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. )
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
| ¨ | Preliminary Proxy Statement |
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ¨ | Definitive Proxy Statement |
| x | Definitive Additional Materials |
| ¨ | Soliciting Material Pursuant to §240.14a-12 |
THE GOODYEAR TIRE & RUBBER COMPANY
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x | No fee required. |
| ¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | Title of each class of securities to which the transaction applies: |
| (2) | Aggregate number of securities to which the transaction applies: |
| (3) | Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of the transaction: |
| (5) | Total fee paid: |
| ¨ | Fee paid previously with preliminary materials. |
| ¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount Previously Paid: |
| (2) | Form, Schedule or Registration Statement No.: |
| (3) | Filing Party: |
| (4) | Date Filed: |
Commencing on April 5, 2013, The Goodyear Tire & Rubber Company provided the following information to certain shareholders:
 Say on
Pay Proposal April 5, 2013 |
 Executive
Summary Strong Operating
Performance in 2012
Policies Around Pay
Indicate Board’s
Attention to Best
Practices
Our
segment
operating
income
in
2012
was
the
second
highest
in
Goodyear’s
history
We achieved record results in North America during 2012
We have continuously improved our compensation program by adopting emerging best
practices Examples include in recent years the addition of a TSR metric,
double trigger change-in-control, elimination of tax gross-ups,
prohibitions against pledging/hedging, among others Below Peer Median
Pay Indicate Good
Alignment with Peer
Group
A quantitative analysis of Goodyear’s CEO pay vs. performance shows that
below median total shareholder return is accompanied by below median
pay Pay is targeted at about median going forward to reflect our CEO’s
successful tenure to date and the company’s strong operating
performance Our CEO’s base salary is set at below median market rates
Low Realized Pay*
and 90%
Performance-Based
Pay Indicate Pay for
Performance
Alignment
During
our
CEO’s
tenure,
Goodyear
experienced
outstanding
results,
increasing
3
year
cumulative
segment operating income by 47% versus the cumulative total in the 3 years prior
Only 10% of our CEO’s compensation is fixed while the remaining 90% is
performance-based variable pay
Our CEO’s realized pay has been significantly less than the reported Summary
Compensation Table amount over the last 3 years
Financial performance metrics and a TSR metric in the pay program align pay and
performance Incentive plan performance goals reflect economic and business
cycle; they do not reflect an effort to make awards easier to earn
Executive Pay and Company Performance Are Well Aligned at Goodyear
2
* Realized pay includes the base salary, annual incentive earned, long term
incentive earned and the pre-tax compensation earned upon the exercise of stock
options and vesting of stock awards regardless of when they were
granted |
 Strong 2012
Operating Performance Reflected in Sound Compensation Plan
Metrics
3
Record Results in
North America
Our performance in North America provides further strong evidence of success
We achieved record results of $514 million in segment operating income in North
America, significantly exceeding 2013 target of $450 million a year
early Enhanced Earnings
Power and
Consistency in a
Weak Environment
in 2012
Tire
industry
unit
volumes,
unlike
volumes
in
the
automotive
and
other
industries,
have
fallen
back to the low levels seen during the depths of the recent recession
Despite
this,
Goodyear’s
segment
operating
income
in
2012
was
the
second
highest
in
Goodyear’s history, following our record-setting performance in
2011 2011 and 2012 mark the only period in the history of Goodyear during
which segment operating income exceeded $1.2 billion for two consecutive
years Increase in Segment
Operating Income
During Our CEO’s
Tenure (2010-
present)*
Performance Metrics
Are Rigorous and
Reflect Market
Conditions
Goodyear is engaged in a multi-year cyclical business and performance metrics
are adjusted annually to reflect anticipated market conditions
Given
strong
tire
market
headwinds,
we
expected
a
larger
decline
in
earnings
in
2012
but
sound management led to above target achievement on three metrics and 2.5% below
target on the fourth metric
*See Reconciliation of Segment Operating Income to Net Income on
Slide 10 |
 Realized
Pay Shows Pay for Performance Alignment
As reported in the Summary Compensation Table at pages 40-42 of Goodyear’s
Proxy Statement dated March 18, 2013 For more information on our calculation
of realized pay, see “Summary of Realized Pay Earned by Our Chief Executive Officer for 2010,
2011 and 2012”
at pages 42-43 of Goodyear’s Proxy Statement dated March 18, 2013
Realized pay includes the base salary, annual incentive earned, long term incentive
earned and the pre-tax compensation earned upon the exercise of stock
options and vesting of stock awards regardless of when they were granted; realizable pay, according to ISS, equals
the sum of base salary, change in pension value, deferred compensation and
“all other” compensation as reported in the Summary
Compensation Table, earned bonus, short-term cash incentives, the earned (or
target if not yet earned) value of any long-term cash awarded during the
period, and fair value of all equity awarded (or earned, for performance shares where the performance period has
ended) during the prior three fiscal years, valued as of the most recent FY end
date 4
Our CEO’s realized pay has been significantly less than the reported Summary
Compensation Table amount over the last 3 years
Beginning with 2011 awards, over 70% of CEO compensation is influenced by stock
price, tying executive pay to the stock price
The tables below show that CEO pay in fact closely tracks company performance
2012 Realized CEO Compensation
2010-2012 Realized CEO Compensation vs.
Summary Compensation Table
(1)
(2)
(3) |
 Segment
Operating Income vs. CEO Total Compensation
5
Total CEO compensation over 3 years declined while company operating
performance was strong
*See Reconciliation of Segment Operating Income to Net Income on
Slide 10 |
 Managing
Pension Liabilities 6
Management is
Taking Solid
Steps to Manage
Pension and
Retiree Liabilities
Froze U.S. salaried plan
Closed USW plan to new entrants
Created VEBA trust for USW retiree medical plans
Capped salaried retiree medical plan
At beginning of 2013, we implemented a hedging program to reduce
plan volatility
In February, we executed a plan to pre-fund frozen U.S. plans to eliminate
ongoing risk Strong
Performance in
Face of Unfunded
Pension Liability
Our performance is a significant achievement for a company dealing with unfunded
pension liabilities that we estimate are dragging the stock price down by
as much as $7/share
This liability should not be seen as a reflection on the performance of the
current management team or a cause of pay for performance
misalignment Management has led the company to record performance over the
last two years in light
of the fact that the company’s stock price has been negatively impacted by
inherited pension liabilities that jumped due to an artificially low
interest rate environment (~85% of the 5-year unfunded increase in U.S.
plans) Pension liabilities continue to provide a headwind to stock price even
with record performance; management is taking steps to manage long-term
pension liabilities |
 Peer Group
is Well Structured for Goodyear
7 |
 Continuous
Focus On Best Practices Around Pay
8
LTI Tied
to
TSR vs. S&P 500
Prohibit Hedging and
Pledging
Payouts earned under our long-term incentive plans based on financial
performance are subject to an increase or decrease of up to 20% based on our
total shareholder return versus the S&P 500 over the three-year
period of the awards, beginning with our 2011 award cycle
We prohibit the hedging and pledging of our common stock by officers, directors
and
employees,
most
recently
strengthening
those
prohibitions
in
2011
Robust Stockholding
Guidelines
We have robust stockholding guidelines for officers and directors, including stock
retention provisions following the exercise of stock options or the vesting
of other stock-based awards that require continued share retention even
after targeted levels
of
ownership
are
attained.
We
most
recently
strengthened
those
guidelines
in
2011
Double-Trigger Change-
in-Control Provisions
We included double-trigger change-in-control provisions in our
change-in-control plan since 2007 and in our equity compensation
plans since 2008 Our Compensation Committee has adopted a number of best
practices that are consistent with our performance-based compensation
philosophy and serve the long-term interests of our shareholders Eliminated
Tax Gross-Ups
Clawback Policy
We adopted a clawback policy in 2011
We
eliminated
excise
tax
gross-ups
and
“walk
away”
rights
in
our
change-in-control
plan
for
future
participants
in
2010
and
for
all
participants
in
2013
We
eliminated
tax
gross-ups
to
our
executive
officers
for
all
perquisites
beginning
in
2009 |
 Support
our 2013 Say on Pay Proposal Our
Board of Directors is confident that the company’s executive compensation
program has been
a key factor in driving Goodyear’s operating performance
Our operating and financial performance was strong in 2012 and our payouts
mirrored that performance
Realized pay data and below median relative pay indicate that the pay
program’s structure aligns pay and performance
Our continued engagement with shareholders on this matter and adoption of
emerging best practices demonstrates the Board’s commitment to improving the
program
9
The Board firmly believes that Goodyear’s executive pay plans are aligned with
shareholder interests and are instrumental to our ability to continue to
attract, incent, motivate and retain the best management team in the industry
and to continue Goodyear’s positive momentum
|
 10
Reconciliation of
Segment Operating Income
Twelve Months Ended
December 31,
($ in millions) |
 |