DEF 14A 1 corning3492731-def14a.htm DEFINITIVE PROXY STATEMENT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.            )
 
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[   ]   Soliciting Material Pursuant to §240.14a-12

  CORNING INCORPORATED  
  (Name of Registrant as Specified In Its Charter)  
 
       
 
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Table of Contents










2019 Notice of Annual Meeting
of Shareholders
& Proxy Statement












 


Table of Contents

Quality
Integrity
Performance
Leadership
Innovation
Independence
The Individual











Corning is guided by an enduring set of Values that define our relationships with employees, customers, and the communities in which we operate.


Table of Contents

   

 
 

Dear Fellow Shareholder:

I hope you will join Corning Incorporated’s Board of Directors, senior leadership, and other stakeholders at our 2019 Annual Meeting in Corning, New York, on May 2 at 11 a.m. Eastern Time. Shareholders will vote on the annual election of directors, approval of the 2019 equity plan for non-employee directors, and the ratification of Corning’s independent registered public accounting firm for 2019. In addition, they will provide an advisory vote on the 2018 compensation for our named executive officers.

This meeting is your opportunity to hear directly from leadership about Corning’s 2018 performance and our expectations for the future. We’re pleased with our strong execution since introducing our Strategy and Capital Allocation Framework in late 2015. With oversight and participation from our Board of Directors, we have distributed nearly $12 billion to shareholders through share repurchases and increases to our quarterly dividend. We’ve launched new innovations and strengthened our portfolio with strategic acquisitions. And we’ve positioned the company to drive sustainable long-term growth.

We work hard to maintain your trust, and one way we do that is by honoring our ongoing commitment to practicing sound corporate governance. We communicate consistently and openly with our shareholders. We follow industry best practices on executive pay, including tying compensation closely to company performance. And we continue to enhance our governance in many ways, such as adopting the principles embodied in the Shareholder-Director Exchange Protocol.

I’m also proud of how we advanced our commitment to sustainability and how we are improving our disclosure around all our practices and policies. Over the past decade, Corning has improved its energy efficiency by more than 30 percent. In 2018, the Company earned its fifth consecutive Energy Star Partner of the Year award and ten of our global manufacturing facilities exceeded energy efficiency goals set by the U.S. Environmental Protection Agency’s ENERGY STAR® Challenge for Industry. I am also proud to report that we celebrated 50 years of Diversity and Inclusion. Since 1968, Corning has established itself as a recognized corporate champion for diversity as demonstrated by our Values, the policies and workplace culture we maintain for our employees, and the issues we have chosen to support in the larger community.

I look forward to sharing more details at the Annual Meeting. The following pages contain the formal notice of meeting and the proxy statement. I encourage you to sign and return your proxy card or vote by telephone or Internet prior to May 2 so that your shares will be represented and voted at the meeting.

Thank you for your investment in Corning and your participation in our governance process.

Sincerely,

Wendell P. Weeks
Chairman of the Board, Chief Executive Officer and President



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Notice of 2019 Annual
Meeting of Shareholders
  

   

Thursday, May 2, 2019

   

11:00 a.m. Eastern Time

The Corning Museum
of Glass
One Museum Way,
Corning, New York 14830



ITEMS OF BUSINESS

1.

Election of 14 directors to our Board of Directors for the coming year;

2.

Advisory approval of our executive compensation (Say on Pay);

3.

Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm;

4.

Approval of the 2019 Equity Plan for Non-Employee Directors; and

5.

Any other business or action which may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.



   

corning.com/2019-proxy

   

Review and download this proxy statement and our Annual Report.

Sign up for electronic delivery of future Annual Meeting materials to reduce Corning’s impact on the environment.

WHO CAN VOTE

You may vote at our 2019 Annual Meeting if you were a shareholder of record at the close of business on March 4, 2019.

Your vote is important to us. Please exercise your right to vote.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 2, 2019: our proxy statement, 2018 Annual Report and other materials are available on our website at corning.com/2019-proxy.

Sincerely,

Linda E. Jolly
Vice President and Corporate Secretary
March 22, 2019

VOTE RIGHT AWAY

Your vote is very important. Even if you plan to attend the Annual Meeting, please promptly submit your proxy or voting instructions by Internet, telephone or mail to ensure the presence of a quorum. You may also vote in person at our Annual Meeting. If you are a shareholder of record, your admission ticket is attached to your proxy card. If your shares are held in the name of a broker, nominee or other intermediary, you must bring proof of ownership with you to the meeting.

By telephone
Dial toll-free 24/7
1-800-690-6903

By mail
Cast your ballot,
sign the proxy card
and send by mail

By Internet
Visit 24/7
proxyvote.com



2      CORNING 2019 PROXY STATEMENT


Table of Contents

 
Table of Contents
  

5 Proxy Statement Summary
16 Corporate Governance and the Board of Directors
16 Corporate Governance
18 Board Leadership Structure
18 Lead Independent Director
19 Committees
19 Audit
20 Compensation
20 Corporate Relations
20 Executive
20 Finance
21 Nominating and Corporate Governance
21 Director Independence
22 Policy on Transactions with Related Persons
22 Compensation Committee Interlocks and Insider Participation
22 Board Composition and Tenure
23 Board Nomination and Refreshment Process
24 Management Succession Planning
24 Risk Oversight
25 Compensation Risk Analysis
26 Board and Shareholder Meeting Attendance
26 Ethics and Conduct
26 Lobbying and Political Contributions Policy
26 Communications with Directors
27 Corporate Governance Materials Available on Corning’s Website
28     Proposal 1
Election of Directors
28 Board of Directors’ Qualifications and Experience
30 Corning’s Director Nominees
37 Director Compensation
37 2018 Director Compensation
38 Directors’ Charitable Giving Programs
40 Stock Ownership Information
40 Stock Ownership Guidelines
40 Section 16(a) Beneficial Ownership Reporting Compliance
41 Beneficial Ownership Table
42     Proposal 2
Advisory Approval of Executive Compensation (Say on Pay)
42 Say on Pay Proposal
43 Compensation Discussion & Analysis
43 Executive Summary
46 2018 Company Performance Overview
50 2018 Executive Compensation Program Details
54 Compensation Peer Group
55 Compensation Program – Other Governance Matters
57 Compensation Committee Report
58 2018 Compensation Tables
58 2018 Summary Compensation Table
61 2018 Grants of Plan Based Awards
62 Outstanding Equity Awards at 2018 Fiscal Year-End
64 Options Exercised and Shares Vested in 2018
64 Retirement Plans
66 Non-qualified Deferred Compensation
67 Arrangements with Named Executive Officers
71 Pay Ratio Disclosure


CORNING 2019 PROXY STATEMENT      3


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4      CORNING 2019 PROXY STATEMENT


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Proxy Statement Summary   

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. As used in this proxy statement, “Corning,” the “Company” and “we” may refer to Corning Incorporated itself, one or more of its subsidiaries, or Corning Incorporated and its consolidated subsidiaries.

   Annual Meeting of Shareholders   
 

Date and Time
May 2, 2019, 11:00 a.m. Eastern Time

 

Place
The Corning Museum of Glass
One Museum Way Corning, New York 14830

 

Record Date
March 4, 2019

 

Admission
See the instructions contained in “Frequently Asked Questions about the Meeting and Voting” on page 79.

On March 22, 2019, we posted this proxy statement, the accompanying proxy card and our 2018 Annual Report on our website at corning.com/2019-proxy and began mailing them shareholders who requested paper copies.

Proposals That Require Your Vote

Proposal       Board Vote
Recommendation
      More
Information
1 Election of 14 directors For Each Nominee page 28
2 Advisory approval of the Company’s executive compensation (Say on Pay) For page 42
3 Ratification of appointment of independent registered public accounting firm For page 72
4 Approval of the 2019 Equity Plan for Non-Employee Directors For page 76

Business Information – Who We Are

Corning is one of the world’s leading innovators in materials science. For more than 167 years, Corning has applied its unparalleled expertise in specialty glass, ceramics and optical physics to develop products that have created new industries, transformed people’s lives and unleashed significant new capabilities. Our innovation approach delivers long-term value for Corning and its shareholders.

Our reportable segments are as follows:

Reportable
Segments*
      2018 Core
Net Sales %
      Segments Description

Display
Technologies

manufactures glass substrates for high performance displays, including organic light-emitting diode (OLEDs) and liquid crystal displays (LCDs)

Optical
Communications

manufactures carrier and enterprise network solutions for the telecom and data center industries

Specialty
Materials

manufactures glass, glass ceramics, and crystals for specific applications including cover glass for display devices

Environmental
Technologies

manufactures ceramic substrates and filters for automotive and diesel emissions control

Life Sciences

manufactures glass and plastic labware, equipment, media and reagents to provide workflow solutions for scientific applications

*All other segments that do not meet the quantitative threshold for separate reporting are grouped as “All Other”. This group is primarily comprised of the pharmaceutical technologies business and new product lines, development projects and corporate investments. All Other represented 2% of Corning’s sales in 2018.


CORNING 2019 PROXY STATEMENT      5


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Proxy Statement Summary

Our 2018 Performance Highlights

Net Sales Earnings per Share Net Cash Provided By
Operating Activities
2018 GAAP Results

$11,290
million

$1.13
(diluted)

$2,919
million

2018 Core Results

$11,398
million
Core Net Sales

$1.78
(diluted)
Core EPS

$3,168
million
Adjusted Operating
Cash Flow

CORE PERFORMANCE MEASURES

In managing the Company and assessing our financial performance, we adjust certain measures provided by our consolidated financial statements with measures that are not calculated in accordance with GAAP and exclude specific items, to arrive at Core Performance Measures.

We believe that Core Performance Measures provide investors greater transparency to the information used by our management team to make financial and operational decisions. We measure our performance for variable compensation purposes using the same Core Performance Measures we discuss with and disclose to our investors.
   
Corning has adopted the use of constant currency reporting for the Japanese yen, New Taiwan dollar, Chinese yuan and South Korean won. For 2018, we used an internally derived yen-to-dollar management rate of ¥107, NT dollar-to-dollar rate of NT$31, a yuan-to-dollar rate of ¥6.7 and won-to-dollar management rate of ₩1,175. We have restated relevant prior periods to these constant currency rates for comparability purposes.
   
The Company believes that the use of constant currency reporting allows investors to understand our results without the volatility of currency fluctuations, and reflects the underlying economics of the translated earnings contracts we have entered into to mitigate the impact of changes in currency exchange rates on our earnings and cash flows. We have hedged approximately 77% of our projected yen exposure through 2022.

Non-GAAP measures are not an alternative, or a replacement, for financial results determined in accordance with generally accepted accounting principles. Please see Appendix A to this proxy statement for a reconciliation of the non-GAAP measures we use in this proxy statement to the most directly comparable GAAP financial measures.

Core Net Sales, Core Earnings per Share (Core EPS) and Adjusted Operating Cash Flow are non-GAAP financial measures used by our management to obtain a clearer view of Corning’s operating results.

Accordingly, these Core Performance Measures form the basis for our compensation performance metrics.


6      CORNING 2019 PROXY STATEMENT


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Proxy Statement Summary

Our Strategy and Capital Allocation Framework

In October 2015, Corning announced a Strategy and Capital Allocation Framework (the Framework) that reflects the Company’s financial and operational strengths, as well as its ongoing commitment to increasing shareholder value. The Framework outlines our leadership priorities, and articulates the opportunities we see across our businesses. We designed the Framework to create significant value for shareholders by focusing our portfolio and leveraging our financial strength. Under our Framework we target generating $26 to $30 billion of cash through 2019, returning more than $12.5 billion to shareholders through 2019 and investing $10 billion through 2019 to sustain our leadership positions and deliver growth.

Leadership Priorities through 2019
Focus Portfolio and Utilize Financial Strength

Focus Portfolio: Deliver strong financial performance and capital stewardship
—   Improve ROIC
Create new sales and profit streams
Seek upside for cash distributions, e.g., potential transactions outside focus areas

Utilize Financial Strength: Deploy $26-$30B in cash through 2019
—   Deliver >$12.5B to shareholders including >10% annual dividend increases
Invest ~$10B in our growth and sustained leadership
Target Debt/EBITDA* ≈ 2x

Progress on all Strategy and Capital Allocation Framework objectives remains excellent
● 2018 Core Sales and EPS up 11% with sales growth in every segment
● Display returns are stable
● Plan-to-date shareholder distributions of $11.8B with outstanding shares reduced ~35%
● Confident in ability to deliver sustained performance

* Target Debt to Target EBITDA, see Appendix A for definitions

Focusing Our Portfolio: Our probability of success increases as we invest in our world-class capabilities. Corning is concentrating approximately 80% of its research, development and engineering investment and capital spending on a cohesive set of three core technologies, four manufacturing and engineering platforms, and five market-access platforms. Our cost of innovation declines as we reapply our talents and repurpose our assets. By combining capabilities we create higher and more sustainable advantages, and, ultimately, delighted customers.

Focused and Cohesive Portfolio
Higher Success Rate, Lower Costs, Delighted Customers

CORNING 2019 PROXY STATEMENT      7


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Proxy Statement Summary

Utilizing Our Financial Strength: We expect to generate and deploy $26 to $30 billion through 2019. We plan to invest $10 billion of that amount to grow and maintain our market leadership positions. We also plan to distribute more than $12.5 billion to our shareholders through share repurchases and our quarterly dividend.

Utilize Financial Strength
2016-2019 Capital Allocation Model

(1) Target Debt to Target EBITDA, see Appendix A for definitions

Performance against the Strategy and Capital Allocation Framework: For the last three years, we have invested for growth through our Strategy and Capital Allocation Framework. The significant benefits of these investments are evident in our financial performance. In 2018, we built new capacity, launched new products, grew sales by more than $1 billion dollars, and extended our leadership position in all businesses. We exited the year with strong execution, expanded margins, and great momentum.

Highlights of progress across Corning’s market-access platforms include:

Optical Communications: Secured contracts with industry leaders in the carrier and data center segments that will add significant sales in 2019 and beyond, introduced new products for the hyperscale data center and carrier environments and expanded market access through the acquisition of 3M’s Communication Markets Division
Mobile Consumer Electronics: Extended the company’s leadership with the launch and adoption of Corning® Gorilla® Glass 6 as well as other cover glass and sensing technology innovations
Automotive: Gained significant new sales and platform wins for gasoline particulate filters including reaching the production milestone of 1 million GPFs; increased pull for Gorilla Glass for Automotive solutions, particularly the industry’s first AutoGrade™ Glass Solutions for automotive interiors, reaching more than 55 platform wins to date
Life Sciences Vessels: Increased shipments of Corning Valor® Glass fourfold year over year, indicating progress toward certification across more pharmaceutical companies
Display: Reached stable returns as the glass pricing environment continued to improve and Corning extended its global leadership by establishing the world’s first Gen 10.5 manufacturing facility

8      CORNING 2019 PROXY STATEMENT


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Proxy Statement Summary

A Tradition of Delivering Value to Shareholders

Corning’s progress on its Strategy and Capital Allocation Framework is part of a longer-term objective of delivering value to shareholders. While we have returned $11.8 billion of the $12.5 billion promised as part of the Framework that began in October 2015, over the past five years, Corning has delivered $17.4 billion to shareholders.

ANNUAL DISTRIBUTIONS TO SHAREHOLDERS (in $ millions)

ANNUAL DIVIDENDS PER COMMON SHARE AND INCREASE OVER PRIOR YEAR

On February 6, 2019, Corning’s Board declared an 11.1% increase in the Company’s dividend, from $0.18 to $0.20 per share quarterly, beginning with the dividend paid in the first quarter of 2019. This marks the eighth dividend increase since October 2011.

CORNING 2019 PROXY STATEMENT      9


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Proxy Statement Summary

Our Director Nominees

All director nominees are independent with the exception of Mr. Weeks.

Name and Primary Occupation Age Director
since
Committee Memberships* Other Public 
Company Boards
Donald W. Blair
Retired Executive Vice President and
Chief Financial Officer, NIKE, Inc.
     60      2014     
Audit
Finance
     1
Leslie A. Brun
Chairman and Chief Executive Officer
Sarr Group, LLC
66 2018
Audit
Compensation
3
Stephanie A. Burns
Retired Chairman and Chief Executive Officer,
Dow Corning Corporation
64 2012
Audit
Corporate Relations
(Chair)
2
John A. Canning, Jr.
Chairman,
Madison Dearborn Partners, LLC
74 2010
Executive
Finance
Governance
0
Richard T. Clark, Lead Independent Director
Retired Chairman, Chief Executive Officer
and President, Merck & Co., Inc.
72 2011
Compensation
Executive
Governance
1
Robert F. Cummings, Jr.
Retired Vice Chairman of Investment Banking,
JPMorgan Chase & Co.
69 2006
Executive
Finance (Chair)
Governance
1
Deborah A. Henretta
Retired Group President of Global E-Business,
Procter & Gamble Company
57 2013
Audit
Corporate Relations
3
Daniel P. Huttenlocher
Dean and Vice Provost,
Cornell Tech
60 2015
Audit
Finance
1
Kurt M. Landgraf
President, Washington
College
72 2007
Audit (Chair)
Compensation
Executive
1
Kevin J. Martin
Vice President, Mobile and Global Access Policy,
Facebook, Inc.
52 2013
Corporate Relations
Governance
0
Deborah D. Rieman
Retired Executive Chairman,
MetaMarkets Group
69 1999
Audit
Compensation (Chair)
0
Hansel E. Tookes II
Retired Chairman and Chief Executive Officer,
Raytheon Aircraft Company
71 2001
Compensation
Executive
Governance (Chair)
3
Wendell P. Weeks
Chairman, Chief Executive Officer and President,
Corning Incorporated
59 2000
Executive (Chair)
2
Mark S. Wrighton
Chancellor and Professor of Chemistry,
Washington University in St. Louis
69 2009
Audit
Finance
2
* Audit = Audit Committee; Compensation = Compensation Committee; Corporate Relations = Corporate Relations Committee; Executive = Executive Committee; Finance = Finance Committee; Governance = Nominating and Corporate Governance Committee

10      CORNING 2019 PROXY STATEMENT


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Proxy Statement Summary

Governance Highlights

Corning is committed to maintaining strong corporate governance as a critical component of driving sustained shareholder value. The Board of Directors continually monitors emerging best practices in governance to best serve the interests of the Company’s stakeholders.

Following is a brief overview of some of our most notable corporate governance practices and policies:
Qualifying shareholders are permitted to include director nominees in the proxy statement (“proxy access”)
 
We contacted holders of over 45% of our common stock last year to discuss our executive compensation programs and corporate governance practices;
 
We ensure alignment of our corporate governance practices with the Investor Stewardship Group’s corporate governance Principles for U.S. Listed Companies (see page 16);
 
We adopted the principles embodied in the Shareholder-Director Exchange (SDX) Protocol; and
 
We have recently enhanced our disclosures regarding sustainability and environmental, social and governance practices.
The Corporate Governance section beginning on page 16 describes our governance framework, which includes the following:
Annual election of all directors

Majority vote standard for the election of directors in uncontested elections

Active shareholder engagement, including by directors, to directly gather investor perspectives

Active, engaged and experienced Lead Independent Director

Independent board committees, with all committees (except the Executive Committee) consisting entirely of independent directors
Regular executive sessions of independent directors

Market competitive director compensation program designed to support and reinforce our governance principles

Robust stock ownership guidelines for directors and named executive officers

Prohibition on pledging, hedging or trading in derivatives of the Company’s stock for directors and employees

Clawback policy for executive incentive compensation in the event of certain financial restatements

Shareholder Communication

Communicating with shareholders, particularly about our Strategy and Capital Allocation Framework, is critically important to Corning. We communicate with our shareholders through a number of channels, including quarterly earnings calls, Securities and Exchange Commission (SEC) filings, Investor Days, investor conferences, our website at corning.com and other electronic communications. Our executives also routinely engage with investors through in-person meetings and calls. In addition to regular discussions regarding our Strategy and Capital Allocation Framework, we also conduct outreach to the governance teams at our largest investors.

In 2018, as part of our shareholder outreach:

we met with 45% of our outstanding shares and approximately two-thirds of our fifty largest shareholders
 
we discussed our Strategy and Capital Allocation framework, governance, compensation, human capital management and sustainability
 
our investors expressed satisfaction with our Strategy and Capital Allocation Framework, as well as our executive compensation program

More information on our shareholder outreach can be found on page 49.

Since the introduction of our Strategy and Capital Allocation Framework though December 31, 2018, Corning’s TSR is up 95.3%, compared with 32.6% for the S&P 500.

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Proxy Statement Summary

Environmental, Social and Governance Matters and Human Capital Management

In accordance with Corning’s Values, we believe that a commitment to positive environmental, social and governance-related business practices strengthens our company and our community, increases our connection with our shareholders, and helps us better serve our customers and the communities in which our employees live and we operate. We also see in these commitments additional ways of creating value for our shareholders, our employees, our customers, and the wider world. As part of our corporate risk management process, the Board and our management monitor long-term risks that may be impacted by environmental, social and governance issues.

Corning demonstrates its commitment to environmental, social, governance and human capital matters, and its Values, in many ways that can be explored on our Sustainability website at corning.com/sustainability. Specifically:

Corning is committed to protecting the environment through the continuous improvement of our processes, products, and services.

For over forty years, Corning has been a leader in developing clean-air technologies, investing more than $2 billion in the development of clean-air products and holding more than 600 environmental technology patents. In 2018, Corning won the European Commission’s Horizon 2020 Materials for Clean Air Award for developing an innovative solution to reduce particulate matter in the air.

The U.S. Environmental Protection Agency has awarded Corning the ENERGY STAR® Partner of the Year for the last 5 years. In 2018, ten of our global manufacturing facilities exceeded energy efficiency goals set by the U.S. Environmental Protection Agency’s ENERGY STAR® Challenge for Industry.

Corning made its first investment in the China Clean Energy Fund in 2018, demonstrating its commitment to promoting renewable energy worldwide.

In 2018, Corning’s commitment to positive environmental, social and governance-related business practices resulted in it receiving an “AA” rating by MSCI ESG Research, Inc., placing Corning among the top quartile of companies in our industry.

In a significant milestone, Corning celebrated the 50th anniversary of its formal Diversity and Inclusion initiative in 2018. What began in 1968 as a U.S.-centered, compliance focused effort today has grown into a movement for diversity and inclusion on a global scale. At Corning:

women make up 40% of all employees, up from about 20% 15 years ago;

in 2017 we achieved 100% pay equity in the United States for men and women (and we run our model two to four times per year to ensure we maintain this equity) and are working to implement it globally; and

since 2006 we have increased diversity from 23% to 42% in our Corporate Management Group, which includes the approximately 200 top leaders throughout our global organization, and increased diversity from 8% to 28% among corporate officers.

Corning has received a score of 100 on the Human Rights Campaign Corporate Equality Index for fourteen consecutive years

Corning’s Human Rights Policy operates in conjunction with, and is mutually supportive of, our Code of Conduct, our Supplier Code of Conduct, our product stewardship programs, our global environmental, health and safety policies and procedures, and our compliance program. Together, these policies and practices demonstrate our firm commitment to respect and advance human rights. More information about these policies can be accessed through our Sustainability page linked above.

For the third year in a row, Corning was named to the “Best-of-the-Best” Corporations for Inclusion list by the National Gay & Lesbian Chamber of Commerce, distinguishing Corning as one of the “Best Places to Work for LGBT Equality” and earned a score of 100 on the Disability Equality Index and recognition as a “Best Place to Work” by the American Association of People with Disabilities and Disability:IN.

Corning received recognition as a Top Supporter of Historically Black Colleges and Universities (HBCUs) for the fifteenth consecutive year by the Council of Engineering Deans of HBCUs.

12      CORNING 2019 PROXY STATEMENT


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Proxy Statement Summary

Supporting Sustainable Communities through Charitable Outreach

Corning is headquartered in a small community in upstate New York and strives to establish itself as the employer of choice for the workers on whom it depends. Throughout its history, the Company has routinely made contributions to civic, educational, charitable, cultural and other institutions that improve the quality of life and increase the resources of the surrounding community, making it more attractive to employees. In a small community, our employees, including executives and their families, inevitably have relationships with the non-profit organizations that receive such contributions from the Company.

The Company undertakes its philanthropic activities both directly and indirectly through The Corning Incorporated Foundation (the Foundation), a separate 501(c)3 organization. We believe in being an active corporate citizen and the Foundation directs its grant-making toward the communities where Corning operates and its employees live, enabling initiatives in four areas: education, culture, human services and volunteerism. In 2018, Corning donated $3.0 million to the Foundation, and the Foundation disbursed approximately $4.6 million, of which approximately 32% was directed toward initiatives supporting education, including grants made under the Corning Incorporated Foundation Matching Gifts and Dollars for Doers programs. Additional information about the Foundation can be found at corningfoundation.org.

Corning’s direct giving includes annual contributions to both local and international cultural and educational institutions. Locally, the Corning Museum of Glass (CMoG) – the world’s leading glass museum – is the largest recipient of the Company’s support. In addition to being a key cultural and community hub, CMOG also provides Corning with a unique innovation crucible where our glass scientists and experts collaborate with glass artists and designers to creatively explore the novel properties of glass and innovate new uses in an environment unconstrained by commercial considerations. Wendell P. Weeks (chairman, CEO and president), David Morse (executive vice president and chief technology officer) and Jeffrey W. Evenson (executive vice president and chief strategy officer) serve on the CMoG board of trustees. In 2018, Corning provided cash and non-cash contributions of services to CMoG of approximately $44 million.

Corning provides financial support to the Alternative School for Math and Science (ASMS), a private middle school located in Corning, New York, with an advanced curriculum focusing on science and math. Currently, children of Corning employees represent approximately 53% of its enrollment. In 2018, non-cash contributions totaled approximately $1.5 million and cash contributions totaled $300,000. Christine M. Pambianchi, (executive vice president, People and Digital) and Kim Frock Weeks (spouse of Wendell P. Weeks, our chairman, CEO and president) serve on the ASMS board of trustees. Ms. Frock Weeks also serves as administrative head of school at ASMS, but receives no salary or benefits in this role.

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Proxy Statement Summary

Executive Compensation Highlights

As shown below, in 2018 approximately 89% of our CEO’s target total compensation (excluding employee benefits and perquisites) and 80% of the other Named Executive Officers’ (NEOs) target total compensation (excluding employee benefits and perquisites) was variable and depended on Corning’s operating performance or stock price.

2018 Pay Components

Pay Component    Tenor and Term      Role      Determination Factors
Base Salary Reviewed annually; Paid biweekly
Fixed portion of annual cash income
Value of role in competitive marketplace

Value of role to the Company

Skills and performance

Internal equity

Short-Term Incentives

Cash - GoalSharing Plan

Cash - Performance Incentive Plan (PIP)
Variable; earned amounts paid annually in February (Goalsharing) and March (PIP)
Variable portion of annual cash income

Focus executives on annual objectives that support the delivery of the short-term business plan
GoalSharing awards apply to all employees, generally at 5% target based on annual corporate and business unit performance. 

PIP target awards are set individually based on the competitive marketplace and level of experience

PIP actual value earned relative to target is based on annual corporate performance against pre-set goals

Long-Term Incentives

Cash Performance Units

Restricted Share Units

Stock Options
Variable; measured and paid (in the case of earned CPUs), or vested (in the case of RSUs and Options), at close of a 3-year performance period
Reinforce need for long-term sustained performance

Focus executives on annual objectives that support the long-term strategy and creation of value

Align the long-term interests of executives and shareholders

Balance cash pay with equity ownership

Encourage retention
Target awards are based on competitive marketplace, level of executive, skills and performance

Actual value earned relative to target is based on corporate performance against pre-set goals and stock price performance over the period

CPU payout may be increased or decreased up to 10% based on ROIC performance over the three-year performance period.

All Other:

Benefits

Perquisites

Severance Protection
Ongoing or Event-Driven
Support the health and security of our executives, and their ability to plan for retirement

Enhance executive productivity
Competitive marketplace 

Limited offerings beyond what is offered to all employees

Level of executive

Standards of good governance

Target Total Compensation

CEO       ALL OTHER NEOs
   

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Proxy Statement Summary

Our Incentive Compensation Performance Metrics

Our goals for annual and long-term incentives focus on the key drivers for executing our Strategy and Capital Allocation Framework and creating and sustaining long-term shareholder value: profitability, cash generation and revenue growth.

Our Metrics and Why We Use Them

Core Earnings per Share (Core EPS):

Core EPS is our key measure of profitability. Corning generally budgets for share repurchases in establishing its target Core EPS measures.

Core Net Sales:

Sales growth, both organic through innovation and through acquisitions, is critical to our short- and long-term success.

Adjusted Operating Cash Flow less CapEx:

Generating strong positive cash flow enables our ongoing investment in growth, sustained leadership and returns to shareholders.

Return on Invested Capital (ROIC)

We focus on ROIC because it reflects our ability to generate returns from the capital we have deployed in our operations. The Cash Performance Units (CPUs) payout is increased or decreased up to 10% based on Corning’s ROIC over the three-year performance period.

Short Term Incentives

PERFORMANCE INCENTIVE PLAN (PIP) – 100% CORPORATE FINANCIAL PERFORMANCE
Components       Weighting       % of target
earned
Core EPS 75% 116%
Core Net Sales 25% 155%
2018 performance result 126%
 
GOALSHARING – 25% CORPORATE PERFORMANCE, 75% BUSINESS UNIT PERFORMANCE
Components % of base
salary earned
Corporate financial performance — 1.25% target × 126% PIP performance 25% 1.58%
Average Business Unit Performance 75% 4.83%
2018 performance result 6.41%

Long Term Incentives (LTI)

CASH (CASH PERFORMANCE UNITS – 60% OF LTI AWARD TARGET)
Components       Weighting       % of target
earned, 2018
performance
year
Operating Cash Flow less CapEx 70% 128%
Core Net Sales 30% 127%
2018 performance result 128%
 
2016-2018 CPU PERFORMANCE RESULTS
Components % of target
earned,
2016-2018
Performance
2016 performance result 88%
2017 performance result 120%
2018 performance result (above) 128%
2016-2018 average performance 112%

ROIC MODIFIER
  2016-2018 average CPU performance result    ×    ROIC Modifier      =      112%     ×     4.74%
  Final percentage of target amount of 2016 CPUs to be paid in 2018 = 117%

EQUITY
Award type       Percentage of
LTI award target
      Value
RESTRICTED STOCK UNITS 25% Dependent upon Corning common stock price on the vesting date
OPTIONS 15% Dependent upon Corning common stock price increase, if any, between time of the grant and time of exercise

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Corporate Governance
and the Board of Directors
  

Corporate Governance

Our Board of Directors employs practices that foster effective Board oversight of critical matters such as strategy, management succession planning, financial and other controls, risk management and compliance. The Board reviews our major governance policies, practices and processes regularly in the context of current corporate governance trends, regulatory changes and recognized best practices. Corning also chooses to align its corporate governance practices with the Investor Stewardship Group’s (ISG) Corporate Governance Framework for U.S. Listed Companies.

The following sections provide an overview of our corporate governance structure and processes, including key aspects of our Board operations, and how they align with the ISG Principles for U.S. Listed Companies.

Practice       Description
ISG Principle 1: Boards are accountable to shareholders
Annual election of directors All directors are elected annually, which reinforces our Board’s accountability to shareholders.
Majority voting standard for director elections Our by-laws mandate that directors be elected under a “majority voting” standard in uncontested elections. Each director nominee must receive more votes “For” his or her election than votes “Against” in order to be elected.
Proxy access Eligible shareholders may include their director nominees in our proxy materials.
No poison pill Corning does not have a poison pill.
ISG Principle 2: Shareholders should be entitled to voting rights in proportion to their economic interest
One-share, One-vote Corning’s has one class of voting stock.
ISG Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives
Shareholder outreach Management and Board members met with investors owning 45% of shares outstanding/two-thirds of Corning’s fifty largest shareholders in 2018. Engagement topics included Corning’s Strategy and Capital Allocation Framework, governance, compensation, human capital management, and sustainability matters.
ISG Principle 4: Boards should have a strong, independent leadership structure
Lead Independent Director Our Corporate Governance Guidelines require a Lead Independent Director with specific responsibilities to ensure independent oversight of management whenever our CEO is also the Chair of the Board. See page 18.
Annual Evaluation of Leadership Structure The Board considers the appropriateness of its leadership structure annually and discloses in the proxy statement why it believes the current structure is appropriate. See page 18.

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Practice       Description
ISG Principle 5: Board should adopt structures and practices that enhance their effectiveness
Independence Our Corporate Governance Guidelines require a substantial majority of our directors to be independent. Currently, all directors but one (or 93%) are independent. Except for our Executive Committee, each of our Board committees consists entirely of independent directors. See page 21.
Skills and qualifications Our Board is composed of accomplished professionals with broad perspectives, skills, experiences, and knowledge relevant to our business, resulting in a high-functioning and engaged Board. A matrix of relevant skills can be found on page 29.
Commitment to Diversity The Committee seeks to achieve diversity within the Board and adheres to the Company’s anti-discrimination policies. Accordingly, the Committee is committed to actively seeking out highly qualified women and minority candidates, as well as candidates with diverse backgrounds, skills and experiences, to include in the pool from which Board nominees are chosen. See page 23.
Director tenure The current average tenure of members of our Board, excluding our CEO Mr. Weeks, is 8.2 years. Our director retirement policy requires a director to retire at the annual meeting of shareholders following the director’s 74th birthday. The Board, upon a recommendation of the Nominating and Corporate Governance Committee, may waive this limitation for any Director if the Board determines that it is in the best interests of the Company. In addition, a director is required to submit an offer of resignation for consideration by the Board upon any significant change in the director’s principal employment or responsibilities. See page 22.
Director overboarding Corning values director participation on other public company boards as a means of adding rigor to our governance and risk oversight practices. However, we have a policy to help provide confidence that each of our directors can dedicate the meaningful amount of time necessary to be a highly effective member of the Corning Board. Absent review and approval by the Nominating and Corporate Governance Committee, a non-employee director may serve on no more than four other public company boards and an employee director may serve on no more than two other public company boards.
Board and committee evaluations The Board and each committee conducts an annual review of its effectiveness. The Chair of the Nominating and Corporate Governance Committee, as part of the Board evaluation, annually interviews each director and solicits his or her opinion regarding the Board’s performance, effectiveness and areas of focus. From those discussions, the Chair reports the results of the self-evaluation to the full Board, composes a list of action items and follows-up to ensure implementation.
Meeting attendance Directors attended 99% of combined total Board and applicable committee meetings in 2018, and all then-sitting directors attended the annual meeting. See page 26.
ISG Principle 6: Boards should develop management incentive structures that are aligned with the long-term strategy of the company
Robust stock ownership guidelines We require robust stock ownership for directors (5x annual cash retainer), CEO (6x base salary), other NEOs (3x base salary) and non-NEO senior management (1.5x base salary). See page 40.
Shareholder support for executive compensation Corning’s executive compensation program received 90% shareholder support in 2018.
Compensation Committee oversight of executive compensation The Compensation Committee annually reviews and approves incentive program design, goals and objectives for alignment with compensation and business strategies.
Long- and short-term goals drive executive compensation Annual and long-term incentive programs are designed to reward financial and operational performance in support of Corning’s Strategy and Capital Allocation Framework, a topic on which management regularly engages shareholders, and which has resulted in a significant increase (95%) in shareholder value since its inception.
Clear communication of economic drivers of executive compensation The proxy statement clearly communicates the link between management incentive plans and the Company’s short and long-term performance, and the success of the Company’s Strategy and Capital Allocation Framework in particular.

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Corporate Governance and the Board of Directors

Board Leadership Structure

The Board regularly considers the issue of board leadership in committee meetings and executive sessions of the independent directors. As the Board reviews its leadership structure, it considers a variety of factors, with a particular focus on those described on page 29. If the Chair and CEO roles are combined, our Corporate Governance Guidelines require that the independent directors annually appoint an independent director to serve as Lead Independent Director. The Lead Independent Director has significant authority and responsibilities with respect to the operation of the Board, as described below under the heading “Lead Independent Director.” The Company believes that a Lead Independent Director effectively promotes strong Board governance and oversight.

The Company’s Corporate Governance Guidelines provide that the Board must annually review whether the role of Chairman should be a non-executive position or combined with that of the CEO. Early in 2019, the Board determined that, at the present time, a combined Chairman and CEO supplemented by a strong Lead Independent Director continues to provide appropriate leadership and oversight and ensures effective functioning of management and the Company.

Richard T. Clark was re-appointed, effective February 6, 2019, to the role of Lead Independent Director of the Board by the independent directors.

Lead Independent Director

Our Lead Independent Director is appointed annually by the independent directors.

The Lead Independent Director’s regular duties include:

presiding at all meetings at which the Chair is not present, including executive sessions of the independent directors (which are held at every Board meeting);

leading the Board’s oversight of Corning’s Strategy and Capital Allocation Framework;

facilitating regular CEO performance reviews and ongoing management succession planning reviews;

participating in conversations with the Company’s shareholders;

serving as liaison between the Chair and the independent directors;

approving Board meeting agendas and schedules;

approving the type of information to be provided to directors for Board meetings;

calling meetings of the independent directors when necessary and appropriate; and

performing such other duties as the Board may from time to time designate.

Our current Lead Independent Director, Richard T. Clark, performs the following additional duties:

meeting with the CEO after regularly scheduled Board meetings to provide feedback on the independent directors’ deliberations; and

regularly speaking with the CEO between Board meetings to discuss matters of concern, often following consultation with other independent directors.

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Corporate Governance and the Board of Directors

Committees

As of the date of this proxy statement, the Board has 14 directors and the following six committees: (1) Audit Committee; (2) Compensation Committee; (3) Corporate Relations Committee; (4) Executive Committee; (5) Finance Committee; and (6) Nominating and Corporate Governance Committee. Each of the committees operates under a written charter adopted by the Board except the Executive Committee, which operates pursuant to Corning’s by-laws. The committee charters and the by-laws are available on our website at investor.corning.com/investor-relations/governance/overview/default.aspx. Each committee reviews and reassesses the adequacy of their charter annually, conducts annual evaluations of their performance with respect to their duties and responsibilities as laid out in the charter, and reports regularly to the Board with respect to the committee’s activities. Additionally, the Board and each of the committees has the authority to retain outside advisors as the Board and/or each committee deems necessary.

Director membership on committees of Corning’s Board is set forth in the following table. “C” denotes Chair of the committee.

Board Committees
Audit g g g g g C g g
Compensation g g g C g
Corporate Relations C g g
Executive g g g g g C
Finance g g C g g
Nominating and Corporate Governance g g g g C

The committees and their functions are as follows:

Committee       Primary Responsibilities

Audit(1)

Number of Meetings
in 2018: 10

Assists the Board of Directors in its oversight of (i) the integrity of Corning’s financial statements, (ii) the independent registered public accounting firm and (iii) Corning’s compliance with legal and regulatory requirements
Approves the appointment of Corning’s independent registered public accounting firm, oversees the firm’s qualifications, independence and performance, and determines the appropriateness of fees for the firm
Reviews the effectiveness of Corning’s internal control over financial reporting, including disclosure controls and procedures
Reviews the results of Corning’s annual audit and quarterly and annual financial statements
Regularly reviews our enterprise risk management program; monitors legal and regulatory risks by regular discussions with management; evaluates potential risks related to accounting, internal control over financial reporting, tax planning and cybersecurity

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Corporate Governance and the Board of Directors

Committee       Primary Responsibilities

Compensation(2)

Number of Meetings
in 2018: 6

Establishes Corning’s goals and objectives with respect to executive compensation
Evaluates the CEO’s performance in light of Corning’s goals and objectives
Determines and approves compensation for the CEO and other Company officers
Recommends to the Board the compensation arrangements for non-management directors
Oversees Corning’s equity compensation plans and makes recommendations to the Board regarding incentive plans
Monitors potential risks related to the design and administration of compensation plans and policies, and benefits and perquisites plans and policies, including performance-based compensation programs, to promote appropriate incentives in line with shareholder interest that do not promote excessive risk-taking

Corporate
Relations

Number of Meetings
in 2018: 5

Assists the Board in fulfilling its oversight responsibility by reviewing Corning’s strategies and policies in, and overseeing risks related to, the areas of public relations and reputation, employment policy and employee relations, political activities, public policy, community responsibility, and environmental and social matters. These areas include:
-Corporate identity, investor relations, media relations (including social media), crisis communications, and product liability
-Safety and health policies; code of conduct; values; diversity and inclusion, Company values, human rights and labor matters, and compliance
-Political and lobbying activities, and relationships with significant governmental agencies in the countries in which the Company operates
-Environmental policies, sustainable development, energy and water management policies
-Charitable contribution strategies, and significant projects undertaken to improve communities within which the company has significant operations and employment

Executive

Number of Meetings
in 2018: 4

Serves primarily as a means of taking action requiring Board approval between regularly scheduled meetings of the Board, and is authorized to act for the full Board on matters other than those items specifically reserved by New York law to the Board

Finance

Number of Meetings
in 2018: 6

Reviews all potential material transactions, including mergers, acquisitions, divestitures and investments in third parties
Reviews capital expenditure plans and capital projects
Monitors Corning’s short- and long-term liquidity
Reviews Corning’s tax position and strategy
Reviews and recommends for approval by the Board declaration of dividends, stock repurchase programs, and short- and long-term financing transactions
Monitors strategic risks related to financial affairs, including capital structure and liquidity risk, transaction execution risk, credit and counterparty risk, market risk, insurance risk, and foreign exchange risk; reviews the policies and strategies for managing financial exposure and contingent liabilities

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Corporate Governance and the Board of Directors

Committee       Primary Responsibilities

Nominating and
Corporate
Governance(3)

Number of Meetings
in 2018: 5

Determines the criteria for selecting and assessing director nominees, identifies individuals qualified to become Board members, reviews candidates recommended by shareholders, and recommends to the Board director nominees to be proposed for election at the annual meeting of shareholders
Monitors significant developments in the regulation and practice of corporate governance
Monitors potential risks related to governance practices by reviewing succession plans and performance evaluations of the Board and CEO, monitoring legal developments and trends regarding corporate governance practices, and evaluating related party transactions
Assists the Board in assessing the independence of directors and reviews transactions between Corning and related persons that are required to be disclosed in our filings with the SEC
Identifies Board members to be assigned to the various committees
Oversees and assists the Board in the review of the Board’s performance
Reviews activities of Board members and senior executives for potential conflicts of interest
(1)

The Board of Directors has determined that each member of the Audit Committee satisfies the applicable audit committee independence requirements of the New York Stock Exchange (NYSE) and the SEC. The Board also determined that each member of our Audit Committee is financially literate and Mr. Landgraf, Mr. Blair, Mr. Brun, Dr. Burns and Dr. Wrighton are “audit committee financial experts” within the meaning of the applicable SEC rules.

(2)

The Board of Directors has determined that each member of the Compensation Committee satisfies the applicable compensation committee independence requirements of the NYSE and the SEC.

(3)

The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee satisfies the applicable nominating committee independence requirements of the NYSE.

Director Independence

Our Board is 93% independent and such independent oversight bolsters our success. Our Board has determined that each of our non-employee directors qualifies as “independent” in accordance with the listing requirements of the NYSE, applicable SEC rules and the Company’s director qualification standards. Mr. Weeks is not independent because he is an executive officer of Corning.

The NYSE listing requirements state that no director may be qualified as “independent” unless our Board affirmatively determines that the director has no material relationship with Corning. When making independence determinations, the Board considers all relevant facts and circumstances which might bar a director from being determined to be “independent”, including the NYSE criteria.

Our Corporate Governance Guidelines require the Board to make an annual determination regarding the independence of each of our directors. In making its independence determinations, the Board considered transactions, if any, that occurred since the beginning of 2016 between Corning and entities associated with our independent directors or members of their immediate family. The Board also reviewed and discussed information with regard to each director’s business and personal activities as they may relate to Corning and Corning’s management. It considered that each of Mr. Martin, Ms. Henretta and Drs. Huttenlocher and Wrighton is or were, during the previous three years, an employee of a company or organization that had a business relationship with Corning at some time during those years. The Board also considered: that Corning’s business relationships with each such company or organization were ordinary course/arm’s length dealings; no Corning director had a personal interest in, or received a personal benefit from, such relationships; any payments or contributions to or from each of these entities constituted less than the greater of $1 million, or 2% of such entity’s consolidated gross revenues in each of those years; that such relationships arise only from such director’s position as an employee of the relevant company with which Corning does business; that such director has no input or direct or indirect material interest in any of the business relationships or transactions; that such director had no role or financial interest in any decisions about any of these relationships or transactions; and that such a relationship does not bar independence under the NYSE listing requirements, applicable SEC rules or Corning’s director qualification standards.

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Corporate Governance and the Board of Directors

Based on all of the relevant facts and circumstances, the Board concluded that none of the director relationships mentioned above constituted a material relationship with Corning that represents a potential conflict of interest, or otherwise interferes with the exercise by any of these directors of his or her independent judgment with respect to Corning.

Policy on Transactions with Related Persons

The Board of Directors has a policy requiring the full Board or a designated Board committee to approve or ratify any transaction involving Corning in which one of our directors, nominees for director, executive officers, or greater than 5% shareholders, or their immediate family members, have a direct or indirect material interest and where the amount involved exceeds $120,000 in any fiscal year. The Board has delegated to the Nominating and Corporate Governance Committee the responsibility for reviewing and approving any such transactions.

In determining whether to approve or ratify any such transaction, the Board or relevant committee must consider, in addition to other factors deemed appropriate, whether the transaction is on terms no less favorable to Corning than transactions involving unrelated parties. No director may participate in any review, approval or ratification of any transaction if he or she, or his or her immediate family member, has a direct or indirect material interest in the transaction.

We did not have any transactions requiring review and approval in accordance with this policy during 2018.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is now, or has ever been, an officer or employee of Corning. No member of the Compensation Committee had any relationship with Corning or any of its subsidiaries during 2018 pursuant to which disclosure would be required under applicable rules of the SEC pertaining to the disclosure of transactions with related persons. No Corning executive officer currently serves or served during 2018 on the board of directors or compensation committee of another company at any time during which an executive officer of such other company served on Corning’s Board or Compensation Committee.

Board Composition and Tenure

Our Board is responsible for the oversight and success of our Company. Beyond a broad range of skills and experiences, we seek to maintain an optimal mix of newer directors, who bring fresh perspectives, and longer-tenured directors, who have contributed to developing our strategy – which takes a long-term approach to innovation – and have acquired an in-depth understanding of our global organization. The result is a high-functioning and engaged Board. A supermajority of independent directors ensures robust debate and challenged opinions in the boardroom, while diversity of gender, age, ethnicity and expertise contributes to a diverse range of views. Our 14 directors include a diverse range of individuals, including three women, two African-Americans, and four directors who hold science, technology or mathematics Ph.Ds. We also have two decades of age diversity among our directors, with their ages ranging between 52 and 74 years. We also value the broad corporate governance experience of directors who serve on the boards of other public companies, which adds additional rigor to our governance and risk oversight practices.

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CHARACTERISTICS OF OUR BOARD (EXCLUDING OUR CEO)
 
5
new directors
joined the Board
in the last six years
100%
Independent
3
Women
 
 
2
African-
Americans
Average age of
directors is
66
Average tenure of
8.2 years

Board Nomination and Refreshment Process

When considering Board candidates, the Nominating and Corporate Governance Committee considers those factors most relevant to the Company’s needs, including related knowledge, diversity of background, and experience in areas including business, finance, accounting, science and technology, marketing, manufacturing, operations, international business, government and human capital management. The Committee assess personal qualities of leadership, character, judgment, ethics and reputation; roles and contributions valuable to the business community and the ability to act on behalf of shareholders; whether the candidate is free of conflicts and has the time required for preparation, participation and meeting attendance. In February 2019, the Committee formalized its diversity focus by approving new Corporate Governance Guidelines which state that it will actively seek out highly qualified women and minority candidates, as well as candidates with diverse backgrounds, skills and experiences, to include in the pool from which Board nominees are chosen.

In the case of incumbent directors, the Nominating and Corporate Governance Committee will review such directors’ overall service to the Company during their term, including the number of meetings attended, level of participation, quality of performance, and any transactions of such directors with the Company during their term. For those potential new director candidates who appear upon first consideration to meet the Board’s selection criteria, the Nominating and Corporate Governance Committee will conduct appropriate inquiries into their background, qualifications and skills relevant to Corning’s Strategy and Capital Allocation Framework and, depending on the result of such inquiries, arrange for in-person meetings with the potential candidates.

The Nominating and Corporate Governance Committee uses multiple sources for identifying director candidates, including executive search firms, its members’ own contacts, and referrals from other directors, members of management and the Company’s advisors. To maintain a pipeline for new directors, the Nominating and Corporate Governance Committee has retained the executive search firm of Spencer Stuart to help identify director prospects, perform candidate outreach, assist in reference and background checks, and provide other related services on an ongoing basis. Director candidates recommended by shareholders in the manner described on page 84 will be considered in the same manner in which the Nominating and Corporate Governance Committee evaluates candidates recommended by other sources. In addition, our by-laws permit a group of up to 20 shareholders who have owned a minimum of 3% of our outstanding capital stock for at least three years to submit director nominees for up to the greater of two directors or 20% of the board for inclusion in our proxy statement. See “How Do I Submit A Shareholder Proposal For, Or Nominate a Director For Election At, Next Year’s Annual Meeting” on page 84 of this proxy statement.

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Corporate Governance and the Board of Directors

Management Succession Planning

One of the Board’s primary responsibilities is ensuring that Corning has a high-performing management team in place. The Company’s CEO is supported by a Management Committee of ten senior executives that oversee the full sphere of the Company’s business, of which four are also our Named Executive Officers. The Board oversees management succession planning, with our Lead Independent Director facilitating ongoing review and Board approval of succession and management development plans for the CEO and Management Committee. The goal of this ongoing process is to maximize the pool of internal candidates able to assume top management positions with minimal business interruption. To assist the Board, the CEO annually provides an assessment of senior managers and their potential as successor CEO, as well as individuals considered potential successors to certain other senior management positions. Each member of the Management Committee annually presents to fellow Management Committee members his or her own succession planning analysis.

Risk Oversight

Our Board recognizes the importance of effective risk oversight in running a successful global business and in fulfilling its fiduciary responsibilities to Corning and its shareholders. While the CEO and other members of our senior leadership team are responsible for the day-to-day management of risk, our Board is responsible for oversight of the Company’s risk management program. The Board exercises this oversight responsibility directly and through its committees.

Board of Directors
(Committee report-outs, discussions with management and annual Board review)

         

Audit Committee
Reviews our enterprise risk management program; monitors legal and regulatory risks by regular discussions with management; oversees internal and external audit; evaluates potential risks related to accounting, internal control over financial reporting, tax planning and cybersecurity, including data protection and digital.

           

Compensation Committee
Monitors potential risks related to the design and administration of compensation plans and policies, and benefits and perquisites plans and policies, including performance-based compensation programs, to promote appropriate incentives in line with shareholder interest that do not promote excessive risk-taking.

           

Finance Committee
Monitors strategic risks related to financial affairs, including (but not limited to) capital structure and liquidity risk, transaction execution risk, credit and counterparty risk, market risk and foreign exchange risk; reviews the policies and strategies related to tax, financial exposures and contingent liabilities.

    
 
  

Corporate Relations Committee
Monitors risks relating to public relations, reputation, employment policy and employee relations, political activity, community responsibility and environmental, social and governance matters.

Nominating and Corporate Governance Committee
Monitors potential risks related to governance practices by reviewing succession plans and performance evaluations of the Board, monitoring legal developments and trends regarding corporate governance practices and evaluating potential related party transactions.

      
                                     
 
 
                   
Management
(Updates to Board or relevant Committees on risk exposures and mitigation efforts)

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Management and the Board discuss risks associated with strategic alternatives being contemplated and the risk-reward associated with these alternatives. Once such a strategy is in place, at each meeting, the Board reviews it with the CEO and discusses any newly-identified strategic risks.

Operationally, management reports periodically to the Board on the Company’s enterprise risk management (ERM) policies and procedures, and to the Audit, Finance, and Corporate Relations Committees on our top risks and compliance policies and practices. Management also provides a comprehensive annual report of top risks to the Board. Corning’s ERM program utilizes (1) a Risk Council chaired by the Executive Vice President and Chief Financial Officer and composed of Corning management and staff to aggregate, prioritize and assess risks, including strategic, financial, operational, business, reputational, governance and managerial risks; (2) an internal audit department; and (3) a Compliance Council, which reports directly to each of the Audit Committee and Corporate Relations Committee and reviews the Company’s compliance with laws and regulations of the countries in which we conduct business.

The Board believes that the work undertaken by the committees of the Board, together with the work of the full board and the Company’s management, enables the Board to effectively oversee Corning’s management of risk.

Assessment of Company Culture

Directors are positioned to assess Company culture in a number of ways. The Company’s full Management Committee attends every Board meeting and numerous other members of management attend committee meetings. Formal dinners and informal lunches with attendees at the meetings provide Directors insight to how our teams function. When presenting an issue relevant to the Board, full business and technology teams attend to answer the Directors’ questions and to join them at these dinners and lunches. Once a year the Board visits our research campus to meet with dozens of employees working on our key innovation initiatives. The Board meets at different Corning locations – occasionally internationally – to see our manufacturing facilities, meet local managers and employees and explore the Company’s culture. At the Company’s annual meeting, all Company officers and their spouses are invited to attend the Board dinner and have opportunities for direct interaction.

Compensation Risk Analysis

In February 2019, the Committee reviewed the conclusions of a risk assessment of our compensation policies and practices covering all employees. This type of assessment is conducted annually by a cross-functional team with representatives from Human Resources (Compensation and Benefits), Law and Finance. The Committee evaluated the levels of risk-taking that potentially could be encouraged by our compensation arrangements, considering the arrangements’ risk-mitigation features, to determine whether they are appropriate in the context of our strategic plan and annual budget, our overall compensation arrangements, our compensation objectives, and Corning’s overall risk profile. Identified risk-mitigation features included the following:

The mix of cash and equity payouts tied to both short-term financial performance, mid-term financial performance, and long-term value creation;
 
The time vesting requirements in our long-term incentive plans, which help align the interests of employees to shareholders;
 
The use of multiple financial performance metrics that are readily monitored and reviewed, and aligned with the corporate and business unit objectives;
 
The rigorous budget and goal-setting processes that involve both top-down and bottom-up analyses;
 
The use of common performance metrics for incentives across Corning’s management team and all eligible employees with corporate results impacting the compensation of all Corning employees;
 
Governance committees and plan caps that are intended to avoid imprudent risk-taking;
 
Our robust stock ownership, clawback, anti-hedging and anti-pledging policies for NEOs and other employees;
 
Multiple levels of review and approval of awards, including Committee approval of all officer compensation; and
 
Immediate oversight of executive pay matters in mergers and acquisitions and unit compensation throughout the acquisition integration process.

The Committee concluded that Corning’s executive compensation program is balanced and does not reward excessive financial risk-taking.

We believe that Corning does not use compensation policies or practices that create risks that are likely to have a material adverse effect on the Company.

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Board and Shareholder Meeting Attendance

The Board of Directors met in person five times during 2018. Attendance at Board and committee meetings averaged 99% in 2018, and each incumbent director attended no less than 90% of the meetings of the Board and committees on which the director served.

All of our directors attended our 2018 Annual Meeting of Shareholders except for Mr. Brun, who became a director in July 2018. The Board has a policy requiring all directors to attend our Annual Meeting, absent extraordinary circumstances.

Ethics and Conduct

We are committed to conducting business lawfully and ethically. Our directors, NEOs, and all Corning employees, are required to act at all times with honesty and integrity. We have a comprehensive Code of Conduct that applies to all Corning directors and employees that covers areas of professional conduct, including conflicts of interest, the protection of corporate opportunities and assets, employment policies, non-discrimination policies, confidentiality, vendor standards, and intellectual property, and requires strict adherence to all laws and regulations applicable to our business. Our Board spends meaningful time with executive management at board meetings, and other members of management at other board events, where the relationships developed enable the Board to ensure that the Company maintains a culture of integrity, responsibility and accountability throughout the organization.

We also have a supplemental “Code of Conduct for Directors and Executive Officers” that includes policies calling for strict observance of all laws applicable to our business, that requires directors and executive officers to avoid any conflict between their personal interests and the interests of the company in dealing with suppliers, customers, and other third parties, and which imposes standards upon certain conduct in their personal affairs, including transactions in securities of the Company, any company affiliate, or any unaffiliated organization. Each director and executive officer is expected to be familiar with and to follow these policies to the extent applicable to them. Any employee can provide an anonymous report of an actual or apparent violation of our Codes of Conduct. We will disclose any future amendments to, or waivers from, any provision of our Codes of Conduct involving our directors, our principal executive officer, principal financial officer, principal accounting officer, controller or other persons performing similar functions on our website within four business days following the date of any such amendment or waiver. No such waivers were sought or granted in 2018.

Lobbying and Political Contributions Policy

Corning encourages employees to participate in the political process on a personal basis. However, any use of Corning funds, property, resources or employee work time for U.S. political purposes — for example, to any U.S. political party, candidate or government official – is subject to Corning’s Lobbying and Political Contributions Policy and must be approved in advance by Corning’s Government Affairs office. Any contact with members of the U.S. Congress on behalf of Corning, or any Corning contribution to U.S. government officials or payment related to these officials, must be approved by and coordinated through Corning’s Government Affairs office. Our policy can be found at corning.com/political-contributions.

Communications with Directors

Shareholders and interested parties may communicate concerns to any director, committee member or the Board by writing to the following address: Corning Incorporated Board of Directors, Corning Incorporated, One Riverfront Plaza, Corning, New York 14831, Attention: Corporate Secretary. Please specify to whom your correspondence should be directed. The Board has instructed our Corporate Secretary to review correspondence directed to the Board and, at the Corporate Secretary’s discretion, to forward items that are appropriate for the Board’s consideration.

26      CORNING 2019 PROXY STATEMENT


Table of Contents

Corporate Governance and the Board of Directors

Corporate Governance Materials Available on Corning’s Website

In addition to our Corporate Governance Guidelines and Director Qualification Standards, other information relating to Corning’s corporate governance is available on the Investor Relations – Governance – Downloads section of our website at investor.corning.com/investor-relations/governance/overview/default.aspx including:

Corporate Governance Guidelines with Director Qualification Standards
 
Corning Incorporated By-Laws
 
Political Contributions and Lobbying Policy
 
Whistleblower Policy
 
Code of Conduct for Directors and Executive Officers
 
Code of Ethics for Chief Executive Officer and Financial Executives
 
Our Code of Conduct
 
Audit Committee Charter
 
Compensation Committee Charter
 
Corporate Relations Committee Charter
 
Finance Committee Charter
 
Nominating and Corporate Governance Committee Charter

Corning’s Human Rights Policy is available at http://www.corning.com/worldwide/en/sustainability/people/human-rights-policy.html.

CORNING 2019 PROXY STATEMENT      27


Table of Contents

Proposal 1
Election of Directors
  

Board of Directors’ Qualifications and Experience

Our Board is composed of accomplished professionals with diverse skills and areas of expertise. The broad range of skills, knowledge, and opinions represented on our Board is one of its core strengths. Moreover, we believe our directors’ wide range of professional experiences and backgrounds, education, and skills provides significant value to the Company, and we intend to continue leveraging this strength.

Upon the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors granted Mr. Canning a one-time waiver of the mandatory retirement age policy on February 6, 2019. The Board concluded that Mr. Canning’s experience and skill set, in particular his broad financial experience and ongoing contributions in furtherance of the Strategy and Capital Allocation Framework, were exceptionally beneficial to the Company and that Mr. Canning’s continued service was in the best interest of the Company through the Framework’s conclusion.

The following table describes key competencies and skills of our directors.

All directors other than Mr. Weeks are independent. Mr. Clark is the Lead Independent Director.

28      CORNING 2019 PROXY STATEMENT


Table of Contents

Proposal 1 Election of Directors

Leadership
These directors have CEO or other senior executive experience, and a demonstrated record of leadership qualities, which includes a practical understanding of organizations, processes, strategy, risk and risk management and methods to drive change and growth.

Industry Experience
These directors have experience in or directly relevant to our businesses, which fosters active participation in developing and implementing our operating plan and business strategy. They have valuable perspectives on issues specific to Corning’s business.

Financial, Investment, and/or Banking Experience
These directors possess an acute understanding of finance and financial reporting processes. Accurate financial reporting and robust auditing are critical to Corning’s success.

Academia, R&D, and Innovation
These directors have advanced degrees in relevant fields and exceptionally deep knowledge of technology and research & development in areas critical to Corning as a science, technology, and innovation company.

Entrepreneurial/Commercial Experience
These directors provide valuable perspectives on developing, investing in and commercializing new technologies

International Experience
Corning’s future success depends, in part, on our ability to grow our businesses outside the United States. Our directors with global business or international experience provide valued perspective on our operations.

Law, Government, or Regulatory Experience
Legal, government and regulatory experience is relevant to Corning as industry regulations can be critical to the financial welfare and growth of our various businesses.

Audit Committee Financial Expert
These directors qualify as audit committee financial experts as defined by applicable SEC rules.

Public Company Board Experience
These directors have extensive experience as members of the board of directors of at least two other public companies.

After considering the recommendations of the Nominating and Corporate Governance Committee, the Board has set the number of directors at fourteen and nominated the persons described below to stand for election. All of the nominees were elected by Corning’s shareholders at the 2018 Annual Meeting, except for Mr. Brun who was appointed to the Board in July 2018, and have consented to being named in this proxy statement and to serve as director if re-elected. The Board believes that each of these nominees is qualified to serve as a director of Corning in light of their respective skills and qualifications, as further described below. Equally important, the Board believes this combination of backgrounds, skills and experiences creates a Board that is well-equipped to exercise oversight responsibilities for Corning’s shareholders and other stakeholders.

If elected by our shareholders, the fourteen director nominees will serve for a one-year term expiring at our 2020 Annual Meeting of Shareholders. Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier resignation or removal.


FOR Our Board unanimously recommends that shareholders vote FOR all of our director nominees.

CORNING 2019 PROXY STATEMENT      29


Table of Contents

Proposal 1 Election of Directors

Corning’s Director Nominees

Age
60
Director Since
2014

 

Committees

Audit
Finance
 

Current Public Company Directorships

Dropbox, Inc.
 

Public Company Directorships Held During the Past 5 Years

None
     

Donald W. Blair

Retired Executive Vice President and Chief Financial Officer, NIKE, Inc.

Mr. Blair was the executive vice president and chief financial officer of NIKE, Inc. from 1999 to October 2015. Prior to joining NIKE, he served fifteen years at PepsiCo, Inc. in a number of senior executive-level corporate and operating unit financial assignments, including chief financial officer roles for PepsiCo Japan (based in Tokyo) and Pepsi-Cola International’s Asia Division (based in Hong Kong). He began his career in 1981 as an accountant with Deloitte Haskins & Sells.

Mr. Blair brings over 36 years of financial expertise and management experience at the international, operational, and corporate levels. He also has proven experience in developing and implementing strategies for delivering sustainable, profitable growth. Mr. Blair’s financial expertise and audit experience are valuable assets to our Finance and Audit committees.

 

Skills and Qualifications

Expertise in finance, audit and management
Executive leadership experience
Experience in international business and finance

Age
66
Director Since
2018

 

Committees

Audit
Compensation
 

Current Public Company Directorships

Broadridge Financial Solutions, Inc.
CDK Global Inc.
Merck & Co., Inc.
 

Public Company Directorships Held During the Past 5 Years

Automatic Data Processing, Inc.
Hewlett Packard Enterprise Company
     

Leslie A. Brun

Chairman and Chief Executive Officer, Sarr Group LLC

Mr. Brun is chairman and chief executive officer of Sarr Group, LLC, vice chairman and senior advisor of G100 Companies and a member of the Council on Foreign Relations. He is also the founder and former chief executive officer and chairman of Hamilton Lane, where he served as chief executive officer and chairman from 1991 until 2005, a former director and chairman of the board of Automatic Data Processing, Inc., and a former director of Hewlett Packard Enterprise Company. In addition, Mr. Brun also served as a managing director and co-founder of the investment banking group of Fidelity Bank, and as a past vice president in the corporate finance division of E.F. Hutton & Co.

Mr. Brun brings to the board significant financial expertise and operating and management experience, along with extensive public company directorship and committee experience. He also brings broad experience on governance issues facing large public companies.

 

Skills and Qualifications

Expertise in finance, management, investment banking, financial advisory and management across highly regulated industries
Executive leadership experience
Extensive corporate governance and public company board experience

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Proposal 1 Election of Directors

Age
64
Director Since
2012

 

Committees

Audit
Corporate Relations (Chair)
 

Current Public Company Directorships

HP Inc.
Kellogg Company
 

Public Company Directorships Held During the Past 5 Years

GlaxoSmithKline plc
     

Stephanie A. Burns

Retired Chairman and Chief Executive Officer, Dow Corning Corporation

Dr. Burns has 35 years of global innovation and business leadership experience. Dr. Burns joined Dow Corning in 1983 as a researcher and specialist in organosilicon chemistry. In 1994, she became the company’s first director of women’s health. She was elected to the Dow Corning Board of Directors in 2001 and elected as president in 2003. She served as chief executive officer from 2004 until May 2011 and served as chair from 2006 until her retirement in December 2011.

Dr. Burns brings significant expertise in scientific research, issues management, science and technology leadership, and business management to the Board, as well as skills related to her Ph.D. in organic chemistry. She is the past honorary president of the Society of Chemical Industry and was appointed by President Obama to the President’s Export Council. Dr. Burns is a former chair of the American Chemistry Council.

 

Skills and Qualifications

Global innovation, manufacturing and business leadership experience
Significant expertise in research and development, science and technology leadership, and audit and business management
Significant public company board experience

Age
74
Director Since
2010

 

Committees

Executive
Finance
Nominating and Corporate Governance
 

Current Public Company Directorships

None
 

Public Company Directorships Held During the Past 5 Years

Exelon Corporation
     

John A. Canning, Jr.

Chairman, Madison Dearborn Partners, LLC

Mr. Canning co-founded Madison Dearborn Partners, LLC in 1992, serving as its chief executive officer until he became chairman in 2007. He previously spent 24 years with First Chicago Corporation, most recently as executive vice president of The First National Bank of Chicago and president of First Chicago Venture Capital. Mr. Canning is trustee and chairman of several Chicago-area non-profit organizations. He is a former commissioner of the Irish Reserve Fund and a former director and chairman of the Federal Reserve Bank of Chicago.

Mr. Canning brings over 38 years of experience in private equity investing, including reviewing financial statements and audit results and making investment and acquisition decisions. As a former director and chairman of the Federal Reserve Bank of Chicago, he has insight into economic trends important to our business. In addition to his business experience, he also has a law degree and is a recognized leader in the Chicago business community. Mr. Canning’s experience in banking and managing investments make him a valued member of our Finance Committee.

 

Skills and Qualifications

Sophisticated in private equity investing, including reviewing financial statements and audit results and making investment and mergers and acquisitions decisions
Applies insight into important economic trends relevant to our business
Experience in banking and managing investments

CORNING 2019 PROXY STATEMENT      31


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Proposal 1 Election of Directors

Age
72
Director Since
2011

 

Committees

Compensation
Executive
Nominating and Corporate Governance
 

Current Public Company Directorships

Automatic Data Processing, Inc.
 

Public Company Directorships Held During the Past 5 Years

None
     

Richard T. Clark

Retired Chairman, Chief Executive Officer and President, Merck & Co., Inc.
Lead Independent Director

Mr. Clark retired from Merck in 2011. He joined Merck in 1972 and held a broad range of senior management positions. He became president and chief executive officer of Merck in May 2005 and chairman of the board in April 2007. He transitioned from the chief executive officer role in January 2011 and served as Merck board chairman through November 2011. He was president of the Merck Manufacturing Division (June 2003 to May 2005) of Merck Sharp & Dohme Corp. He is chairman of the board of Project Hope and a trustee of several charitable non-profit organizations.

As the former chairman, president and chief executive officer of a Fortune 100 company, Mr. Clark brings broad managerial expertise, operational expertise, and deep business knowledge, as well as a track record of achievement.

 

Skills and Qualifications

Broad and deep managerial expertise, operational expertise, and business knowledge
Extensive experience in the issues facing public companies and multinational businesses
Significant public company board experience, including as chairman and chief executive officer of an R&D-focused global corporation

Age
69
Director Since
2006

 

Committees

Executive
Finance (Chair)
Nominating and Corporate Governance
 

Current Public Company Directorships

W. R. Grace & Co.
 

Public Company Directorships Held During the Past 5 Years

None
     

Robert F. Cummings, Jr.

Retired Vice Chairman of Investment Banking, JPMorgan Chase & Co.

Mr. Cummings retired as vice chairman of Investment Banking at JPMorgan Chase & Co. (JPM) in February 2016. He had served in that role since December 2010, advising on client opportunities across sectors and industry groups. Mr. Cummings began his business career in the investment banking division of Goldman, Sachs & Co. in 1973 and was a partner of that firm from 1986 until his retirement in 1998. He served as an advisory director at Goldman Sachs until 2002.

Mr. Cummings’ Board qualifications include more than 33 years of investment banking experience at Goldman Sachs and JPM, where he advised corporate clients on financings, business development, mergers, and acquisitions, and other strategic financial issues. Additionally, he brings knowledge in the areas of technology, telecommunications, private equity, and real estate to the Board.

 

Skills and Qualifications

Extensive investment banking experience including finance, business development, and mergers and acquisitions
Knowledgeable in the areas of technology, telecommunications, private equity and real estate

32      CORNING 2019 PROXY STATEMENT


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Proposal 1 Election of Directors

Age
57
Director Since
2013

 

Committees

Audit
Corporate Relations
 

Current Public Company Directorships

Meritage Homes Corporation
NiSource, Inc.
American Eagle Outfitters, Inc.
 

Public Company Directorships Held During the Past 5 Years

Staples, Inc.
     

Deborah A. Henretta

Retired Group President of Global E-Business, Procter & Gamble

Ms. Henretta has over 30 years of business leadership experience across both developed and developing markets, as well as expertise in brand building, marketing, philanthropic program development and government relations. She joined Procter & Gamble (P&G) in 1985. In 2005, she was appointed President of P&G’s business in ASEAN, Australia and India. She was appointed group president, P&G Asia in 2007, group president of P&G Global Beauty Sector in June 2013, and group president of P&G E-Business in February 2015. She retired from P&G in June 2015.

Ms. Henretta was a member of Singapore’s Economic Development Board (EDB) from 2007 to 2013. She contributed to the growth strategies for Singapore, and was selected to serve on the EDB’s Economic Strategies Committee between 2009 and 2011. In 2008, she received a U.S. State Department appointment to the Asia-Pacific Economic Cooperation’s Business Advisory Council. In 2011, she was appointed chair of this 21-economy council, becoming the first woman to hold the position. In that role, she advised top government officials, including former President Barack Obama and former Secretary of State Hillary Clinton.

Ms. Henretta is a partner at G100 Companies where she assisted in establishing a Board Excellence program that provides director education on board oversight and governance responsibilities, including the areas of digital transformation and cyber security, as well as a partnership program for New Director Training.

 

Skills and Qualifications

Significant experience in business leadership and global and international operations
Skilled in brand building, marketing and emerging market management
Significant knowledge of digital transformation and cyber security

Age
60
Director Since
2015

 

Committees

Audit
Finance
 

Current Public Company Directorships

Amazon.com, Inc.
 

Public Company Directorships Held During the Past 5 Years

None
     

Daniel P. Huttenlocher

Dean and Vice Provost, Cornell Tech

Dr. Huttenlocher is the founding dean of Cornell Tech, the technology graduate school of Cornell University located in New York City, a position he has held since 2012. In addition to positions as a professor and dean at Cornell, Dr. Huttenlocher has served as chief technology officer at Intelligent Markets, Inc. and as a principal scientist and member of the senior leadership team at the Xerox Palo Alto Research Center.

Dr. Huttenlocher holds a Ph.D. in computer science and a Master of Science degree in Electrical Engineering, both from the Massachusetts Institute of Technology. He is a renowned computer science researcher and educator, and a prolific inventor with two dozen U.S. patents. He brings to the board extensive experience in technology innovation and commercialization, and expertise in developing next-generation products and services.

 

Skills and Qualifications

Extensive experience in innovation and commercialization
Expertise in information technology and computer software
Experience with emerging technologies and customer experience

CORNING 2019 PROXY STATEMENT      33


Table of Contents

Proposal 1 Election of Directors

Age
72
Director Since
2007

 

Committees

Audit (Chair)
Compensation
Executive
 

Current Public Company Directorships

Louisiana-Pacific Corporation
 

Public Company Directorships Held During the Past 5 Years

None
     

Kurt M. Landgraf

President, Washington College

In July 2017, Mr. Landgraf was elected president of Washington College. He previously served as president and chief executive officer of Educational Testing Service (ETS), a private non-profit educational testing and measurement organization, from 2000 until his retirement in December 2013. Prior to that, he was executive vice president and chief operating officer of E.I. Du Pont de Nemours and Company (DuPont), where he previously held a number of senior leadership positions, including chief financial officer.

Mr. Landgraf was selected for his wealth of executive management experience in public companies, non-profit entities, higher education, and government. He brings to the Board his financial expertise and operations skills and experience, represented by his positions at ETS and DuPont. Mr. Landgraf’s other areas of specialized knowledge include technology, transportation, education, finance, pharmaceuticals, health care, energy, materials, and mergers and acquisitions.

 

Skills and Qualifications

Extensive executive management experience in public companies, non-profit entities, higher education and government
Financial and audit expertise
Operations experience
Specialized knowledge including technology, transportation, education, pharmaceuticals, health care, energy, materials, and mergers and acquisitions
Significant public company board experience

Age
52
Director Since
2013

 

Committees

Corporate Relations
Nominating and Corporate Governance
 

Current Public Company Directorships

None
 

Public Company Directorships Held During the Past 5 Years

Xtera Communications, Inc.
     

Kevin J. Martin

Vice President, Mobile and Global Access Policy, Facebook, Inc.

Before Mr. Martin became Vice President, Mobile and Global Access Policy at Facebook, Inc. he was a partner and co-chair of the telecommunications practice at Squire Patton Boggs, an international law firm, from 2009 to 2015, and chairman of the Federal Communications Commission (FCC) from March 2005 to January 2009.

Mr. Martin has two decades experience as a lawyer and policymaker in the telecommunications field. Before joining the FCC as a commissioner in 2001, Mr. Martin was a special assistant to the president for Economic Policy and served on the staff of the National Economic Council, focusing on commerce and technology policy issues. He served as the official U.S. government representative to the G-8’s Digital Opportunity Task Force.

Mr. Martin brings deep experience to the board in the telecommunications, economics, governmental and legal arenas.

 

Skills and Qualifications

Specialized knowledge of telecommunications, social media and information technology industries
Extensive knowledge of government policy and regulatory environment

 

34      CORNING 2019 PROXY STATEMENT


Table of Contents

Proposal 1 Election of Directors

Age
69
Director Since
1999

 

Committees

Audit
Compensation (Chair)
 

Current Public Company Directorships

None
 

Public Company Directorships Held During the Past 5 Years

Neustar, Inc.
     

Deborah D. Rieman

Retired Executive Chairman, MetaMarkets Group

Dr. Rieman has more than 31 years of experience in the software industry. In 2016, she retired as executive chairman of MetaMarkets Group. Previously, she was managing director of Equus Management Company, a private investment fund. From 1995 to 1999, she served as president and chief executive officer of Check Point Software Technologies, Incorporated.

Dr. Rieman brings significant expertise in information technology, innovation and entrepreneurial endeavors to the Board and skills related to her Ph.D. in mathematics. She is also the former president and chief executive officer of a software company specializing in security and has experience in technology development, marketing, business development and support, investor relations and investing.

 

Skills and Qualifications

Expertise in information technology and cyber security
Experience in technology development, marketing, business development and support, innovation, entrepreneurial endeavors and investing

Age
71
Director Since
2001

 

Committees

Compensation
Executive
Nominating and Corporate Governance (Chair)
 

Current Public Company Directorships

Harris Corporation
NextEra Energy, Inc.
Ryder Systems Inc.
 

Public Company Directorships Held During the Past 5 Years

None
     

Hansel E. Tookes II

Retired Chairman and Chief Executive Officer, Raytheon Aircraft Company

Mr. Tookes retired from Raytheon Company in December 2002. He joined Raytheon in 1999 and served as president of Raytheon International, chairman and chief executive officer of Raytheon Aircraft, and executive vice president of Raytheon Company. From 1980 to 1999, Mr. Tookes served United Technologies Corporation as president of Pratt and Whitney’s Large Military Engines Group and in a variety of other leadership positions.

Mr. Tookes provides extensive experience in operations, manufacturing, performance excellence, business development, technology-driven business environments, and military and government contracting. He also brings his science and engineering education, training and knowledge to the Board. Mr. Tookes’ industry expertise includes aviation, aerospace and defense, transportation, and technology.

 

Skills and Qualifications

Extensive experience in global operations, manufacturing, performance excellence, business development, technology-driven business environments, and military and government contracting
Education, training and knowledge in science and engineering
Extensive public company board experience

CORNING 2019 PROXY STATEMENT      35


Table of Contents

Proposal 1 Election of Directors

Age
59
Director Since
2000

 

Committees

Executive (Chair)
 

Current Public Company Directorships

Amazon.com, Inc.
Merck & Co., Inc.
 

Public Company Directorships Held During the Past 5 Years

None
     

Wendell P. Weeks

Chairman, Chief Executive Officer and President, Corning Incorporated

Mr. Weeks joined Corning in 1983. He was named vice president and general manager of the Optical Fiber business in 1996; senior vice president in 1997; senior vice president of Opto Electronics in 1998; executive vice president in 1999; and president, Corning Optical Communications in 2001. Mr. Weeks was named president and chief operating officer of Corning in 2002; president and chief executive officer in 2005; and chairman and chief executive officer on April 26, 2007. He added the title of president in December 2010. Mr. Weeks brings deep and broad knowledge of the Company based on his long career across a wide range of Corning’s staff groups and major businesses.

Mr. Weeks has 36 years of Corning experience including financial management, business development, commercial leadership, and general management. His experiences in many of Corning’s businesses and technologies, and twelve years as chief executive officer, have given him a unique understanding of Corning’s diverse business operations and innovations.

 

Skills and Qualifications

Wide range of experience including financial management, business development, commercial leadership, and general management
Unique understanding of Corning’s businesses and innovations

Age
69
Director Since
2009

 

Committees

Audit
Finance
 

Current Public Company Directorships

Brooks Automation, Inc.
Cabot Corporation
 

Public Company Directorships Held During the Past 5 Years

None
     

Mark S. Wrighton

Chancellor and Professor of Chemistry, Washington University in St. Louis

Dr. Wrighton has more than 26 years of leadership experience overseeing large research universities. Since 1995, Dr. Wrighton has been chancellor and professor of Chemistry at Washington University in St. Louis, a major research university. Before joining Washington University, he was a researcher and professor at the Massachusetts Institute of Technology, where he was head of the Department of Chemistry from 1987 to 1990, and then provost from 1990 to 1995. Dr. Wrighton served as a presidential appointee to the National Science Board from 2000 to 2006. He is also a past chair of the Association of American Universities, The Business Higher Education Forum, and the Consortium on Financing Higher Education. He was elected to membership in the American Academy of Arts and Sciences and the American Philosophical Society, and he is a Fellow of the American Association for the Advancement of Science.

Dr. Wrighton is a professor, chemist and research scientist with expertise in materials and research interests in the areas of transition metal catalysis, molecular electronics and photoprocesses at electrodes. He also has expertise in areas of direct relevance to Corning, including materials chemistry, photochemistry, surface chemistry and life sciences. Under Dr. Wrighton’s executive and fiscal leadership, Washington University has grown significantly in academic stature, research enterprise, infrastructure, student quality, curriculum and international reputation. Dr. Wrighton brings to the Board his vast scientific knowledge and understanding of complex research and development issues.

 

Skills and Qualifications

Deep knowledge in areas of direct relevance to Corning, including materials chemistry, photochemistry, surface chemistry and life sciences
Executive leadership experience, including finance and audit experience
Extensive experience leading institutions with research and development focus
Significant public company board experience

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Director Compensation
  

The Compensation Committee strives to set director compensation at levels that ensure directors are paid appropriately for their time commitment and responsibilities relative to directors at companies of comparable size, industry and scope of operations. The Committee believes that providing a competitive compensation package is important because it enables Corning to attract and retain highly qualified directors who are critical to the Company’s long-term success. Our objective is to pay non-employee directors competitively compared to the compensation peer group (listed on page 55) and to award a significant portion of director compensation in equity. The Compensation Committee’s independent consultant, Frederic W. Cook & Co., Inc., conducts an annual review of the director compensation levels relative to Corning’s compensation peer group and advises the Committee annually to ensure that compensation levels remain competitive.

The Company uses a combination of stock-based compensation and cash for its directors. Corning believes it is desirable that a significant portion of director compensation be linked to the Company’s performance and is therefore paid in restricted units of common stock, which are settled in shares following retirement or resignation from the Board. To continue to enable the company to attract and incent our Directors, it is important that shareholders approve Corning’s 2019 Equity Plan for Non-Employee Directors, Proposal 4 of this proxy statement.

Directors may elect to defer all or a portion of their cash compensation. Amounts deferred may be allocated to an account earning interest, compounded quarterly, at the rate equal to the prime rate of Citibank, N.A. at the end of each calendar quarter, a restricted stock unit account, or a combination of such accounts. In 2018, six directors elected to defer some or all of their cash compensation. A cap on director’s compensation of $700,000 per director per year will go into effect upon the approval of Corning’s 2019 Equity Plan for Non-Employee Directors, Proposal 4 of this proxy statement.

As an employee of the Company, Mr. Weeks is not compensated separately for service on the Board or any of its Committees.

2018 Director Compensation

The following table outlines 2018 director compensation:

Annual Equity Grants      

Each non-employee director annually receives a form of long-term equity compensation approved by the Board. Annual equity grants for non-employee directors are generally approved at the February meeting of the Board. If, however, a director is appointed between the February meeting and December 31, then that director will receive a pro-rata grant shortly after joining the Board.

In 2018, our directors’ annual equity compensation was increased from $155,000 to $165,000. We issued 5,533 restricted stock units (with a grant date value of approximately $165,000) to each non-employee director under our 2010 Equity Plan for Non-Employee Directors, prorated for Directors joining the Board after February 2018. These restricted stock units are not available for transfer or sale until six months after the date of a director’s retirement or resignation.

Annual Cash Retainer $110,000
Lead Independent
Director Retainer

Our Lead Independent Director received an additional cash retainer of $35,000.

 


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Director Compensation

Committee Chair Retainer      

The Audit Committee Chair and Compensation Committee Chair each received an additional cash retainer of $20,000. Other Committee Chairs received an additional cash retainer of $15,000.

Committee Member
Retainers

Each Audit Committee member received a cash retainer of $18,000; each Compensation Committee member received a cash retainer of $12,000; and each Executive, Finance, Nominating and Corporate Governance, and Corporate Relations Committee member received a cash retainer of $10,000.

In 2018, the directors below performed the following roles:

Name                              Leadership Role
Mr. Clark Lead Independent Director
Mr. Landgraf Audit Committee Chair
Dr. Rieman Compensation Committee Chair
Dr. Burns Corporate Relations Committee Chair
Mr. Cummings Finance Committee Chair
Mr. Tookes Nominating and Corporate Governance Committee Chair

Non-employee directors are reimbursed for expenses (including costs of travel, food, and lodging) incurred in attending Board, committee, and shareholder meetings. Directors are also reimbursed for reasonable expenses associated with participation in director education programs.

Directors’ Charitable Giving Programs

Although closed to directors joining the Board after October 5, 2016, Corning has a Directors’ Charitable Giving Program pursuant to which a director may direct the Company to make a charitable bequest to one or more qualified charitable organizations recommended by such director and approved by Corning in the amount of $1,000,000 (employee directors) or $1,250,000 (non-employee directors) following his or her death.

This program is either funded directly by the Company or by purchasing insurance policies on the lives of the directors. However, we are under no obligation to use the proceeds of the insurance policies to fund a director’s bequest and can elect to retain any proceeds from the policies as assets of Corning and use another source of funds to pay the directors’ bequests. In 2018, we paid a total of $82,982 in premiums and fees on such policies for our current directors. Because the charitable deductions and cash surrender value of life insurance policies accrue solely to Corning, the directors derive no direct financial benefit from the program, and we do not include these amounts in the directors’ compensation. Generally, one must have been a director for five years to participate in the program. Directors who had not yet achieved five years’ tenure as of October 5, 2016 will be permitted to participate after five years of Board service. In 2018, Messrs. Canning, Clark, Cummings, Landgraf, Martin, Tookes and Weeks, Ms. Henretta and Drs. Burns, Rieman and Wrighton were eligible to participate in the program.

Directors are also eligible to participate in the Corning Incorporated Foundation Matching Gifts Program for eligible charitable organizations. This Program is available to all Corning employees and directors. The maximum matching gift amount available from the Foundation on behalf of each participant in the Program is $7,500 per calendar year.

Corning also pays premiums on our directors’ and officers’ liability insurance policies covering directors.

Changes to Director Compensation in 2019

In February 2019, the Board approve certain changes to director compensation proposed by the Compensation Committee in consultation with the Committee’s independent consultant. Effective January 1, 2019, the non-employee directors’ annual equity grant will increase from $165,000 to $175,000. As with the 2018 director equity compensation, this amount will be payable in restricted stock units, which are not available for transfer or sale until six months after the date of a director’s retirement or resignation. In addition, the Audit Committee Chair retainer will increase from $20,000 to $25,000 effective January 1, 2019.

38      CORNING 2019 PROXY STATEMENT


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Director Compensation

2018 DIRECTOR COMPENSATION TABLE

Name       Fees Earned or
Paid in Cash(1)
($)
      Stock
Awards(2)
($)
      All Other
Compensation(3)
($)
      Total
($)
Donald W. Blair        $ 138,000  $ 164,994            $ 5,244  $ 308,238
Leslie A. Brun(4) 70,000 82,504 0 152,504
Stephanie A. Burns 153,000 164,994 0 317,994
John A. Canning, Jr. 140,000 164,994 7,500 312,494
Richard T. Clark 177,000 164,994 7,500 349,494
Robert F. Cummings, Jr. 155,000 164,994 0 319,994
Deborah A. Henretta 138,000 164,994 0 302,994
Daniel P. Huttenlocher 138,000 164,994 0 302,994
Kurt M. Landgraf 170,000 164,994 7,500 342,494
Kevin J. Martin 130,000 164,994 7,000 301,994
Deborah D. Rieman 160,000 164,994 0 324,994
Hansel E. Tookes II 157,000 164,994 0 321,994
Mark S. Wrighton 138,000 164,994 0 302,994
(1) Includes all fees and retainers paid or deferred pursuant to the Corning Incorporated Non-Employee Directors’ Deferred Compensation Plan.
(2) The amounts in this column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of awards of restricted stock units granted pursuant to the 2010 Equity Plan for Non-Employee Directors. Assumptions used in the calculation of these amounts are included in Note 11 to the Company’s audited financial statements for the fiscal year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 12, 2019. There can be no assurance that the grant date fair value amounts will ever be realized. The total number of award shares, RSUs, RSU deferrals and options each Director had outstanding as of December 31, 2018 is shown in the table below. Total stock holdings for directors as of December 31, 2018 are shown in the “Beneficial Ownership of Directors and Officers” table.
(3) The amounts in this column reflect charitable donation matches made by the Corning Incorporated Foundation Matching Gifts Program.
(4) Mr. Brun’s compensation reflects prorated amounts from July 18, 2018, the date he joined the Board.

The following are the total number of award shares and units and deferrals outstanding each Director had as of December 31, 2018

Name       Award Shares/Units and RSU
Deferrals Outstanding at
December 31, 2018
(1)
      Options
Outstanding at
December 31, 2018(2)
Donald W. Blair 55,837 0
Leslie A. Brun 2,812 0
Stephanie A. Burns 63,634 0
John A. Canning, Jr. 100,944 1,323
Richard T. Clark 53,409 0
Robert F. Cummings, Jr. 177,792 2,345
Deborah A. Henretta 60,998 0
Daniel P. Huttenlocher 25,357 0
Kurt M. Landgraf 157,087 0
Kevin J. Martin 42,953 0
Deborah D. Rieman 111,060 2,345
Hansel E. Tookes II 98,310 2,345
Mark S. Wrighton 69,760 2,345
(1) This column reflects restricted shares and restricted share units awarded and outstanding or deferred for each Director as of December 31, 2018.
(2) No options were granted to non-employee directors in 2018.

CORNING 2019 PROXY STATEMENT      39


Table of Contents

Stock Ownership
Information
  

Stock Ownership Guidelines

We believe in the importance of equity ownership by directors and executive management as an effective link to shareholders, and require all directors, named executive officers (NEOs), and non-NEO executive management to achieve the required levels of ownership under our stock ownership guidelines within five years of their election, appointment or designation. Restricted and direct and indirectly owned shares, and current and deferred restricted stock units, each count toward our stock ownership guidelines. An NEO who falls below the ownership requirement for any reason will have up to three years to return to the required minimum ownership level. All directors and NEOs who have been so for five years or more currently comply with our guidelines.

DIRECTORS    CEO    OTHER NEOs    NON-NEO SENIOR
MANAGEMENT
       

5X
Annual Cash Retainer

6X
Base Salary

3X
Base Salary

1.5X
Base Salary

Our directors and executive management are also subject to our anti-hedging and anti-pledging policies. For further information, see “Anti-Hedging Policy” and “Anti-Pledging Policy” both on page 56.

Section 16(a) Beneficial Ownership Reporting Compliance

SEC rules require disclosure of those directors, officers, and beneficial owners of more than 10% of our common stock who fail to timely file reports required by Section 16(a) of the Securities Exchange Act of 1934 during the most recent fiscal year. Based on review of reports furnished to us and written representations that no other reports were required during the fiscal year ended December 31, 2018, all Section 16(a) filing requirements were met.

40      CORNING 2019 PROXY STATEMENT


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Stock Ownership Information

Beneficial Ownership Table

As of December 31, 2018   Shares Directly or
Indirectly Owned
(1)(2)(3)
  Stock Options
Exercisable
Within 60 Days
  Restricted Share
Units Vesting
Within 60 Days
  (A)
Total Shares
Beneficially
Owned
  Percent
of Class
  (B)
Restricted Share
Units Not Vesting
Within 60 Days(4)
  Total of
Columns
(A) + (B)
The Vanguard Group 62,711,606 (5) 7.83
BlackRock, Inc. 53,217,738 (6) 6.60
T. Rowe Price Associates, Inc. 43,683,804 (7) 5.40
State Street Corporation 40,385,093 (8) 5.00
Donald W. Blair 17,243 0 0 17,243 * 38,594 55,837
Leslie A. Brun 0 0 0 0 * 2,812 2,812
Stephanie A. Burns 49,288 0 0 49,288 * 23,100 72,388
John A. Canning, Jr. 139,150 1,323 0 140,473 * 51,794 192,267
Richard T. Clark 41,962 0 0 41,962 * 11,447 53,409
Robert F. Cummings, Jr. 151,199 2,345 0 153,544 * 113,106 266,650
Deborah A. Henretta 25,965 0 0 25,965 * 35,033 60,998
Daniel P. Huttenlocher 13,910 0 0 13,910 * 11,447 25,357
Kurt M. Landgraf 62,957 0 0 62,957 * 94,130 157,087
Kevin J. Martin 31,506 0 0 31,506 * 11,447 42,953
Deborah D. Rieman 100,813 2,345 0 103,158 * 11,447 114,605
Hansel E. Tookes II 96,863 2,345 0 99,208 * 11,447 110,655
Mark S. Wrighton 63,743 2,345 0 66,088 * 11,447 77,535
Wendell P. Weeks 800,371 (9) 488,003 3,182 1,291,556 * 246,598 1,538,154
R. Tony Tripeny 48,939 102,663 993 152,595 * 51,006 203,601
James P. Clappin 90,836 36,664 1,065 128,565 * 62,750 191,315
Lawrence D. McRae 137,456 162,943 1,081 301,480 * 66,321 367,801
David L. Morse 35,953 72,365 1,033 109,351 * 61,830 171,181
All Directors and Executive
Officers as a group (25 persons) 2,162,918 (10)(11) 1,468,167 10,995 3,642,080 * 1,214,102 4,856,182
* Less than 0.50%
(1) Includes shares of common stock subject to forfeiture and restrictions on transfer, granted under Corning’s Incentive Stock Plans.
(2) Includes shares of common stock subject to forfeiture and restrictions on transfer, granted under Corning’s Restricted Stock Plans for non-employee directors.
(3) Includes shares of common stock held by The Bank of New York Mellon Corporation as the trustee of Corning’s Investment Plans for the benefit of the members of the group, who may instruct the trustee as to the voting of such shares. If no instructions are received, the trustee votes the shares in the same proportion as it votes the shares for which instructions were received. The power to dispose of shares of common stock is also restricted by the provisions of the plans. The trustee holds for the benefit of Messrs. Weeks, Tripeny, Clappin, McRae and Dr. Morse, and all executive officers as a group, the equivalent of 12,577, 0, 2,312, 6,740, 0 and 24,654 shares of common stock, respectively. It also holds for the benefit of all employees who participate in the plans the equivalent of 12,059,562 shares of common stock (being 1.52% of the class).
(4) Restricted Share Units represent the right to receive unrestricted shares of common stock upon the lapse of restrictions, at which point the holders will have sole investment and voting power. Restricted Share Units that will not vest within 60 days of the date of this table are not considered beneficially owned for purposes of the table and therefore are not included in the Total Shares Beneficially Owned column because the holders are not entitled to voting rights or investment control until the restrictions lapse. However, ownership of these RSUs further aligns our Directors and Executive Officers’ interests with those of our shareholders.
(5) Reflects shares beneficially owned by The Vanguard Group (Vanguard), according to a Schedule 13G/A filed by Vanguard with the SEC on February 11, 2019, reflecting ownership of shares as of December 31, 2018. Vanguard has sole voting power and/or sole dispositive power with respect to 61,552,331 shares and shared voting power and/or shared dispositive power with respect to 1,159,275. According to the Schedule 13G/A, Vanguard beneficially owned 7.83% of our common stock as of December 31, 2018.
(6) Reflects shares beneficially owned by BlackRock, Inc. (BlackRock), according to a Schedule 13G/A filed by BlackRock with the SEC on February 2, 2019, reflecting ownership of shares as of December 31, 2018. BlackRock has sole voting power and/or sole dispositive power with respect to 53,217,738 shares and shared voting power and/or shared dispositive power with respect to 0 shares. According to the Schedule 13G/A, BlackRock beneficially owned 6.6% of our common stock as of December 31, 2018.
(7) Reflects shares beneficially owned by T. Rowe Price Associates, Inc. (T. Rowe Price), according to a Schedule 13G filed by T. Rowe Price with the SEC on February 14, 2019, reflecting ownership of shares as of December 31, 2018. T. Rowe Price has sole voting power and/or sole dispositive power with respect to 43,683,804 shares and shared voting power and/or shared dispositive power with respect to 0. According to the Schedule 13G, T. Rowe Price beneficially owned 5.4% of our common stock as of December 31, 2018.
(8) Reflects shares beneficially owned by State Street Corporation (State Street), according to a Schedule 13G filed by State Street with the SEC on February 14, 2019, reflecting ownership of shares as of December 31, 2018. State Street has sole voting power and/or sole dispositive power with respect to 0 shares and shared voting power and/or shared dispositive power with respect to 40,385,093. According to the Schedule 13G, State Street beneficially owned 5.0% of our common stock as of December 31, 2018.
(9) Includes 787,794 shares held by a revocable trust of which Mr. Weeks is the beneficiary. He currently has no voting authority over these shares.
(10) Does not include 28,745 shares owned by the spouses and minor children of certain executive officers and directors as to which such officers and directors disclaim beneficial ownership.
(11) As of December 31, 2018, none of our directors or executive officers have pledged any such shares.

CORNING 2019 PROXY STATEMENT      41


Table of Contents

Proposal 2
Advisory Approval of Executive Compensation
(Say on Pay)
  

Our Board of Directors requests that shareholders approve the compensation of our Named Executive Officers (NEOs), pursuant to Section 14A of the Securities Exchange Act of 1934, as disclosed in this proxy statement, which includes the Compensation Discussion and Analysis, the Summary Compensation Table and the supporting tabular and narrative disclosure on executive compensation.

This vote is advisory and not binding on the Company, but the Board of Directors values shareholder opinion and will consider the outcome of the vote in determining our executive compensation programs.

Say on Pay Proposal

Our Board maintains a “pay for performance” philosophy that forms the foundation for all of the Compensation Committee’s decisions regarding executive compensation. In addition, our compensation programs are designed to facilitate strong corporate governance, foster collaboration and support our short- and long-term corporate strategy.

The Compensation Discussion and Analysis portion of this proxy statement contains a detailed description of our executive compensation philosophy and programs, the compensation decisions the Compensation Committee has made under those programs and the factors considered in making those decisions, including 2018 Company performance, focusing on the compensation of our NEOs. Our shareholders have affirmed their support of our programs in our outreach discussions and in last year’s Say on Pay results. We believe that we have created a compensation program deserving of shareholder support.

For these reasons, the Board of Directors recommends that shareholders vote in favor of the resolution:

RESOLVED, that on an advisory non-binding basis, the total compensation paid to the Company’s Named Executive Officers (CEO, CFO and three other most highly compensated executives), as disclosed in the proxy statement for the 2019 Annual Meeting of Shareholders pursuant to the SEC’s executive compensation disclosure rules, including the Compensation Discussion & Analysis, the Summary Compensation Table, and the supporting tabular and related narrative disclosure on executive compensation, is hereby APPROVED.

FOR Our Board unanimously recommends a vote FOR the advisory approval of our executive compensation as disclosed in this proxy statement.

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Compensation Discussion
& Analysis
  

This Compensation Discussion & Analysis (CD&A) presents Corning’s executive compensation for 2018, including the compensation for our Named Executive Officers (NEOs), and describes how this compensation aligns with our pay for performance philosophy and supports the success of our Strategy and Capital Allocation Framework.

OUR NEOs IN FISCAL YEAR 2018 WERE:
Named Executive Officer       Role       Years in Role       Years at Corning
Wendell P. Weeks Chairman, Chief Executive Officer (CEO) and President 14 Years as CEO
(12 years as CEO/Chairman)
36 years
R. Tony Tripeny Executive Vice President and Chief Financial Officer 3 Years 34 years
James P. Clappin Executive Vice President, Corning Glass Technologies 8 Years 39 years
Lawrence D. McRae Vice Chairman and Corporate Development Officer 3 Years as Vice Chairman
(19 years as Corporate Development Officer)
34 years
David L. Morse Executive Vice President and Chief Technology Officer 6 Years 43 years

CD&A Table of Contents

To assist shareholders in finding important information, we call your attention to the following sections of the CD&A:

43       Executive Summary
46 Company Performance Overview
50 2018 Executive Compensation Program Details
54 Compensation Peer Group
55 Compensation Program – Other Governance Matters
57 Compensation Committee Report
58 2018 Compensation Tables

Executive Summary

Executive Compensation Philosophy

Our compensation program is designed to attract and retain the most talented employees within our industry segments and to motivate them to perform at the highest level while executing on our Strategy and Capital Allocation Framework. In order to retain and motivate this caliber of talent, the Compensation Committee (the Committee) is committed to promoting a performance-based culture. Rewards are tied to financial metrics that incent management to successfully deliver on the Strategy and Capital Allocation Framework and our commitments to our shareholders.

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Table of Contents

Compensation Discussion & Analysis

Target Total Compensation

CEO       ALL OTHER NEOs
   

Our Short- and Long-Term Incentives
Short-Term Incentives
(Paid in Cash)

Long-Term Incentives
(CPU, RSU and Option Awards)

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Compensation Discussion & Analysis

2018 Compensation Metrics

Our key compensation metrics are Core Earnings per Share (Core EPS), Core Net Sales and Adjusted Operating Cash Flow less CapEx. These metrics are designed to ensure the success of our Strategy and Capital Allocation Framework by improving profitability (Core EPS), incenting top line growth (Core Net Sales) and generating operating cash (Adjusted Operating Cash Flow less CapEx).

  CORE EPS CORE NET SALES ADJUSTED OPERATING
CASH FLOW LESS CAPEX
2018 Actual Results $1.78 $11,398
million
$926
million
2018 Score as %
of Target Payout
116%
of target for 2018
155% for PIP
127% for CPUs*
of target for 2018
128%
of target for 2018

* The payout scales for CPUs and PIP differ; CPUs are capped at 150% and PIP is capped at 200%. Please see page 47 for more information.

Please see “Our 2018 Performance Highlights” on page 6 for more information about our Core Performance Measures and Appendix A to this proxy statement for a reconciliation of the non-GAAP measures we use in this proxy statement to the most directly comparable GAAP financial measures.

Core Earnings per Share (Core EPS), Core Net Sales and Adjusted Operating Cash Flow are non-GAAP financial measures used by our management to obtain a clearer view of Corning’s operating results.
 
Accordingly, these Core Performance Measures form the basis for our compensation performance metrics.

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Table of Contents

Compensation Discussion & Analysis

2018 Company Performance Overview

In 2018, we utilized our financial strength to continue our focus on innovation, advancing key programs across our market-access platforms to make progress in our Strategy and Capital Allocation Framework.

Highlights of progress across Corning’s market-access platforms include:

Optical Communications: Secured contracts with industry leaders in the carrier and data center segments that will add significant sales in 2019 and beyond, introduced new products for the hyperscale data center and carrier environments and expanded market access through the acquisition of 3M’s Communication Markets Division
 
Mobile Consumer Electronics: Extended the company’s leadership with the launch and adoption of Corning® Gorilla® Glass 6 as well as other cover glass and sensing technology innovations
 
Automotive: Gained significant new sales and platform wins for gasoline particulate filters including reaching the production milestone of 1 million GPFs; increased pull for Gorilla Glass for Automotive solutions, particularly the industry’s first AutoGrade™ Glass Solutions for automotive interiors, reaching more than 55 platform wins to date
 
Life Sciences Vessels: Increased shipments of Corning Valor® Glass fourfold year over year, indicating progress toward certification across more pharmaceutical companies
 
Display: Reached stable returns as the glass pricing environment continued to improve and Corning extended its global leadership by establishing the world’s first Gen 10.5 manufacturing facility

Please see “Our 2018 Performance Highlights” on page 6 and “Our Strategy and Capital Allocation Framework” on page 7 for additional information on Corning’s 2018 financial performance.

2018 Performance and Compensation Alignment

Each year we set rigorous and challenging performance goals aligned with our strategic objectives. We continue to believe that top line growth, overall profitability, and the generation of operating cash flow are the most important measures to the successful execution of our Strategy and Capital Allocation Framework and delivery of long-term shareholder value.

Approximately 89% of the CEO’s target total compensation (excluding employee benefits and perquisites) and 80% of the other NEOs’ target total compensation (excluding employee benefits and perquisites) is variable and depends upon our operating performance or is linked to our stock price.

Net profitability and sales growth, both short- and long-term, drive success under our Strategy and Capital Allocation Framework. Accordingly, we have incentive measures linked to both short- and long-term outcomes. Our short-term incentives are cash payments composed of the Performance Incentive Plan (PIP) and the GoalSharing plan. Under each of the PIP and the GoalSharing plan, Core EPS (75% weight) measures bottom line profitability and Core Net Sales (25% weight) focuses on increasing top line growth. These two financial goals comprise 100% of PIP payouts for NEOs. Actual performance was above the established PIP targets for 2018, with the blended result being a payout of 126% of PIP target.

GoalSharing is a company-wide plan that rewards our workforce for the Company’s and Business Unit’s success by including compensation objectives reflecting a combination of corporate financial (25% weight) and business unit performance (75% weight). NEOs receive payouts based on the weighted average performance of all business unit plans, which resulted in a payout of 6.41% of base salary for 2018.

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Compensation Discussion & Analysis

Our Long-Term Incentive (LTI) awards reflect our belief that cash flows and revenue growth enable investments that will sustain our growth over the long term and that the interests of our executives and shareholders should be aligned. LTI awards are comprised of 60% Cash Performance Units (CPUs), 25% Restricted Stock Units (RSUs), and 15% Stock Options. CPU awards are based 70% on Adjusted Operating Cash Flow less CapEx and 30% on Core Net Sales, averaged over a three-year performance period. In addition to the above measures, 2016 CPUs are subject to an ROIC modifier of up to +/-10% based on ROIC improvement over the period 2016 through 2018. We implemented this ROIC modifier in response to investor feedback and in support of our Capital Allocation Framework. We define ROIC as core net income before interest, divided by invested capital. Core net income before interest is calculated using constant exchange rates for Japanese yen, New Taiwan dollar and Chinese yuan against the U.S. dollar, and a constant tax rate. Invested capital is the sum of total assets excluding foreign currency hedge assets less total liabilities excluding foreign currency hedge liabilities and debt. The Compensation Committee approved this ROIC modifier calculation in early 2016.

The following table compares the 2018 actual results and targeted goals for each performance measure compared with 2017.

2018 2017
Measure       Actual and
% increase
vs. ’17 Actual
      Target and
% increase
vs. ’17 Actual
      Actual       Target
Core EPS $1.78 $1.74 $1.60 $1.57
Percentage increase vs ’17 Actual +11.9% +8.8%
Core Net Sales (millions) $11,398 $11,028 $10,258 $9,945
+11.5% +7.5%
Adjusted Operating Cash Flow $926 $696 $816 $756
less CapEx (millions) N/A(1) N/A(1)
(1) Adjusted Operating Cash Flow less CapEx goals are established yearly, independent of the prior year.

Please see “Our 2018 Performance Highlights” on page 6 for more information about our Core Performance Measures and Appendix A to this proxy statement for a reconciliation of the non-GAAP measures we use in this proxy statement to the most directly comparable GAAP financial measures. In 2018, Corning used constant currency rates for the Japanese yen of ¥107:$1, for the New Taiwan dollar of NT$31:$1, for the Chinese yuan of ¥6.7:$1 and for the South Korean won of ₩1,175:$1, and restated all prior periods to these constant currency rates for comparability purposes. For additional information about our Core Performance Measures, please see page 6.

Our rigorous goal setting process is demonstrated by the following payout scale for our short- and long-term incentive plans:

Short Term/Annual Incentive
2018 PIP Measures
Long-Term Incentive
2018 CPU Measures
(Year Three of 2016-2018 Plan)
Core EPS Goal
(Weighted 75%)
Core Net Sales Goal
(Weighted 25%)
Adjusted Operating Cash
Flow less CapEx Goal (Weighted 70%)
Core Net Sales Goal
(Weighted 30%)
   Payout %    Core
EPS
   Growth
(over
prior year)
   Core Net
Sales
(in $M)
   Growth
(over
prior year)
   Adjusted
OCF less
CapEx (in $M)
   % of
2018 Plan
   Core Net
Sales
(in $M)
   % of
2017
Core Net
Sales
200% $1.96 22.8% $11,490 12.0% Capped at 150%
150% 1.89 18.6% 11,387 11.0% $1,096 157.5% $11,490 12.0%
125% 1.81 13.4% 11,205 9.2% 896 128.7% 11,387 11.0%
TARGET 100% 1.74 9.4% 11,028 7.5% 696 100.0% 11,028 7.5%
75% 1.64 2.7% 10,601 3.3% 496 71.3% 10,601 3.3%
50% 1.60 0.5% 10,387 1.3% 429 61.7% 10,387 1.3%
0% 1.42 -10.7% 10,054 -2.0% 296 42.5% 10,054 -2.0%

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Compensation Discussion & Analysis

ROIC Modifier

In 2016, based on investor feedback and in support of our Capital Allocation Framework, the Compensation Committee added a three-year ROIC modifier to CPUs. With this modifier, the CPU payout may be increased or decreased up to 10% based on ROIC performance over the three-year performance period. For the 2016-2018 performance period, the ROIC target was established at 250 basis points, which the Committee believed was challenging but achievable through continued strong operating performance. The setting of this target reflected the multi-year operating plan for the company and management’s assessment of future Company performance. The ROIC modifier for 2016 CPUs (based on 2016 through 2018 performance) was as follows:

ROIC Improvement
2016 – 2018
(in basis points)
      Modifier (Adjustment to 2016 CPUs)
250 +10%
175 +5%
100 No adjustment
50 -5%
0 -10%

From 2016 to 2018, ROIC improved 174 basis points, resulting in a +4.74% increase to the 2016 CPU payout made in 2019.

Results for Short Term Incentives and the 2016-2018 LTI Plan

Short Term Incentives
PERFORMANCE INCENTIVE PLAN (PIP)
100% CORPORATE FINANCIAL PERFORMANCE
Components       Weighting       % of target
earned
Core EPS 75% 116%
Core Net Sales 25% 155%
2018 performance result 126%
 
GOALSHARING – 25% CORPORATE PERFORMANCE,
75% BUSINESS UNIT PERFORMANCE
Components % of base
salary earned
Corporate financial performance —
1.25% target × 126% performance
(See PIP above) 25% 1.58%
Average Business Unit Performance 75% 4.83%
2018 performance result 6.41%

Long Term Incentives
CASH PERFORMANCE UNITS
(60% OF LTI TARGET – OTHER 40% ARE RSUs AND OPTIONS)
Components       Weighting       % of target
earned, 2018
performance
year
Operating Cash Flow less CapEx   70% 128%
Core Net Sales 30% 127%
2018 performance result 128%
 
2016-2018 CPU PERFORMANCE RESULTS
Components % of target
earned,
2016-2018
performance
2016 performance result 88%
2017 performance result 120%
2018 performance result 128%
2016-2018 average performance   112%

ROIC MODIFIER
2016-2018 average performance      ×      ROIC Modifier      =      Final percentage of target amount of 2016 CPUs to be paid in 2018
112% × 4.74% = 117%

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Compensation Discussion & Analysis

Total Shareholder Return

Corning’s Total Shareholder Return (TSR), which consists of stock price appreciation and reinvestment of common dividends, outperformed the S&P 500 Index over the last 1-, 3-, and 5-year periods as of year-end 2018. Since the introduction of our Strategy and Capital Allocation Framework, we have outperformed the S&P 500 Index by nearly three times in terms of total shareholder return.

The Strategy and Capital Allocation Framework has paid off from a financial perspective.
Between its inception in October 2015 and year-end 2018, Corning had TSR of approximately
95% vs. less than 35% for the S&P 500.

ANNUALIZED TOTAL SHAREHOLDER RETURN       TOTAL SHAREHOLDER RETURN SINCE START OF FRAMEWORK
As of year-end 2018 October 21, 2015 through year-end 2018

Source: Bloomberg

Source: Bloomberg

Shareholder Engagement

At our 2018 annual meeting of shareholders, our Say on Pay proposal received support from
90%
of votes cast.

Strong Say on Pay Results. At our 2018 Annual Meeting of shareholders, our Say on Pay proposal received support from 90% of votes cast. We have received 90% or greater support for our Say on Pay proposal each of the past three years. We view this level of shareholder support as an affirmation of our current pay practices and pay for performance philosophy.

Shareholder Outreach. In 2018, as part of our shareholder outreach program, we met with shareholders representing approximately 45% of our outstanding shares, and approximately two-thirds of our top fifty shareholders. In these meetings, we discussed our Strategy and Capital Allocation Framework (SCAF), as well as governance, compensation, human capital management and sustainability matters. We learned through these meetings that our investors are pleased with the SCAF and believe we have clearly articulated how it creates shareholder value and is connected to management compensation at Corning. These shareholders also were generally supportive of our executive compensation program, the direct linkage of financial metrics in our performance-based variable compensation plans to the SCAF, and the addition of the ROIC modifier that was implemented in 2016 in response to investor feedback. As in previous years, shareholders were not prescriptive about compensation plan design. Instead, they were more interested to see that the results and outcomes delivered by the incentive plans were aligned appropriately with Corning’s performance and had appropriately incented our executives to deliver on our SCAF.


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Table of Contents

Compensation Discussion & Analysis

Robust Compensation Program Governance

Corning has rigorous and robust governance with respect to its executive compensation plan:

Close alignment of pay with performance over both the short and long-term horizon, and delivery of the goals of our Strategy and Capital Allocation Framework
Mix of cash and equity incentives tied to short-term financial performance and long-term value creation
CEO total compensation targeted within a competitive range of the Compensation Peer Group median
Caps on payout levels for annual incentives in a budgeted down-cycle year
Significant NEO share ownership requirements
Anti-hedging and pledging policies
Clawback policy applicable to both cash and equity compensation
Minimum 3-year vesting period for restricted stock or restricted stock unit awards in employee equity plan
Independent compensation consultant advisor to the Compensation Committee
History of demonstrated responsiveness to shareholder concerns and feedback, and ongoing commitment to shareholder engagement
Limited and modest perquisites that have a sound benefit to the Company’s business
No tax gross-ups or tax assistance on perquisites
No repricing or cash buyout of underwater stock options without shareholder approval
No excise tax gross-ups for officer agreements entered into after July 2004

2018 Executive Compensation Program Details

Our key compensation program principles are as follows:

Provide a competitive base salary
   
Pay for performance
   
Incent execution of our Strategy and Capital Allocation Framework
   
Apply a team-based management approach
   
Increase the proportion of performance-based incentive compensation for more senior positions
   
Align the interests of our executive group with shareholders

Base Salary

Base salaries provide a form of fixed compensation and are reviewed annually by the Committee, which considers internal equity and individual performance, as well as competitive positioning, as discussed in the “Compensation Peer Group” section starting on page 54. In 2018, Mr. Weeks’ base salary increased by 3%, consistent with the salary increase budget for all other U.S. salaried employees. Mr. Tripeny received a base salary increase of 15% as part of a multi-year strategy to better align his overall compensation package to comparable external salary benchmarks as he continues to demonstrate strong performance as CFO. Base salaries of the remaining NEOs increased by 5.5% as a result of strong performance and to align compensation with both internal and external salary benchmarks as the Company grows.

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Short-Term Incentives

Short-term incentives are designed to reward NEOs for Corning’s consolidated annual financial performance supporting our Strategy and Capital Allocation Framework and team-based management approach. Corning has two short-term incentive plans: the Performance Incentive Plan (PIP) and GoalSharing.

PIP targets are individually established by the Committee each February as a percentage of year-end salary depending on the competitive marketplace and level of experience. In 2018, Mr. Weeks’ PIP target is unchanged at 150% of year-end base salary. Mr. McRae’s PIP target is 85% of year-end base salary and other NEOs have PIP targets of 80%. PIP goals are approved in February and payments are made by the following March 15 once the performance results are known. As outlined on page 48, the 2018 PIP payout will be 126% of target based on performance achievement above the pre-established targets.

GoalSharing is designed to motivate employees to work together to achieve the most critical goals in each business unit. All Corning employees are eligible for GoalSharing with a target generally equal to 5% of base salary. Earned GoalSharing may be 0% - 10% of base salary, and is weighted 25% on corporate financial performance and 75% on business unit performance. The NEOs’ GoalSharing is based 25% on corporate financial performance and 75% on the average of the results of all business unit plans. GoalSharing goals are approved in February each year and payment are made by the end of the following February once the performance results are known. As outlined on page 48, the 2018 GoalSharing payout will be 6.41% of year-end base pay due to achievement above the pre-established targets.

Long-Term Incentives

Long-Term Incentives (LTI) are comprised of cash and equity in the form of CPUs, RSUs, and stock options (Options). We believe it is important to link LTI amounts to financial measures that support the execution of our Strategy and Capital Allocation Framework and generate long-term value for our shareholders. We also believe it is important for a portion of LTI to be in the form of equity to align our executives’ stock ownership interests with those of our shareholders.

LTI targets are established by the Committee for each NEO annually in February. Mr. Weeks’ 2018 LTI target is $9 million. Other NEOs’ targets may be found in footnote 3 to the Summary Compensation Table on page 58 and range from $2.125 million to $2.4 million.

CPUs represent 60% of the annual LTI target. Payout is based on cash generation and revenue growth, measures that support our Strategy and Capital Allocation Framework as well as our long-term financial health and success. The performance measures for CPUs are 1) Adjusted Operating Cash Flow less CapEx (70%), which aligns the cash flow goal to our capital allocation plan and maintains focus on our CapEx, and 2) Core Net Sales (30%). Actual CPUs earned are based on the average performance over a three-year period. CPUs awarded in 2018 are also subject to a three-year ROIC modifier of up to ±10% to further align compensation earned with the goal of our Strategy and Capital Allocation Framework to improve our corporate ROIC. Accordingly, CPUs earned for the years 2018-2020 will be paid out (in 2021) subject to an adjustment of up to ±10%, depending on Corning’s ROIC performance over the three-year performance period compared to a pre-established performance target.
   
RSUs represent 25% of the annual target LTI value. The number of RSUs granted is determined based on the closing stock price on the first business day of April, and awards cliff vest approximately three years from the grant date.
   
Options represent 15% of the annual target LTI value. The number of Options granted is determined using a Black-Scholes valuation. Options were granted on the first business day of April. Vesting is three years after the grant date, and the option awards have a maximum ten-year term.

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Long-Term Incentives – Cash Component

* Performance targets are established in February each year for the calendar year. See page 48 for 2018 performance measures and results
** 3-year ROIC improvement target is established at the beginning of each 3-year performance period. See page 48 for 2016-2018 performance measure and results

2018 Long-Term Incentives – Equity Components




Compensation
Component
Target
Opportunity
Number of
Units/Options Granted
Vesting
Period
Value
Realized
Restricted
Stock
Units (RSUs)

CEO:
$2.25 million

Other NEOs:
$0.53 million to
$0.6 million

25% of LTI target, based on the closing price of Corning’s common stock on the grant date (April 2, 2018) Approximately
3 years
Dependent upon Corning common stock price on the vesting date
Stock
Options

CEO:
$1.35 million

Other NEOs:
$0. 32 million to
$0.36 million

15% of LTI target, based on the Black Scholes Valuation at the time of the grant (April 2, 2018) 3 years Dependent upon Corning common stock price increase, if any, between time of the grant and the time of exercise

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CEO Target Compensation

Over the past fourteen years, under the leadership of Mr. Weeks, Corning has grown significantly, achieved the lowest cost position and market leadership in many key businesses, and created new-to-the-world product categories, such as Corning® Gorilla® Glass, heavy-duty diesel substrates and filters, customized fiber-to-the-home solutions and Corning Valor® Glass.

Based on this sustained level of performance, in February 2018, the Compensation Committee approved a 3% base salary increase for Mr. Weeks, and an increase in LTI target to $9 million.

Base salary – increased by 3% in line with base salary increases for all other U.S. based salaried employees.
Short-Term Incentives Target –remained flat at 155% of base salary, comprised of a PIP target of 150% of base salary and a GoalSharing target of 5% of base salary.
Long-Term Incentives Target – increased to $9 million from $8.25 million

Eighty-nine percent of Mr. Weeks’ pay is directly tied to Corning’s operating performance and stock price.

Employee Benefits and Perquisites

Employee Benefits: Our NEOs are eligible to participate in the same employee benefits plans as all other eligible U.S. salaried employees. These plans include medical, dental, life insurance, disability, matching gifts, qualified defined benefit and defined contribution plans. We also maintain non-qualified defined benefit and defined contribution retirement and long-term disability plans with the same general features and benefits as our qualified plans for all U.S. salaried employees affected by tax law compensation, contribution or deduction limits.

In addition to the standard benefits available to all eligible U.S. salaried employees, the NEOs are eligible for the benefits and perquisites described in this section.

Executive Supplemental Pension Plan (ESPP): We maintain an ESPP to reward and retain long-serving individuals who are critical to executing Corning’s innovation strategy. Our non-qualified ESPP covers approximately 20 active participants, including all of the NEOs. In 2006, we capped the percentage of cash compensation earned as a retirement benefit under the ESPP at a maximum of 50% of final average pay for 25 or more years of service, a change that applies to all the NEOs except Dr. Morse. The definition of pay used to determine benefits includes base salary and annual cash bonuses. Long-term cash or equity incentives are not included and do not affect retirement benefits. Executives must have at least ten years of service to be vested under this plan. All of the NEOs meet the ten-year vesting requirement.

While we seek to maintain well-funded qualified retirement plans, we do not fund our non-qualified retirement plans.

For additional details of the ESPP benefits and plan features, please refer to the section entitled “Retirement Plans” on page 64.

Executive Physical and Wellness: All executives are eligible for an annual physical exam in addition to wellness programs sponsored by Corning for all employees.

Relocation and Expatriate-Related Expenses: As part of our global mobility program, our policies provide that employees who relocate to another country at our request are eligible for certain relocation and expatriate benefits to facilitate the transition and international assignment. These benefits include moving expenses, allowances for housing and goods and services, and tax assistance. These policies are intended to recognize and compensate employees for incremental costs incurred with moving or with living and working outside of the employee’s home country. The goal of these relocation and expatriate assistance programs is to ensure that employees are not financially advantaged or disadvantaged because of their relocation and/or international assignment, including related taxes. In July 2016, Mr. Clappin’s assignment in Tokyo ended and he relocated back to Corning, NY. While he was based in Tokyo, Mr. Clappin was eligible for expatriate benefits. These amounts are detailed in footnote 5, section (v) to the Summary Compensation Table.

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Other Executive Perquisites: We provide the NEOs with an overall allowance that can be used for home security, modest personal aircraft usage, and limited financial counseling services. Each NEO is responsible for all taxes on any imputed income resulting from these perquisites.

Given the limited commercial flight options available in the Corning, New York area, the Committee believes that a well-managed program of limited personal aircraft use provides an extremely important benefit at a reasonable cost to the Company. We closely monitor business and personal usage of our planes and limit personal usage to keep it at a low percentage of total usage. The Committee establishes annual personal aircraft usage caps under this program (both hours and absolute dollar value) for each NEO. The established cap for the CEO was 100 hours and $170,000; the cap for the other NEOs was approximately half this level or lower. Actual utilization falls below these caps. For additional details, refer to footnotes relating to “All Other Compensation” included with the Summary Compensation Table starting on page 58.

Executive Severance: We have entered into severance agreements with each NEO. The severance agreements provide clarity for both Corning and the executive if the executive’s employment terminates. By having an agreement in place, we avoid the uncertainty, negotiations and potential litigation that may otherwise occur in the event of termination. The agreements are competitive with market practices at many other large companies and are helpful in retaining senior executives. Additional details can be found under “Arrangements with Named Executive Officers” on page 67.

Executive Change-in-Control Agreements: The Committee believes that it is in the best interests of shareholders, employees and the communities in which Corning operates to ensure an orderly process if a change in control were to occur. The Committee also believes it is important to prevent the loss of key management personnel (who would be difficult to replace) that may occur in connection with a potential or actual change in control. Therefore, we have provided each NEO with a change-in-control agreement (separate from the severance agreements described above). The change-in-control agreements provide that an executive’s employment must be terminated or effectively terminated in connection with a change in control in order to receive severance benefits. Additional details about the specific agreements can be found under “Arrangements with Named Executive Officers – Change-in-Control Agreements” on page 69.

In 2012, the Committee approved updated forms of agreements for all corporate officers entering into change-in-control agreements after July 2004, which contain no provision for gross-ups for excise taxes, and cap severance and other benefits at 2.99 times base salary plus target bonus, with cash severance for most officers limited to 2 times base salary plus target bonus. Except for Mr. Tripeny, whose agreement is dated January 1, 2015, our current NEOs have grandfathered agreements that were entered into prior to July 2004.

Compensation Peer Group

Corning is a diversified technology company with five reportable business segments. The majority of our businesses do not have U.S. public company peers. Most of our businesses compete with non-U.S. companies in Asia and Europe, or privately-held companies that do not provide comparable executive compensation disclosure. In attempting to identify peer companies for compensation purposes, Corning must look to globally diversified companies or innovation companies in other industries to find organizations of similar size and complexity (when viewed in terms of revenues, net income, market capitalization, assets and number of employees). For these reasons, our peer group for compensation purposes does not closely resemble the companies with which we compete for business.

Our largest competitors and most relevant financial performance peers are not U.S. public companies.
 
Corning must look to globally diversified companies or innovation companies in other industries to find companies of similar size and complexity.

We currently participate in and use several executive compensation surveys for NEO positions. Primary surveys are the Willis Towers Watson General Industry Executive Compensation Survey, the Equilar TrueValue Survey and Aon Hewitt Total Compensation Measurement Survey for Executives. The surveys provide general market data for relevant positions in companies with revenues and market capitalization similar to Corning’s in both the Technology industry and in general industry.

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2018 Compensation Peer Group

The Compensation Peer Group in 2018 is set forth below. It is the same as the Compensation Peer Group in 2017, except for Monsanto Company and Praxair, Inc., which were acquired during 2018 and are no longer included.

Advanced Micro Devices, Inc.     Cummins Inc.     Medtronic, Inc.     TE Connectivity Limited
Agilent Technologies, Inc. Danaher Corporation Motorola Solutions, Inc. Texas Instruments Incorporated
Applied Materials, Inc. Dover Corporation NetApp, Inc. Thermo Fisher Scientific, Inc.
BorgWarner, Inc. Eaton Corporation PLC PPG Industries, Inc.
Boston Scientific Corporation Harris Corporation QUALCOMM, Inc.
Broadcom Corporation Juniper Networks, Inc. Rockwell Automation, Inc.

The Company selects a fair and challenging Compensation Peer Group as a reference point when setting its executive compensation. The Company’s percentage ranking versus the Compensation Peer Group is near to or well-above the median in all measured categories.

PERCENT RANK, CORNING VERSUS COMPENSATION PEER GROUP

 

Corning uses the Compensation Peer Group solely as a reference point, in combination with broader executive compensation surveys, to assess each NEO’s target total direct compensation (i.e., salary, target bonus, and the grant date fair value of long-term incentives). Our goal is to position our CEO’s target total direct compensation within a competitive range of the Compensation Peer Group median. Median target total direct CEO compensation in the Compensation Peer Group was determined to be $12.9 million, and 75th percentile target total direct CEO compensation was $15.4 million, compared with Corning target total direct CEO compensation of $12.7 million. Beyond the CEO, external data serves as a reference point, with internal equity and individual performance and impact being more important considerations in establishing a base salary and target total direct compensation for the other NEOs.

Compensation Program – Other Governance Matters

Role of Compensation Consultant

The Compensation Committee has the authority to retain and terminate a compensation consultant, and to approve the consultant’s fees and all other terms of such engagement. Since 2014, the Committee has retained an executive compensation expert from Frederic W. Cook & Co., Inc. (FW Cook) as its independent consultant.

In 2018, FW Cook attended all Committee meetings. FW Cook advises the Committee on all matters related to NEO and director compensation and assists the Committee in interpreting its data as well as data and recommendations received from the Company.

In 2018, the Company also engaged Compensation Advisory Partners LLC (CAP) and Willis Towers Watson (WTW) to assist management with various executive compensation matters.

The Committee conducted an independence review of FW Cook, CAP and WTW pursuant to SEC and NYSE rules, and concluded that the work of each firm for Committee did not raise any conflicts of interest concerns. FW Cook provides no services to Corning other than the services rendered to the Committee.

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Role of Executive Management in the Executive Compensation Process

Corning’s executive vice president, People and Digital and senior vice president (SVP), Global Compensation and Benefits, working closely with other members of Corning’s Human Resources, Law and Finance departments, are responsible for designing and implementing executive compensation programs and discussing with the Committee significant proposals or topics that affect executive compensation at the Company. The SVP, Global Compensation and Benefits, formulates the target total compensation recommendations for all of the NEOs (except the CEO) and reviews the recommendations for each of the other NEOs with the CEO. The NEOs do not recommend or suggest individual compensation actions that benefit them personally.

The CEO may propose adjustments he deems appropriate before management’s recommendations are submitted to the Committee. Recommendations for the CEO’s compensation are prepared by the Committee’s independent compensation consultant (FW Cook) and are not discussed or reviewed with the CEO prior to the Committee’s review and the CEO is not present for discussion of his compensation by the Committee.

After the annual budget is finalized each year, the Committee receives management’s recommendations for the compensation plan performance metrics and sets the final targets for the year.

The CFO typically attends the annual Committee meeting to review the CD&A, and attends that portion of the February Committee meeting where performance metrics are reviewed.

Clawback Policy

Our clawback policy gives the Committee the sole and absolute discretion to make retroactive adjustments to any cash or equity-based incentive compensation paid to executive officers and other key employees if such payment was based upon the achievement of financial results that were subsequently the subject of a restatement. The Committee has discretion to seek recovery of any amount that it determines was received inappropriately by such individuals.

Anti-Hedging Policy

Our anti-hedging policy prohibits employees and directors from selling or buying publicly traded options on Corning stock, or trading in any Corning stock derivatives. Additionally, these individuals may not engage in transactions in which they may profit from short-term speculative swings in the value of Corning stock utilizing “short sales” or “put” or “call” options.

Anti-Pledging Policy

Our anti-pledging policy prohibits employees and directors from holding Corning stock in a margin account or pledging Company securities as collateral for a loan.

Tax Deductibility of Compensation

Historically, the Committee has made compensation decisions with an eye towards deductibility of performance-based pay under IRC Section 162(m). However, the Tax Cuts and Jobs Act of 2017 (“the Tax Act”) that was signed into law December 22, 2017 eliminated the exemption from Section 162(m)’s deduction limit for performance-based compensation, effective for taxable years beginning after December 31, 2017. Compensation paid to our covered officers in excess of $1 million therefore will not be deductible unless it qualifies for transition relief.

Accounting Implications

In designing our compensation and benefit programs, we review the accounting implications of our decisions. We seek to deliver cost-effective compensation and benefit programs that meet both the needs of the Company and our employees.

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Compensation Committee Report

The Compensation Committee of the Board of Directors (the Committee), which is composed entirely of independent directors, is responsible to the Board of Directors and our shareholders for the oversight and administration of executive compensation at Corning. The Committee approves the principles guiding the Company’s compensation philosophy, reviews and approves executive compensation levels (including cash compensation, equity incentives, benefits and perquisites for officers) and reports its actions to the Board of Directors for review and, as necessary, approval. The Committee is responsible for interpreting Corning’s executive compensation plans and programs. In the event of any questions or disputes, the Committee may use its judgment and/or discretion to make final administrative decisions regarding these plans and programs. It is our practice that all compensation decisions affecting a corporate officer must be reviewed and approved by the Committee. Additional details regarding the role and responsibilities of the Committee are defined in the Committee Charter, located in the Corporate Governance section of the Company’s website.

The Committee has reviewed and discussed the foregoing CD&A with management. Based on our review and discussions with management, we recommended to the Board of Directors that the CD&A be included in this proxy statement and in our Annual Report on Form 10-K for the year ended December 31, 2018.

The Compensation Committee:

Deborah D. Rieman, Chair
Leslie A. Brun
Richard T. Clark
Kurt M. Landgraf
Hansel E. Tookes II

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Compensation Discussion & Analysis

2018 Compensation Tables

2018 Summary Compensation Table

This table describes the total compensation paid to our NEOs for fiscal years 2018, 2017 and 2016, as required. The components of the total compensation are described in the footnotes below and in more detail in the tables and narratives that follow. For information on the role of each component of compensation, see the description under “Compensation Discussion and Analysis.”

2018 Non-Equity Incentive Plan Compensation for each NEO, shown in the table below in column (f), is arrived at by adding together the relevant 2018 value in each of columns (A), (B), (C), (D), (X) and (Y) from the tables in Footnote 3 below.

(a) (b) (c) (d)(1) (e)(2) (f)(3) (g)(4) (h)(5) (i)
Named Executive Officer Year Salary
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Change in
Pension
Value And
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Total
($)
Wendell P. Weeks     2018     $1,412,769     $2,250,004     $1,068,905     $9,496,910     $214,550     $477,933     $14,921,071
Chairman, Chief Executive 2017 1,370,971 2,062,503 1,154,705 9,240,173 2,680,783 359,440 16,868,575
Officer and President 2016 1,337,740 2,062,491 963,399 5,750,512 928,531 266,582 11,309,255
R. Tony Tripeny 2018 643,269 531,248 252,380 2,128,343 784,470 137,172 4,476,882
Executive Vice President and 2017 553,269 475,011 265,933 1,796,340 858,254 111,412 4,060,219
Chief Financial Officer 2016 504,808 349,991 163,480 916,406 214,950 126,222 2,275,857
James P. Clappin 2018 731,515 587,497 279,101 2,521,206 49,144 333,350 4,501,813
Executive Vice President, 2017 703,600 524,988 293,929 2,401,287 674,260 157,335 4,755,399
Corning Glass Technologies 2016 686,538 525,007 245,230 1,537,749 66,568 3,452,856 6,513,948
Lawrence D. McRae 2018 780,113 600,012 285,043 2,720,709 58,395 68,687 4,512,959
Vice Chairman and Corporate 2017 750,173 562,491 314,921 2,610,289 893,805 78,304 5,209,983
Development Officer 2016 731,971 562,505 262,737 1,633,734 90,676 83,329 3,364,952
David L. Morse 2018 677,465 562,494 267,225 2,444,561 444,224 149,850 4,545,819
Executive Vice President and 2017 646,683 524,988 293,929 2,321,182 1,154,083 115,809 5,056,674
Chief Technology Officer 2016 631,010 525,007 245,230 1,498,641 468,668 97,390 3,465,946
(1) The amounts in the Stock Awards column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of awards of restricted stock units and restricted stock awards granted pursuant to the long term incentive plan. Assumptions used in the calculation of these amounts are included in Note 1 to the Company’s audited financial statements for the fiscal year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 12, 2019. This same method was used for the fiscal years ended December 31, 2017 and 2016. There can be no assurance that the grant date fair value amounts will ever be realized.
(2) The amounts in the Options Awards column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of stock option awards granted pursuant to the long term incentive plan. Assumptions used in the calculation of these amounts are included in Note 1 to the Company’s audited financial statements for the fiscal year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 12, 2019. The grant date fair value amounts may never be realized.
(3) The amounts in the Non-Equity Incentive Plan Compensation column reflect the sum of annual short term incentive payments and earned cash performance units. All of the annual cash bonuses paid to the NEOs are performance-based. Cash bonuses are paid annually through two plans: (i) GoalSharing; and (ii) the Performance Incentive Plan (PIP). Awards earned under the 2018 GoalSharing plan were 6.41% of each NEO’s year-end base salary and paid in February 2019. Awards earned under the 2018 PIP were based on actual corporate performance compared to the Core EPS and core net sales goals established for the plans in February 2018. Based on actual performance, each of the NEOs earned PIP awards equal to 126% of their annual target bonus opportunities (established as a percentage of year-end base salary). Cash awards earned under the PIP for 2018 will be paid in March 2019.

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Named Executive Officer       Year End
Base Salary
      2018
PIP Target %
      Actual 2018 PIP
Performance
Results
(% Tgt.)
      (X)
2018
PIP $ Award
      Actual 2018
GoalSharing
Performance %
      (Y)
2018
GoalSharing
$ Award
Wendell P. Weeks $1,435,200 150% 126% $2,712,528 6.41% $91,996
R. Tony Tripeny 690,000 80% 126% 695,520 6.41% 44,229
James P. Clappin 750,000 80% 126% 756,000 6.41% 48,075
Lawrence D. McRae 800,000 85% 126% 856,800 6.41% 51,280
David L. Morse 700,000 80% 126% 705,600 6.41% 44,870

In addition to the 2018 PIP and 2018 GoalSharing awards noted above, the amounts in column (f) also reflect the earned portions of CPU Awards granted in 2018, 2017 and 2016 on the basis of 2018 performance against established measures. 2018 CPU award payouts will be made in 2021 based on actual corporate performance compared to the established performance goals averaged over three years (2018, 2019 and 2020) and subject to the ROIC modifier as described on page 48. 2017 and 2016 CPU award payouts are based on performance goals averaged over three years (2017, 2018 and 2019) and (2016, 2017 and 2018) respectively and are also subject to the ROIC modifier. Adjusted operating cash flow, capex and core net sales goals for 2019 and 2020 are yet to be established. While the final payout amounts for 2018 and 2017 CPU awards are unknown, the table below reflects the earned amount of 2018, 2017 and 2016 CPU awards which are reflected in the “Non-Equity Incentive Plan Compensation” column above, on the basis of 2018 performance metrics which excludes the portion of the 2018 award that remains unearned because ROIC performance against targets (2018-2020) are not yet known and the portion of 2017 award that remains unearned because ROIC performance against targets (2017-2019) are not yet known. The 3-year ROIC modifier for the period 2016-2018 was +4.74%. The summary compensation table includes an adjustment for 2016 CPUs as shown in the table below as a result of this modifier.

Named Executive Officer 2018 LTI
Target
2018 CPU
Target
Award
($)
2018 CPU
Performance
Results %
(A)
Prorated Earned
2018 CPU Award
Based on 2018
Performance
(Year One of
Three)
($)*
2017 CPU
Target
Award
($)
(B)
Prorated Earned
2017 CPU Award
Based on 2018
Performance
(Year Two of
Three)
($)*
2016 CPU
Target
Amount
(C)
Prorated Earned
2016 CPU Award
Based on 2018
Performance
(Year Three of
Three)*
($)
(D)
Prorated Earned
2016 CPU Award
Based on
True-up of
2016 - 2018
Performance and
ROIC Modifier**
($)
Wendell P. Weeks $9,000,000 $5,400,000 128% $2,073,600 $4,950,000 $1,900,800 $4,950,000 $1,900,800 $817,186
R. Tony Tripeny 2,125,000 1,275,000 128% 489,600 1,140,000 437,760 840,000 322,560 138,674
James P. Clappin 2,350,000 1,410,000 128% 541,440 1,260,000 483,840 1,260,000 483,840 208,011
Lawrence D. McRae 2,400,000 1,440,000 128% 552,960 1,350,000 518,400 1,350,000 518,400 222,869
David L. Morse 2,250,000 1,350,000 128% 518,400 1,260,000 483,840 1,260,000 483,840 208,011
*

reduced by 10% to accommodate the ROIC modifier result which is not known until the end of the 3-year performance period. These amounts get trued-up and reported in the third and final year of each 3-year performance period.

**

2016 CPUs earned as a result of the true-up of final performance under the 3-year plan as well as the ROIC modifier of +4.74% based on 2016-2018 ROIC improvement against pre-established objectives


(4)

The amounts in the “Change in Pension Value And Nonqualified Deferred Compensation Earnings” column reflect the increase in the actuarial present value of the NEO’s benefits under all defined benefit pension plans established by the Company determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. Although the “Change in Pension Value And Nonqualified Deferred Compensation Earnings” column is also used to report the amount of above market earnings on compensation that is deferred under the nonqualified deferred compensation plan, Corning does not have any above market earnings under its nonqualified deferred compensation plan, also referred to as the Supplemental Investment Plan. In 2018 the discount rate used to value the actuarial liability increased approximately 69 basis points from 3.6% to 4.29%. Discount rate changes over the past several years have resulted in significant year-to-year fluctuations in the present value of pension benefits as shown below:


Named Executive Officer       2018 Present
Value in
Pension
Benefits ($)
             2017 Present
Value in
Pension
Benefits ($)
             2016 Present
Value in
Pension
Benefits ($)
      2015 Present
Value in
Pension
Benefits ($)
Wendell P. Weeks $27,702,770 $27,488,220 $24,807,437 $23,878,906
R. Tony Tripeny 6,974,564 6,190,094 5,331,840 5,116,890
James P. Clappin 9,480,036 9,430,892 8,756,632 8,690,064
Lawrence D. McRae 10,435,294 10,376,899 9,483,094 9,392,418
David L. Morse 10,016,059 9,571,835 8,417,752 -------Not an NEO--------
Valuation Discount Rate 4.29% 3.60% 4.02% 4.25%

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Compensation Discussion & Analysis

(5)

The following table shows “All Other Compensation” amounts provided to the NEOs. Capped personal aircraft rights, financial counseling services and home security are the only perquisites offered to the NEOs. The value of the personal aircraft rights in the table below reflects the incremental cost of providing such perquisites and is calculated based on the average variable operating costs to the Company. Hourly rates are developed using variable operating costs that include fuel costs, mileage, maintenance, crew travel expense, catering and other miscellaneous variable costs. Fixed costs that do not change based on usage, such as pilot salaries, hangar expense and general taxes and insurance are excluded.


Named Executive Officer     Year     Company Match
on Qualified
401(k) Plan
    Company Match
on Supplemental
Investment Plan
    Value of
Personal
Aircraft
Rights(i)
    Value of Home
Security Costs
and Financial
Counseling(ii)
    Expatriate
Benefits
    Other(iii)     TOTALS
Wendell P. Weeks 2018 $16,227 $77,320 $195,485      $179,746 (iv)  $0 $9,155 $477,933
2017 14,603 75,028 94,117 165,921 (iv)  0 9,771 359,440
2016 9,880 73,165 56,893 109,520 (iv)  0 17,124 266,582
R. Tony Tripeny 2018 4,900 54,092 17,758 47,219 0 13,203 137,172
2017 4,800 30,685 14,138 50,859 0 10,930 111,412
2016 4,800 25,017 4,303 80,030 0 12,072 126,222
James P. Clappin 2018 16,810 89,499 53,820 18,680 132,122 (v)  22,419 333,350
2017 7,410 65,894 49,039 23,461 0 11,531 157,335
2016 7,410 58,473 54,708 17,791 3,311,896 (v)  2,578 3,452,856
Lawrence D. McRae 2018 16,981 0 47,673 3,620 0 413 68,687
2017 16,673 0 58,055 3,231 0 345 78,304
2016 16,364 0 59,489 6,781 0 695 83,329
David L. Morse 2018 15,129 82,896 29,369 10,708 0 11,748 149,850
2017 14,820 52,554 24,588 12,052 0 11,795 115,809
2016 14,820 45,734 20,080 12,389 0 4,367 97,390
(i)

Amounts shown above reflect aircraft usage over the calendar 2018 although the executive allowance runs from November 1 through October 30. Mr. Weeks’ use of Corning aircraft for travel to external board meetings is also included.

(ii)

NEOs may use their executive allowance for residential security and financial counseling services.

(iii)

These amounts include costs attributable to executive physicals, including associated travel costs, an annual Board gift, and contributions made under the Corning Incorporated Foundation Matching Gifts Program.

(iv)

This reflects Company-paid expenses relating to personal and residential security benefitting Mr. Weeks and, through association, his family. Mr. Weeks’ personal safety and security are of vital importance to the Company’s business and prospects, and the Board considers these costs to be appropriate. However, because these costs can be viewed as conveying a personal benefit to Mr. Weeks, they are reported as perquisites in this column.

(v)

This reflects expenses pursuant to our standard global mobility program in connection with Mr. Clappin’s assignment in Tokyo, Japan as President, Corning Glass Technologies. Mr. Clappin repatriated back to the US in July 2016. Given the length of his assignment, trailing foreign tax payments are possible based on the allocation of long-term incentive compensation to appropriate tax jurisdictions.


60      CORNING 2019 PROXY STATEMENT


Table of Contents

Compensation Discussion & Analysis

2018 Grants of Plan Based Awards


Estimated Future Payouts Under
Non-Equity Incentive Plan Awards

Named
Executive
Officer
Award Grant
Date
Date of
Committee
Action
  Threshold(1)
($)

Target(1)
($)

Maximum(1)
($)

  All Other
Stock
Awards:
Number
of Shares
of Stock or
Units
(#)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
Exercise
or Base
Price of
Option
Awards
($/Sh)
Closing
Market
Price on
Date of
Grant
Grant Date
Fair Value
of Stock
and Option
Awards
Wendell P. Performance
Weeks Incentive Plan n/a $0 $2,152,800 $4,305,600
GoalSharing Plan n/a 0 71,760 143,520
Cash Performance Units 2/6/18 2/6/18 0 5,400,000 8,910,000
Time-Based Restricted
Stock Units 4/2/18 2/6/18 83,241 27.03 $2,250,004(2)
Stock Options 4/2/18 2/6/18 149,849 27.03 27.03 1,068,905(3)
R. Tony Performance
Tripeny Incentive Plan n/a 0 552,000 1,104,000
GoalSharing Plan n/a 0 34,500 69,000
Cash Performance Units 2/6/18 2/6/18 0 1,275,000 2,103,750
Time-Based Restricted
Stock Units 4/2/18 2/6/18 19,654 27.03 531,248(2)
Stock Options 4/2/18 2/6/18 35,381 27.03 27.03 252,380(3)
James P. Performance
Clappin Incentive Plan n/a 0 600,000 1,200,000
GoalSharing Plan n/a 0 37,500 75,000
Cash Performance Units 2/6/18 2/6/18 0 1,410,000 2,326,500
Time-Based Restricted
Stock Units 4/2/18 2/6/18 21,735 27.03 587,497(2)
Stock Options 4/2/18 2/6/18 39,127 27.03 27.03 279,101(3)
Lawrence D. Performance
McRae Incentive Plan n/a 0 680,000 1,360,000
GoalSharing Plan n/a 0 40,000 80,000
Cash Performance Units 2/6/18 2/6/18 0 1,440,000 2,376,000
Time-Based Restricted
Stock Units 4/2/18 2/6/18 22,198 27.03 600,012(2)
Stock Options 4/2/18 2/6/18 39,960 27.03 27.03 285,043(3)
David L. Performance
Morse Incentive Plan n/a 0 560,000 1,120,000
GoalSharing Plan n/a 0 35,000 70,000
Cash Performance Units 2/6/18 2/6/18 0 1,350,000 2,227,500
Time-Based Restricted
Stock Units 4/2/18 2/6/18 20,810 27.03 562,494(2)
Stock Options 4/2/18 2/6/18 37,462 27.03 27.03 267,225(3)
(1)

The amounts shown in columns (d), (e) and (f) reflect the award amounts under (i) the Company’s 2018 Performance Incentive Plan (PIP) (ii) 2018 GoalSharing Plan and (iii) the Cash Performance Units under the Company’s 2012 Long-Term Incentive Plan. Awards under these plans are paid in cash. If the threshold level of performance is not met the payout will be 0%. If the performance target is met, the payout is 100% of the target award. If the maximum level of performance is met for GoalSharing and PIP, the payout is 200% of the target award and 165% for CPUs. These payouts incorporate the 150% performance metrics cap plus the maximum 10% ROIC modifier. PIP and GoalSharing awards are based on the individual’s 2018 bonus target and year-end base salary. Actual awards earned for CPUs are based on average performance against established metrics over three years (2018, 2019, 2020), adjusted up or down by up to 10% based on ROIC results versus the pre-established goal for the three-year period, and will be payable in February 2021.

(2)

These amounts reflect the total grant date fair value computed in accordance with FASB ASC Topic 718 of stock awards granted in calendar year 2018 pursuant to the Company’s 2012 Long-Term Incentive Plan and correspond to the amounts set forth in the “Stock Awards” column of the 2018 Summary Compensation Table. Stock awards vest 100% three years after grant date.

(3)

These amounts reflect the total grant date fair value computed in accordance with FASB ASC Topic 718 of stock options granted in calendar year 2018 pursuant to the Company’s 2012 Long-Term Incentive Plan and correspond to the amounts set forth in the “Option Awards” column of the 2018 Summary Compensation Table. Stock options vest 100% three years after grant date.


CORNING 2019 PROXY STATEMENT      61


Table of Contents

Compensation Discussion & Analysis

Outstanding Equity Awards at 2018 Fiscal Year-End

The following table shows stock option awards classified as exercisable and unexercisable as of December 31, 2018. The table also shows unvested restricted stock and restricted stock unit awards assuming a market value of $30.21 a share (the NYSE closing price of the Company’s stock on December 31, 2018).

Option Awards Stock Awards
Named
Executive
Officer
   Grant
Date
   Vesting
Code(1)
   Number of
Securities Underlying
Unexercised Options
Exercisable
(#)
   Number of
Securities Underlying
Unexercised Options
Unexercisable
(#)
   Option
Exercise
Price
($)
   Option
Expiration
Date
   Number of
Shares or Units
of Stock That
Have Not Vested
(#)(2)
   Market Value of
Shares or Units
of Stock That
Have Not Vested
($)(3)
Wendell P. 04/30/13 A 114,943 0 14.50 4/30/2023 249,780 $7,545,854
Weeks 05/31/13 A 108,436 0 15.37 5/31/2023
03/31/14 A 42,027 0 20.82 3/31/2024
04/30/14 A 41,846 0 20.91 4/30/2024
05/30/14 A 41,080 0 21.30 5/30/2024
03/31/15 A 44,092 0 22.68 3/31/2025
04/30/15 A 47,778 0 20.93 4/30/2025
05/29/15 A 47,801 0 20.92 5/29/2025
03/31/16 A 0 49,366 20.89 3/31/2026
04/29/16 A 0 55,236 18.67 4/29/2026
05/31/16 A 0 49,366 20.89 5/31/2026
03/31/17 A 0 137,514 27.00 3/31/2027
04/02/18 A 0 149,849 27.03 4/2/2028
Total 488,003 441,331
R. Tony Tripeny 02/01/12 A 7,229 0 12.90 2/1/2022 51,999 $1,570,890
03/01/12 A 14,456 0 12.97 3/1/2022
03/28/13 A 16,075 0 13.33 3/28/2023
04/30/13 A 14,778 0 14.50 4/30/2023
05/31/13 A 13,942 0 15.37 5/31/2023
03/31/14 A 6,004 0 20.82 3/31/2024
04/30/14 A 5,978 0 20.91 4/30/2024
05/30/14 A 5,869 0 21.30 5/30/2024
03/31/15 A 5,787 0 22.68 3/31/2025
04/30/15 A 6,271 0 20.93 4/30/2025
05/29/15 A 6,274 0 20.92 5/29/2025
03/31/16 A 0 8,377 20.89 3/31/2026
04/29/16 A 0 9,373 18.67 4/29/2026
05/31/16 A 0 8,377 20.89 5/31/2026
03/31/17 A 0 31,670 27.00 3/31/2027
04/02/18 A 0 35,381 27.03 4/2/2028
Total 102,663 93,178
James P. 03/31/15 A 11,574 0 22.68 3/31/2025 63,815 $1,927,851
Clappin 04/30/15 A 12,542 0 20.93 4/30/2025
05/29/15 A 12,548 0 20.92 5/29/2025
03/31/16 A 0 12,566 20.89 3/31/2026
04/29/16 A 0 14,060 18.67 4/29/2026
05/31/16 A 0 12,566 20.89 5/31/2026
03/31/17 A 0 35,004 27.00 3/31/2027
04/02/18 A 0 39,127 27.03 4/2/2028
Total 36,664 113,323

62      CORNING 2019 PROXY STATEMENT


Table of Contents

Compensation Discussion & Analysis

Option Awards Stock Awards
Named
Executive
Officer
   Grant
Date
   Vesting
Code(1)
   Number of
Securities Underlying
Unexercised Options
Exercisable
(#)
   Number of
Securities Underlying
Unexercised Options
Unexercisable
(#)
   Option
Exercise
Price
($)
   Option
Expiration
Date
   Number of
Shares or Units
of Stock That
Have Not Vested
(#)(2)
   Market Value of
Shares or Units
of Stock That
Have Not Vested
($)(3)
Lawrence D. 01/03/11 B 16,888 0 19.19 1/3/2021 67,402 $2,036,214
McRae 02/01/11 B 14,283 0 22.69 2/1/2021
03/01/11 B 14,711 0 22.03 3/1/2021
04/30/13 A 12,841 0 14.50 4/30/2023
05/31/13 A 30,982 0 15.37 5/31/2023
03/31/14 A 12,008 0 20.82 3/31/2024
04/30/14 A 11,956 0 20.91 4/30/2024
05/30/14 A 11,737 0 21.30 5/30/2024
03/31/15 A 11,850 0 22.68 3/31/2025
04/30/15 A 12,840 0 20.93 4/30/2025
05/29/15 A 12,847 0 20.92 5/29/2025
03/31/16 A 0 13,463 20.89 3/31/2026
04/29/16 A 0 15,064 18.67 4/29/2026
05/31/16 A 0 13,463 20.89 5/31/2026
03/31/17 A 0 37,504 27.00 3/31/2027
04/02/18 A 0 39,960 27.03 4/2/2028
Total 162,943 119,454
David L. Morse 03/31/14 A 12,008 0 20.82 3/31/2024 62,863 $1,899,091
04/30/14 A 11,956 0 20.91 4/30/2024
05/30/14 A 11,737 0 21.30 5/30/2024
03/31/15 A 11,574 0 22.68 3/31/2025
04/30/15 A 12,542 0 20.93 4/30/2025
05/29/15 A 12,548 0 20.92 5/29/2025
03/31/16 A 0 12,566 20.89 3/31/2026
04/29/16 A 0 14,060 18.67 4/29/2026
05/31/16 A 0 12,566 20.89 5/31/2026
03/31/17 A 0 35,004 27.00 3/31/2027
04/02/18 A 0 37,462 27.03 4/2/2028
Total 72,365 111,658
(1)

The company uses the following vesting codes

A

100% Vesting 3 years after grant date

B

1/3 Vesting 1 year after grant date, 1/3 Vesting 2 years after grant date and 1/3 Vesting 3 years after grant date

(2)

Amounts include:

(i)

93,910; 15,758; 23,725; 25,503 and 23,725 restricted share units granted to Messrs. Weeks, Tripeny, Clappin, McRae and Dr. Morse, respectively, on March 31, 2016, which vest on April 15, 2019.

(ii)

72,629; 16,587; 18,355; 19,701 and 18,328 restricted share units granted to Messrs. Weeks, Tripeny, Clappin, McRae and Dr. Morse, respectively, on March 31, 2017, which vest on April 15, 2020.

(iii)

83,241; 19,654; 21,735; 22,198 and 20,810 restricted share units granted to Messrs. Weeks, Tripeny, Clappin, McRae and Dr. Morse, respectively, on April 2, 2018, which vest on April 15, 2021.

(3)

Year-end market price is based on the December 31, 2018 NYSE closing price of $30.21.


CORNING 2019 PROXY STATEMENT      63


Table of Contents

Compensation Discussion & Analysis

Options Exercised and Shares Vested in 2018

The following table sets forth certain information regarding options exercised and restricted stock and restricted stock units that vested during 2018 for the NEOs.

Option Awards Stock Awards
Named Executive Officer       Number of Shares
Acquired on Exercise
(#)
      Value Realized
on Exercise
($)
      Number of Shares
Acquired on Vesting
(#)
      Value Realized
on Vesting
($)
Wendell P. Weeks 462,354 $8,220,903 87,685 $2,429,749
R. Tony Tripeny 67,659 1,043,723 18,267 514,600
James P. Clappin 0 0 22,893 634,915
Lawrence D. McRae 50,667 854,808 26,091 725,960
David L. Morse 63,151 670,437 22,839 633,569

Retirement Plans

Qualified Pension Plan

Corning maintains a qualified defined benefit pension plan to provide retirement income to Corning’s U.S.-based employees which was amended effective July 1, 2000, to include a cash balance component. All salaried and non-union hourly employees as of July 1, 2000, were given a choice to prospectively accrue benefits under the previously existing career average earnings formula or a cash balance formula, if so elected. Employees hired subsequent to July 1, 2000, earn benefits solely under the cash balanc