 32 | |
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Information regarding the background and experience of each of these executive officers is listed below, except for information regarding Messrs. Yemin and Soreq, which is included under Proposal 1 above since they are directors standing for re-election at the Annual Meeting.
Executive Officers
| Reuven Spiegel
|
Mr. Spiegel has served as our Chief Financial Officer since May 2020, and as a member of the board of directors of the general partner of Delek Logistics since July 2014. Prior to joining the board of directors of the general partner of Delek Logistics, Mr. Spiegel served as Chief Executive Officer of Israel Discount Bank Ltd. (TLV: DSCT) from 2011 through 2014 where he had previously held the position of Executive Vice President from 2001 through 2005. In 2005 and 2006, Mr. Spiegel also served as Chairperson of the board of Discount Mortgage Bank. Mr. Spiegel also served as Chief Executive Officer of IDB Bank of NY from 2006 to 2010. He also has experience as an executive in the real estate industry. | |
| Denise McWatters
|
Ms. McWatters has served as the Executive Vice President, General Counsel and Corporate Secretary of the Company and of the general partner of Delek Logistics since February 2021. Ms. McWatters previously served as the General Counsel, Chief Compliance Officer and Corporate Secretary of HF Sinclair Corporation, formerly HollyFrontier Corporation, an independent petroleum refiner (NYSE: DINO), and of the general partner of Holly Energy Partners, L.P. (NYSE: HEP) from May 2008 until August 2019. Prior to joining HollyFrontier, Ms. McWatters served as the General Counsel of The Beck Group, an architecture, construction and design firm, from 2005 through October 2007. Ms. McWatters also previously served as a shareholder at two national law firms. | |
| Joseph Israel
|
Mr. Israel is an industry veteran with over 25 years of energy experience and a proven track record of driving operational excellence. Most recently, he served as President & CEO, Par Petroleum LLC, a subsidiary of Par Pacific. He also served as Senior Vice President, Par Pacific Holdings, and a Member of Par Pacific’s Board of Directors. In these roles, he led operations for Par’s integrated refining and logistics system, including 154,000 barrels per day of refining capacity. Mr. Israel has also held leadership positions at Hunt Refining Company and Alon USA, which was acquired by the Company in 2017. | |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 33 | |
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This “Compensation Discussion and Analysis” is intended to provide material information that is necessary to provide an understanding of our compensation policies and decisions regarding the individuals named in the Summary Compensation Table in this Proxy Statement. These individuals may be referred to as our “named executive officers” or “NEOs” herein. For 2023, our NEOs were as follows:
Avigal Soreq, our President and Chief Executive Officer;
Ezra Uzi Yemin, our Executive Chairman and former President and Chief Executive Officer;
Reuven Spiegel, our Executive Vice President and Chief Financial Officer;
Denise McWatters, our Executive Vice President, General Counsel, and Corporate Secretary;
Joseph Israel, our Executive Vice President, Operations; and
Todd O’Malley, our former Executive Vice President and Chief Operating Officer.
Executive Summary
Executive Officer Performance in 2023
As more fully described in the Company’s 2023 Annual Report, 2023 marked a strong year for the Company as we continued to grow. The Company achieved numerous accomplishments during 2023, including:
| ✓ Delivered the safest year on the Company’s record; |
| ✓ Continued our focus on safety, reliability, and environmental responsibility; |
| ✓ Operated refining system at record total throughput; |
| ✓ Hired Joseph Israel as Executive Vice President, Operations, Patrick Reilly as Executive Vice President and Chief Commercial Officer, and Tommy Chavez as Senior Vice President, Refining Operations; |
| ✓ Significantly grew logistics gathering and processing volumes; |
| ✓ Logistics segment delivered record adjusted segment EBITDA in Q4 2023; |
| ✓ Retail segment reported its best Q4 outside of the COVID-19 year of 2020; |
| ✓ Successfully completed the Tyler refinery turnaround in the first quarter of 2023 with zero process or safety incidents, the turnaround was completed substantially on time and on budget and positions us to capture market opportunities; |
| ✓ As a part of our operational excellence initiatives and to align with our strategic priorities, we took steps to improve the efficiency of our cost structure including cost reductions in our general and administrative expenses; |
| ✓ Made significant progress on $100 million Company-wide cost reduction and process improvement efforts, achieving 60% in 2023; |
| ✓ Returned $145.7 million to stockholders through dividends and the repurchase of over 3.5 million shares for $85.4 million; |
| ✓ Reduced our long-term obligations by approximately $454 million; |
| ✓ Took significant steps towards execution of the proposed Sum of the Parts transaction; and |
| ✓ Published our fourth annual Sustainability Report, which included information on our new and updated safety expectations. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 34 | |
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Compensation Highlights for Fiscal 2023
The following are the highlights of our 2023 compensation program:
| ∎ | Our Human Capital and Compensation Committee has adopted a strong pay-for-performance philosophy which targets compensation at the market median of a group of similarly sized energy and industrial companies. |
| ∎ | Compensation is paid in a mix of base salary; annual cash-based incentives under our Annual Incentive Plan (“AIP”); and equity-based long-term incentive awards (consisting of equal amounts of Restricted Stock Units (“RSUs”) and Performance-based Restricted Stock Units (“PSUs”)). |
| ∎ | Compensation is tied to our financial, operating, environmental, safety, and stock performance, so that a substantial portion of the compensation provided to our executive officers is at risk. |
| ∎ | Payment of annual cash-based incentives under the 2023 AIP is based on achieving critical measures of financial, safety, environmental, and operating performance, consistent with our pay-for-performance philosophy. Financial metrics comprise 60% of the Company performance weighting and includes efficiencies as a result of our Zero Based Budgeting (“ZBB”) initiative and Earnings Before Interests Taxes Depreciation and Amortization (“EBITDA”) against Company established performance targets. Any payment under the 2023 AIP requires achieving at least threshold Adjusted EBITDA performance for the year. In 2023, the Company achieved the threshold Adjusted EBITDA hurdle of $550 million; therefore, cash bonuses were earned under the 2023 AIP. |
| ∎ | In February 2023, our Board approved payments under the 2022 Executive Merger and Acquisition Bonus Plan effective from June 1, 2022 through May 31, 2023 (the “M&A Bonus Plan”) applicable to certain NEOs. The purpose of the M&A Bonus Plan is to incentivize its participants to achieve the Company’s objectives related to the integration and performance of Delaware Gathering (formerly 3 Bear) following the Delaware Gathering Acquisition. All goals were achieved at target and in advance of the end of the performance period. |
| ∎ | Our equity-based long-term incentive program is intended to attract, motivate, and retain participants, and to enhance stockholder value through the use of non-cash, equity incentive compensation opportunities. In 2023 as in past years, 50% of the target value of each executive’s long-term incentive opportunity was granted in time vesting RSUs and 50% was granted in performance-vesting PSUs. In 2023, 50% of RSUs were awarded in Company stock and 50% of the RSUs were awarded in Delek Logistics common limited partner units. The RSU grants vest on a quarterly basis over a three-year period and the PSU grants vest based on our total shareholder return (“TSR”) relative to our peers. |
Advisory Vote on Executive Compensation
We conducted an advisory vote to approve our executive compensation at our 2023 Annual Meeting of Stockholders, and more than 98% of the votes cast were in favor of our NEO compensation as described in our Proxy Statement. As a result, our NEO compensation was approved (on an advisory basis) by our stockholders.
While these votes are not binding on us, our Board, or its committees, we believe it is important for our stockholders to have an opportunity to express their views regarding our executive compensation philosophy, our compensation policy and programs, and our decisions regarding executive compensation, all as disclosed in our Proxy Statement. Our Board and its Human Capital and Compensation Committee value the opinions of our stockholders. Our Board will consider any concerns raised by our stockholders and our Human Capital and Compensation Committee will evaluate whether any actions are necessary to address the concerns. In addition to the advisory vote to approve our executive compensation, we encourage ongoing engagement with our stockholders on executive compensation and corporate governance issues.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 35 | |
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Summary of Compensation Actions for 2023 and 2024
At its February 2024 meeting, the Human Capital and Compensation Committee approved the following actions regarding the Company’s compensation program for 2024. The Human Capital and Compensation Committee’s actions were influenced by the Company’s current financial and share performance, a desire to maintain strong pay for performance alignment, as well as market insights and advice provided by the Human Capital and Compensation Committee’s independent consultant.
| u | The Human Capital and Compensation Committee approved payouts under the 2023 AIP for 2023 at 158% of target for the Company’s executive officers, including our NEOs, led by strong performance on our Adjusted EBITDA Achievement matrix discussed in further detail later in this section. PSUs measuring TSR relative to peers were granted in 2021 for the 2021 through 2023 performance period (1/1/2021 – 12/31/2023, 1/1/2022 – 12/31/2023, and 1/1/2023 – 12/31/2023) but failed to reach the threshold level payout; therefore, no payout was earned under the 2023 period. |
| u | The Human Capital and Compensation Committee approved an Annual Incentive Plan for the 2024 fiscal year (the “2024 AIP”) applicable to executive officers. Under the 2024 AIP, payment of awards will be based on the Company’s Adjusted EBITDA for the year ending December 31, 2024. Under the 2024 AIP, no annual bonuses will be paid to our executive officers unless the Company’s Adjusted EBITDA for the year ending December 31, 2024 equals or exceeds $550 million. If this threshold is achieved, the 2024 AIP will be funded and the payouts will be determined based on Company Adjusted EBITDA achievement and operating metrics. |
| u | The Human Capital and Compensation Committee approved long-term incentive awards to our named executive officers under the 2020 Long-Term Incentive Plan (the “2020 LTIP”). The awards consist of RSUs and PSUs. The PSUs vest at the end of the applicable three-year performance period based on our relative total shareholder return (“TSR”), which we define generally as appreciation in the Company’s stock price plus all dividends paid during the applicable performance period, relative to the performance of the peer group of companies identified by the Human Capital and Compensation Committee. Our NEOs may earn from 0% to 200% of the PSUs granted based on certain performance standards. The RSUs generally vest quarterly in equal amounts through the third anniversary of the grant date (provided the initial installment that would otherwise vest three months following the grant date will instead vest with the second installment six months following the grant date), subject to the employee’s continued employment with the Company. In 2022, two-thirds of RSUs awarded under the 2020 LTIP were in Company stock and one-third of the RSUs were in Delek Logistics common limited partner units. Beginning in fiscal year 2023, one-half of RSUs awarded under the 2020 LTIP are in Company stock and one-half of the RSUs are in Delek Logistics common limited partner units. |
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Compensation Overview, Objectives and Philosophy
Our executive compensation framework in 2023 emphasized retention and recruitment in a manner that was designed to support stockholder value and reward the performance of our executive officers with reference to the overall performance of the Company. We have developed a compensation framework that is designed to:
These objectives governed the decisions that the Human Capital and Compensation Committee made during 2023 for compensation of our executive officers and will govern the decisions it makes during fiscal year 2024 with respect to the amount and type of compensation payable to our executive officers. Further, we believe that these objectives strengthen our commitment to operate our business in conformity with the highest standards of ethical conduct.
Elements of Our Compensation
The compensation framework for our executive officers consists primarily of the following three elements:
| ∎ | Fixed Compensation: Base salaries, predetermined severance, limited fringe benefits and perquisites and other benefits are primarily intended to attract and retain our executive officers by providing reliable compensation that is not contingent upon short-term or long-term objectives. |
| ∎ | Annual Incentive Compensation: Performance-based annual cash bonuses are primarily intended to reward superior performance of both financial and non-financial goals by our executive officers and support fixed compensation in attracting and retaining our executive officers. |
| ∎ | Long-Term Incentive Compensation: In 2023, our long-term incentive compensation for our executive officers included grants of time-vesting RSUs and performance-based PSUs. |
Regarding the mix of these elements in our executive compensation framework, our philosophy has been to weigh more heavily toward long-term incentive compensation and less toward fixed and annual incentive compensation, and we expect this philosophy to continue. Each of these elements is discussed further below.
Compensation Setting Process
The Human Capital and Compensation Committee is responsible for determining the amount and mix of total compensation to be paid to our executive officers. In making these determinations for our NEOs other than Mr. Soreq, the Human Capital and Compensation Committee typically solicits the input and recommendations of Mr. Soreq. For all of our NEOs, the Human Capital and Compensation Committee references external consultant studies of our compensation programs conducted contemporaneously or in recent years.
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Our goal from each year is to develop an appropriate mix of fixed, annual incentive and long-term incentive compensation to attract and retain our executive officers while simultaneously incentivizing them to exert their best efforts to maximize near-term results and longer-term value for our stockholders.
External Consultants
We believe that, in some circumstances, external compensation consultants can provide valuable assistance to us in setting executive compensation. The Human Capital and Compensation Committee typically engages external compensation consultants to provide reports related to the design and amount of executive compensation and to evaluate achievement under performance awards. The Human Capital and Compensation Committee also engages compensation consultants to provide director compensation analyses and target compensation reports that are used to develop our director compensation framework. Finally, the Human Capital and Compensation Committee engages compensation consultants to assist us with the development of our annual cash bonus plans and the evaluation of achievement under such plans. For 2023, the Human Capital and Compensation Committee retained Pay Governance LLC (“Pay Governance”), a nationally recognized independent executive compensation consultant, to provide the Human Capital and Compensation Committee advice on executive compensation matters going forward. We expect that, from time to time, the Human Capital and Compensation Committee will continue to reference data and guidance provided, and to be provided, by Pay Governance or similar external consultants in setting executive and director compensation. The Human Capital and Compensation Committee believes that Pay Governance is independent of management and provides the Human Capital and Compensation Committee with objective guidance.
Benchmarking
We believe that effective executive compensation practices depend upon the particular facts and circumstances of each employer and should not be dictated by the practices of others. However, we believe that referencing specific
and aggregated compensation data from certain companies and groups of companies from time to time can be a useful tool in our decision-making process for all areas of our compensation framework.
At its July 2023 meeting, the Human Capital and Compensation Committee approved a revised compensation peer group of twenty companies for use in 2024 (the “Comparator Group”). Pay Governance played a key role in identifying a broader set of companies to serve as peers based on the following characteristics:
| ∎ | Companies with commodity exposure, cyclical/volatile business cycles, heavy manufacturing operations, and/or safety and environmental focus |
| ∎ | U.S.-based industrial public companies from the refining, midstream, chemical, and materials industries |
| ∎ | Reasonably aligned with the Company from a market capitalization and revenue and assets perspective |
We believe compensation data derived from appropriate comparative cross sections of competitors in our industries and companies with market capitalization and/or operating complexity similar to ours provides meaningful market information to be referenced from time to time in our compensation decisions. The Comparator Group consists of the following twenty companies:
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| Alcoa Corporation | CVR Energy, Inc. | Plains All American Pipeline, L.P. | ||
| Arconic Corporation | EnLink Midstream, LLC | PBF Energy Inc. | ||
| Cabot Corporation | Green Plains Inc. | Ryerson Holding Corporation | ||
| Calumet Specialty Products Partners, L.P. | Genesis Energy, L.P. | Schnitzer Steel Industries, Inc. | ||
| The Chemours Company | HF Sinclair Corporation | Sunoco LP | ||
| Commercial Metals Company |
Huntsman Corporation |
World Kinect Corporation | ||
| Crestwood Equity Partners LP | Par Pacific Holdings, Inc. | |||
Variable Compensation and Promotion of a Long-Term Perspective
We increase the variable at-risk components of compensation for our executives as they progress higher into our organization and adjust the ratio of short-term to long-term compensation to promote accountability and a long-term equity ownership culture. We structure our executive compensation program so that the proportion of variable versus fixed compensation increases as the role and responsibility of the executive increases. We believe this structure is appropriate as executives are best positioned to be able to affect the Company’s performance. Therefore, they should receive a substantial portion of their total compensation value in the form of long-term equity incentives that measure and reward the Company’s performance over a multiple year period. The table below illustrates that the actual percentage of variable pay relative to total compensation depends on the executive’s position
within the Company. The higher the executive’s position within the Company, the greater the proportion of variable pay that is linked to Company performance and shareowner return metrics. Similarly, as the executive rises to positions of greater responsibility within our Company, short-term compensation begins to decrease proportionately relative to long-term compensation which, in most cases, begins to represent a greater proportion of the executive’s total compensation. Accordingly, the decision to emphasize variable elements for these individuals results in a reduced emphasis of fixed elements of compensation. In some cases, the variances between short-term and long-term compensation are related to tenure in the position or initial compensation package provided upon hiring. The following chart summarizes the breakout of fixed versus variable compensation and short-term versus long-term compensation as disclosed in the Summary Compensation Table for our NEOs in 2023.
| Fixed vs. Variable Compensation |
Short vs. Long-Term Compensation | |||||||||
| % of Annual Compensation Fixed |
% of Annual Compensation Variable (1) |
% of Short-Term Compensation (1) |
% of Long-Term Compensation | |||||||
| Avigal Soreq |
11% | 89% | 46% | 54% | ||||||
| Ezra Uzi Yemin |
13% | 87% | 64% | 36% | ||||||
| Reuven Spiegel |
20% | 80% | 53% | 47% | ||||||
| Denise McWatters |
21% | 79% | 52% | 48% | ||||||
| Joseph Israel |
17% | 83% | 47% | 53% | ||||||
| Todd O’Malley |
15% | 85% | 39% | 61% | ||||||
| (1) | The percent listed is based on the actual bonus payout for 2023. |
Fixed Compensation
A portion of our NEOs’ overall cash compensation is base salary. Generally, NEO base salaries have not been based upon specific measures of corporate performance, but are
determined by the Human Capital and Compensation Committee with reference to each employee’s individual performance, position and responsibilities, the fixed compensation of our other NEOs and other members of senior management, competitive data and the
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recommendations of our Chief Executive Officer paid to her or him each year (except as it pertains to his own compensation). The decision to award generally seeks to position executive officer base salaries around the median of the Comparator Group and survey data from other companies of similar size to us. The Human Capital and Compensation Committee believes that the fixed compensation paid to our executive officers is appropriate and helps achieve our objectives to attract, retain, and motivate our executive officers.
For a description of the base salaries and other elements of fixed compensation paid to our NEOs for 2023, please refer to the Summary Compensation Table in this Proxy Statement.
Annual Incentive Compensation
Annual cash bonuses paid to our executive officers for a fiscal year are typically determined in the first quarter of the ensuing fiscal year and are intended to reward company-wide performance.
Compensatory Arrangements and Annual Bonuses
No compensatory arrangement with any executive officer guarantees that an annual cash bonus will be annual cash bonuses to our executive officers, and the determination of the amounts thereof (if any), is the prerogative of the Human Capital and Compensation Committee and/or the Board.
2023 Annual Incentive Plan
In February 2023, the Human Capital and Compensation Committee approved an Annual Incentive Plan for the 2023 fiscal year (the “2023 AIP”) applicable to executive officers, which is the same plan applicable to other employees otherwise eligible under the 2023 AIP.
Under the 2023 AIP, no annual bonuses would be paid to our executive officers unless the Company’s Adjusted EBITDA for the year ending December 31, 2023 equaled or exceeded $550 million. If this threshold was achieved, the 2023 AIP was to be funded and the Human Capital and Compensation Committee could further evaluate the Company’s relative performance and exercise downward discretion under the formula set forth below.
| Category |
Metric |
Weight |
Target |
0.5x |
1.0x |
1.5x |
2.0x | |||||||
| Financial |
EBITDA | 40% | 802 | 550 | 802 | 923 | 1003 | |||||||
| Financial |
ZBB | 20% | 45 | 40 | 45 | 47 | 50 | |||||||
| Safety |
Safety Program Implementation | 10% | 10% | 5% | 10% | 15% | 20% | |||||||
| HSE |
LTIR | 7.5% | 0.35 | 0.42 | 0.35 | 0.32 | 0.28 | |||||||
| TRIR | 2.5% | 0.61 | 0.73 | 0.61 | 0.55 | 0.49 | ||||||||
| Tier 1P | 2.5% | 19 | 23 | 19 | 17 | 15 | ||||||||
| PSE | 6.3% | 14 | 17 | 14 | 13 | 11 | ||||||||
| Environmental | 6.3% | 54 | 65 | 54 | 49 | 43 | ||||||||
| Sustainability |
GHG | 2.5% | 14.40 | 17.28 | 14.40 | 12.96 | 11.52 | |||||||
| Diversity | 2.5% | 1% | 0.50% | 1% | 1.50% | 2% | ||||||||
| Total |
100% | |||||||||||||
|
| ||||||||||||||
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| ● | Financial Performance. The Human Capital and Compensation Committee would attribute 40% of its evaluation to the Company’s financial performance under an Adjusted EBITDA achievement (“EBITDA Achievement”). |
| ● | Zero Base Budget (“ZBB”). Captured savings initiative. |
| ● | Safety Program Implementation. Increased focus on safety culture, through new initiatives rolled out in 2023. |
| ● | Safety Metrics. The Human Capital and Compensation Committee would attribute 10% of its evaluation, apportioned equally, to the Company’s performance in safety as measured by each of (i) the Company’s total recordable incident rate (“TRIR”) and (ii) the Company’s days away, restricted or transferred rate (“DART”). |
| ● | Process Safety Management/Environmental Metrics. The Human Capital and Compensation Committee would attribute 10% of its evaluation to process safety management and environmental metrics as follows: (i) 5% of its evaluation to Tier I and II events at company refining facilities under the OSHA Process Safety Management standard and (ii) 5% of its evaluation to environmental metrics which consist of (A) 3% to spills and releases, (B) 1% to flaring hours and (C) 1% to water exceedances. |
| ● | Sustainability. Focus on greenhouse gas reduction initiatives and focus on diverse hiring practices. |
| ● | Sum of the Parts Modifier. The Board has discretion to adjust bonuses under the 2023 AIP based on how the Board sees progression in the Sum of the Parts achievement. |
2023 AIP Performance
In February 2024, the Human Capital and Compensation Committee evaluated the performance of the Company under the 2023 AIP under each of the metrics described above, and determined achievement under the 2023 AIP, upon the recommendations of the Company, as follows:
| ∎ | The Company’s Adjusted EBITDA for the year ending December 31, 2023 of $923 million exceeded the $550 million threshold contained in the 2023 AIP. |
| ∎ | The Company’s performance under each of the metrics described above resulted in total payout under the 2023 AIP of 158% of target, as follows: |
| ∎ | The Company’s Adjusted EBITDA Achievement was greater than $550 million which resulted in achievement of 60% of the 40% target. |
| ∎ | The Company’s TRIR and DART of 7.5% and 5%, respectively, resulted in achievement of 15% of the 10% target. |
| ∎ | The Company’s Process Safety Management / Environmental Metrics resulted in achievement of 12.5% and 9.4% of the 6.3% and 6.3% targets, respectively. |
| ∎ | The Company’s Safety Program Implementation achieved 20% of the 10% target. |
| ∎ | The Company’s GHG and Diversity achieved 1.3% and 5% of the 2.5% and 2.5% targets, respectively. |
| ∎ | The Company’s Zero-Based Budget (“ZBB”) achieved 25% of the 20% target. |
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The following table illustrates each NEO’s opportunity under 2023 AIP as well as the actual bonus earned under the 2023 AIP for 2023 performance:
| 2023 AIP Opportunities as a % of Base Salary |
Actual 2023 AIP Earned | |||||||||||
| Minimum | Target | Maximum | % of Base Salary |
Dollar Value | ||||||||
| Avigal Soreq |
0% | 140% | 280% | 216.5% | $1,948,100 | |||||||
| Ezra Uzi Yemin |
0% | 140% | 280% | 287.8% | $1,438,938 | |||||||
| Reuven Spiegel |
0% | 90% | 180% | 137.6% | $825,413 | |||||||
| Denise McWatters |
0% | 75% | 150% | 118.6% | $474,375 | |||||||
| Joseph Israel |
0% | 80% | 160% | 126.5% | $759,000 | |||||||
| Todd O’Malley |
0% | 100% | 200% | 39.5% | $276,719 | |||||||
Executive Merger and Acquisition Bonus Plan
In July 2022, our Board approved the 2022 Executive Merger and Acquisition Bonus Plan effective from June 1, 2022 through May 31, 2023 (the “M&A Bonus Plan”) applicable to certain NEOs. The purpose of the M&A Bonus Plan is to incentivize its participants to achieve the Company’s objectives related to the integration and performance of Delek Delaware Gathering following the Delek Delaware Gathering Acquisition. In February 2024, the Human Capital and Compensation Committee found that the Company achieved a 100% payout under the M&A Bonus Plan.
Under the M&A Bonus Plan, the amounts of any bonuses would be based on the Human Capital and Compensation Committee’s evaluation of the Company’s performance with respect to certain metrics described below.
| • | Financial Performance. The Human Capital and Compensation Committee would attribute 10% of its evaluation to the Company’s financial performance based on EBITDA from June 1, 2022 through December 31, 2022 with a target $40.8 million. |
| • | Safety Metrics. The Human Capital and Compensation Committee would attribute 5% of its evaluation to the Company’s performance in safety as measured by TRIR with a target of 0.60. |
| • | Systems Availability. The Human Capital and Compensation Committee would attribute 10% of its evaluation to systems availability metrics as follows: (i) water system availability with a target of 92%, (ii) gas plant availability with a target of 92.4%, and (iii) crude system availability with a target of 89.3%. |
| • | Refinery Reliability and Utilization. The Human Capital and Compensation Committee would attribute the remaining 75% of its evaluation to the Company’s performance in the integration of Delek Delaware Gathering with the Company’s (i) information technology, (ii) supply chain, (iii) accounting, (iv) human resources, and (v) safety operations. |
In February 2023, our Board approved payments under the M&A Bonus Plan. All goals were achieved at target and in advance of the end of the performance period.
Long-Term Incentives
The Human Capital and Compensation Committee believes that the grant of long-term compensation, primarily in the form of long-term equity incentive awards, to our executive officers is appropriate to attract, motivate, and retain such individuals, and enhance stockholder value through the use
of non-cash, equity incentive compensation opportunities. The Human Capital and Compensation Committee believes that the best interests of our stockholders would be most effectively advanced by enabling our executive officers, who are responsible for our management, growth and
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success, to receive compensation from time to time in the form of long-term incentive awards. Because the vesting of long-term awards is based upon continued employment with us, the awards are designed to provide our executive officers with an incentive to remain with us. Since long-term awards will increase in value in conjunction with an increase in the value of our Common Stock or other performance metrics, such awards are also designed to align the interests of our executive officers and our stockholders.
Compensatory Arrangements and Long-Term Incentives
No compensatory arrangement with any NEO guarantees that long-term incentive compensation will be awarded to her or him each year. The decision to award long-term incentive compensation to our NEOs, and the determination of the amounts thereof (if any), is the prerogative of the Human Capital and Compensation Committee and/or the Board.
Equity Awards in 2023
In 2023, the Human Capital and Compensation Committee approved long-term incentive awards to our named executive officers under the 2016 Long-Term Incentive Plan (the “2016 Plan”). The awards have two components: (i) time-vested RSUs and (ii) PSUs. The time-vested RSUs generally vest quarterly in equal amounts through the third
anniversary of the grant date (provided the initial installment that would otherwise vest three months following the grant date will instead vest with the second installment six months following the grant date). The time-vested RSUs are conditioned upon the employee’s continued employment with the Company.
The PSUs granted to Messrs. Soreq, Israel, and O’Malley and Ms. McWatters on March 10, 2023 were subject to performance periods beginning January 1, 2023 and ending December 31, 2023, beginning January 1, 2024 and ending December 31, 2024, beginning January 1, 2025 and ending December 31, 2025, and beginning January 1, 2023 and ending December 31, 2025. The PSUs granted to Mr. Spiegel on March 10, 2023 were subject to performance periods beginning January 1, 2023 and ending December 31, 2023, beginning January 1, 2024 and ending December 31, 2024, and beginning January 1, 2023 and ending December 31, 2024.
The PSUs vest at the end of the applicable performance period and are based on our relative TSR, which we define generally as appreciation in the Company’s stock price plus all dividends paid during the applicable performance period, relative to the performance of the peer group of companies identified by the Human Capital and Compensation Committee. Our named executive officers may earn from 0% to 200% of the PSUs granted based on the performance standards in the table below:
Beginning in 2023, TSR performance awards are based on relative performance, with the payout determined based on the rank of the Company’s TSR (stock price plus all dividends paid during the applicable performance period) compared to the TSR of the peer group companies (see the list of companies below), over the three-year performance period, as well as for each year within the performance period.
Shares may be earned each year if the performance criteria are met, or forfeited if the performance criteria is not met. Awards do not vest and payout until the end of the three-year performance period and are subject to the executive’s continued employment.
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| Performance Level | Relative TSR | Payout (as a % of target) | ||
| Below Threshold |
< 25th Percentile | 0% | ||
| Threshold |
25th Percentile | 50% | ||
| Target |
50th Percentile | 100% | ||
| Maximum |
≥ 75% Percentile | 200% | ||
The time-vested RSUs granted prior to 2023 generally vest quarterly in equal amounts through the third anniversary of the grant date (provided the initial installment that would otherwise vest three months following the grant date will instead vest with the second installment six months following the grant date). The time-vested RSUs are conditioned upon the employee’s continued employment with the Company. Beginning in 2023, the time-vested RSUs vest in equal amounts annually through the third anniversary of the grant date.
PSU Awards Granted for The Performance Period 2021 through 2023
PSU grants made to executive officers in 2021 for the performance period 2021 through 2023 reflected the same relative TSR plan design described above. The peer group used to evaluate TSR consisted of the following companies:
| Calumet Specialty Product Partners, L.P. |
Par Pacific Holdings, Inc. | |
| CVR Energy, Inc. |
PBF Energy, Inc. | |
| HF Sinclair Corporation |
Phillips 66 | |
| Marathon Petroleum Corporation |
Valero Energy Company | |
No awards were earned under the 2021 through 2023 PSU plan due to the Company’s TSR falling below the peer group 25th percentile.
2016 Long-Term Incentive Plan
In 2016, our stockholders approved our 2016 Plan, which succeeded our 2006 Long-Term Incentive Plan (the “2006 Plan”) adopted by our Board upon our initial public offering. The 2016 Plan allows us to grant stock options, stock appreciation rights (“SARs”), restricted stock, RSUs, performance awards and other stock-based awards to certain directors, officers, employees, consultants and other individuals who perform services for us or our affiliates. RSU and PSU awards under the 2016 Plan may be accompanied by dividend equivalent rights providing for a lump sum cash amount equal to the accrued dividends from the grant date of the RSU or PSU, which is paid in cash on the vesting date.
The Human Capital and Compensation Committee generally administers the 2016 Plan, has discretion to select the persons to whom awards are made under the 2016 Plan, and prescribes the terms and conditions of each award under the 2016 Plan. The Board also has the power to administer the 2016 Plan. With respect to the application of the 2016 Plan to non-employee directors, the Board has sole responsibility and authority for matters relating to the grant and administration of awards. For a description of the
Human Capital and Compensation Committee’s delegation of authority to grant equity awards, please see the narrative discussion of our Human Capital and Compensation Committee under the heading “Committees of the Board of Directors” in this Proxy Statement.
Equity awards under the 2016 Plan are subject to exercise or base prices equal to (or greater than) the market price of our Common Stock on the grant date. We define the market price of our Common Stock as the NYSE closing price on the date of the grant, or the last previous NYSE closing price if the date of the grant occurs on a day when the NYSE is not open for trading. For a description of the equity awards made under the 2016 Plan in 2023 to our NEOs and directors, please see the narrative discussions and tables under the headings “Grants of Plan-Based Awards in 2023” and “2023 Director Compensation” in this Proxy Statement.
We intend to continue our practice of providing long-term equity-based compensation under the 2016 Plan to our employees, including our NEOs, through time-vested grants with exercise or base prices equal to (or greater than) the fair market value of our Common Stock on the
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grant date. We also intend to continue our practice of making initial grants to newly hired executives, including future NEOs. The Human Capital and Compensation Committee does not currently consider gains or losses from prior equity awards in setting other elements of compensation.
Fringe Benefits, Perquisites and Severance Provisions
Our NEOs are eligible to participate in the benefit plans generally available to all of our employees, which include health, dental, life insurance, vision, and disability insurance. We also sponsor a voluntary 401(k) Employee Retirement Savings Plan (“401(k) Plan”) for eligible employees (including our NEOs) administered by Fidelity Investments. Employees must be at least 21 years of age to participate in the 401(k) Plan. Prior to January 1, 2021, after the first anniversary of employment with us, provided such employee is at least 21 years of age and with at least
1,000 hours worked, we matched employee contributions to the 401(k) Plan, including those by our NEOs, on a fully vested basis up to a maximum of six percent of eligible compensation.
Because compensation limits imposed on qualified retirement plans by the Internal Revenue Code prevent certain of our executives, including our NEOs, from being able to contribute amounts to the 401(k) Plan sufficient to receive the full Company match of six percent of eligible compensation, in 2019 we adopted the Delek US Holdings, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) that allows our executives, including our NEOs, to receive such matching contributions. The Deferred Compensation Plan allows participating executives, including our NEOs, to defer up to 50% of their base salary, and up to 100% of amounts payable under our annual incentive plan, and, prior to January 1, 2021, receive matching contributions as if they had been made under the 401(k) Plan up to a maximum of six percent of eligible compensation.
Since the 2008 tax year, we have reimbursed our executive officers for the cost of professional preparation of their income tax returns. Because our executive officers are typically among our most highly compensated employees, their personal tax returns may be examined in connection with examinations of our tax returns. In addition, Exchange Act reporting requirements expose the executive officers’
compensation to public scrutiny. We believe that encouraging our executive officers to seek professional tax advice will mitigate the personal risks that accompany the heightened scrutiny of their compensation, provide us with a retention and recruiting tool for executive officers, and protect us from the negative publicity that could surround an executive officer’s misstatement of his or her personal income tax liabilities.
We currently have written employment arrangements with each of Messrs. Yemin, Soreq, Spiegel, and Israel and Ms. McWatters. These employment arrangements generally provide for certain benefits to and commitments from each NEO, including:
| • | Provisions requiring the confidentiality of Company information obtained by the executive during his or her employment; |
| • | Non-competition and non-solicitation restrictions on the executive in the event of termination of his or her employment; and |
| • | The provision of certain perquisites described above including reimbursement of certain tax preparation costs and, for Messrs. Yemin, Soreq, and Spiegel, the use of a Company-owned vehicle, and for Mr. Spiegel, reimbursement for certain rent expenses, which perquisites are more fully described in the Summary Compensation Table in this Proxy Statement. |
In addition, these employment agreements, as well as the terms of the 2006 Plan, the 2016 Plan, and Delek Logistics LTIP, may require us to provide compensation or other benefits to our NEOs in connection with certain events related to a termination of employment or a change in control or exchange transaction. For a description of the terms of these arrangements, see “Potential Payments Upon Termination or Change-in-Control” in this Proxy Statement. We have established these arrangements because we believe that providing NEOs with compensation and benefit arrangements upon termination or a change in control or exchange transaction is necessary for us to be competitive with compensation packages of other companies in our industry and assists us in recruiting and retaining talented executives. In addition, formalizing these benefits provides us with certainty in terms of our obligations to an eligible executive in the event that our relationship with any such executive is terminated.
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Stock Ownership Guidelines
The Board has adopted the following stock ownership and retention guidelines for its executive officers, including Mr. Soreq, and for its non-employee directors:
| INDIVIDUAL | VALUE OF SHARES TO BE OWNED | |
| Chief Executive Officer | 5 x Base Salary | |
| Other Executive Officers | 2 x Base Salary | |
| Non-Employee Directors | 3 x Annual Retainer |
As an executive officer, our former President and Chief Executive Officer, Mr. Yemin, must retain shares equal to two times his base salary. Executive officers and non-employee directors have five years to meet the requisite ownership threshold and, once attained, are expected to continuously own sufficient shares to meet that threshold. Compliance with the guidelines is monitored by the Human Capital and Compensation Committee.
Clawback Policy
Our Human Capital and Compensation Committee adopted a clawback policy in March 2016 that was updated in November 2023 (the “Clawback Policy”). The changes to the Clawback Policy in 2023 addressed new SEC rules and included the following changes: (i) recovery is triggered by a restatement of financial statements, regardless of fault on the part of the executive; (ii) if triggered, the Company must pursue recovery of excess compensation, subject to limited exceptions when recovery would cost more than would be recovered; (iii) the Company must recover the excess of what was paid over what would have been paid based on the restated financial statements, all on a pre-tax basis; and (iv) the Clawback Policy applies to all incentive compensation based on financial reporting measures during the past three years, including performance-vesting equity compensation.
Under the Clawback Policy, as amended in November 2023, if our consolidated financial statements are restated within three years of the first filing of such financial statements with the SEC due to material noncompliance with any financial reporting requirements
under applicable securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the Human Capital and Compensation Committee may require that any current or former employee subject to the Clawback Policy (which includes all of our executive officers) forfeit and/or return to us all or a portion of any compensation that was granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure (as such term is defined in the Clawback Policy) and shall include any award of stock options, restricted stock, RSUs, PSUs, or other performance shares, phantom shares or SARs during the period subject to restatement or the period during which the fraud, intentional misconduct, gross negligence, or failure to monitor conduct or risk took place.
Prohibition Against Speculative Transactions
Our Code of Business Conduct and Ethics, which applies to all of our employees and directors, prohibits speculative transactions in our stock such as short sales, puts, calls or other similar options to buy or sell our stock in an effort to hedge certain economic risks or otherwise. In 2019 we also prohibited the pledging of our stock as collateral for loans or otherwise, with existing pledges grandfathered in.
Guidelines for Trades by Insiders
We maintain policies that govern trading in our Common Stock by officers and directors required to report under Section 16 of the Exchange Act, as well as certain other employees who may have regular access to material non-public information about us. These policies include pre-approval requirements for all trades and periodic trading “black-out” periods designed with reference to our quarterly financial reporting schedule. We also require pre-approval of all trading plans adopted pursuant to Rule 10b5-1 promulgated under the Exchange Act. To mitigate the potential for abuse, no trades are allowed under a trading plan within 90 days after adoption.
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Human Capital and Compensation Committee Report
The Human Capital and Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and based on the review and discussions, the Human Capital and Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
| Members of the Human Capital and Compensation Committee Shlomo Zohar, Chair William J. Finnerty Richard J. Marcogliese Gary M. Sullivan, Jr. Laurie Z. Tolson |
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Summary Compensation Table
The Summary Compensation Table below summarizes the compensation for the fiscal year ended December 31, 2023 (and the two prior fiscal years) for (i) our principal executive officer (Mr. Soreq), (ii) our principal financial officer (Mr. Spiegel), (iii) our three other most highly compensated executive officers for the fiscal year ended December 31, 2023 (Ms. McWatters and Messrs. Yemin and Israel), and (iv) an additional individual who would have been a named executive officer but for the fact that they were not serving as an executive officer at December 31, 2023 (Mr. O’Malley). We refer to these individuals collectively herein as our “named executive officers” or “NEOs.” The footnotes to the Summary Compensation Table set forth narrative discussions of the material factors necessary to understand the information disclosed in the table.
| Name Principal Position(s) |
Fiscal Year |
Salary (1) | Bonus (2) | Stock Awards (3) |
Option Awards |
Non-Equity Incentive Plan Compensation (4) |
All Other Compensation (5) |
Total (6) | ||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||
| Avigal Soreq Chief Executive Officer |
2023 | 880,000 | 1,120,000 | 3,623,101 | — | 1,948,100 | 152,096 | 7,723,297 | ||||||||
| 2022 | 421,538 | — | 3,721,397 | — | 1,898,400 | 294,429 | 6,335,764 | |||||||||
| 2021 | 34,615 | — | — | — | — | 547,040 | 581,656 | |||||||||
| Ezra Uzi Yemin Executive Chairman |
2023 | 650,000 (7) | 1,280,417 | 1,499,970 | — | 1,438,938 | 49,423 | 4,918,748 | ||||||||
| 2022 | 937,500 | — | 9,253,982 | — | 2,170,306 | 79,109 | 12,440,898 | |||||||||
| 2021 | 871,026 | — | 7,771,055 | — | — | 26,332 | 8,668,413 | |||||||||
| Reuven Spiegel EVP, Chief Financial Officer |
2023 | 580,000 | 375,000 | 1,057,004 | — | 825,413 | 120,284 | 2,957,701 | ||||||||
| 2022 | 500,000 | — | 1,000,473 | — | 635,625 | 57,210 | 2,193,307 | |||||||||
| 2021 | 490,385 | 500,000 | 969,748 | — | — | 7,498 | 1,967,630 | |||||||||
| Denise McWatters EVP, General Counsel, and Corporate Secretary |
2023 | 400,000 | 300,000 | 724,611 | — | 474,375 | 26,064 | 1,925,050 | ||||||||
| 2022 | 400,000 | — | 875,342 | — | 508,500 | 19,195 | 1,803,037 | |||||||||
| 2021 | 362,308 | — | 848,462 | — | — | 2,741 | 1,213,511 | |||||||||
| Joseph Israel EVP, Operations |
2023 | 438,462 | — | 1,100,897 | — | 759,000 | 236,831 | 2,535,190 | ||||||||
| Former Executive Officer |
||||||||||||||||
| Todd O’Malley (8) Former EVP, Chief Operating Officer |
2023 | 538,462 | 700,000 | 1,552,714 | — | 276,719 | 580,763 | 3,648,657 | ||||||||
| 2022 | 673,077 | 50,000 | 1,875,814 | — | 1,186,500 | 27,040 | 3,812,432 | |||||||||
| 2021 | 484,616 | 50,000 | 969,724 | — | — | 425,929 | 1,930,268 |
| (1) | Amounts shown represent 26 bi-weekly pay periods during each fiscal year and are not reduced to reflect the NEO’s contributions, if any, to the Company’s 401(k) Plan. Amounts shown are amounts actually earned by the NEO during the applicable fiscal year and reflect, to the extent applicable, the impact of any salary adjustments during the year. |
| (2) | As part of the 2022 Delaware Gathering Acquisition, for 2023, the amounts reported in this column reflect payouts under the M&A Bonus Plan related to the Delek Delaware Gathering Acquisition. |
| (3) | Amounts in this column represent the grant date fair value of PSUs, DK RSUs, and DKL RSUs granted under the 2016 Plan as calculated for financial statement reporting purposes. It does not represent the value of equity awards actually paid to the respective executives in any given year due to vestings and forfeitures. For the values of equity awards which actually vested in 2023, see the column titled “Stock Awards – Value Realized on Vesting” in the Option Exercises and Stock Vested Table below. |
The fair value of PSUs is calculated using a Monte-Carlo simulation model, which assumes a risk-free rate of interest of 4.32%, an expected term of 2.81 years and expected volatility of 64.46%. The fair value of RSUs is calculated using the closing price of our Common Stock and DKL’s common limited partner units on the date of the grant. Assumptions used in the calculation of these amounts for the 2023 fiscal year are included in footnote 20 to our audited financial statements for the 2023 fiscal year included in our Annual Report on Form 10-K filed with the SEC on February 28, 2024. Because the fair value of PSUs is calculated differently than the fair value of RSUs, the grant
| DELEK US HOLDINGS, INC. |
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date fair values for PSUs and RSUs covering identical quantities of shares may differ. If achievement of the highest level of performance conditions is assumed, the grant date fair value of the PSUs and RSUs granted in 2023 would be $5,496,222 for Mr. Soreq, $1,564,067 for Mr. Spiegel, $1,099,235 for Ms. McWatters, $2,355,480 for Mr. O’Malley, and $1,701,832 for Mr. Israel. The grant date fair value of each PSU and RSU award in 2023 is set forth in the Grants of Plan-Based Awards in 2023 table on page 45.
| (4) | For 2023, the amounts reported in this column reflect amounts earned under the 2023 AIP. |
| (5) | For fiscal year 2023, this amount includes matching contributions to the Company’s 401(k) Plan in the amount of $22,500 for each of Messrs. Yemin, Soreq, Spiegel, Israel, and O’Malley and Ms. McWatters, and group term life insurance premiums of $810 for Mr. Soreq, $2,322 for Mr. Yemin, $6,858 for Mr. Spiegel, $3,564 for Ms. McWatters, and $955 for Mr. O’Malley. For Mr. Soreq, this amount also includes reimbursement in the amount of $4,680 for professional tax preparation fees, $3,000 for medical examination fees, $42,395 for auto expenses, $77,712 for relocation services rendered in 2023, and $1,000 for HSA employer contributions. For Mr. Yemin, this amount also includes reimbursement in the amount of $24,601 for professional tax preparation fees. For Mr. Spiegel, this amount also includes reimbursement in the amount of $910 for phone expenses, $72,721 for rent, and $14,295 for auto expenses. For Mr. Israel, this amount also includes reimbursement in the amount of $214,331 for relocation services rendered in 2023. No other NEO had perquisites or other personal benefits in 2023 with an aggregate value in excess of $10,000. |
| (6) | The amounts in this column include the grant date fair value of equity awards that vest over a three year period as described in footnote (3) above, and therefore do not reflect the dollar value of compensation actually received by our executives in any given year. For example, while the grant date fair value of equity awards for Mr. Soreq in 2023 was $3,623,101, the dollar value of Mr. Soreq’s equity awards which actually vested during 2023 was only $1,132,681. |
| (7) | Mr. Yemin’s salary was further reduced from $800,000 to $500,000 on June 19, 2023, in accordance with his employment agreement. |
| (8) | During the fiscal year ended December 31, 2023 Mr. O’Malley served as our EVP, Chief Operating Officer. Mr. O’Malley resigned from the Company effective as of September 22, 2023. The All Other Compensation column includes $207,308 representing payment for accrued vacation and $350,000 representing severance pay in connection with his resignation. |
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Grants of Plan-Based Awards in 2023
The following table provides information regarding plan-based awards granted to our NEOs during fiscal year 2023:
| Name | Estimated Future Payouts Under ($) (1) |
Estimated Future Payouts Under Equity Incentive Plan Awards (#) (2) |
All Other Stock Awards: Number of Shares of Stock or Units (#) |
Grant Date (3) | ||||||||||||||
| Threshold | Target | Maximum | Grant Date | Threshold | Target | Maximum | ||||||||||||
| Soreq |
— | $1,260,000 | $2,520,000 | 03/10/2023 03/10/2023 03/10/2023 03/10/2023 03/10/2023 03/10/2023 |
7,508 7,508 7,508 15,015 |
15,015 15,015 15,015 30,030 |
30,030 30,030 30,030 60,060 |
37,537 (4) 16,895 (5) |
$253,003 $434,534 $432,432 $753,152 $874,987 $874,992 | |||||||||
| Yemin |
— | $700,000 | $1,400,000 | 03/10/2023 03/10/2023 |
32,175 (4) 14,481 (5) |
$749,999 $749,971 | ||||||||||||
| Spiegel |
— | $540,000 | $1,080,000 | 03/10/2023 03/10/2023 03/10/2023 03/10/2023 03/10/2023 |
3,539 3,540 4,719 |
7,078 7,079 9,438 |
14,156 14,158 18,876 |
11,797 (4) 5,309 (5) |
$110,417 $201,752 $194,895 $274,988 $274,953 | |||||||||
| McWatters |
— | $300,000 | $600,000 | 03/10/2023 03/10/2023 03/10/2023 03/10/2023 03/10/2023 03/10/2023 |
1,502 1,502 1,502 3,003 |
3,003 3,003 3,003 6,006 |
6,006 6,006 6,006 12,012 |
7,507 (4) 3,379 (5) |
$50,601 $86,907 $86,486 $150,630 $174,988 $174,998 | |||||||||
| Israel |
— | $480,000 | $960,000 | 06/09/2023 06/09/2023 06/09/2023 06/09/2023 06/09/2023 06/09/2023 |
2,151 2,151 2,151 4,301 |
4,301 4,301 4,301 8,602 |
8,602 8,602 8,602 17,204 |
10,752 (4) 5,112 (5) |
$98,063 $126,320 $127,009 $249,544 $249,984 $249,977 | |||||||||
| Former Executive Officer | ||||||||||||||||||
| O’Malley |
— | $700,000 | $1,400,000 | 03/10/2023 03/10/2023 03/10/2023 03/10/2023 03/10/2023 03/10/2023 |
3,218 3,218 3,218 6,435 |
6,435 6,435 6,435 12,870 |
12,870 12,870 12,870 25,740 |
16,087 (4) 7,240 (5) |
$108,430 $186,229 $185,328 $322,780 $374,988 $374,960 | |||||||||
| (1) | Represents possible payouts under the 2023 AIP. |
| (2) | The amounts in this column reflect the threshold, target, and maximum shares to be issued upon the vesting of PSUs. The PSUs granted to Messrs. Soreq, and O’Malley and Ms. McWatters on March 10, 2023 are subject to four different performance periods: January 1, 2023 and ending December 31, 2023, January 1, 2024 and ending December 31, 2024, January 1, 2025 and ending December 31, 2025, and January 1, 2023 and ending December 31, 2025. The PSUs granted to Mr. Spiegel on March 10, 2023 are subject to three different performance periods: January 1, 2023 and ending December 31, 2023, January 1, 2024 and ending December 31, 2024, and January 1, 2023 and ending December 31, 2024. The PSUs granted to Mr. Israel on June 9, 2023 are subject to four different performance periods: January 1, 2023 and ending December 31, 2023, January 1, 2024 and ending December 31, 2024, January 1, 2025 and ending December 31, 2025, and January 1, 2023 and ending December 31, 2025. |
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| (3) | The amounts in this column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes over the expected term of the grant. Assumptions used in the calculation of this amount for the 2023 fiscal year are included in footnote 20 to our audited financial statements for the 2023 fiscal year included in our Annual Report on Form 10-K filed with the SEC on February 28, 2024. Because the fair value of PSUs is calculated differently than the fair value of RSUs, the grant date fair values for PSUs and RSUs covering identical quantities of shares may differ. |
| (4) | The amounts in this column reflect the Delek shares to be issued upon the vesting of RSUs granted under the 2016 Plan. The RSUs vest quarterly for three years, pro rata. |
| (5) | The amounts in this column reflect the Delek Logistics common units to be issued upon the vesting of RSUs granted under the Delek Logistics 2012 Long-Term Incentive Plan. The RSUs vest quarterly for three years, pro rata. |
Narrative to the Summary Compensation Table and Grants of Plan-Based Awards in 2023 Table
The following is a discussion of certain terms of the employment agreements with our NEOs that we believe are necessary to an understanding of the information disclosed in the Summary Compensation Table and Grants of Plan-Based Awards in 2023 Table.
Yemin Employment Agreement
On March 28, 2022, we announced that Mr. Yemin would be transitioning from our Chief Executive Officer to Executive Chairman of the Board in June 2022, in connection with the appointment of Avigal Soreq as our Chief Executive Officer. In connection with this transition we entered into two agreements with Mr. Yemin. The first is an amendment to the amended and restated employment agreement that the Company entered into with Mr. Yemin on May 8, 2020 (the “Yemin Employment Agreement”) that terminates the Yemin Employment Agreement on the date he becomes our Executive Chairman of the Board, provided, however, that the accelerated vesting described below under the heading “Potential Payments Upon Termination or Change-In-Control” in this Proxy Statement under the Yemin Employment Agreement will be preserved through Mr. Yemin’s tenure as Executive Chairman of the Board.
The second agreement entered into with Mr. Yemin in connection with this transition is a new Executive Chairman Agreement (the “Executive Chairman Agreement”). Under the Executive Chairman Agreement Mr. Yemin will, provided that he continues to be elected as a member of the Board, serve as the Executive Chairman of the Board and be entitled to receive a base salary of $800,000 for the first twelve months following the Executive Chairman Agreement and base salary of $500,000 through the period beginning on the first anniversary of the effective date of the Executive Chairman Agreement and ending December 31, 2023. Mr. Yemin is eligible to receive, through the period ending December 31, 2023, an annual
target bonus of 140% of the base salary in effect for the calendar year in which such bonus is payable. If at any time during the period ending December 31, 2025 Mr. Yemin ceases to be a member of the Board, he will serve as an advisor to our Chief Executive Officer and the Board on mutually agreeable terms to be determined in good faith and will receive competitive market compensation for such services.
Effective as of March 1, 2023, the Human Capital and Compensation Committee and the Board voted to approve an amendment to the Executive Chairman Agreement (the “Executive Chairman Agreement Amendment”). Under the Executive Chairman Agreement Amendment, the term of the Executive Chairman Agreement is extended to December 31, 2024, with an annual base salary of $500,000 for the 2024 fiscal year. Additionally, under the Executive Chairman Agreement Amendment Mr. Yemin will receive grants of time-vesting equity awards on March 10, 2023 consisting of $750,000 of Delek RSUs and $750,000 of DKL RSUs, which grants will vest 50% on December 31, 2023 and 50% on December 31, 2024, subject to Mr. Yemin’s continued service to the Company.
Under the terms of the Yemin Employment Agreement and the Executive Chairman Agreement, as amended, Mr. Yemin may receive certain benefits upon the expiration or termination of his employment. Please see the narrative discussion under the heading “Potential Payments Upon Termination or Change-In-Control” in this Proxy Statement for further discussion of these terms.
Soreq Employment Agreement
On May 28, 2022, we entered into an employment agreement with Mr. Soreq (the “Soreq Agreement”) with a fixed term ending on June 12, 2026. The Soreq Agreement does not contemplate automatic extension. In addition, the failure to renew the Soreq Agreement will not constitute an
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event that triggers severance payments. Under the Soreq Agreement, Mr. Soreq is entitled to an annual base salary of at least $800,000 and his annual target bonus will be 140% of his base salary, with a maximum payout opportunity of 200% of the target amount. The Soreq Agreement also provides that Mr. Soreq is eligible for annual grants under the Company’s 2016 Long-Term Incentive Plan in a target amount of at least $3,000,000 per year split evenly between time-vested RSUs and performance-based PSUs. The Soreq Agreement includes a noncompetition clause which provides that Mr. Soreq will not compete with the Company, directly or indirectly, in the geographic area defined in the agreement during its term and for one year thereafter. The Soreq Agreement also includes non-solicitation provisions with respect to the customers and employees of the Company during the term of the Soreq Agreement and for one year thereafter. In addition to benefits available to the Company’s senior executive officers generally, the Soreq Agreement also provides reimbursement for the reasonable costs of professional preparation of his personal income tax returns, not to exceed $25,000 in any calendar year, and a Company provided car.
In February 2023, the Human Capital and Compensation Committee and the Board voted to approve an increase in Mr. Soreq’s base salary from $800,000 annually to $900,000 annually, effective as of March 1, 2023. Additionally, the Human Capital and Compensation Committee and the Board voted to approve an increase in Mr. Soreq’s long-term incentive compensation from $3,000,000 annually to $3,500,000 annually, effective as of March 1, 2023. The Human Capital and Compensation Committee also approved the grant of time-vesting RSUs to Mr. Soreq under the Company’s 2016 Long-Term Incentive Plan on March 10, 2023 with an aggregate grant date fair value of $875,000, which will vest quarterly over three years upon Mr. Soreq’s continued service to the Company. Finally, the Human Capital and Compensation Committee approved a grant of performance-based PSUs on March 10, 2023 in target quantities equal to $1.75 million.
Mr. Soreq also entered into a separate Change in Control Agreement with us as described below under the heading “Potential Payments Upon Termination or Change-In-Control” in this Proxy Statement. The Change in Control Agreement has a term that begins six months prior to a change in control and continues for 24 months following the change in control.
Mr. Soreq may receive certain benefits upon the expiration or termination of his employment. Please see the narrative discussion under the heading “Potential Payments Upon Termination or Change-In-Control” in this Proxy Statement for further discussion of these terms.
Spiegel Employment Agreement
On August 1, 2020, we entered into an employment agreement with Mr. Spiegel that expires on December 31, 2023 (the “Spiegel Agreement”). The Spiegel Agreement amends and replaces the offer letter the Company entered into with Mr. Spiegel in April 2020 in connection with his appointment as Chief Financial Officer. The Spiegel Agreement provides for the following: an annual base salary of $500,000; a $500,000 cash bonus opportunity payable in April 2021; beginning in 2021, an annual bonus opportunity with a target amount of 75% of base salary and a maximum payout opportunity of 200% of the target amount; and, beginning in 2021, annual grants under the Company’s 2016 Long-Term Incentive Plan in an amount of $800,000 per year split evenly between time-vesting RSUs and performance-based PSUs.
The Spiegel Agreement includes a noncompetition clause which provides that Mr. Spiegel will not compete with the Company, directly or indirectly, in the geographic territory defined in the Spiegel Agreement during the term of the Spiegel Agreement and for one year thereafter. The Spiegel Agreement also includes non-solicitation provisions with respect to the customers and employees of the Company during the term of the Spiegel Agreement and for one year thereafter.
In February 2023, the Human Capital and Compensation Committee and the Board voted to amend the Spiegel Agreement to extend the term through December 31, 2024. The Human Capital and Compensation Committee and the Board also approved an increase in Mr. Spiegel’s base salary from $500,000 annually to $600,000 annually, effective as of March 1, 2023. Additionally, the Human Capital and Compensation Committee and the Board voted to approve an increase in Mr. Spiegel’s annual bonus opportunity from a target amount of 75% of base salary to 90% of base salary. The Human Capital and Compensation Committee and the Board also voted to approve grants under the Company’s 2016 Long-Term Incentive Plan in an amount of $1,100,000 split evenly between time-vesting RSUs, which will vest annually over two years, and performance-based PSUs, which are subject to a performance period of January 1, 2023 to December 31, 2024.
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In February 2023, the Human Capital and Compensation Committee and the Board also voted to approve a consulting agreement (the “Spiegel Consulting Agreement”) with Mr. Spiegel which will become effective upon the earlier of (i) three months’ notice or (ii) December 31, 2024, unless Mr. Spiegel is terminated for cause. The term of the Spiegel Consulting Agreement is for twelve months and provides for an annual base salary of $400,000.
Mr. Spiegel may receive certain benefits upon the expiration or termination of his employment. Please see the narrative discussion under the heading “Potential Payments Upon Termination or Change-In-Control” in this Proxy Statement for further discussion of these terms.
McWatters Employment Agreement
On February 3, 2021, we entered into an employment agreement with Ms. McWatters that expires on February 28, 2025 (the “McWatters Agreement”). The McWatters Agreement provides Ms. McWatters with an annual base salary of at least $400,000 and sets her annual bonus target at 75% of base salary with a maximum payout opportunity of 200% of the target amount. The McWatters Agreement also provides that Ms. McWatters is eligible for annual grants under the Company’s 2016 Long-Term Incentive Plan in a target amount of at least $700,000 per year split evenly between time-vested RSUs and performance-based PSUs.
The McWatters Agreement includes non-solicitation provisions with respect to the customers and employees of
the Company during the term of the McWatters Agreement and for one year thereafter.
Ms. McWatters may receive certain benefits upon the expiration or termination of her employment. Please see the narrative discussion under the heading “Potential Payments Upon Termination or Change-In-Control” in this Proxy Statement for further discussion of these terms.
Israel Employment Agreement
Effective as of March 27, 2023, we entered into an employment agreement with Mr. Israel that expires on March 27, 2027 (the “Israel Agreement”). The Israel Agreement provides Mr. Israel with an annual base salary of at least $600,000 and sets his annual bonus target at 80% of base salary with a maximum payout opportunity of 200% of the target amount. The Israel Agreement also provides that Mr. Israel is eligible for annual grants under the Company’s 2016 Long-Term Incentive Plan in a target amount of at least $1,000,000 per year split evenly between time-vested RSUs and performance-based PSUs.
The Israel Agreement includes non-solicitation provisions with respect to the customers and employees of the Company during the term of the Israel Agreement and for one year thereafter.
Mr. Israel may receive certain benefits upon the expiration or termination of his employment. Please see the narrative discussion under the heading “Potential Payments Upon Termination or Change-In-Control” in this Proxy Statement for further discussion of these terms.
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Outstanding Equity Awards at December 31, 2023
The following table provides information about the number of outstanding equity awards held by our NEOs at December 31, 2023.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options Exercisable |
Number of Securities Underlying Unexercised Options Unexercisable |
Option Exercise Price |
Option Expiration Date |
Number of Shares or Units That Have Not Vested |
Market Value of Shares or Units That Have Not Vested (1) |
Equity Incentive Plan Awards | |||||||||||||||||||||||||
| Number of Unearned Shares or Units |
Market or Payout Value of Unearned Shares or Units (1) |
|||||||||||||||||||||||||||||||
| Avigal Soreq |
— | — | — | — | |
14,976 28,153 4,668 12,672 |
(2) (2) (3) (3) |
$ $ $ $ |
386,381 726,347 201,518 547,050 |
|
|
11,230 22,463 15,015 15,015 15,015 30,030 |
(2) (2) (3) (3) (3) (3) |
$ $ $ $ $ $ |
289,734 579,545 387,387 387,387 387,387 774,774 |
| ||||||||||||||||
| Ezra Uzi Yemin |
— | — | — | — | |
7,040 46,975 16,088 2,420 12,430 7,241 |
(4) (5) (6) (4) (5) (6) |
$ $ $ $ $ $ |
181,632 1,211,955 415,070 104,471 536,603 312,594 |
|
|
126,709 169,104 |
(4) (5) |
$ $ |
3,269,092 4,362,883 |
| ||||||||||||||||
| Reuven Spiegel |
— | — | — | — | |
6,742 3,035 |
(9) (9) |
$ $ |
173,944 131,021 |
|
|
16,090 18,282 7,078 7,079 9,438 |
(7) (8) (9) (9) (9) |
$ $ $ $ $ |
415,122 471,676 182,612 182,638 243,500 |
| ||||||||||||||||
| Denise McWatters |
— | — | — | — | |
783 4,445 5,631 269 1,176 2,535 |
(10) (11) (12) (10) (11) (12) |
$ $ $ $ $ $ |
20,201 114,681 145,280 11,613 50,768 109,436 |
|
|
7,039 15,996 3,003 3,003 3,003 6,006 |
(10) (11) (12) (12) (12) (12) |
$ $ $ $ $ $ |
181,606 412,697 77,477 77,477 77,477 154,955 |
| ||||||||||||||||
| Joseph Israel |
— | — | — | — | |
8,960 4,260 |
(13) (13) |
$ $ |
231,168 183,904 |
|
|
4,301 4,301 4,301 8,602 |
(13) (13) (13) (13) |
$ $ $ $ |
110,966 110,966 110,966 221,932 |
| ||||||||||||||||
| Former Executive Officer |
| |||||||||||||||||||||||||||||||
| Todd O’Malley |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (1) | Amounts in these columns with respect to Delek RSUs and PSUs are based upon a market value of $25.80 per share, which was the closing price of our Common Stock on the NYSE on December 29, 2023, the last trading day of fiscal year 2023. Amounts with respect to Delek Logistics RSUs are based upon a market value of $43.17 per Delek Logistics common unit, which was the closing price of Delek Logistics common units on the NYSE on December 29, 2023, the last trading day of fiscal year 2023. The value of PSUs assumes settlement at the target quantities. |
| (2) | On June 10, 2022, Mr. Soreq was granted 44,923 PSUs, 29,949 Delek RSUs and 9,331 Delek Logistics RSUs. 11,230 of the PSUs were subject to a performance period that began January 1, 2022 and ended December 31, 2022, all of these PSUs were paid out.11,230 of the PSUs are subject to a performance period that began January 1, 2022 and ends December 31, 2023. 22,463 of the PSUs are subject to a performance period that began January 1, 2022 and ends December 31, 2024. The RSUs vest quarterly over three years, pro rata. 14,973 of the Delek RSUs and 4,663 of the Delek Logistics RSUs had vested at December 31, 2023. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 54 | |
Table of Contents
| (3) | On March 10, 2023, Mr. Soreq was granted 75,075 PSUs, 37,537 Delek RSUs and 16,895 Delek Logistics RSUs. 15,015 of the PSUs are subject to a performance period that began January 1, 2023 and ends December 31, 2023. 15,015 of the PSUs are subject to a performance period that began January 1, 2024 and ends December 31, 2024. 15,015 of the PSUs are subject to a performance period that began January 1, 2025 and ends December 31, 2025. 30,030 of the PSUs are subject to a performance period that began January 1, 2023 and ends December 31, 2025. The RSUs vest quarterly over three years, pro rata. 9,384 of the Delek RSUs and 4,223 of the Delek Logistics RSUs had vested at December 31, 2023. |
| (4) | On March 10, 2021, Mr. Yemin was granted 126,709 PSUs, 84,473 Delek RSUs and 29,029 Delek Logistics RSUs. The PSUs are subject to a performance period that began January 1, 2021 and ends December 31, 2023. The RSUs vest quarterly over three years, pro rata. 77,433 of the Delek RSUs and 26,609 of the Delek Logistics RSUs had vested at December 31, 2023. |
| (5) | On March 10, 2022, Mr. Yemin was granted 169,104 PSUs, 112,736 Delek RSUs (cash award) and 29,827 Delek Logistics RSUs (cash award). The PSUs are subject to a performance period that began January 1, 2022 and ends December 31, 2024. The RSUs vest quarterly over three years, pro rata. 65,761 of the Delek RSUs (cash award) and 7,240 of the Delek Logistics RSUs (cash award) had vested at December 31, 2023. |
| (6) | On March 10, 2023, Mr. Yemin was granted 32,175 Delek RSUs and 14,481 Delek Logistics RSUs. 16,087 of the Delek RSUs and 7,240 Delek Logistics RSUs had vested at December 31, 2023. |
| (7) | On March 10, 2021, Mr. Spiegel was granted 16,090 PSUs, 10,726 Delek RSUs and 3,686 Delek Logistics RSUs. The PSUs are subject to a performance period that began January 1, 2021 and ends December 31, 2023. The RSUs vest quarterly over three years, pro rata. 10,726 of the Delek RSUs and 3,686 of the Delek Logistics RSUs had vested at December 31, 2023. |
| (8) | On March 10, 2022, Mr. Spiegel was granted 18,282 PSUs, 12,188 Delek RSUs and 3,225 Delek Logistics RSUs. The PSUs are subject to a performance period that began January 1, 2022 and ends December 31, 2023. The RSUs vest quarterly over three years, pro rata. 12,188 of the Delek RSUs and 3,225 of the Delek Logistics RSUs had vested at December 31, 2023. |
| (9) | On March 10, 2023, Mr. Spiegel was granted 23,595 PSUs, 11,797 Delek RSUs and 5,309 Delek Logistics RSUs. 7,078 PSUs are subject to a performance period that began January 1, 2023 and ends December 31, 2023. 7,079 PSUs are subject to a performance period that began January 1, 2024 and ends December 31, 2024. 9,438 PSUs are subject to a performance period that began January 1, 2023 and ends December 31, 2024. 5,055 Delek RSUs and 2,274 Delek Logistics RSUs had vested at December 31, 2023. |
| (10) | On March 10, 2021, Ms. McWatters was granted 14,077 PSUs, 9,385 Delek RSUs and 3,225 Delek Logistics RSUs. 3,519 of the PSUs were subject to a performance period that began January 1, 2021 and ended December 31, 2021; none of these PSUs were paid out on. 3,519 of the PSUs were subject to a performance period that began January 1, 2021 and ended December 31, 2022, of these PSUs 1,759 were paid out. 7,039 of the PSUs are subject to a performance period that began January 1, 2021 and ends December 31, 2023. The RSUs vest quarterly over three years, pro rata. 8,602 of the Delek RSUs and 2,956 of the Delek Logistics RSUs had vested at December 31, 2023. |
| (11) | On March 10, 2022, Ms. McWatters was granted 15,996 PSUs, 10,664 Delek RSUs and 2,821 Delek Logistics RSUs. The PSUs are subject to a performance period that began January 1, 2022 and ends December 31, 2024. The RSUs vest quarterly over three years, pro rata. 6,219 of the Delek RSUs and 1,645 of the Delek Logistics RSUs had vested at December 31, 2023. |
| (12) | On March 10, 2023, Ms. McWatters was granted 15,015 PSUs, 7,507 Delek RSUs and 3,379 Delek Logistics RSUs. 3,003 of the PSUs are subject to a performance period that began January 1, 2023 and ends December 31, 2023. 3,003 of the PSUs are subject to a performance period that began January 1, 2024 and ends December 31, 2024. 3,003 of the PSUs are subject to a performance period that began January 1, 2025 and ends December 31, 2025. 6,006 of the PSUs are subject to a performance period that began January 1, 2023 and ends December 31, 2025. The RSUs vest quarterly over three years, pro rata. 1,876 of the Delek RSUs and 844 of the Delek Logistics RSUs had vested at December 31, 2023. |
| (13) | On June 9, 2023, Mr. Israel was granted 21,505 PSUs, 10,752 Delek RSUs and 5,112 Delek Logistics RSUs. 4,301 of the PSUs are subject to a performance period that began January 1, 2023 and ends December 31, 2023. 4,301 of |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 55 | |
Table of Contents
| the PSUs are subject to a performance period that began January 1, 2024 and ends December 31, 2024. 4,301 of the PSUs are subject to a performance period that began January 1, 2025 and ends December 31, 2025. 8,602 of the PSUs are subject to a performance period that began January 1, 2023 and ends December 31, 2025. The RSUs vest quarterly over three years, pro rata. 1,792 of the Delek RSUs and 852 of the Delek Logistics RSUs had vested at December 31, 2023. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 56 | |
Table of Contents
Option Exercises and Stock Vested in 2023
The following table provides information about NQSO and SAR exercises by, and the vesting of RSUs and PSUs for, our NEOs during fiscal year 2023.
| Name | Option Awards | Stock Awards | ||||||||||||||
| Number of Shares Acquired on Exercise |
Value Realized on Exercise |
Number of Shares Acquired on Vesting |
Value Realized on Vesting |
|||||||||||||
| Avigal Soreq |
n/a | n/a | 37,927 | (1) | $ | 1,132,681 | (1) | |||||||||
| Ezra Uzi Yemin |
n/a | n/a | 129,384 | (2) | $ | 3,879,538 | (2) | |||||||||
| Reuven Spiegel |
n/a | n/a | 22,145 | (3) | $ | 691,391 | (3) | |||||||||
| Denise McWatters |
n/a | n/a | 13,178 | (4) | $ | 405,237 | (4) | |||||||||
| Joseph Israel |
n/a | n/a | 2,644 | (5) | $ | 88,590 | (5) | |||||||||
| Former Executive Officer |
||||||||||||||||
| Todd O’Malley |
n/a | n/a | 16,725 | (6) | $ | 516,192 | (6) | |||||||||
| (1) | Quantities and values for these columns are comprised of the following: |
| NAME |
VESTING DATE |
SHARES/UNITS VESTED |
SYMBOL | AWARD TYPE | FAIR MARKET VALUE PER SHARE OR UNIT* |
FAIR MARKET VALUE |
||||||||||||
| SOREQ |
3/10/2023 | 777 | DKL | RSU | $ | 51.79 | $ | 40,241 | ||||||||||
| 3/10/2023 | 2,495 | DK | RSU | $ | 23.31 | $ | 58,158 | |||||||||||
| 3/10/2023 | 11,230 | DK | PSU | $ | 23.31 | $ | 261,771 | |||||||||||
| 6/9/2023 | 2,495 | DK | RSU | $ | 24.03 | $ | 59,955 | |||||||||||
| 6/9/2023 | 777 | DKL | RSU | $ | 53.26 | $ | 41,383 | |||||||||||
| 9/8/2023 | 8,752 | DK | RSU | $ | 30.71 | $ | 268,774 | |||||||||||
| 9/8/2023 | 3,592 | DKL | RSU | $ | 41.35 | $ | 148,529 | |||||||||||
| 12/8/2023 | 5,624 | DK | RSU | $ | 25.94 | $ | 145,887 | |||||||||||
| 12/8/2023 | 2,185 | DKL | RSU | $ | 49.42 | $ | 107,983 | |||||||||||
| * | The amounts in this column reflect the NYSE closing price of our Common Stock or DKL’s common limited partner units on the vesting date or the last trading day prior to the vesting date. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 57 | |
Table of Contents
| (2) | Quantities and values for these columns are comprised of the following: |
| NAME |
VESTING DATE |
SHARES/UNITS VESTED |
SYMBOL | AWARD TYPE | FAIR MARKET VALUE PER SHARE OR UNIT* |
FAIR MARKET VALUE |
||||||||||||
| YEMIN |
3/10/2023 | 27,742 | DK | RSU | $ | 23.31 | $ | 646,666 | ||||||||||
| 3/10/2023 | 4,904 | DKL | RSU | $ | 51.79 | $ | 253,978 | |||||||||||
| 3/10/2023 | 9,394 | DK | RSU – Cash Award |
$ | 23.31 | $ | 218,974 | |||||||||||
| 6/9/2023 | 7,040 | DK | RSU | $ | 24.03 | $ | 169,171 | |||||||||||
| 6/9/2023 | 4,904 | DKL | RSU | $ | 53.26 | $ | 261,187 | |||||||||||
| 6/9/2023 | 9,394 | DK | RSU – Cash Award |
$ | 24.03 | $ | 225,738 | |||||||||||
| 9/8/2023 | 7,040 | DK | RSU | $ | 30.71 | $ | 216,198 | |||||||||||
| 9/8/2023 | 4,904 | DKL | RSU | $ | 41.35 | $ | 202,780 | |||||||||||
| 9/8/2023 | 9,395 | DK | RSU – Cash Award |
$ | 30.71 | $ | 288,520 | |||||||||||
| 12/8/2023 | 7,040 | DK | RSU | $ | 25.94 | $ | 182,618 | |||||||||||
| 12/8/2023 | 4,905 | DKL | RSU | $ | 49.42 | $ | 242,405 | |||||||||||
| 12/8/2023 | 9,395 | DK | RSU – Cash Award |
$ | 25.94 | $ | 243,706 | |||||||||||
| 12/29/2023 | 16,087 | DK | RSU | $ | 25.80 | $ | 415,045 | |||||||||||
| 12/29/2023 | 7,240 | DKL | RSU | $ | 43.17 | $ | 312,551 | |||||||||||
| * | The amounts in this column reflect the NYSE closing price of our Common Stock or DKL’s common limited partner units on the vesting date or the last trading day prior to the vesting date. |
| (3) | Quantities and values for these columns are comprised of the following: |
| NAME | VESTING DATE |
SHARES/UNITS VESTED |
SYMBOL | AWARD TYPE | FAIR MARKET VALUE PER SHARE OR UNIT* |
FAIR MARKET VALUE | ||||||
| SPIEGEL |
3/10/2023 | 2,858 | DK | RSU | $23.31 | $66,620 | ||||||
| 3/10/2023 | 845 | DKL | RSU | $51.79 | $43,763 | |||||||
| 6/9/2023 | 2,858 | DK | RSU | $24.03 | $68,678 | |||||||
| 6/9/2023 | 845 | DKL | RSU | $53.26 | $45,005 | |||||||
| 9/8/2023 | 2,859 | DK | RSU | $30.71 | $87,800 | |||||||
| 9/8/2023 | 845 | DKL | RSU | $41.35 | $34,941 | |||||||
| 12/8/2023 | 2,860 | DK | RSU | $25.94 | $74,188 | |||||||
| 12/8/2023 | 846 | DKL | RSU | $49.42 | $41,809 | |||||||
| 12/29/2023 | 5,055 | DK | RSU | $25.80 | $130,419 | |||||||
| 12/29/2023 | 2,274 | DKL | RSU | $43.17 | $98,169 | |||||||
| * | The amounts in this column reflect the NYSE closing price of our Common Stock or DKL’s common limited partner units on the vesting date or the last trading day prior to the vesting date. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 58 | |
Table of Contents
| (4) | Quantities and values for these columns are comprised of the following: |
| NAME | VESTING DATE |
SHARES/UNITS VESTED |
SYMBOL | AWARD TYPE | FAIR MARKET VALUE PER SHARE OR UNIT* |
FAIR MARKET VALUE | ||||||
| MCWATTERS |
3/10/2023 | 1,760 | DK | PSU | $23.31 | $41,026 | ||||||
| 3/10/2023 | 1,670 | DK | RSU | $23.31 | $38,928 | |||||||
| 3/10/2023 | 504 | DKL | RSU | $51.79 | $26,102 | |||||||
| 6/9/2023 | 1,670 | DK | RSU | $24.03 | $40,130 | |||||||
| 6/9/2023 | 504 | DKL | RSU | $53.26 | $26,843 | |||||||
| 9/8/2023 | 2,922 | DK | RSU | $30.71 | $89,735 | |||||||
| 9/8/2023 | 1,067 | DKL | RSU | $41.35 | $44,120 | |||||||
| 12/8/2023 | 2,296 | DK | RSU | $25.94 | $59,558 | |||||||
| 12/8/2023 | 785 | DKL | RSU | $49.42 | $38,795 | |||||||
| * | The amounts in this column reflect the NYSE closing price of our Common Stock or DKL’s common limited partner units on the vesting date or the last trading day prior to the vesting date. |
| (5) | Quantities and values for these columns are comprised of the following: |
| NAME | VESTING DATE |
SHARES/UNITS VESTED |
SYMBOL | AWARD TYPE | FAIR MARKET VALUE PER SHARE OR UNIT* |
FAIR MARKET VALUE | ||||||
| ISRAEL |
12/8/2023 | 1,792 | DK | RSU | $25.94 | $46,484 | ||||||
| 12/8/2023 | 852 | DKL | RSU | $49.42 | $42,106 | |||||||
| * | The amounts in this column reflect the NYSE closing price of our Common Stock or DKL’s common limited partner units on the vesting date or the last trading day prior to the vesting date. |
| (6) | Quantities and values for these columns are comprised of the following: |
| NAME |
VESTING DATE | SHARES/UNITS VESTED |
SYMBOL | AWARD TYPE | FAIR MARKET VALUE PER SHARE OR UNIT* |
FAIR MARKET VALUE |
||||||||||||
| O’MALLEY |
3/10/2023 | 2,011 | DK | PSU | $ | 23.31 | $ | 46,876 | ||||||||||
| 3/10/2023 | 2,798 | DK | RSU | $ | 23.31 | $ | 65,221 | |||||||||||
| 3/10/2023 | 811 | DKL | RSU | $ | 51.79 | $ | 42,002 | |||||||||||
| 6/9/2023 | 2,798 | DK | RSU | $ | 24.03 | $ | 67,236 | |||||||||||
| 6/9/2023 | 811 | DKL | RSU | $ | 53.26 | $ | 43,194 | |||||||||||
| 9/8/2023 | 5,479 | DK | RSU | $ | 30.71 | $ | 168,260 | |||||||||||
| 9/8/2023 | 2,017 | DKL | RSU | $ | 41.35 | $ | 83,403 | |||||||||||
| * | The amounts in this column reflect the NYSE closing price of our Common Stock or DKL’s common limited partner units on the vesting date or the last trading day prior to the vesting date. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 59 | |
Table of Contents
Non-Qualified Deferred Compensation
We sponsor a voluntary 401(k) Plan that allows eligible employees to make plan contributions on both a pre-tax and after-tax basis. Prior to January 1, 2021, we matched eligible employee contributions, including those by our NEOs, on a fully-vested basis up to a maximum of six percent of eligible compensation. Although NEOs are eligible to participate in the 401(k) Plan, the application of annual compensation limits under the Internal Revenue Code significantly limits our NEOs’ contributions under the 401(k) Plan. In 2019, we adopted a non-qualified Deferred Compensation Plan that allows our participating executives, including our NEOs, to defer up to 50% of their base salary, and up to 100% of amounts payable under our annual incentive plan. Prior to January 1, 2021, participants also received matching contributions as if they had been made under the 401(k) Plan up to a maximum of six percent of eligible compensation.
The following table sets forth information regarding the contributions by each NEO and the Company to the Deferred Compensation Plan, as well as information regarding earnings, aggregate withdrawals and distributions and balances for each NEO as of and for the fiscal year ended December 31, 2023.
| Name | Executive Contributions in Last FY (1) |
Registrant Contributions in Last FY (2) |
Aggregate Earnings in Last FY (3) |
Aggregate Withdrawals/ Distributions |
Aggregate Balance at Last FYE |
|||||||||||||||
| Soreq |
— | — | — | — | — | |||||||||||||||
| Yemin |
— | — | — | — | — | |||||||||||||||
| Spiegel |
— | — | — | — | — | |||||||||||||||
| McWatters |
— | — | — | — | — | |||||||||||||||
| Israel |
— | — | — | — | — | |||||||||||||||
| Former Executive Officer |
||||||||||||||||||||
| O’Malley |
— | — | — | — | — | |||||||||||||||
| (1) | These amounts represent elective contributions into the Deferred Compensation Plan during 2023 of eligible compensation earned by each of our NEOs. The amount of any base salary deferred is included in the amount reported in the 2023 salary column of the Summary Compensation Table above, and the amount of any annual incentive deferred is included in the amount reported in the 2023 non-equity incentive plan compensation column of the Summary Compensation Table above. Deferrals related to amounts otherwise payable in 2024 (even if considered earned in 2023) will be shown as executive contributions for 2024. |
| (2) | These amounts represent Company matching contributions to the Deferred Compensation Plan during 2023. The amount in this column for each NEO is included in the 2023 “All Other Compensation” column of the Summary Compensation Table above. The amounts in this column account for the company match of 100% up to 6%. This calculation considers the NEOs eligible earnings for the year and what was already paid on the 401(k) match. |
| (3) | These amounts represent the net gains for each NEO for the contributions to the Deferred Compensation Plan. None of these amounts are included in compensation reported in the Summary Compensation Table above because none of the earnings are considered to be “above market.” |
The Deferred Compensation Plan account of each participating NEO is deemed to be invested in certain investment options available under the plan, as designated by the NEO. Deemed investment earnings and losses are applied to each NEO’s Deferred Compensation Plan account based upon the performance of the applicable investment. The Deferred Compensation Plan allows participants to elect the timing and method of distributions.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 60 | |
Table of Contents
Potential Payments Upon Termination or Change-In-Control
The following tables disclose the estimated payments and benefits that would be provided to each of our NEOs, applying the assumptions that each of the triggering events relating to termination of employment and changes in control described in their respective employment agreements, the 2006 Plan, the 2016 Plan, and the Delek Logistics LTIP took place on December 29, 2023 and their last day of employment was December 29, 2023. These amounts are in addition to benefits payable generally to our salaried employees. Due to a number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may differ. Factors that could affect these amounts include the timing during the year of any such event and the fair market values of our Common Stock and Delek Logistics’ common units.
| Termination of Employment (1) | Soreq (2) | Yemin (3) | Spiegel (4) | McWatters (5) | Israel (6) | O’Malley (7) | ||||||||||||||||||
| Severance Payment |
$ | 5,580,000 | $ | 1,900,000 | $ | 1,680,000 | $ | 1,000,000 | $ | 1,080,000 | $ | 626,719 | ||||||||||||
| COBRA |
$ | 52,212 | $ | 52,212 | $ | 34,808 | $ | 34,808 | $ | 34,808 | $ | — | ||||||||||||
| Accrued/Unused Vacation |
$ | 117,692 | $ | 134,615 | $ | 94,615 | $ | 55,385 | $ | 53,077 | $ | 207,308 | ||||||||||||
| Accelerated RSUs |
$ | 478,938 | $ | 985,527 | $ | 152,461 | $ | 154,488 | $ | 82,945 | $ | — | ||||||||||||
| Accelerated PSUs |
$ | 1,321,743 | $ | 6,177,681 | $ | 1,033,935 | $ | 585,866 | $ | 184,943 | $ | — | ||||||||||||
| Accelerated SARs |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
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| TOTAL |
$ | 7,550,584 | $ | 9,250,035 | $ | 2,995,819 | $ | 1,830,547 | $ | 1,435,773 | $ | 834,026 | ||||||||||||
| Change-In-Control (8) | Soreq (9) | Yemin (10) (11) | Spiegel (12) | McWatters (13) | Israel (14) | O’Malley (7) | ||||||||||||||||||
| Severance/Change-In-Control Payment |
$ | 7,740,000 | $ | 3,700,000 | $ | 2,820,000 | $ | 1,700,000 | $ | 2,160,000 | $ | — | ||||||||||||
| COBRA |
$ | 52,212 | $ | 52,212 | $ | 34,808 | $ | 34,808 | $ | 34,808 | $ | — | ||||||||||||
| Accrued/Unused Vacation |
$ | 117,692 | $ | 134,615 | $ | 94,615 | $ | 55,385 | $ | 53,077 | $ | — | ||||||||||||
| Accelerated RSUs |
$ | 1,861,296 | $ | 2,762,326 | $ | 304,965 | $ | 451,979 | $ | 415,072 | $ | — | ||||||||||||
| Accelerated PSUs |
$ | 2,806,214 | $ | 7,631,975 | $ | 1,495,549 | $ | 981,690 | $ | 554,829 | $ | — | ||||||||||||
| Accelerated Options/SARs |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
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| TOTAL |
$ | 12,577,415 | $ | 14,281,129 | $ | 4,749,936 | $ | 3,223,861 | $ | 3,217,786 | $ | — | ||||||||||||
| (1) | The “Termination of Employment” table assumes that (a) we terminated the NEO’s employment without cause effective December 29, 2023, the last trading day of fiscal year 2023, using the closing price our Common Stock on the NYSE of $25.80 per share and the closing price of Delek Logistics common units on the NYSE of $43.17 per unit, (b) any required advance notice provisions had been satisfied, (c) the vesting of equity awards under the 2006 Plan and 2016 Plan were accelerated by our Board pursuant to any applicable employment agreement provisions (including the prorated acceleration of PSUs at target quantities), and (d) the vesting of equity awards under the Delek Logistics LTIP were not accelerated because the Delek Logistics GP board is not bound by the employment agreements with our NEOs. |
| (2) | Assumes acceleration of 11,248 unvested DK RSUs, 4,372 unvested DKL RSUs, and 51,230 unvested PSUs. |
| (3) | Assumes acceleration of 25,830 unvested DK RSUs, 7,392 unvested DKL RSUs, and 239,445 unvested PSUs. |
| (4) | Assumes acceleration of 3,371 unvested DK RSUs, 1,517 unvested DKL RSUs, and 40,075 unvested PSUs. |
| (5) | Assumes acceleration of 3,811 unvested DK RSUs, 1,301 unvested DKL RSUs, and 22,708 unvested PSUs. |
| (6) | Assumes acceleration of 1,791 unvested DK RSUs, 851 unvested DKL RSUs, and 7,168 unvested PSUs. |
| (7) | Mr. O’Malley resigned from the Company effective as of September 22, 2023. The amounts shown in the table reflect the amounts that were actually paid in connection with his resignation. No amounts are shown in the Change-in-Control table because employment actually terminated in 2023. |
| (8) | The “Change-In-Control” table assumes that an “exchange transaction” (as described under the heading “2006 Long-Term Incentive Plan” below) and “change in control” (as described under the heading “2016 Long-Term Incentive Plan” below) occurred on December 29, 2023, the last trading day of fiscal year 2023, when the fair market values of our |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 61 | |
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| Common Stock and Delek Logistics’ common units were $25.80 per share and $43.17 per unit, respectively, and, as a result, the NEO’s employment is terminated and our Board and the Delek Logistics GP board of directors decided that all outstanding plan-based and other equity awards should become fully vested (including PSUs at target values) and participate in the transaction value of the shares covered by the award (e.g., by exercise or cash out). |
| (9) | Assumes acceleration of 43,129 unvested DK RSUs, 17,340 unvested DKL RSUs, and 108,768 unvested PSUs. |
| (10) | Assumes acceleration of 70,103 unvested DK RSUs, 22,091 unvested DKL RSUs, and 295,813 unvested PSUs. |
| (11) | Mr. Yemin’s change in control payout on his equity awards are single trigger, such that he will receive his equity awards whether or not he is terminated. |
| (12) | Assumes acceleration of 6,742 unvested DK RSUs, 3,035 unvested DKL RSUs, and 57,967 unvested PSUs. |
| (13) | Assumes acceleration of 10,859 unvested DK RSUs, 3,980 unvested DKL RSUs, and 38,050 unvested PSUs. |
| (14) | Assumes acceleration of 8,960 unvested DK RSUs, 4,260 unvested DKL RSUs, and 21,505 unvested PSUs. |
Narrative to the Potential Payments Upon Termination or Change-In-Control Tables
Yemin Employment Agreement
Under the Executive Chairman Agreement, in the event Mr. Yemin is terminated without cause (as defined in the Executive Chairman Agreement) or terminates his employment with good reason (as defined in the Executive Chairman Agreement), Mr. Yemin would be entitled to (i) an amount equal to the sum of his then-current base salary and target annual bonus as in effect immediately before any notice of termination, (ii) the costs of continuing family health insurance coverage for 12 months following termination of employment, (iii) any annual bonus Mr. Yemin would have otherwise been entitled to if his employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to senior executives of the Company pursuant to the Company’s annual bonus programs, and (iv) the immediate vesting of all unvested equity awards as follows: (A) for unvested performance awards, on a prorated basis through the termination of employment based on actual results evaluated after the close of the applicable performance period and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) for full value equity awards (e.g., restricted stock, restricted stock units and phantom units) and appreciation equity awards (e.g., non-qualified stock options and stock appreciation rights), only to the extent that such awards would have vested if Mr. Yemin’s employment had continued during a period equal to the lesser of six months following termination of employment or the balance of the term of the Executive Chairman Agreement.
If Mr. Yemin terminates his employment for any reason, other than with good reason or upon his death or disability,
and provides at least three months’ advance written notice of termination, Mr. Yemin would be entitled to an amount equal to 50% of his annual base salary at the time notice is delivered, plus the costs of continuing family health insurance coverage for 12 months following the termination of his employment.
If, within two years of a change in control of the Company (as defined in the Executive Chairman Agreement), Mr. Yemin’s employment is terminated by the Company without cause or he terminates his employment for good reason, Mr. Yemin would be entitled to receive (i) an amount equal to two times the sum of his then-current base salary and target annual bonus as in effect immediately before any notice of termination, (ii) the costs of continuing family health insurance coverage for 12 months following termination of employment, (iii) any annual bonus Mr. Yemin would have otherwise been entitled if his employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to senior executives of the Company pursuant to the Company’s annual bonus programs, and (iv) the immediate vesting of all unvested equity awards. In addition to the foregoing, Mr. Yemin would receive an additional $500,000 cash bonus had the change in control occurred before March 10, 2021.
All payments to be made by the Company upon termination as described above are subject to Mr. Yemin executing a release of claims in favor of the Company. In addition to benefits available to the Company’s senior executive officers generally, the Executive Chairman Agreement also provides reimbursement for the reasonable costs of professional preparation of his personal income tax returns, not to exceed $25,000 in any calendar year.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 62 | |
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All payments to be made by the Company upon termination as described above are subject to Mr. Yemin executing a release of claims in favor of the Company.
Please see the narrative discussion following the Summary Compensation Table and Grants of Plan Based Awards in 2023 table in this Proxy Statement for further discussion of the material terms of the Yemin Employment Agreement and the Executive Chairman Agreement.
Soreq Employment Agreement
The Soreq Agreement contains certain provisions relating to the termination of his employment. In the event Mr. Soreq is terminated without cause (as defined in the Soreq Agreement) or terminates his employment with good reason (as defined in the Soreq Agreement), Mr. Soreq would be entitled to (I an amount equal to three times the sum of his then-current base salary and target annual bonus as in effect immediately before any notice of termination, (ii) the costs of continuing family health insurance coverage for 18 months following termination of employment, (iii) any annual bonus Mr. Soreq would have otherwise been entitled to if his employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and (iv) the immediate vesting of all unvested equity awards as follows: (A) for unvested performance awards, on a prorated basis through the termination of employment based on actual results evaluated after the close of the applicable performance period and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) for full value equity awards (e.g., restricted stock, restricted stock units and phantom units) and appreciation equity awards (e.g., non-qualified stock options and stock appreciation rights), only to the extent that such awards would have vested if Mr. Soreq’s employment had continued during a period equal to the lesser of six months following termination of employment or the balance of the term of the Soreq Agreement. If Mr. Soreq terminates his employment for any reason, other than with good reason or upon his death or disability, and provides at least three months’ advance written notice of termination, Mr. Soreq would be entitled to an amount equal to 50% of his annual base salary at the time notice is delivered, plus the costs of continuing family health insurance coverage for twelve months following the termination of his employment.
Mr. Soreq also entered into a separate Change in Control Agreement with the Company (the “Soreq Change in Control Agreement”) to provide certain benefits in connection with a termination of his service by the Company without cause (as defined in the Soreq Change in Control Agreement) or by Mr. Soreq with good reason (as defined in the Soreq Change in Control Agreement) either six months prior to or 24 months following a change in control (as described in the Soreq Change in Control Agreement). In such an event, Mr. Soreq would be entitled to receive (i) three times then-current base salary, (ii) target annual bonus as in effect immediately before any notice of termination, (iii) the costs of continuing family health insurance coverage for 18 months following termination of employment, (iv) any annual bonus Mr. Soreq would have otherwise been entitled to if his employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to senior executives of the Company pursuant to the Company’s annual bonus programs, and (v) the immediate vesting of all unvested equity awards as follows: (A) for unvested performance awards, based on actual results evaluated after the close of the applicable performance period and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) for all other awards, vesting in full.
All payments to be made by the Company upon termination as described above are subject to Mr. Soreq executing a release of claims in favor of the Company. In addition to benefits available to the Company’s senior executive officers generally, the Soreq Agreement also provides reimbursement for the reasonable costs of professional tax and financial counseling, not to exceed $25,000 in any calendar year.
Spiegel Employment Agreement
Under the Spiegel Agreement, in the event Mr. Spiegel is terminated without cause (as defined in the Spiegel Agreement) or terminates his employment with good reason (as defined in the Spiegel Agreement), Mr. Spiegel would be entitled to (i) an amount equal to the sum of his then-current base salary and target annual bonus as in effect immediately before any notice of termination, (ii) the costs of continuing family health insurance coverage for 12 months following termination of employment, (iii) any annual bonus Mr. Spiegel would have otherwise been
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 63 | |
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entitled to if his employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to senior executives of the Company pursuant to the Company’s annual bonus programs, and (iv) the immediate vesting of all unvested equity awards as follows: (A) for unvested performance awards, on a prorated basis through the termination of employment based on actual results evaluated after the close of the applicable performance period and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) for full value equity awards (e.g., restricted stock, restricted stock units and phantom units) and appreciation equity awards (e.g., non-qualified stock options and stock appreciation rights), only to the extent that such awards would have vested if Mr. Spiegel’s employment had continued during a period equal to the lesser of six months following termination of employment or the balance of the term of the Spiegel Agreement.
If Mr. Spiegel terminates his employment for any reason, other than with good reason or upon his death or disability, and provides at least three months’ advance written notice of termination, Mr. Spiegel would be entitled to an amount equal to 50% of his annual base salary at the time notice is delivered, plus the costs of continuing family health insurance coverage for 12 months following the termination of his employment.
If, within two years of a change in control of the Company (as defined in the Spiegel Agreement), Mr. Spiegel’s employment is terminated by the Company without cause or he terminates his employment for good reason, Mr. Spiegel would be entitled to receive (i) an amount equal to two times the sum of his then-current base salary and target annual bonus as in effect immediately before any notice of termination, (ii) the costs of continuing family health insurance coverage for 12 months following termination of employment, (iii) any annual bonus Mr. Spiegel would have otherwise been entitled if his employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to senior executives of the Company pursuant to the Company’s annual bonus programs, and (iv) the immediate vesting of all unvested equity awards. In addition to the foregoing, Mr. Spiegel would receive an
additional $500,000 cash bonus had the change in control occurred before March 10, 2021.
All payments to be made by the Company upon termination as described above are subject to Mr. Spiegel executing a release of claims in favor of the Company. In addition to benefits available to the Company’s senior executive officers generally, the Spiegel Agreement also provides reimbursement for the reasonable costs of professional preparation of his personal income tax returns, not to exceed $25,000 in any calendar year.
McWatters Employment Agreement
Under the McWatters Agreement, in the event Ms. McWaters is terminated without cause (as defined in the McWatters Agreement) or terminates her employment with good reason (as defined in the McWatters Agreement), Ms. McWatters would be entitled to (i) an amount equal to the sum of her then-current base salary and target annual bonus as in effect immediately before any notice of termination, (ii) the costs of continuing family health insurance coverage for 12 months following termination of employment, (iii) any annual bonus Ms. McWatters would have otherwise been entitled to if her employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to senior executives of the Company pursuant to the Company’s annual bonus programs, and (iv) the immediate vesting of all unvested equity awards as follows: (A) for performance awards, on a prorated basis through the termination of employment based on actual results evaluated after the close of the applicable performance period and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) for full value equity awards (e.g., restricted stock, restricted stock units and phantom units) and appreciation equity awards (e.g., non-qualified stock options and stock appreciation rights), only to the extent that such awards would have vested if Ms. McWatters’ employment had continued during a period equal to the lesser of six months following termination of employment or the balance of the term of the McWatters Agreement.
If Ms. McWatters terminates her employment for any reason, other than with good reason or upon her death or disability, and provides at least three months’ advance written notice of termination, Ms. McWatters would be
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 64 | |
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entitled to an amount equal to 50% of her annual base salary at the time notice is delivered, plus the costs of continuing family health insurance coverage for 12 months following the termination of her employment.
If, within two years of a change in control of the Company (as defined in the McWatters Agreement), Ms. McWatters’ employment is terminated by the Company without cause or she terminates her employment for good reason, Ms. McWatters would be entitled to receive (i) an amount equal to two times the sum of her then-current base salary and target annual bonus as in effect immediately before any notice of termination, (ii) the costs of continuing family health insurance coverage for 12 months following termination of employment, (iii) any annual bonus Ms. McWatters would have otherwise been entitled if her employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to senior executives of the Company pursuant to the Company’s annual bonus programs, and (iv) the immediate vesting of all unvested equity awards.
All payments to be made by the Company upon termination as described above are subject to Ms. McWatters executing a release of claims in favor of the Company. In addition to benefits available to the Company’s senior executive officers generally, the McWatters Agreement also provides reimbursement for the reasonable costs of professional tax and financial counseling.
Israel Employment Agreement
Under the Israel Agreement, in the event Mr. Israel is terminated without cause (as defined in the Israel Agreement) or terminates his employment with good reason (as defined in the Israel Agreement), Mr. Israel would be entitled to (i) an amount equal to the sum of his then-current base salary and target annual bonus as in effect immediately before any notice of termination, (ii) the costs of continuing family health insurance coverage for 12 months following termination of employment, (iii) any annual bonus Mr. Israel would have otherwise been entitled to if his employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to senior executives of the Company pursuant to the Company’s annual bonus programs, and
(iv) the immediate vesting of all unvested equity awards as follows: (A) for performance awards, on a prorated basis through the termination of employment based on actual results evaluated after the close of the applicable performance period and payable in a lump sum at the same time as performance awards are paid to executives of the Company generally and (B) for full value equity awards (e.g., restricted stock, restricted stock units and phantom units) and appreciation equity awards (e.g., non-qualified stock options and stock appreciation rights), only to the extent that such awards would have vested if Mr. Israel’s employment had continued during a period equal to the lesser of six months following termination of employment or the balance of the term of the Israel Agreement.
If Mr. Israel terminates his employment for any reason, other than with good reason or upon his death or disability, and provides at least three months’ advance written notice of termination, Mr. Israel would be entitled to an amount equal to 50% of his annual base salary at the time notice is delivered, plus the costs of continuing family health insurance coverage for 12 months following the termination of his employment.
If, within two years of a change in control of the Company (as defined in the Israel Agreement), Mr. Israel’s employment is terminated by the Company without cause or he terminates his employment for good reason, Mr. Israel would be entitled to receive (i) an amount equal to two times the sum of his then-current base salary and target annual bonus as in effect immediately before any notice of termination, (ii) the costs of continuing family health insurance coverage for 12 months following termination of employment, (iii) any annual bonus Mr. Israel would have otherwise been entitled if his employment had continued through the end of the bonus year based upon the actual performance of the Company, prorated for the period of actual employment during the bonus year, and paid upon the payment of the annual bonuses to senior executives of the Company pursuant to the Company’s annual bonus programs, and (iv) the immediate vesting of all unvested equity awards.
All payments to be made by the Company upon termination as described above are subject to Mr. Israel executing a release of claims in favor of the Company. In addition to benefits available to the Company’s senior executive officers generally, the Israel Agreement also provides reimbursement for the reasonable costs of professional tax and financial counseling.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 65 | |
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2006 Long-Term Incentive Plan
Under the 2006 Plan and the applicable award agreements, equity awards that are not vested at the time the participant’s employment terminates will generally be immediately forfeited unless our Board or Human Capital and Compensation Committee determines otherwise. Options and SARs that are vested but unexercised at the time of termination of employment will generally be forfeited unless they are exercised before the earlier of 30 days after such termination or the expiration of the award.
If an “exchange transaction” (as defined in the 2006 Plan) occurs with respect to our Common Stock, then, unless other arrangements are made, unvested awards granted under the 2006 Plan may be treated under either of two alternatives. Such unvested awards may be converted into economically equivalent awards with respect to the stock of the acquiring or successor company, or they may become fully vested and participate in the transaction value of the shares covered by the award (e.g., by exercise or cash out). Subject to the above, the disposition of unvested awards under the 2006 Plan in the event of an exchange transaction will be determined by our Board, in its discretion. For the purposes of the 2006 Plan, an “exchange transaction” includes certain mergers or other transactions which result in the holders of our Common Stock receiving cash, stock or other property in exchange for or in connection with their shares of our Common Stock. For an illustration of the value of accelerated equity awards under the 2006 Plan and the Delek Logistics LTIP assuming that an exchange transaction occurred on December 31, 2023, please see the “Change-In-Control” table above which assumes the acceleration of RSUs as set forth in the corresponding footnotes.
2016 Long-Term Incentive Plan
Under the 2016 Plan and the applicable award agreements, equity awards that are not vested at the time the participant’s employment terminates will generally be immediately forfeited unless our Board or Human Capital and Compensation Committee determines otherwise. Options and SARs that are vested but unexercised at the time of termination of employment will generally be forfeited
unless they are exercised before the earlier of 30 days after such termination or the expiration of the award.
Upon the occurrence of a change in control (as defined in the 2016 Plan), outstanding awards will be adjusted or substituted in accordance with the terms of the 2016 Plan. If the participant does not receive a replacement award with respect to any outstanding award as of the change in control, then each such outstanding award will become fully vested and, if applicable, exercisable and any restrictions applicable to such award will lapse. For awards subject to performance goals, if the participant does not receive a replacement award, payout at a change in control will be based upon the greater of (i) a pro rata portion of the amount payable based upon “target” performance under the applicable performance goals or (ii) the amount payable based on actual performance level had the performance period ended on the date of the change in control. If a participant terminates his or her employment for Good Reason (as defined in the 2016 Plan), the participant is involuntarily terminated for reasons other than for cause, or the participant’s employment terminates due to the participant’s death or disability during the two-year period commencing on the date of a change in control, then (A) all replacement awards held by the participant will become fully vested and, if applicable, exercisable and free of restrictions (with any applicable performance goals deemed to have been achieved at a target level as of the date of such vesting), and (B) all stock options held by the participant immediately before such termination of employment that the participant also held as of the date of the change in control or that constitute replacement awards will remain exercisable for not less than two years following such termination of employment or until the expiration of the stated term of such stock option, whichever period is shorter (provided, however, that if the applicable award agreement provides for a longer period of exercisability, that provision will control). For an illustration of the value of accelerated equity awards under the 2016 Plan assuming that a “change in control” occurred on December 29, 2023, the last trading day of fiscal year 2023, please see the “Change-In-Control” table above which assumes the acceleration of RSUs as set forth in the corresponding footnotes.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 66 | |
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Chief Executive Officer Pay Ratio
The pay ratio reported below is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation permit companies to use a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported below.
Ratio and Methodology
For 2023, we estimate the ratio of the annual total compensation of our CEO to the median annual total compensation of our employees as follows:
| Annual total compensation of our median employee (1): |
$89,268 | |
| Annual total compensation of our Chief Executive Officer, as reported above in the Summary Compensation Table: |
$7,723,297 | |
| CEO Pay Ratio: |
87:1 | |
| (1) | Excludes our Chief Executive Officer. |
CEO pay ratio, excluding the “Excluded Employees” addressed below:
| Annual total compensation of our median employee (1): |
$137,056 | |
| Annual total compensation of our Chief Executive Officer, as reported above in the Summary Compensation Table: |
$7,723,297 | |
| CEO Pay Ratio: |
56:1 | |
| (1) | Excludes our Chief Executive Officer and the employees referenced under “Excluded Employees” below. |
To determine the median employee, we prepared a list of all active employees as of December 31, 2023 (other than our Chief Executive Officer and, as applicable, the employees referenced under “Excluded Employees” below), and, for that population, calculated 2023 taxable compensation. We did not make any assumptions, adjustment or estimates with respect to the compensation for the employees, but we did annualize the compensation for full-time employees not employed by us for the full year. We selected taxable compensation to represent 2023 earnings because it includes wages, overtime (for our hourly employees) and equity compensation. Once the median employee was identified, we calculated annual total compensation for such median employee using the same methodology we use for our NEOs in the Summary Compensation Table above.
Excluded Employees
As permitted by the SEC rules requiring disclosure of our CEO pay ratio and in the interest of providing an additional disclosure that investors and other stakeholders may find meaningful, we have provided an alternative CEO pay ratio that excludes our retail-level hourly employees. We estimate that we had approximately 1,249 retail-level hourly employees as of December 31, 2023. As our retail operations rely on a large labor pool of retail employees who work fewer hours and are compensated at lower levels, on a relative basis, than employees working in traditional downstream refining jobs, our median employee determined without excluding retail level employees is likely not similar in terms of job function or compensation level to the median employee of other domestic U.S. refiners who do not have significant retail operations.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 67 | |
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Year |
Summary Compensation Table Total for Yemin (1) ($) |
Summary Compensation Table Total for Soreq (1) ($) |
Compensation Actually Paid to Yemin (1) (2) (3) ($) |
Compensation Actually Paid to Soreq (1) (2) (3) ($) |
Average Summary Compensation Table Total for Non-PEO NEOs (1) ($) |
Average Compensation Actually Paid to Non-PEO NEOs (1) (2) (3) ($) |
Value of Initial Fixed $100 Investment based on: (4) |
Net Income ($ millions) |
Adjusted EBITDA (5) ($ millions) | |||||||||||
TSR ($) |
Peer Group TSR ($) | |||||||||||||||||||
2023 |
— |
— |
||||||||||||||||||
2022 |
||||||||||||||||||||
2021 |
— |
— |
( |
|||||||||||||||||
2020 |
— |
— |
( |
( | ||||||||||||||||
| (1) | Non-PEO NEOs for each year presented are listed below. Mr. Soreq’s compensation for 2020 is included in the Non-PEO NEO column for that year as set forth below. |
2020 |
2021 |
2022 |
2023 | |||
| Avigal Soreq | Louis LaBella | Reuven Spiegel | Ezra Uzi Yemin | |||
| Louis LaBella | Reuven Spiegel | Denise McWatters | Reuven Spiegel | |||
| Reuven Spiegel | Denise McWatters | Todd O’Malley | Denise McWatters | |||
| Assaf Ginzburg | Todd O’Malley | Nithia Thaver | Joseph Israel | |||
| Frederec Green | Todd O’Malley | |||||
| Abigail Yates | ||||||
| (2) | The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs during the applicable year. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. |
| (3) | Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEOs and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the amounts from the Stock Awards column set forth in the Summary Compensation Table. Amounts in the Exclusion of Change in Pension Value column reflect the amounts attributable to the Change in Pension Value reported in the Summary Compensation Table. Amounts in the Inclusion of Pension Service Cost are based on the service cost for services rendered during the listed year. |
Year |
Summary Compensation Table Total for Soreq ($) |
Exclusion of Stock Awards for Soreq ($) |
Inclusion of Equity Values for Soreq ($) |
Compensation Actually Paid to Soreq ($) | ||||
2023 |
( |
Year |
Average Summary Compensation Table Total for Non-PEO NEOs ($) |
Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs($) |
Average Inclusion of Equity Values for Non-PEO NEOs ($) |
Average Compensation Actually Paid to Non-PEO NEOs ($) | ||||
2023 |
( |
( |
DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 68 | |
Year |
Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Soreq ($) |
Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Soreq ($) |
Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Soreq ($) |
Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Soreq ($) |
Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Soreq ($) |
Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Soreq ($) |
Total - Inclusion of Equity Values for Soreq ($) | |||||||
2023 |
( |
( |
||||||||||||
Year |
Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) |
Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) |
Average Vesting- Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) |
Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) |
Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) |
Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($) |
Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | |||||||
2023 |
( |
( |
( | |||||||||||
| (4) | The Peer Group TSR set forth in this table utilizes a custom group of peer companies, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report on Form 10-K for the year ended December 31, 2023. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the Peer Group, respectively. Historical stock performance is not necessarily indicative of future stock performance. The peer group is comprised of Calumet Specialty Products Partners, L.P. (NASDAQ: CMLT), CVR Energy, Inc. (NYSE: CVI), HF Sinclair Corporation (NYSE: DINO) (formerly HollyFrontier Corporation (NYSE: HCF)), Marathon Petroleum Corporation (NYSE: MPC), PBF Energy, Inc. (NYSE: PBF), Phillips 66 (NYSE: PSX), Par Pacific Holdings (NYSE: PARR), and Valero Energy Corporation (NYSE: VLO) (the “Peer Group”). For 2023, to better align our 10-K Performance Graph with our custom TSR peer group and to ensure the use of a comparable group of companies operating in a consolidating industry, we added CLMT and PARR to our peer group. The peer group TSR performance for the peer group disclosed in our 2023 Proxy filing, absent these additions, would have been, for the years ending 12/31/2020, 12/31/2021, 12/31/2022, and 12/31/2023, respectively: $65.62, $85.42, $144.40, and $176.94. |
| (5) | We determined Non-PEO NEOs in 2023. This performance measure may not have been the most important financial performance measure for years 2022, 2021, and 2020 and we may determine a different financial performance measure to be the most important financial performance measure in future years. For details regarding the reconciliation of U.S. GAAP to our Adjusted EBITDA, refer to the Adjusted net income (loss) per share reconciliation in the press release announcing our financial results for the quarter ended December 31, 2023 furnished as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on February 27, 2024 (the “2023 Earnings Release”). |
DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 69 | |
DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 70 | |
DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 71 | |
DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 72 | |
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PROPOSAL 2: ADVISORY RESOLUTION APPROVING OUR EXECUTIVE
COMPENSATION PROGRAM FOR OUR NAMED EXECUTIVE OFFICERS
The Dodd-Frank Act enables our stockholders to vote to approve on an advisory (non-binding) basis, the compensation of our NEOs as disclosed in this Proxy Statement in accordance with the SEC’s rules. Stockholders may also abstain from voting.
We are asking our stockholders to indicate their support for the compensation of our NEOs as disclosed in this Proxy Statement. This Proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to express their views on the compensation paid to our NEOs. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask the stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the stockholders approve, on an advisory basis, the executive compensation program for the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the United States
Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables, other related tables and disclosure, and narrative discussion, all as set forth under the caption “Executive Compensation” in the Proxy Statement.”
Vote Required
The affirmative vote of holders of a majority of the shares of Common Stock present or represented at the meeting and entitled to vote thereon is required for the adoption of this Proposal. Abstentions have the same effect as a vote “against” the Proposal. Broker non-votes have no effect on the outcome of the vote on this Proposal.
The “say-on-pay” vote is advisory, and therefore is not binding on us, the Human Capital and Compensation Committee or the Board. However, the Board and its committees value the opinions of the stockholders and, to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, will consider the stockholders’ concerns and the Board and its committees will evaluate whether any actions are necessary to address those concerns.
The Board of Directors recommends a vote “FOR” the approval of the above resolution.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 73 | |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 21, 2024, (i) the beneficial ownership of our Common Stock and common units representing common limited partnership interests in Delek Logistics Partners, LP (“Delek Logistics” or “DKL”) by all of our directors and director nominees, the executive officers named in the Summary Compensation Table (the “NEOs”), and all directors, director nominees, NEOs and executive officers as a group; and (ii) the beneficial ownership of our Common Stock by each person known by us to own more than five percent of our Common Stock. The amounts and percentage of units beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all securities shown as beneficially owned by them, subject to community property laws where applicable. Unless otherwise indicated below, each person or entity has an address in care of our principal executive offices at 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027.
| Amount and Nature of Beneficial Ownership of Common Stock (1) |
Percent of Common Stock (2) |
Amount and |
Percent of Common Units (2) |
|||||||||||||
| The Vanguard Group (3) |
6,724,376 | 10.5% | n/a | n/a | ||||||||||||
| BlackRock, Inc. (4) |
6,833,893 | 10.7% | n/a | n/a | ||||||||||||
| State Street Corporation (5) |
3,761,846 | 5.9% | n/a | n/a | ||||||||||||
| River Road Asset Management, LLC (6) |
3,747,111 | 5.9% | n/a | n/a | ||||||||||||
| Dimensional Fund Advisors LP (7) |
4,139,141 | 6.5% | n/a | n/a | ||||||||||||
| Norges Bank (The Central Bank of Norway) (8) |
3,380,497 | 5.3% | n/a | n/a | ||||||||||||
| Directors and NEOs: |
||||||||||||||||
| Avigal Soreq |
50,254 | * | 10,372 | * | ||||||||||||
| Ezra Uzi Yemin (9) |
957,837 | 1.5% | 198,670 | * | ||||||||||||
| Christine Benson Schwartzstein |
— | n/a | — | n/a | ||||||||||||
| William J. Finnerty |
35,523 | * | — | n/a | ||||||||||||
| Richard J. Marcogliese |
31,269 | * | — | n/a | ||||||||||||
| Leonardo Moreno |
6,760 | * | — | n/a | ||||||||||||
| Gary M. Sullivan, Jr. |
39,518 | * | — | n/a | ||||||||||||
| Vasiliki (Vicky) Sutil |
21,759 | * | — | n/a | ||||||||||||
| Laurie Z. Tolson |
8,116 | * | — | n/a | ||||||||||||
| Shlomo Zohar |
32,123 | * | — | n/a | ||||||||||||
| Reuven Spiegel |
20,473 | * | 8,088 | * | ||||||||||||
| Denise McWatters |
14,965 | * | 4,514 | * | ||||||||||||
| Joseph Israel |
2,250 | * | 1,069 | * | ||||||||||||
| All directors and executive officers as a group (13 persons) |
1,220,847 | 1.9% | 222,713 | * | ||||||||||||
| * | Less than 1% of the issued and outstanding shares of our Common Stock or issued and outstanding common units of Delek Logistics, as applicable. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 74 | |
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| (1) | For purposes of this table, a person is deemed to have “beneficial ownership” of any securities when such person has the right to acquire them within 60 days after February 21, 2024. For stock options and time-vested RSUs, we report shares equal to the number of options or RSUs that are vested or that will vest within 60 days of February 21, 2024. For SARs, we report the shares that would be delivered upon exercise of SARs that are vested or that will vest within 60 days of February 21, 2024 (which is calculated by multiplying the number of SARs by the difference between $27.78, the closing price of our Common Stock on February 21, 2024, and the exercise price divided by $27.78). For units under the Delek Logistics LTIP, we report the units that are vested or that will vest within 60 days of February 21, 2024. For purposes of computing the percentage of outstanding securities held by each person named above, any securities which such person has the right to acquire within 60 days after February 21, 2024 are deemed to be outstanding but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. |
| (2) | Percentage of our Common Stock is based upon 64,019,267 issued and outstanding shares on February 21, 2024 (excluding securities held by, or for the account of, the registrant or its subsidiaries). Percentage of Delek Logistics common units is based upon 43,616,811 common limited partner units issued and outstanding on February 21, 2024. |
| (3) | Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on February 13, 2024 by The Vanguard Group with an address of 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. The Vanguard Group has sole voting power with respect to 0 shares, sole dispositive power with respect to 6,610,575 shares, shared voting power with respect to 53,780 shares and shared dispositive power with respect to 113,801 shares. |
| (4) | Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on January 24, 2024 by BlackRock, Inc. with an address of 50 Hudson Yards, New York, New York 10001. BlackRock, Inc. has sole voting power with respect to 6,479,513 shares and sole dispositive power with respect to all shares. |
| (5) | Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on January 25, 2024 by State Street Corporation with an address of State Street Financial Center, One Congress Street, Suite 1, Boston, Massachusetts 02111. State Street Corporation has sole voting power with respect to 0 shares, sole dispositive power with respect to 0 shares, shared voting power with respect to 3,552,504 shares and shared dispositive power with respect to all shares. |
| (6) | Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on January 30, 2024 by River Road Asset Management, LLC with an address of 462 South 4th Street, Suite 2000, Louisville, Kentucky 40202. River Road Asset Management, LLC has sole voting power with respect to 3,593,959 shares and sole dispositive power with respect to all shares. |
| (7) | Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on February 9, 2024 by Dimensional Fund Advisors LP with an address of 6300 Bee Cave Road, Building One, Austin, Texas 78746. Dimensional Fund Advisors LP has sole voting power with respect to 4,062,896 shares and sole dispositive power with respect to all shares. |
| (8) | Beneficial ownership information is based on a Schedule 13G/A filed with the SEC on February 14, 2023 by Norges Bank (The Central Bank of Norway) with an address of Bankplassen 2, PO Box 1179 Sentrum, NO 0107 Oslo, Norway. Norges Bank (The Central Bank of Norway) has sole voting power with respect to 3,138,270 shares, sole dispositive power with respect to 3,138,270 shares, shared voting power with respect to 0 shares and shared dispositive power with respect to 242,227 shares. |
| (9) | 691,945 shares of our Common Stock and 158,467 of Delek Logistics Partners, LP’s units are held of record by Yemin Investments, L.P., a limited partnership of which Mr. Yemin is the sole general partner. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 75 | |
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Approval Policy for Related Party Transactions
The Board has adopted a written related party transactions policy to document procedures pursuant to which “related party transactions” are reviewed, approved or ratified. Under Item 404 of Regulation S-K, a “related party transaction” means any transaction or series of transactions in which the Company or a subsidiary is a participant, the amount involved exceeds $120,000, and any related person has a direct or indirect material interest, subject to certain exceptions. The policy covers all related party transactions between us and any related party requiring disclosure under Item 404.
The policy states that, in most instances, the Audit Committee is best suited to review and approve related
party transactions that may arise within the Company. However, the policy permits the disinterested members of the Board to exercise any authority otherwise assigned to the Audit Committee by the policy. In particular, the Board believes that any related party transaction in which any director is interested should typically be reviewed and approved by all disinterested members of the Board. An interested director is not allowed to vote upon a transaction in which he or she is involved. Depending upon the issue presented, the disinterested members of the Board may request to hear from the interested director during the course of their deliberations, but the interested director does not vote upon the matter and is not present during the vote on such matter. A related party transaction may be consummated only if it is ratified or approved by the Audit Committee or disinterested members of the Board.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 76 | |
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Equity Compensation Plan Information
As of December 29, 2023 there were 5,373,382 shares available for issuance under the 2016 Plan.
The following table provides information as of December 29, 2023, the last trading day of fiscal year 2023, regarding all compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights |
Number of securities | |||
| (a) | (b) | (c) | ||||
| Equity compensation plans approved by security holders |
2,522,096 (1) | $30.36 (2) | 5,373,382 (1)(3) | |||
| Equity compensation plans not approved by security holders |
— | — | — | |||
| TOTAL |
2,522,096 | $30.36 | 5,373,382 | |||
| (1) | At December 29, 2023, the last trading day of fiscal year 2023, 827,090 SARs outstanding under our 2006 Plan, the 2016 Plan, and the Alon 2005 Long-Term Incentive Plan (the “Plans”) were at base prices above the $25.80 fair market value of our Common Stock on that date. For purposes of column (a), we included the number of shares that would have been issued to settle all outstanding SARs at December 29, 2023, calculated to be 13,048, which is determined based on the difference between the exercise price of the SAR and the market price of our Common Stock at December 29, 2023. The number of shares that have been excluded from column (c) totaled 11,010 and related to the assumed exercise of SARs as of December 29, 2023 under the 2016 Plan and the Alon 2005 Long-Term Incentive Plan, as column (c) excludes the 2006 Plan and the Alon 2005 Long-Term Incentive Plan (as we are no longer issuing awards under those Plans). |
| (2) | At December 29, 2023, 1,216,115 SARs/options were outstanding under the Plans at a weighted average exercise price of $35.14. |
| (3) | Consists of the number of securities available for future issuance under the 2016 Plan (5,373,382 shares as of December 29, 2023). |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 77 | |
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AUDIT COMMITTEE REPORT
Overview
The Audit Committee is composed of non-employee directors who are independent and financially literate in accordance with the applicable requirements of the NYSE and the SEC. The Board has designated Messrs. Sullivan, Marcogliese, and Zohar as Audit Committee Financial Experts under the guidelines of the SEC. On January 1, 2023, the Audit Committee was comprised of Messrs. Sullivan (chair), Marcogliese, Moreno, and Zohar and Ms. Sutil.
Responsibilities
Management is responsible for our system of internal controls and the overall financial reporting process. Our independent registered public accounting firm, Ernst & Young LLP (“Ernst & Young”), is responsible for performing
an independent audit of our consolidated financial statements and on the effectiveness of our internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), and to issue reports thereon. The Audit Committee is responsible for overseeing management’s conduct of the financial reporting process and systems of internal accounting and financial controls, as well as other responsibilities described under the “Committees of the Board of Directors” section in this Proxy Statement.
Activities in 2023
During 2023, the Audit Committee established meeting agendas in consultation with the Board and members of the Company’s management. The Audit Committee also, among other activities, performed the following:
| ✓ | Reviewed and discussed with both management and Ernst & Young all earnings releases and annual and quarterly financial statements prior to their issuance. Such discussions included that each set of audited financial statements reviewed had been prepared in accordance with United States generally accepted accounting principles (“GAAP”), and reviewed significant accounting and disclosure matters with Ernst & Young. |
| ✓ | Discussed with Ernst & Young matters required to be discussed pursuant to PCAOB Auditing Standard No. 1301 (Communications with Audit Committees), including the quality of our accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the audited financial statements. The Audit Committee also discussed with Ernst & Young matters relating to its independence, including a review of audit and non-audit fees and the written disclosures and an annual independence confirmation letter from Ernst & Young required by applicable requirements of the PCAOB. The Audit Committee also discussed and reviewed materials regarding Ernst & Young’s system of quality control. |
| ✓ | Met with the senior members of the Company’s financial management team at each regularly scheduled meeting including discussions regarding financial reporting developments and other financial matters. |
| ✓ | Held private sessions at each regularly scheduled meeting with management, including the Chief Financial Officer, the head of Internal Audit Services, the General Counsel, and Ernst & Young featuring candid discussions about financial reporting, internal controls, legal, compliance and other issues including the results of any “hotline” calls. |
| ✓ | Received reports at each regularly scheduled meeting on management’s process to assess the adequacy of the Company’s system of internal control over financial reporting, results of tests of controls, and management’s conclusions on the effectiveness of the Company’s internal controls over financial reporting. |
| ✓ | Approved the Company’s internal audit plan and reviewed quarterly the status of the internal audit plan, staffing, findings of internal audit activities, and performance of the internal audit function. |
| ✓ | Reviewed the Company’s financial forecast, cash flows, financing plans and debt compliance. |
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 78 | |
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2023 Audited Financial Statements
Members of the Audit Committee rely, without independent verification, on the information and representations provided to them by management and on the communications made to them by Ernst & Young. Accordingly, the oversight provided by the Audit Committee should not be considered as providing an independent basis for determining that management has established and maintained appropriate internal control over financial reporting, that the financial statements have been prepared in accordance with GAAP, or that the audit of the Company’s financial statements by Ernst & Young has been carried out in accordance with PCAOB standards.
The Audit Committee has reviewed the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. We have discussed the financial statements with management and Ernst & Young including discussions concerning the following:
| • | The reasonableness of significant accounting judgments and estimates, |
| • | The clarity and completeness of disclosures in the financial statements, |
| • | The quality, not just the acceptability, of the accounting principles, |
| • | The auditor’s report on the effectiveness of internal control over financial reporting, |
| • | The auditor’s report on the financial statements including Critical Audit Matters, |
| • | Matters required to be reported to the Audit Committee by the independent registered public accounting firm under the rules of the PCAOB including receipt of a letter confirming the independence of Ernst & Young, and |
| • | Management’s representations and certifications regarding the financial statements and internal control over financial reporting. |
Taking all these reviews and discussions into account, the Audit Committee members whose names are listed below, recommended to the Board that it approve the inclusion of the audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023, for filing with the SEC.
Members of the Audit Committee
Gary M. Sullivan, Jr., Chair
Richard J. Marcogliese
Leonardo Moreno
Vasiliki (Vicky) Sutil
Shlomo Zohar
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 79 | |
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RELATIONSHIP WITH INDEPENDENT AUDITORS
Set forth below are the fees paid for the services of Ernst & Young:
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Audit fees (1) |
$3,860,000 | $4,413,500 | ||||||
| Audit-related fees (2) |
$143,500 | $8,000 | ||||||
| Tax fees |
— | $4,403 | ||||||
| All other fees |
— | — | ||||||
|
|
|
|
|
|||||
| Total |
$4,003,500 | $4,425,903 | ||||||
| (1) | Audit fees include services related to the audits of the consolidated financial statements and internal controls over financial reporting, review of quarterly condensed consolidated financial statements and audit services provided in connection with acquisitions and dispositions, regulatory filings, and other transactions during the year. Fees and expenses are for services provided in connection with the audit of the fiscal year, regardless of when the fees and expenses were paid. |
| (2) | Audit-related fees consist of subscription services to access accounting and financial reporting research materials, and audits in connection with acquisitions and dispositions. |
The Audit Committee is responsible for the audit fee negotiations associated with the retention of the independent registered public accounting firm. The Audit Committee has a policy that it will pre-approve all audit and non-audit services provided by the independent registered public accounting firm and will not engage the independent registered public accounting firm to perform any specific non-audit services prohibited by law or regulation. The Audit Committee has given general pre-approval for specified audit, audit-related, and tax services after consideration that such services do not impair auditor independence. The term of any general pre-approval is 12 months from the date of pre-approval unless the Audit Committee specifically provides for a different term. The Audit Committee will annually review the services for which general pre-approval is given. The Audit Committee may revise the list of general pre-approved services from time to time, based upon subsequent determinations. Unless a type of service to be provided by the independent registered public accounting firm has received general pre-approval, it will require specific pre-approval by the Audit Committee.
The Audit Committee has considered and determined that the provision of non-audit services by our independent registered public accounting firm is compatible with maintaining auditor independence.
Pre-Approval Policies and Procedures. In general, all engagements performed by our independent registered public accounting firm, whether for auditing or non-auditing services, must be pre-approved by the Audit Committee. During 2023, all of the services performed for us by Ernst & Young were pre-approved by the Audit Committee.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 80 | |
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PROPOSAL 3: APPROVAL OF THE PROPOSED AMENDMENT TO THE SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCORPORATE NEW DELAWARE LAW PROVISIONS REGARDING OFFICER EXCULPATION
We are asking you to approve an amendment to the Company’s Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to provide for exculpation of certain officers of the Company as permitted by recent amendments to Delaware law (the “Proposed Amendment”).
The Board has unanimously approved, subject to stockholder approval, an amendment to our Certificate of Incorporation to update the exculpation provision as described below. If our stockholders approve the Proposed Amendment, subject to the discretion of the Board, we intend to file a Certificate of Amendment to our Second Amended and Restated Certificate of Incorporation, as amended, adding the new language below with the Secretary of State of the State of Delaware as soon as practicable after the Annual Meeting.
Overview of the Proposed Amendment
Consistent with Delaware law, the Proposed Amendment to our Certificate of Incorporation relating to officers is more limited in scope than the existing director exculpation provision and only permits exculpation of officers for certain direct claims. Further, the Proposed Amendment does not permit officers to be exculpated for liability arising out of:
| • | claims brought by the company itself; |
| • | claims brought by stockholders in the name of the company (derivative claims); |
| • | breaches of the duty of loyalty to the company or its stockholders; |
| • | acts or omissions not in good faith; |
| • | acts or omissions that involve intentional misconduct; |
| • | acts or omissions that involve a knowing violation of law; or |
| • | any transaction in which the officer derived an improper personal benefit. |
In accordance with the recent amendment to Delaware law, the officers who will be covered by the expanded
exculpation provision include any officer who is or was the president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer, or chief accounting officer of the Company; any officer who is or was identified in the Company’s public filings with the SEC as one of the most highly compensated executive officers; and any officers who consent to being identified as an officer for purposes of service of process, at any time during the course of conduct alleged in the action or proceeding to be wrongful.
Rationale for the Proposed Amendment
The State of Delaware, which is our state of incorporation, recently enacted legislation that authorizes Delaware corporations to limit the liability of certain of their officers in the limited circumstances described above. As a result of this development, we propose expanding our existing director exculpation provision to cover officers to the extent now permitted by Delaware law.
The rationale of the Board for recommending the Proposed Amendment is to balance stockholders’ interest in accountability with their interest in the Company being able to attract and retain the highest quality officers and avoiding litigation abuse resulting from the current disparity that exists in the treatment of directors, who oversee and are ultimately accountable for corporate actions, and the officers who execute those actions on behalf of the Board.
The Board considered that the role of directors and officers requires them to make decisions on crucial matters in response to time-sensitive opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of the absence of any underlying merit. The Proposed Amendment will better align the protections available to our officers with those currently available to our directors. It will also avoid an emerging practice among plaintiff’s lawyers of adding officers to direct claims relating to the duty of care in mergers and acquisition-related and other litigation so that claims against the officers continue even when identical
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 81 | |
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claims against directors are dismissed. The costs to the Company to defend such claims can be significant, even when the claims are baseless. The Board believes that limiting concern about personal liability will empower officers to best exercise their business judgment in furtherance of stockholder interests without the distraction of potentially being subject to claims following actions taken in good faith.
In addition, we expect other companies with which we compete for employees to adopt exculpation clauses that limit the personal liability of officers as now permitted by the Delaware General Corporation Law. The Board believes that failing to adopt the Proposed Amendment will impact recruitment and retention of exceptional officer candidates who conclude that the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the company as compared to serving as an officer at another company that does exculpate officers.
Further, the Board noted that the Proposed Amendment would not eliminate stockholders’ right to pursue derivative claims relating to alleged breaches of the duty of care or limit the ability of the company itself to bring claims against officers. Therefore, taking into account the narrow class and type of claims for which officers’ liability would be exculpated, the Board believes the Proposed Amendment would enhance the ability to attract and retain talented officers, potentially reduce litigation costs associated with frivolous lawsuits, and more generally align the protections available to our officers with those currently available to our directors.
Based on the above, the Board has determined that it is in the best interests of the Company and our stockholders to amend the Certificate of Incorporation as described in this Proposal.
Text of the Proposed Amendment
Accordingly, we ask our stockholders to approve an amendment to the Company’s Second Amended and Restated Certificate of Incorporation, as amended, to replace the existing Article ELEVENTH with the following (changes marked in underlined blue text):
“ELEVENTH: A director or officer (as defined in Section 102(b)(7) of the GCL) of this corporation shall not be personally liable to the corporation or its stockholders for monetary damages for the breach of any fiduciary duty as a director or officer, except (a) for any breach of the director’s or officer’s duty of loyalty to the corporation or its stockholders, (b) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (c) for a director under Section 174 of the GCL, as the same exists or hereafter may be amended, (d) for any transaction from which the director or officer derived an improper personal benefit, or (e) an officer in any action by or in the right of the corporation. If the GCL is amended after the date of incorporation of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the corporation shall be eliminated or limited to the fullest extent permitted by the GCL, as so amended.”
The full text of the Proposed Amendment to the Certificate of Incorporation is attached to this Proxy Statement as Appendix A.
Vote Required
The affirmative vote of holders of a majority of the outstanding shares of Common Stock entitled to vote thereon is required to approve the Proposed Amendment to the Certificate of Incorporation. Abstentions and broker non-votes have the same effect as a vote “against” the Proposal.
The Board of Directors recommends a vote “FOR” the approval of the amendment to our Second Amended and Restated Certificate of Incorporation, as amended, to reflect new Delaware law provisions regarding officer exculpation.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 82 | |
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PROPOSAL 4: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR 2024
The Audit Committee is responsible for the appointment, compensation (including final approval of audit and other fees), retention and oversight of the independent registered public accounting firm that audits our financial statements and our internal control over financial reporting.
The Audit Committee annually reviews Ernst & Young’s independence and performance in deciding whether to retain Ernst & Young or engage an alternative independent auditor. As part of this review, the Audit Committee, among other factors, considers the following:
| • | Ernst & Young’s historical and annual performance including input from Audit Committee members, other independent directors and our management. |
| • | Ernst & Young’s expertise and qualifications in serving as independent auditor for our different business operations. |
| • | A review of Ernst & Young’s known legal risks and any significant legal or regulatory proceedings in which it is involved. |
| • | Other information on audit quality and performance including recent PCAOB reports on Ernst & Young and its peer firms. |
| • | Periodic rotation of the lead partner and engagement quality review partner and their industry experience and expertise most relevant to the Company’s business operations. |
| • | Ernst & Young’s conclusion that they are independent with respect to serving as our independent auditor. |
In addition to Ernst & Young’s conclusion that they are independent, the Audit Committee believes that Ernst & Young is independent and that there are controls and processes that help ensure such independence including the following: (a) Audit Committee oversight of Ernst & Young includes at least four private meetings each year and an additional four private meetings with the Audit Committee Chair prior to each quarterly Audit Committee meeting; (b) Audit Committee interaction with and review of the industry and other qualifications of the lead partner and of the engagement quality review partner; (c) oversight of
non-audit services that require preapproval by the Audit Committee precludes certain non-audit services and determines that Ernst & Young is an appropriate service provider; (d) discussions with Ernst & Young regarding their internal system of quality control including the firm’s internal quality reviews and procedures for maintaining independence with regard to audit clients; and (e) the overall regulatory framework and regulations and requirements of the PCAOB and the SEC that Ernst & Young is subject to as an independent registered public accounting firm.
The Audit Committee oversees and participates in the selection of the lead engagement partner. Management interviews candidates who meet professional, industry-specific experience, and personal criteria among other considerations. Management recommends a finalist candidate to the Audit Committee. The Audit Committee Chair then interviews the finalist and, in consultation with the Audit Committee, considers management’s recommendation and approves the appointment.
Ernst & Young’s tenure as our independent registered public accounting firm is since 2002. In addition to the considerations of independence, periodic rotation, performance, and other matters discussed above, the reappointment of Ernst & Young provides continuity. Continuity enhances audit quality, efficiency, avoids switching costs, and can provide for competitive fees through the institutional knowledge and experience serving the Company over an extended period. As a matter of sound governance, the Audit Committee, in consultation with management and the Board, may periodically consider putting the audit of the Company’s financial statements out to bid.
After evaluating the foregoing criteria, the Audit Committee has appointed Ernst & Young as the independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2024, including the audit of our internal control over financial reporting. Representatives of Ernst & Young are expected to be present at the Annual Meeting and will be offered the opportunity to make a statement if they so desire. They will also be available to respond to appropriate questions.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 83 | |
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We are asking you to ratify the selection of Ernst & Young as our independent registered public accounting firm for the 2024 fiscal year. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of Ernst & Young to our stockholders for ratification because we value your views on our independent registered public accounting firm and as a matter of good corporate practice. In the event that our stockholders fail to ratify the selection, it will be considered as a direction to the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of us and our stockholders.
Vote Required
The affirmative vote of holders of a majority of the shares of Common Stock present or represented at the meeting and entitled to vote thereon is required to ratify the selection of Ernst & Young as our independent registered public accounting firm for the 2024 fiscal year. Abstentions have the same effect as a vote “against” this Proposal. Broker non-votes have no effect on the outcome of the vote on this Proposal.
The Board of Directors recommends a vote “FOR” the ratification of Ernst & Young LLP as our independent registered public accounting firm.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 84 | |
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OTHER PROXY INFORMATION
Information About the Annual Meeting and Voting
Cost of Solicitation of Proxies
We will bear all costs and expenses relating to the solicitation of proxies for the Company, including the costs of preparing, printing and mailing to stockholders this Proxy Statement and accompanying materials. Directors, certain officers, certain employees or other agents of the Company may solicit proxies in person, by telephone, telefax, personal calls, or other electronic means. The Company will request banks, brokers, custodians and other nominees in whose names shares are registered to furnish to the beneficial owners of the Company’s Common Stock this Proxy Statement and the proxy card, and any other materials related to the Annual Meeting, including, copies of our 2023 Annual Report, and, upon request, the Company will reimburse such registered holders for their out-of-pocket and reasonable expenses in connection therewith.
Proxies
Shares of Common Stock that are entitled to be voted at the Annual Meeting and are represented by properly executed proxies will be voted in accordance with the instructions on those proxies. You may vote by proxy or at the Annual Meeting. You are encouraged to read the Proxy Statement and vote your shares as soon as possible to ensure that your shares are represented and voted at the Annual Meeting. If you hold your shares as a record holder, you may vote your shares by proxy via the phone or the Internet by following the instructions provided on the enclosed proxy card or by completing, signing, dating and returning your proxy card in the postage-paid envelope provided. If you hold your shares through your broker or other custodian, please follow the instructions you received from the holder of record to vote your shares.
Many of our stockholders hold their shares in more than one account and may receive separate proxy cards or voting instructions forms for each of those accounts. If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please sign, date and return or otherwise submit your proxy with respect to each proxy card to ensure that all of your shares are voted.
If no instructions are indicated, shares on a properly executed proxy will be voted:
| • | FOR ALL the ten (10) director nominees identified in this Proxy Statement and on the proxy card; |
| • | FOR the non-binding resolution to approve the compensation of our named executive officers; |
| • | FOR the approval of an amendment to our Second Amended and Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation; and |
| • | FOR the ratification of the appointment of Ernst & Young to serve as our independent registered public accounting firm for the year ending December 31, 2024. |
In respect of any other matters that may properly come before the Annual Meeting, shares represented by properly executed proxies may be voted at the discretion of the proxy holder. The Board is not currently aware of any other matters to be presented at the Annual Meeting.
Revocation of Proxies
A stockholder who has executed and returned a proxy may revoke it at any time prior to its exercise at the Annual Meeting by executing and returning a proxy bearing a later date by mail, by voting via the Internet, by filing with our Corporate Secretary a written notice of revocation bearing a later date than the proxy being revoked, or by voting the Common Stock covered thereby virtually at the Annual Meeting. In order to revoke a proxy executed with respect to shares held in street name, the stockholder must contact the appropriate broker or nominee.
Virtually attending the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request or vote in person at the Annual Meeting.
Broker Non-Votes
Shares of Common Stock that are held in “street name,” which means shares of Common Stock held of record by a trustee or in an account at a brokerage firm, bank, dealer or other similar organization (collectively, brokerage firms), may be voted, even if the beneficial holder does not provide the brokerage firm with voting instructions. Brokerage firms have the authority under applicable securities rules to cast votes on certain “routine” matters, even if they do not receive instructions from their customers. When a proposal is not a routine matter and the brokerage firm has not received voting instructions from the beneficial owner of the shares with respect to that proposal, the brokerage firm cannot vote the shares on that proposal. This is called a “broker non-vote.”
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 85 | |
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See also “What is the effect of abstentions, withheld votes and broker non-votes?” under the “Questions & Answers” section of this Proxy Statement, above.
Vote Required
PROPOSAL 1: Because the director election at the 2024 Annual Meeting is uncontested, as defined in the Bylaws, the election of directors will be by a majority of the votes cast, meaning that the ten (10) director-nominees will be elected only if the number of votes cast “FOR” the nominee’s election exceeds the number of votes cast “AGAINST” that nominee’s election at the Annual Meeting.
PROPOSAL 2: The affirmative vote of holders of a majority of the shares of Common Stock present or represented at the Annual Meeting and entitled to vote thereon is required for the adoption of this Proposal. Abstentions have the same effect as a vote “against” this Proposal. Broker non-votes have no effect on the outcome of the vote on this Proposal.
The “say-on-pay” vote is advisory, and therefore is not binding on us, the Human Capital and Compensation Committee or the Board. However, the Board and its committees value the opinions of the stockholders and, to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, will consider the stockholders’ concerns and the Board and its committees will evaluate whether any actions are necessary to address those concerns.
PROPOSAL 3: The affirmative vote of holders of a majority of the outstanding shares of Common Stock entitled to vote thereon is required to approve the amendment to the Second Amended and Restated Certificate of Incorporation. Abstentions and broker non-votes have the same effect as a vote “against” this Proposal.
PROPOSAL 4: The affirmative vote of holders of a majority of the shares of Common Stock present or represented at the Annual Meeting and entitled to vote thereon is required to ratify the selection of Ernst & Young as our independent registered public accounting firm for the 2024 fiscal year. Abstentions have the same effect as a vote “against” this Proposal. Broker non-votes have no effect on the outcome of the vote on this Proposal.
Holders of Record
You may vote by proxy or at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, you are encouraged to read this Proxy Statement and submit your proxy card or voting instructions form as soon as possible to ensure that your shares are represented and voted at the Annual Meeting. If you hold shares as a record holder, you may vote the shares by via the phone or the Internet by
following the instructions provided on the enclosed proxy card, by completing, signing, dating and returning your proxy card in the postage-paid envelope provided or by attending the Annual Meeting and voting in person. Each method is discussed further below:
| • | Voting by Mail. If you choose to vote by mail, simply mark the proxy card and complete, sign, date and return it in the postage-paid envelope provided. The proxy card must be completed, signed and dated by the stockholder or the stockholder’s authorized representative. |
| • | Voting by Telephone. Stockholders of record can vote by phone by following the instructions on your proxy card or by calling toll-free at 1-800-690-6903. Voice prompts will instruct stockholders to vote their shares and confirm that their vote has been properly recorded. |
| • | Voting over the Internet. Registered stockholders can vote on the Internet by accessing the website shown on your proxy card and following the easy directions. As with telephone voting, stockholders can confirm that their votes have been properly recorded. We provide Internet proxy voting to allow stockholders to vote their shares online, with procedures designed to ensure the authenticity and correctness of proxy vote instructions. However, please be aware that stockholders must bear any costs associated with their Internet access, such as usage charges from Internet access providers and telephone companies. |
| • | Voting Virtually at the Annual Meeting. You may virtually attend and vote your shares during the Annual Meeting by visiting our Annual Meeting website at www.virtualshareholdermeeting.com/DK2024. To virtually attend the Annual Meeting, you will need the instructions included on your proxy card. Shares held in your name as the stockholder of record may be voted electronically during the Annual Meeting. Shares for which you are the beneficial owner but not the stockholder of record also may be voted electronically during the Annual Meeting. Even if you plan to virtually attend the Annual Meeting we recommend that you also vote by proxy as described above so that your vote will be counted if you later decide not to virtually attend the Annual Meeting. |
If you have any questions or need assistance, please contact our Investor Relations department at (615) 767-4344.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 86 | |
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STOCKHOLDER PROPOSALS FOR 2025 ANNUAL MEETING
To be considered for inclusion in the proxy statement for our 2025 Annual Meeting pursuant to Rule 14a-8 under the Exchange Act, stockholder proposals must be in writing and submitted to the Corporate Secretary, Delek US Holdings, Inc., 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027, and must otherwise comply with the requirements of Rule 14a-8. The proposal must be received no later than November 22, 2024 for us to consider it for inclusion.
Stockholders who desire to present business at our 2025 Annual Meeting, without inclusion in the Proxy Statement for such meeting, including a nomination of a candidate for election as director at such meeting, must notify our Corporate Secretary of such intent in accordance with our Bylaws by writing to our Corporate Secretary, Delek US Holdings, Inc., 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027. To be timely, such notice must be received no earlier than January 2, 2025, nor later than February 1, 2025, provided that if the date of the Annual Meeting is advanced more than 30 calendar days prior to or delayed by more than 60 calendar days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of the 90th calendar day prior to such annual meeting or the 10th calendar day following the day on which public disclosure of the date of such meeting is first made. The advance notice must also meet the other requirements of Section 2.02 of our Bylaws. You may obtain a copy of our Bylaws by writing to our Corporate Secretary at the address above.
| DELEK US HOLDINGS, INC. |
2024 PROXY STATEMENT | 87 | |
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APPENDIX A
FIRST AMENDMENT
TO THE
DELEK US HOLDINGS, INC.
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
Delek US Holdings, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “GCL”), does hereby certify as follows:
FIRST: That Article ELEVENTH of the Second Amended and Restated Certificate of Incorporation of the corporation, as amended, is hereby amended in its entirety to read as follows (the “Amendment”):
ELEVENTH: A director or officer (as defined in Section 102(b)(7) of the GCL) of this corporation shall not be personally liable to the corporation or its stockholders for monetary damages for the breach of any fiduciary duty as a director or officer, except (a) for any breach of the director’s or officer’s duty of loyalty to the corporation or its stockholders, (b) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (c) for a director under Section 174 of the GCL, as the same exists or hereafter may be amended, (d) for any transaction from which the director or officer derived an improper personal benefit, or (e) an officer in any action by or in the right of the corporation. If the GCL is amended after the date of incorporation of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the corporation shall be eliminated or limited to the fullest extent permitted by the GCL, as so amended.
SECOND: That the Amendment was duly adopted in accordance with the applicable provisions of Section 242 of the GCL.
THIRD: That the Amendment shall become effective upon filing with the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed this day of , 2024.
| DELEK US HOLDINGS, INC. | ||||
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Delek US Holdings, Inc. 310 Seven Springs Way Suite 500 Brentwood, Tennessee 37027 |
DEFINITIVE PROXY MATERIALS
VOTE BY INTERNET
Before the Meeting – Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information until 11:59 p.m. Eastern Time on the day before the meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
During the Meeting – Go to www.virtualshareholdermeeting.com/DK2024 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE – 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, New York 11717. |
KEEP THIS PORTION FOR YOUR RECORDS
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
DELEK US HOLDINGS, INC.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE “FOR” EACH DIRECTOR NOMINEE IN PROPOSAL 1:
| 1 Election of Directors: | ||||||||||||||
| NOMINEES: | For | Against | Abstain | |||||||||||
| 1 | Ezra Uzi Yemin | ☐ | ☐ | ☐ | ||||||||||
| 2 | Avigal Soreq | ☐ | ☐ | ☐ | ||||||||||
| 3 | Christine Benson Schwartzstein | ☐ | ☐ | ☐ | ||||||||||
| 4 | William J. Finnerty | ☐ | ☐ | ☐ | ||||||||||
| 5 | Richard J. Marcogliese | ☐ | ☐ | ☐ | ||||||||||
| 6 | Leonardo Moreno | ☐ | ☐ | ☐ | ||||||||||
| 7 | Gary M. Sullivan, Jr. | ☐ | ☐ | ☐ | ||||||||||
| 8 | Vasiliki (Vicky) Sutil | ☐ | ☐ | ☐ | ||||||||||
| 9 | Laurie Z. Tolson | ☐ | ☐ | ☐ | ||||||||||
| 10 | Shlomo Zohar | ☐ | ☐ | ☐ | ||||||||||
| THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE “FOR” PROPOSALS 2, 3, AND 4: | ||||||||
| FOR | AGAINST | ABSTAIN | ||||||
| 2 | To adopt the advisory resolution approving the executive compensation program for our named executive officers as described in the Proxy Statement. |
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| 3 | To approve the amendment to our Second Amended and Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation. |
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| 4 | Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the 2024 fiscal year. |
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Note: If any other matters come before the meeting or any adjournment thereof, the persons named in this proxy will vote in their discretion.
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
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YOUR VOTE IS IMPORTANT
Regardless of whether you plan to virtually attend the 2024 Annual Meeting of Stockholders,
you can be sure these shares are represented at the meeting by voting online or promptly
returning the proxy in the enclosed envelope.
Proxy card must be signed and dated on the reverse side.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The 2023 Annual Report, Notice & Proxy Statement are available at ir.delekus.com
Annual Meeting of Stockholders
May 2, 2024, 11:30 a.m., Central Daylight Savings Time
This proxy is solicited by the Board of Directors
Avigal Soreq and Reuven Spiegel, and each of them, as the true and lawful attorneys, agents and proxies of the undersigned, with full power of substitution and resubstitution, are hereby authorized to represent and to vote all shares of common stock, par value $0.01 per share, of Delek US Holdings, Inc. held of record by the undersigned on March 8, 2024, at the Annual Meeting of Stockholders to be held on May 2, 2024, at 11:30 a.m., Central Daylight Savings Time, via live webcast at www.virtualshareholdermeeting.com/DK2024, and any adjournment or postponement thereof. Any and all proxies heretofore given are hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD’S RECOMMENDATIONS.
(Continued and to be signed on the reverse side)