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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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Filed by a Party other than the Registrant o

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

 

WORLD FUEL SERVICES CORPORATION

(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):

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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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.

 

 

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LOGO

WORLD FUEL SERVICES CORPORATION
9800 Northwest 41st Street
Miami, Florida 33178

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 2020

April 9, 2020

              Notice is hereby given that the Annual Meeting of Shareholders of WORLD FUEL SERVICES CORPORATION will be held on Friday, May 22, 2020, at 8:00 a.m., Eastern Time, at our offices located at 9800 Northwest 41st Street, Miami, Florida 33178* for the following purposes:

    1.
    To elect as directors the eight nominees named in the attached proxy statement;

    2.
    To conduct a non-binding, advisory vote on executive compensation;

    3.
    To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered certified public accounting firm for the 2020 fiscal year;

    4.
    To approve the World Fuel Services Corporation 2020 Omnibus Plan; and

    5.
    To transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.

              These matters are more fully discussed in the accompanying proxy statement.

              Shareholders of record at the close of business on March 30, 2020 are entitled to notice of and to vote at the meeting and any adjournment thereof.

              Whether or not you expect to be present at the meeting, please vote using the Internet, by telephone or by mail, in each case by following the instructions in our proxy statement. Shareholders who execute a proxy may nevertheless attend the meeting, revoke their proxy and vote their shares in person.

    By Order of the Board of Directors
WORLD FUEL SERVICES CORPORATION
    GRAPHIC
    R. Alexander Lake, Jr.
Executive Vice President, Chief Legal Officer and
Corporate Secretary

              We mailed a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statement and annual report for the year ended December 31, 2019 on or about April 9, 2020.

Our proxy statement and annual report are available online at: www.proxyvote.com

   


*
We currently intend to hold the Annual Meeting of Shareholders in person. However, we are actively monitoring the coronavirus, or COVID-19 pandemic, and are sensitive to the public health and travel concerns that our shareholders may have, as well as protocols that federal, state and local governments may impose. If it is not possible or advisable to hold the Annual Meeting of Shareholders in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include switching to a virtual meeting format, or changing the time, date or location of the Annual Meeting of Shareholders. Any such change will be announced via press release and will be available on our website at: www.wfscorp.com in the Investor Relations section and filed as definitive additional soliciting materials with the SEC.

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PROXY SUMMARY

This proxy summary highlights information contained elsewhere in this proxy statement and does not contain all information that you should review and consider. Please read the entire proxy statement with care before voting.

2020 ANNUAL MEETING

Date and Time:   Friday, May 22, 2020, at 8:00 a.m. Eastern Time
Place:   World Fuel Services Corporation, 9800 Northwest 41st Street, Miami, Florida 33178
Record Date:   March 30, 2020
Voting:   Each share of common stock outstanding at the close of business on March 30, 2020 has one vote on each matter that is properly submitted for a vote at the annual meeting.

PROPOSALS AND BOARD RECOMMENDATION

PROPOSAL   Board Recommendation   Page Reference
(for more details)
 

Election of Directors

  FOR each Director Nominee     7  

Non-Binding, Advisory Vote on Executive Compensation

 

FOR

   
68
 

Ratification of PricewaterhouseCoopers LLP as our Independent Registered Certified Public Accounting Firm

 

FOR

   
69
 

Approval of the 2020 Omnibus Plan

 

FOR

   
73
 

2019 EXECUTIVE COMPENSATION HIGHLIGHTS

The following summary of our executive compensation program highlights our commitment to executive compensation practices that align the interests of our executives and shareholders. For a comprehensive discussion of our executive compensation, see "Compensation Discussion and Analysis", beginning on page 36 of this proxy statement.

World Fuel Services Corporation     |     2020 Proxy Statement    i


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What We Do
  What We Don't Do
GRAPHIC   Executive compensation program tied to our financial and operating performance and designed to create value for our shareholders, employees,
        customers and other stakeholders

GRAPHIC   Use performance measures that are aligned with business objectives

GRAPHIC   Require minimum vesting under our equity plan

GRAPHIC   Monitor our compensation programs for risk-taking incentives

GRAPHIC   Maintain robust stock ownership guidelines applicable to executive officers

GRAPHIC   Maintain rigorous stock retention requirements applicable to executive officers

GRAPHIC   Prohibit hedging of shares by executive officers, directors and all other employees

  GRAPHIC   Executive officers are not eligible for guaranteed bonuses

GRAPHIC   No tax gross ups

GRAPHIC   No excessive perquisites

GRAPHIC   No single-trigger vesting of awards upon a change of control

GRAPHIC   No repricing of stock options

GRAPHIC   No liberal share recycling under our equity plan

GRAPHIC   No liberal definition of "change of control"

GRAPHIC   No payment of dividends on unvested equity awards

BOARD AND GOVERNANCE HIGHLIGHTS

We believe that good corporate governance is critical to support our efforts to achieve our performance goals while delivering long-term value to our shareholders, employees, customers and other stakeholders. The following table summarizes certain highlights of our corporate governance practices, policies and highlights. For a comprehensive discussion of our corporate governance policies, see "Corporate Governance", beginning on page 12 of this proxy statement.

GRAPHIC   Director resignation policy for all directors in uncontested elections

GRAPHIC   Annual election of directors

GRAPHIC   Majority independent Board

GRAPHIC   Regular shareholder engagement on governance, compensation and other issues of interest to our shareholders

GRAPHIC   Robust stock ownership guidelines applicable to directors

  GRAPHIC   Independent lead director facilitates and strengthens the Board's independent oversight

GRAPHIC   Independent directors meet in executive session without management present

GRAPHIC   Strong Board oversight of risk management process

GRAPHIC   Annual Board evaluations and self-assessments

GRAPHIC   Policies prohibiting hedging of shares by directors

GRAPHIC   No related person transactions in 2019

World Fuel Services Corporation     |     2020 Proxy Statement    ii


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RECENT GOVERNANCE ACTIONS

GRAPHIC   Documented and formalized our commitment to Board diversity in our Corporate Governance Guidelines and the Governance Committee charter;

GRAPHIC   Formed the Sustainability and Corporate Responsibility Committee of the Board in 2020 to oversee our programs, policies, risks and initiatives regarding environmental, health, safety, sustainability, diversity and other social responsibility
        issues and impacts (collectively, "Sustainability Matters") on us and our business;

GRAPHIC   Commenced the development of a multi-year sustainability and corporate responsibility program designed to identify and prioritize the most significant Sustainability Matters for us and our stakeholders, establish goals and objectives in areas
        where our actions can be most impactful on those priorities, implement initiatives to achieve those goals and objectives, and identify and collect the data needed to measure and report our progress; and

GRAPHIC   Became a signatory to the United Nations Global Compact, the world's largest corporate responsibility initiative established to encourage companies to align strategies and operations with universal principles on human rights, labor,
        environment and anti-corruption, and to report on the actions being taken to advance these societal goals.

World Fuel Services Corporation     |     2020 Proxy Statement    iii


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  Page
PROXY STATEMENT   1

QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING

 

2

I.

 

PROPOSAL NO. 1—ELECTION OF DIRECTORS

 

7

II.

 

CORPORATE GOVERNANCE

 

12

 

 

Board Leadership Structure

 

12
    Lead Independent Director   13
    Shareholder Engagement   13
    Meetings   14
    Director Independence   14
    Annual Board and Committee Self-Evaluations   14
    Corporate Governance Principles   15
    Committees of the Board   15
    Director Nomination Process   22
    Nominee Qualifications and the Nomination Process   22
    Director Resignation Policy   24
    Sustainability and Corporate Responsibility   24
    Board's Role in Risk Oversight   28
    Code of Conduct   29
    Review and Approval of Related Person Transactions   29
    Director Compensation and Ownership Guidelines   31

III.

 

INFORMATION CONCERNING EXECUTIVE OFFICERS

 

34

IV.

 

COMPENSATION DISCUSSION AND ANALYSIS

 

36

V.

 

EXECUTIVE COMPENSATION TABLES

 

55

VI.

 

PROPOSAL NO. 2—NON-BINDING, ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

68

VII.

 

PROPOSAL NO. 3—RATIFICATION OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

 

69

VIII.

 

PROPOSAL NO. 4—APPROVAL OF THE 2020 OMNIBUS PLAN

 

73

IX.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

86

X.

 

OTHER MATTERS

 

89

 

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

89
    Shareholder Proposals for the 2021 Annual Meeting   89
    List of Shareholders Entitled to Vote at the Annual Meeting   90
    Expenses Relating to this Proxy Solicitation   90
    Communication with our Board   90
    Available Information   90
    Electronic Delivery   91
    Householding   91
    Appendix A: 2020 Omnibus Plan   A-1

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LOGO

WORLD FUEL SERVICES CORPORATION
9800 Northwest 41st Street
Miami, Florida 33178



PROXY STATEMENT



IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FRIDAY, MAY 22, 2020

The proxy materials listed below are available to you at www.proxyvote.com. You will need your 12-digit control number found on your proxy card, voter instruction form or Notice of Internet Availability to access these materials:

    our annual report for the fiscal year ended December 31, 2019;

    our 2020 proxy statement (including all attachments thereto);

    the proxy card; and

    any amendments to the foregoing materials that are required to be furnished to shareholders.

              Among other things, this proxy statement contains information regarding (i) the date, time and location of the meeting; (ii) a list of the matters being submitted to our shareholders; and (iii) information concerning voting for these matters at the meeting.


INTRODUCTION

              This proxy statement is furnished to the shareholders of World Fuel Services Corporation in connection with the solicitation of proxies by the Board of Directors, or the "Board", for the 2020 annual meeting of shareholders, or the "Annual Meeting". The terms "World Fuel", "Company," "we," "our" and "us" used in this proxy statement refer to World Fuel Services Corporation and its subsidiaries unless the context otherwise requires.

              We are utilizing the Securities and Exchange Commission, or "SEC", rule allowing companies to furnish proxy materials to their shareholders over the Internet. In accordance with this rule, on or about April 9, 2020, we sent our shareholders as of the close of business on March 30, 2020 a Notice of Internet Availability of Proxy Materials for the Annual Meeting, which we refer to as the "Notice". The Notice contains instructions on how to access our proxy statement and annual report and vote online. If you received a Notice and would like to receive a printed copy of our proxy materials from us instead of downloading a printable version from the Internet, please follow the instructions included in the Notice for requesting such materials at no charge.

World Fuel Services Corporation     |     2020 Proxy Statement    1


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QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING

What is the date, time and place of the Annual Meeting?

              Our Annual Meeting will be held on Friday, May 22, 2020, at 8:00 a.m., Eastern Time, at our offices located at 9800 Northwest 41st Street, Miami, Florida 33178. We currently intend to hold the Annual Meeting in person. However, we are actively monitoring the coronavirus, or COVID-19, pandemic and are sensitive to the public health and travel concerns that our shareholders may have, as well as protocols that federal, state, and local governments may impose. If it is not possible or advisable to hold the Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include switching to a virtual meeting format, or changing the time, date or location of the Annual Meeting. Any such change will be announced via press release and will be available on our website at: www.wfscorp.com in the Investor Relations section and filed as definitive additional soliciting materials with the SEC.

What am I being asked to vote on and what is the Board recommendation?

              At the Annual Meeting you will be asked to vote on the following four proposals. Our Board recommendation for each of these proposals is set forth below:

 
  Proposal   Board Recommendation
1.   To elect eight directors each for a term expiring at the next annual meeting or until his or her successor has been duly elected and qualified.   FOR each Director Nominee
2.   To approve on a non-binding, advisory basis, the compensation of our named executive officers ("NEOs"), as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion below.   FOR
3.   To ratify the appointment of PricewaterhouseCoopers LLP ("PwC") as our independent registered certified public accounting firm ("independent auditor") for the 2020 fiscal year.   FOR
4.   To approve the World Fuel Services Corporation 2020 Omnibus Plan (the "2020 Plan" or the "Plan").   FOR

              You will also be asked to consider and act upon such other business as may properly come before the Annual Meeting.

Who is entitled to vote at the Annual Meeting?

              Only holders of record of our common stock at the close of business on March 30, 2020, the record date for the Annual Meeting, are entitled to notice of, and to attend and vote at the Annual Meeting, or any postponements or adjournments of the meeting. At the close of business on the record date, 65,504,262 shares of our common stock were issued and outstanding.

World Fuel Services Corporation     |     2020 Proxy Statement    2


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What is the difference between a shareholder of record and a beneficial owner?

              If your shares are registered directly in your name with our transfer agent, EQ Shareowner Services, you are considered, with respect to those shares, the "shareholder of record."

              If your shares are held by a brokerage firm, bank, trustee, other agent or record holder, each sometimes referred to as a "nominee," you are considered the "beneficial owner" of shares held in street name. The Notice has been forwarded to you by your nominee who is considered, with respect to those shares, the shareholder of record. As the beneficial owner, you have the right to direct your nominee on how to vote your shares by following their instructions for voting by telephone or on the Internet or, if you specifically request a copy of the printed materials, you may use the voting instruction card included in such materials.

What are the voting rights of our shareholders?

              Our shareholders have one vote per share of our common stock owned on the record date for each matter properly presented at the Annual Meeting. For example, if you owned 100 shares of our common stock at the close of business on March 30, 2020, you can cast 100 votes for each matter properly presented at the Annual Meeting. Holders of our common stock have no cumulative voting rights.

What constitutes a quorum?

              A quorum will be present at the Annual Meeting if holders of a majority of the issued and outstanding shares of our common stock on the record date are represented at the Annual Meeting in person or by proxy. If a quorum is not present at the Annual Meeting, we expect to postpone or adjourn the Annual Meeting to solicit additional proxies. Abstentions and broker non-votes (as described below) will be counted as shares present and entitled to vote for the purpose of determining the presence or absence of a quorum.

What are "broker non-votes" and how are they treated?

              A "broker non-vote" occurs when a bank, broker, trustee, agent or other holder of record holding shares for a beneficial owner withholds its vote on a particular proposal because that holder does not have discretionary voting power for such proposal and has not received instructions from the beneficial owner. If your broker is the shareholder of record, your broker is required to vote your shares in accordance with your instructions. If you do not give instructions to your broker, the rules of the New York Stock Exchange, or "NYSE", allow brokers the discretionary authority to vote your shares with respect to "routine" matters but not "non-routine" matters.

              The table below sets forth, for each proposal on the ballot, whether a broker can exercise discretion and vote your shares absent your instructions. If they cannot, such broker non-vote will not be counted as a vote cast and will therefore have no impact on the approval of the proposal.

Proposal   Can Brokers Vote
Absent
Instructions?
Election of Directors   No
Non-Binding, Advisory Vote on Executive Compensation   No
Ratification of Independent Registered Certified Public Accounting Firm   Yes
Approval of the 2020 Omnibus Plan   No

World Fuel Services Corporation     |     2020 Proxy Statement    3


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              If other matters are properly brought before the Annual Meeting and they are not considered routine under the applicable NYSE rules, shares held by a bank, broker or other holder of record holding shares for a beneficial owner will not be voted on such non-routine matters by that holder unless that holder has received voting instructions. As stated above, broker non-votes are counted as present for the purpose of determining whether a quorum is present.

How are abstentions treated?

              Abstentions will not be counted as votes cast in the final tally of votes with regard to Proposals 1, 2 and 3. Therefore, abstentions will have no effect on the outcome of these proposals. Proposal 4 (Approval of the 2020 Omnibus Plan) is subject to NYSE shareholder approval rules which provide that abstentions are counted as votes cast. Therefore abstentions will have the effect of a vote "AGAINST" Proposal 4. As stated above, abstentions will be counted for the purpose of determining whether a quorum is present.

Will my shares be voted if I do not provide my proxy?

              If your shares are held in the name of a bank, broker or other holder of record, they may be voted by the bank, broker or other holder of record with respect to "routine" matters (as described above under the caption "What are "broker non-votes" and how are they treated?") even if you do not give the bank, broker or other holder of record specific voting instructions. If you are a shareholder of record and hold your shares directly in your own name, your shares will not be voted unless you provide a proxy or fill out a written ballot in person at the Annual Meeting.

How do I vote?

      To Vote by Internet, Telephone or Mail:

              You can vote by proxy whether or not you attend the Annual Meeting. To vote by proxy, you have a choice of voting over the Internet, by telephone or by using a traditional proxy card.

    To vote by Internet, go to www.proxyvote.com and follow the instructions there. You will need the 12-digit control number included on your proxy card, voter instruction form or Notice.

    To vote by telephone, dial the number listed on your proxy card, your voter instruction form or Notice. You will need the 12-digit control number included on your proxy card, voter instruction form or Notice.

    If you received a Notice and wish to vote by traditional proxy card, you can request a full set of materials at no charge through one of the following methods:

      1)
      By Internet: by visiting www.proxyvote.com

      2)
      By phone: by using the phone number listed on the Notice

              To reduce our administrative and postage costs, we ask that you vote through the Internet or by telephone, both of which are available 24 hours a day. To ensure that your vote is counted, please remember to submit your vote by 11:59 p.m. Eastern Time on Thursday, May 21, 2020.

World Fuel Services Corporation     |     2020 Proxy Statement    4


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      To Vote in Person:

              If your shares are registered in your name, you must bring a valid photo identification and deliver your completed proxy card or ballot in person.

              If you hold your shares in "street name," you will need to bring a valid photo identification to the Annual Meeting and obtain a legal proxy from your bank, broker or other nominee to vote the shares that are held for your benefit, attach such legal proxy to your completed proxy card and deliver it in person.

If I plan to attend the Annual Meeting, should I still vote by proxy?

              Yes. Casting your vote in advance does not affect your right to attend the Annual Meeting. If you vote in advance and also attend the Annual Meeting, you do not need to vote again at the Annual Meeting unless you want to change your vote.

What vote is required for the proposals?

Proposal   Description of Votes Needed

Election of Directors

  The eight nominees for election as directors will be elected by a "plurality" of the votes cast at the Annual Meeting. This means that the eight nominees who receive the highest number of "FOR" votes will be elected as directors, even if those nominees do not receive a majority of the votes cast. "Withhold" votes will not be counted as votes cast either for or against the election of a director and will have no effect on the results of the election of directors, although they will be considered present for the purpose of determining the presence of a quorum. See page 24 of this proxy statement for additional information about our director resignation policy in uncontested elections.


Non-Binding, Advisory Vote on Executive Compensation

  The affirmative vote of a majority of the votes cast on the proposal is required for the approval of the non-binding, advisory vote with respect to executive compensation.


Ratification of Independent Registered Certified Public Accounting Firm

  The affirmative vote of a majority of the votes cast on the proposal is required for the ratification of the appointment of PwC as our independent auditor for the 2020 fiscal year.


Approval of the 2020 Omnibus Plan

  The affirmative vote of a majority of the votes cast on the proposal is required for the approval of the 2020 Omnibus Plan.

How will my proxy holder vote?

              The enclosed proxy designates Michael J. Kasbar, our Chairman, President and Chief Executive Officer and Paul H. Stebbins, Director and Chairman Emeritus, to hold your proxy and vote your shares. Messrs. Kasbar and Stebbins will vote all shares of our common stock represented by properly executed proxies received in time for the Annual Meeting in the manner specified by the holders of those shares. Messrs. Kasbar and Stebbins intend to vote all shares of our common stock represented

World Fuel Services Corporation     |     2020 Proxy Statement    5


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by proxies that are properly executed by the record holder but that otherwise do not contain voting instructions as follows:

Proposal    

Election of Directors

  FOR each Director Nominee

Non-Binding, Advisory Vote on Executive Compensation

 

FOR

Ratification of Independent Registered Certified Public Accounting Firm

 

FOR

Approval of 2020 Omnibus Plan

 

FOR

What happens if additional matters are presented at the Annual Meeting?

              Other than the items of business described above, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy to the proxy holders named in the attached proxy card, such persons will vote in accordance with the recommendation of our Board, "FOR" or "AGAINST" such other matters.

Can I change my vote after I have voted?

              Voting by telephone, over the Internet or by mailing a proxy card does not preclude a shareholder from voting in person at the Annual Meeting. A shareholder may revoke a proxy, whether submitted via telephone, the Internet or mail, at any time prior to its exercise by (i) filing with our Corporate Secretary a duly executed revocation of proxy, (ii) properly submitting, either by telephone, mail or Internet, a proxy to our Corporate Secretary bearing a later date or (iii) appearing at the Annual Meeting and voting in person. Attendance at the meeting will not itself constitute revocation of a proxy.

What do I need to bring with me in order to attend the Annual Meeting?

              If you are a shareholder of record, you will need to bring with you to the Annual Meeting any proxy card that is sent to you and valid photo identification. Otherwise, you will be admitted only upon other verification of record ownership at the admission counter.

              If you are the beneficial owner of shares held in street name, bring with you to the Annual Meeting your most recent brokerage statement or a letter from your bank, broker, trustee, agent or other record holder indicating that you beneficially owned shares of our common stock on March 30, 2020 and valid photo identification. We can use that to verify your beneficial ownership of common stock and admit you to the Annual Meeting. If you intend to vote at the Annual Meeting, you also will need to bring to the Annual Meeting a legal proxy from your bank, broker, trustee, agent or other holder of record that authorizes you to vote the shares that the record holder holds for you in its name.

Where can I find voting results of the Annual Meeting?

              We will announce the results for the proposals voted upon at the Annual Meeting and publish final detailed voting results in a Form 8-K filed with the SEC within four business days after the Annual Meeting.

Who should I call with other questions?

              If you have additional questions about this proxy statement or the Annual Meeting or would like additional copies of this proxy statement or our annual report, please contact: World Fuel Services Corporation at 9800 Northwest 41st Street, Miami, Florida 33178, Attention: Corporate Secretary, Telephone: (305) 428-8000.

World Fuel Services Corporation     |     2020 Proxy Statement    6


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I.            PROPOSAL NO. 1—ELECTION OF DIRECTORS

              Eight individuals have been nominated to serve as our directors for the ensuing year and until their successors shall have been duly elected and qualified. All nominees are presently directors. One of our existing independent directors, Mr. Stephen J. Gold will not be standing for re-election to the Board following the Annual Meeting.

              The persons named as proxies in the accompanying proxy card have advised management that unless authority is withheld in the proxy, they intend to vote for the election of the individuals identified as nominees below. We do not contemplate that any nominee named below will be unable or will decline to serve. However, if any nominee is unable to serve or declines to serve, the persons named in the accompanying proxy card may vote for another person, or persons, in their discretion, unless our Board chooses to reduce the number of directors serving on the Board. In accordance with our By-Laws, the Board may consist of four to ten directors, and the Board may increase or decrease the number of directors by amending our By-Laws. The Board presently consists of nine directors and will be reduced to eight following the Annual Meeting.

Director Nominees

              We believe that each of our nominees possesses the experience, skills and qualities to fully perform his or her duties as a director and to contribute to our success. In addition, each of our nominees is being nominated because they each possess the highest standards of personal integrity, are accomplished in their field, have an understanding of the interests and issues that are important to our shareholders and are able to dedicate sufficient time to fulfilling their obligations as a director. Our nominees as a group complement each other and each other's respective experiences, skills and qualities. For an additional discussion of the nomination process, see "Nominee Qualifications and the Nomination Process" beginning on page 22 of this proxy statement.

              The following sets forth certain information with respect to each nominee standing for election to the Board. The biographies of each of the nominees and directors contain information regarding the individual's service as a director, business experience, and the qualifications, attributes or skills that led to the conclusion that the individual should serve as our director.



             
    MICHAEL J. KASBAR   Age: 63   Director Since: 1995


             


             
    Chairman, President and Chief Executive Officer


             

 

 

Background:

 

 

Mr. Kasbar has served as Chairman of the Board since May 2014 and has served as our President and Chief Executive Officer since January 2012. From July 2002 to December 2011, he served as our President and Chief Operating Officer. From January 1995 to July 2002, he served as Chief Executive Officer of World Fuel Services Americas, Inc. (formerly Trans-Tec Services, Inc.), at the time our principal subsidiary engaged in the marine fuel services business. From September 1985 to December 1994, Mr. Kasbar was an officer, shareholder and director of Trans-Tec Services, Inc., a global marine fuel services company, and its affiliated companies. Mr. Kasbar co-founded Trans-Tec Services, Inc. in 1985 and has extensive executive experience in the fuel services business. Mr. Kasbar is also a member of the Business Roundtable. Mr. Kasbar is the first cousin of our director, Richard A. Kassar.

 

 

Skills & Qualifications:

 

 

Mr. Kasbar brings to the Board a unique understanding of our strategies and operations through over 20 years of service with us and more than 30 years of experience in the fuel services business.

World Fuel Services Corporation     |     2020 Proxy Statement    7


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    KEN BAKSHI   Age: 70   Director Since: 2002


             


             
    Independent Director


             
    Committees:   Compensation (Chair), Governance, Sustainability & Corporate Responsibility, Technology & Operations and Nominating Subcommittee (Chair)


             

 

 

Background:

 

 

Since June 2003, Mr. Ken (Kanwaljit) Bakshi has been managing partner of Trishul Capital Group LLC and Trishul Advisory Group LLC, two privately owned equity investment and consulting companies. From July 2013 to June 2015, Mr. Bakshi served as Executive Chairman of the board of directors of Amala Inc., a skin care products company. Prior to that, from April 2008 to July 2013, he was Chairman of the board of directors and Chief Executive Officer of Amala Inc. From March 2006 through June 2009, he was Vice Chairman of the board of directors of Row 2 Technologies, a software development firm he co-founded, and from December 2002 to February 2006, he was employed by Row 2 Technologies as Chief Executive Officer. From July 2000 to December 2002, he was employed as Executive Vice President and Chief Operating Officer of Vistaar, Inc., an incubator of business to business internet-based marketplaces. From 1998 to 2000, Mr. Bakshi served as Senior Vice President of Wyeth (formerly known as American Home Products Corp.), a NYSE company until 2009 when it was acquired by Pfizer, Inc. Prior to 1998, Mr. Bakshi served in various capacities with American Home Products Corp. and American Cyanamid Company, which was acquired by American Home Products Corp. in 1994.

 

 

Skills & Qualifications:

 

 

Mr. Bakshi brings to the Board extensive experience in private equity investments, management consulting and technology and significant executive experience running operating units within large multinational publicly traded corporations.

 



             
    JORGE L. BENITEZ   Age: 60   Director Since: 2015


             


             
    Independent Director


             
    Committees:   Audit, Governance, Sustainability & Corporate Responsibility (Chair), Technology & Operations (Chair) and Nominating Subcommittee


             

 

 

Background:

 

 

Mr. Benitez retired from Accenture plc in September 2014 after more than 33 years of service, the last three years of which Mr. Benitez served as Chief Executive Officer of North America, where he had primary responsibility for Accenture's business and operations in North America. From September 2006 to August 2011, Mr. Benitez served as Chief Operating Officer, Products Operating Group, the largest of Accenture's five operating groups, where he was responsible for executing the business strategy and ensuring operational excellence across a wide set of consumer industry groups, including: automotive; air, freight and travel services; industrial equipment; and infrastructure and transportation services. Prior to that, Mr. Benitez held various senior leadership roles and other positions since joining Accenture in 1981. In 2015, Mr. Benitez joined the board of directors of Fifth Third Bancorp, a Nasdaq company [FITB], and currently serves as its chairman of the technology committee and as a member of its audit committee, nominating and corporate governance committee, and its risk and compliance committee.

 

 

Skills & Qualifications:

 

 

Mr. Benitez brings to the Board his extensive experience developing and executing business strategies across a range of industries, particularly air, freight and travel and transportation services, as well as significant executive experience running operating units within a large multinational publicly traded corporation.

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    SHARDA CHERWOO   Age: 61   Director Since: 2020


             


             
    Independent Director


             
    Committees:   Governance, Sustainability & Corporate Responsibility and Technology & Operations


             

 

 

Background:

 

 

Ms. Cherwoo retired as a Senior Partner from Ernst & Young LLP ("EY") in January 2020, after more than 37 years of service, including 28 years as a Client Service Partner with specialized industry focus in private equity, financial services, health care and emerging and disruptive technology companies. Since October 2015, Ms. Cherwoo launched and spearheaded EY's Intelligent Automation program, with a focus on strategic direction, governance and risk management. As part of that role, she also directed EY's investments in robotic process automation ("RPA") and digital transformation initiatives. She also advised a number of Fortune 500 companies on their intelligent automation strategies, including operating models, digital and talent transformation planning, artificial intelligence and blockchain initiatives. Ms. Cherwoo concurrently served as a Senior Advisory Partner in EY's Private Equity practice group since 2009 and as a Global Client Service Partner and Global Tax Account Leader since 1991, where she was responsible for advising on digital transformation, RPA initiatives, complex tax accounting and global tax planning, as well as mergers, acquisitions and divestitures and their impact on business and global tax strategies. From 2001 to 2004, Ms. Cherwoo served as the founding Chief Executive Officer of EY's Global Shared Services operations in Bangalore, India, which was EY's first global offshoring center for client-facing operations. Prior to that, Ms. Cherwoo held various senior leadership roles and other positions since joining EY in the US in 1982 in the audit practice.

 

 

In addition to her strategic, operational and leadership roles, Ms. Cherwoo has been committed to mentoring and bringing innovative ideas to diversity and inclusiveness efforts. In 2018, she was awarded the American Business Award® Silver Stevie® Award for Most Innovative Woman of the Year in Business Services; in 2017, she received the Gold Stevie® Award for Innovation of the Year for her work in RPA and the 2017 Gold Best in Biz Award for Innovator of the Year.

 

 

Skills & Qualifications:

 

 

Ms. Cherwoo brings to the Board her significant experience in advising companies on digital transformation initiatives and RPA strategies, including digital and talent transformation planning, artificial intelligence and blockchain initiatives, as well as substantial management experience.

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    RICHARD A. KASSAR   Age: 72   Director Since: 2002


             


             
    Independent Director


             
    Committees:   Audit, Compensation, Governance and Technology & Operations


             

 

 

Background:

 

 

Mr. Kassar is the Chief Financial Officer of Freshpet Company, a Nasdaq company [FRPT] since July 2014 and is currently a principal of Go7Brands, LLC, a brand management company, where he also serves as Senior Vice President and Chief Financial Officer. Previously, Mr. Kassar had served as President of Freshpet Company from January 2011 to July 2014 and as Chief Executive Officer from October 2006 to December 2010. From February 2002 to July 2006, Mr. Kassar was the Senior Vice President and Chief Financial Officer of The Meow Mix Company, a cat food company. From May 2001 to January 2002, he was self-employed as a consultant to venture capital firms, advising them primarily on the acquisition of consumer brands. From December 1999 to May 2001, Mr. Kassar was employed as Co-President and Chief Financial Officer of Global Household Brands, a manufacturer of household products. From 1986 to December 1999, he was employed by Chock Full O'Nuts, a coffee company, in various positions, and most recently served as Senior Vice President and Chief Operating Officer. Mr. Kassar also served as a director, member of the compensation committee and chairman of the audit committee of Vaughan Foods, Inc., a Nasdaq company until March 2010, which was sold in October 2011. Until March 2010, Mr. Kassar also served as a director, member of the compensation committee and chairman of the audit committee of Velocity Express, Inc., a Nasdaq company until August 2009, which was sold in November 2009. Mr. Kassar is the first cousin of Michael J. Kasbar, our Chairman, President and Chief Executive Officer.

 

 

Skills & Qualifications:

 

 

Mr. Kassar brings to the Board his extensive executive experience in brand management, consumer products and corporate finance and has significant experience as a senior finance executive.

 



             
    JOHN L. MANLEY   Age: 71   Director Since: 2010


             


             
    Independent Director


             
    Committees:   Audit (Chair), Governance and Technology & Operations


             

 

 

Background:

 

 

Mr. Manley retired from Deloitte & Touche LLP in 2009 after more than 27 years as a partner, the last three years of which Mr. Manley was Managing Partner of Deloitte's Northeast Region Audit and Enterprise Risk Services Practice. Mr. Manley founded and was the National Director of Deloitte's Regulatory Consulting Practice, which included practices in financial services, health care, government contracting, energy and utilities. Before joining Deloitte, Mr. Manley had seven years of regulatory experience with the SEC and the Commodity Futures Trading Commission, or CFTC, in various positions, including serving as the Chief Accountant and Director of the Division of Trading and Markets of the CFTC. Mr. Manley served as a director and Chairman of the audit committee of UBS Trust Company N.A. from 2013 to August 2015. Mr. Manley is a Certified Public Accountant, on inactive status.

 

 

Skills & Qualifications:

 

 

Mr. Manley brings to the Board extensive executive management, financial reporting, risk management and regulatory experience.

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    STEPHEN K. RODDENBERRY   Age: 71   Director Since: 2006


             


             
    Independent Director, Lead Independent Director


             
    Committees:   Compensation and Governance (Chair; Presiding Director)


             

 

 

Background:

 

 

Mr. Roddenberry has served as our director since June 2006. Mr. Roddenberry is a partner in the law firm of Akerman LLP where he has been employed as an attorney since 1988. Mr. Roddenberry advises clients in corporate compliance and governance issues, public and private securities transactions, mergers and acquisitions, and private equity investments.

 

 

Skills & Qualifications:

 

 

Mr. Roddenberry brings to the Board extensive experience in private equity mergers and acquisitions, investment management, venture capital, public finance and securities.

 



             
    PAUL H. STEBBINS   Age: 63   Director Since: 1995


             


             
    Independent Director, Chairman Emeritus


             
    Committees:   Sustainability & Corporate Responsibility


             

 

 

Background:

 

 

Prior to his appointment as Chairman Emeritus, from January 2012 to May 2014, Mr. Stebbins served as Executive Chairman of the Board. From July 2002 to December 2011, he served as our Chairman of the Board and Chief Executive Officer and, from August 2000 to July 2002, he served as our President and Chief Operating Officer. From January 1995 to August 2000, Mr. Stebbins served as President and Chief Operating Officer of World Fuel Services Americas,  Inc. (formerly Trans-Tec Services, Inc.), at the time our principal subsidiary engaged in the marine fuel services business. From September 1985 to December 1994, Mr. Stebbins was an officer, shareholder and director of Trans-Tec Services, Inc., a global marine fuel services company, which Mr. Stebbins co-founded in 1985. In December 2006, Mr. Stebbins joined the board of directors of First Solar, Inc., a Nasdaq company, and currently serves as the chairman of the nominating and governance committee and a member of the audit and compensation committees. Mr. Stebbins is a member of the Board of Advisors of the Amigos de las Americas Foundation of Houston, Texas (amigosinternational.org) and Board of Directors of The Silk Road Project founded by Yo-Yo Ma (silkroadproject.org). Mr. Stebbins is a founding member of FixUS (FixUSNow.org) and also a member of the leadership council of Fix The Debt Campaign (fixthedebt.org) and the Council on Foreign Relations.

 

 

Skills & Qualifications:

 

 

Mr. Stebbins brings to the Board a unique understanding of our strategies and operations through over 20 years of service to our Company and more than 30 years of experience in the fuel services business.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE ABOVE DIRECTOR NOMINEES.

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II.          CORPORATE GOVERNANCE

Board and Committee Governance

Board Leadership Structure

              The Board regularly considers the appropriate leadership structure for us and does not have a formal policy with respect to the separation of the positions of Chief Executive Officer and Chairman of the Board. Rather, the Board believes that different Board leadership structures may be appropriate for us at different times, and that it should have the flexibility to make this decision based on its evaluation of current circumstances. When making this decision, the Board considers factors such as:

    the person filling each role;

    the presence of a lead independent director and the person in that role;

    the composition, independence, and effectiveness of the entire Board; and

    other corporate governance structures in place.

              Mr. Kasbar currently serves as Chairman of the Board in addition to his role as President and Chief Executive Officer. Our Board believes that our Chief Executive Officer is in the best position to most effectively serve as the Chairman of the Board given that he has the primary responsibility for managing our day-to-day operations and therefore has a detailed and in-depth knowledge of the issues, opportunities and challenges facing us and our businesses. The Board also believes that the Chief Executive Officer serving as Chairman of the Board further promotes information flow between management and the Board and enhances the quality of the Board's overall decision-making process.

              In making its decision to combine the roles of Chief Executive Officer and Chairman of the Board, the Board considered that its leadership structure was appropriate given the following strong governance structures and processes in place to ensure the independence of the Board, eliminate conflicts of interest and prevent the dominance of the Board by senior management:

    the presence of, and the responsibilities and authority of, the Board's strong lead independent director;

    the composition of the Board, which includes a super-majority of independent non-management directors;

    the composition of the Board's standing committees, which are comprised of, and chaired solely by, independent non-management directors;

    the fact that the independent non-management directors meet in regular executive sessions without management present to discuss the effectiveness of our management, the quality of the Board meetings and any other issues and concerns; and

    the fact that all Board members have unrestricted access to management and outside advisors.

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Lead Independent Director

              Our independent directors annually elect our lead independent director. Consistent with best practices, our lead independent director:

    presides at all meetings of the Board at which the Chairman of the Board is not present, including executive sessions of the independent directors;

    serves as a liaison between the Chairman of the Board and the independent directors;

    reviews Board meeting agendas and schedules to assure that there is sufficient time for discussion of all agenda items;

    has the authority to call meetings of the independent directors;

    if requested by major shareholders, ensures that he is available for consultations and direct communication;

    has the authority to retain outside advisors and consultants who report directly to the Board; and

    consults with and assists the Chief Executive Officer in accomplishing his objectives as the Chief Executive Officer deems appropriate.

              Currently, Mr. Roddenberry serves as our lead independent director. The Board believes that having a lead independent director benefits us and our shareholders by providing leadership and an organizational structure for the independent directors.

Shareholder Engagement

              We regularly engage with our shareholders to better understand their perspectives on our Company, including our business strategies, financial performance, and matters of corporate governance and executive compensation. This dialogue has helped inform the Board's decision-making and ensure our interests remain well-aligned with those of our shareholders. In recent years, these engagements have covered governance issues, such as majority voting, board leadership and director nomination processes, and compensation and capital allocation policies. During 2019, we interacted with the 18 largest holders of our common stock, representing approximately 50% percent of our outstanding shares. We believe that these engagements provide valuable feedback and this feedback is shared regularly with the Board and its relevant committees. As a result of the feedback we received from our shareholders in the past few years, we have, among other things:

    adopted a director resignation policy for all directors in uncontested elections;

    enhanced our disclosure regarding our director nomination process and the combined skills of our Board;

    amended our Governance Committee charter and Corporate Governance Principles to better reflect the Board's perspective and existing practice regarding the inclusion of diverse candidates in the director nomination process; and

    modified our long-term incentive compensation programs to enhance predictability and shareholder alignment.

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Meetings

              During 2019, the Board met four times. Each director attended at least 75% of the aggregate of the total number of meetings of the Board and the total number of meetings held by each of the Board committees on which he or she served. In addition, it is our policy that each director should attend all meetings of shareholders, absent extenuating circumstances. All of our directors that were standing for election at the 2019 annual meeting of shareholders attended the meeting.

              All of our independent directors meet in executive session (without management present) during each scheduled Board meeting and at other times as they may deem necessary. Mr. Roddenberry currently serves as the Presiding Director over all executive sessions of the independent directors.

Director Independence

              Our Corporate Governance Principles require that a majority of our directors meet the standards for independence required by the listing standards of the NYSE. In addition, members of our Audit Committee must meet the independence standards for audit committee members adopted by the SEC. Members of the Audit Committee must also have no relationship with us that interferes with their exercise of independent judgment. Members of our Compensation Committee must meet the definition of "non-employee director" contained in Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and meet the independence requirements under the NYSE listing standards. The Board may also consider other factors in making its determination that a director has no material relationship with us that could compromise that director's independence.

              Our Corporate Governance Principles provide that no more than two members of management shall serve on the Board. Mr. Kasbar is the only member of management currently serving on our Board. All of our other directors, Messrs. Bakshi, Benitez, Gold, Kassar, Manley, Presby, Roddenberry, Stebbins and Ms. Cherwoo, are independent of us and our management under NYSE listing standards, and our Audit Committee members and Compensation Committee members are independent under the standards applicable to membership in such committees. In making this determination, our Board considered that Mr. Kassar is the first cousin of Mr. Kasbar, and the Board determined that the familial relationship between Messrs. Kasbar and Kassar was not material because it would not adversely affect Mr. Kassar's ability to exercise his independent judgment as our director. Mr. Kasbar is not deemed to be an independent director because of his employment relationship with us and therefore he is precluded from sitting on any of our committees.

Annual Board and Committee Self-Evaluations

              Each year, our Board and its committees conduct self-evaluations to ensure they are performing effectively and to identify opportunities to improve Board and committee performance. The Governance Committee annually reviews the format and scope of our Board's evaluation process in light of general corporate governance developments and best practices and recommends changes it believes are appropriate. Each chair of our Board's committees also reviews and updates, as appropriate, a separate self-evaluation of committee performance, which is provided to the members of each committee for comment and feedback. Once the format and content of the evaluation is approved, a Board self-assessment is conducted under the oversight of the Governance Committee and for each committee, led by the committee chair. As part of the assessment, a written questionnaire is circulated which is designed to solicit feedback on a range of issues, including Board and committee structure, process and dynamics, the flow of information from management, and agenda topics. The feedback received from the evaluations is discussed during a review session led by the Governance Committee and the individual committees, as appropriate.

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              In addition to these annual self-assessments, the Board evaluates and modifies its oversight of our business operations on an ongoing basis. During their executive sessions, the independent directors consider agenda topics that they believe deserve additional focus and raise new topics to be addressed in future meetings.

Corporate Governance Principles

              The Board has adopted Corporate Governance Principles, which are amended from time to time to incorporate certain current best practices in corporate governance. The Corporate Governance Principles describe our corporate governance practices and policies and provide a framework for our Board governance. The topics addressed in our Corporate Governance Principles include, among other things:

    Role of the lead independent director;

    Director independence;

    Director qualifications, functions and tenure;

    Committees of the Board;

    Director orientation and continuing education;

    Management development and succession planning;

    Director resignation policy in uncontested elections; and

    Director compensation.

              Our Corporate Governance Principles are available on our website at www.wfscorp.com by clicking on Investor Relations and then Corporate Governance. Copies of this document may also be obtained by any shareholder, without charge, by writing to our Corporate Secretary.

Committees of the Board

              Our Board has five standing committees: the Audit Committee, the Compensation Committee, the Governance Committee, the Sustainability & Corporate Responsibility Committee and the Technology & Operations Committee. The following table illustrates the current membership of each of our Board's committees, which are composed entirely of independent directors:

Director   Audit   Compensation   Governance   Sustainability &
Corporate
Responsibility
  Technology &
Operations

 

 

 

 

 

 

 

 

 

 

 

Ken Bakshi

      Chair   GRAPHIC   GRAPHIC   GRAPHIC

Jorge L. Benitez

 

GRAPHIC

     

GRAPHIC

 

Chair

 

Chair

Sharda Cherwoo

         

GRAPHIC

 

GRAPHIC

 

GRAPHIC

Stephen J. Gold

         

GRAPHIC

     

GRAPHIC

Richard A. Kassar

 

GRAPHIC

 

GRAPHIC

 

GRAPHIC

     

GRAPHIC

John L. Manley

 

Chair

     

GRAPHIC

     

GRAPHIC

Stephen K. Roddenberry

     

GRAPHIC

 

Chair

       

Paul H. Stebbins

             

GRAPHIC

   

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              As discussed above, Mr. Gold will not be standing for re-election at the 2020 Annual Meeting, thus the size of the Governance Committee will be reduced to six members and the size of the Technology & Operations Committee will be reduced to five members.

              Each of the Board's committees operates under a written charter adopted by our Board which addresses the purpose, duties and responsibilities of the committee. Each committee reviews its charter at least annually and recommends charter changes to the Board as appropriate. During 2019, each of the committees in existence at the time reviewed and revised its charter. The Sustainability & Corporate Responsibility Committee was formed in March 2020 and its initial charter was adopted by the Board upon the committee's inception. A current copy of each committee charter can be found on our website at www.wfscorp.com by clicking on Investor Relations and then Corporate Governance.

AUDIT COMMITTEE

Members:

John L. Manley (Chair)

Jorge L. Benitez

Richard A. Kassar

Meetings in 2019: 10

 

  Responsibilities

The Audit Committee's responsibilities include:

overseeing and reviewing the financial reporting process and the integrity of our financial statements and related financial information;

reviewing the qualifications, performance and independence, and approving the appointment and compensation of, our independent auditors;

reviewing with our independent auditors the results of the audit engagement, including a review of the consolidated financial statements and other matters required to be discussed under the standards of the Public Company Accounting Oversight Board;

reviewing the effectiveness of our internal audit function as well as our internal control environment and systems;

approving all audit and non-audit services to be provided by our independent auditors;

discussing with management financial risks and the policies and practices established to manage such risks;

together with the Technology & Operations Committee, reviewing our cybersecurity and related information technology risks, controls and procedures, including plans to mitigate cybersecurity risks and to respond to data breaches;

monitoring and reviewing our compliance with applicable laws and regulations and our Code of Conduct; and

establishing procedures for: (i) the receipt, retention, and treatment of complaints we receive from our employees regarding accounting, internal accounting controls, and auditing matters; and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
  

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  Independence and Financial Expertise

The Board reviewed the background, experience and independence of the Audit Committee members and based on this review, the Board determined that each member of the Audit Committee:

meets the NYSE listing standards and SEC requirements for independence with respect to audit committee members;

is financially literate, knowledgeable and qualified to review financial statements; and

qualifies as an "audit committee financial expert" under the SEC rules.

 

 

The charter provides that a member of the Audit Committee shall not simultaneously serve on the audit committees of more than two other public companies unless the Board determines that simultaneous service would not impair the ability of the member to effectively serve on the Audit Committee. None of the members of our Audit Committee currently serve on the audit committees of more than two other public companies.

        

 

 

 

COMPENSATION COMMITTEE

Members:

Ken Bakshi (Chair)

Richard A. Kassar

Stephen K. Roddenberry

Meetings in 2019: 7

    Responsibilities

The Compensation Committee's responsibilities include:

reviewing and approving annually, the goals and objectives relevant to the compensation of our CEO and, based upon recommendations of our CEO, our other executive officers;

evaluating the performance of our CEO and other executive officers in light of such goals and objectives;

establishing the compensation levels of our CEO and our other executive officers, including long-term incentive compensation, based on this evaluation, and approving the compensation of other executive officers based upon recommendations of our CEO;

reviewing and making recommendations to the Board with respect to stock option, equity based and incentive compensation plans and the administration of such plans;

establishing and monitoring our executive officers' compliance with stock retention and ownership requirements;

approving any employment, severance and consulting arrangements with executive officers;

reviewing annually, a risk assessment of our compensation policies and practices with respect to all employees, including NEOs;

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reviewing and discussing with management, the Compensation Discussion and Analysis included in our annual proxy statement and recommending such inclusion to the Board;

reviewing and recommending to the Board the frequency with which we conduct advisory shareholder votes on executive compensation;

reviewing the results of any advisory shareholder votes on executive compensation and considering whether to recommend adjustments to our executive compensation policies and practices as a result of such votes;

 

 

together with the Governance Committee, considering management development and succession; and

making recommendations to the Board on non-management director compensation, including stock ownership requirements.
  

 

  Independence

The Board reviewed the background, experience and independence of the Compensation Committee members and based on this review, the Board determined that each member of the Compensation Committee is independent and a non-employee pursuant to:

NYSE listing standards; and

Rule 16b-3 of the Exchange Act.

 

 

In affirmatively determining the independence of each Compensation Committee member, the Board considers all factors specifically relevant to determining whether such director has a relationship with us or any of our subsidiaries which is material to such director's ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by us to such director; and (ii) whether such director is affiliated with us, a subsidiary of ours or an affiliate of one of our subsidiaries. The Compensation Committee may form and delegate authority to subcommittees when appropriate.
  

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee was at any time during 2019 an officer or employee of our Company. None of our executive officers serves as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our Board or Compensation Committee.

        

 

 

 

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GOVERNANCE COMMITTEE

Members:

Stephen K. Roddenberry

(Chair)

Ken Bakshi

Jorge L. Benitez

Sharda Cherwoo

Stephen J. Gold

Richard A. Kassar

John L. Manley

Meetings in 2019: 4

The Governance Committee meets in executive session (without management present) in connection with each scheduled Board meeting and at other times as it deems necessary.

 

  Responsibilities

The Governance Committee's responsibilities include:

recommending to the Board criteria for Board membership and the size and composition of the Board;

identifying and reviewing individuals qualified to become members of the Board;

reviewing the qualifications of persons nominated by the Governance Committee and by our shareholders pursuant to our By-Laws;

recommending to the Board, the director nominees for the annual meeting of shareholders and to fill vacancies and newly created directorships;

recommending to the Board the members to serve on each Board committee;

recommending performance criteria for the Board and reviewing the procedures, effectiveness and performance of the Board as a whole, the individual directors and the Board's committees;

recommending to the Board whether to accept or reject a director resignation, or take other action, where a director receives a greater number of "withheld" than "for" votes in an uncontested election;

recommending overall compensation for directors;

annually reviewing our corporate governance principles and committee charters;

leading the annual performance evaluation of the Board and its committees;

reviewing and, if appropriate, approving related person transactions;

 

 

annually evaluating the performance of the NEOs and discussing any changes to the executives' compensation recommended by the Compensation Committee; and

together with the Compensation Committee, considering management development and succession.

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Independence

The Board reviewed the background, experience and independence of the Governance Committee members and based on this review, the Board determined that each member of the Governance Committee meets the independence requirements of the NYSE's listing standards.

Nominating Subcommittee

The Nominating Subcommittee was formed by the Governance Committee to assist the Governance Committee with identifying and recruiting qualified candidates for Board membership. The Nominating Subcommittee, which does not have a separate committee charter, consists of two of the members at large of the Governance Committee, currently Messrs. Benitez and Bakshi, who serves as Chair.

        

 

 

 

SUSTAINABILITY & CORPORATE RESPONSIBILITY COMMITTEE

Members:

Jorge L. Benitez (Chair)

Ken Bakshi

Sharda Cherwoo

Paul H. Stebbins

Meetings in 2019: Not applicable, as the committee was formed in March 2020.

    Responsibilities

The responsibilities of the Sustainability & Corporate Responsibility Committee include:

reviewing and providing input on management's strategy, goals and integration of Sustainability Matters into strategic and tactical business activities across the Company to create long-term shareholder value and sustainable growth;

overseeing internal and external communications and disclosures regarding our position on, reporting of, or approach to significant Sustainability Matters, including by reviewing, as appropriate, disclosures and other communications to stakeholders;

overseeing and providing input to management on our identification, assessment and management of risks associated with Sustainability Matters such as climate change and its impact on us and our business;

considering, analyzing and providing input on significant public issues, trends, regulation and legislation regarding Sustainability Matters that are pertinent to us and our stakeholders;

reviewing the goals that we may publish from time to time for our performance with respect to Sustainability Matters and monitoring our progress against those goals;

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reviewing, overseeing and providing input to management on the Company's policies, strategies and programs related to Sustainability Matters; and

reviewing our charitable giving policies and programs and receiving reports from management on charitable contributions made by us, directly and through any foundations, that are in support of our goals regarding Sustainability Matters.

Independence

The Board reviewed the background, experience and independence of the Sustainability & Corporate Responsibility Committee members and based on this review, the Board determined that each member of the committee meets the independence requirements specified in its charter.

        

 

 

 

TECHNOLOGY & OPERATIONS COMMITTEE

Members:

Jorge L. Benitez (Chair)

Ken Bakshi

Sharda Cherwoo

Stephen J. Gold

Richard A. Kassar

John L. Manley

Meetings in 2019: 5

    Responsibilities

The Technology & Operations Committee's responsibilities include:

reviewing and discussing with management the financial, tactical and strategic benefits of significant technology and operations projects and initiatives and our progress on such projects and initiatives;

reviewing and, as appropriate, making recommendations to the Board regarding significant technology investments in support of our technology strategy;

reviewing and discussing with management risks related to technology and operations initiatives, including regulatory, environmental and other significant technology-related risks; and

consulting with the Audit Committee regarding technology and operations systems and processes that relate to or affect our internal control systems, information security, fraud and cybersecurity risks, including assisting in the review of cybersecurity risks against our risk management methodologies and the steps taken to monitor and control such exposures.

Independence

The Board reviewed the background, experience and independence of the Technology & Operations Committee members and based on this review, the Board determined that each member of the committee meets the independence requirements specified in its charter.

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Director Nomination Process

Nominee Qualifications and the Nomination Process

              The Governance Committee believes that the Board should collectively possess a broad range of skills, knowledge, business experience and diversity of backgrounds that provides effective oversight of our business. The Governance Committee has established a matrix of skills and experience which it has determined would be beneficial to have represented on our Board based on a number of factors, including our current operating requirements, business strategy, and the long-term interests of our shareholders. The following table highlights certain of the skills and experience of our Board (additional details are set forth in their individual biographies beginning on page 7 of this proxy statement):

GRAPHIC

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              The Board's objective is to maintain a diverse membership that can best further the success of our business and represent shareholder interests through the exercise of sound judgment using its diversity of experience and perspectives. The Governance Committee periodically assesses the skills and experience required of directors, comparing our needs in Board composition and the individual skills and experience of our directors. This assessment enables the Governance Committee to update the skills and experience it seeks in the Board, as a whole and in individual directors, as our needs evolve over time in order to maintain a balance of knowledge, experience and capabilities. As a result of such periodic assessment, the Governance Committee evaluates current directors and potential director nominees and will recommend any changes to Board size or composition that it believes is necessary to create a balanced and effective Board.

              To the extent that the Governance Committee believes that specific skills or experience needs to be added to the Board, the committee initiates a search for a Board nominee, seeking input from board members and senior management. The Governance Committee may retain professional search firms to identify director candidates and maintains the authority to approve the fees and other retention terms of any such firm. The criteria for evaluating director nominees takes into account the candidate's intellect, integrity, judgment, experience and background, including diversity, such as race, gender and ethnicity, as well other factors deemed appropriate in adding value to the composition of the Board, such as public service. Further, as set forth in our Corporate Governance Principles, the Governance Committee is committed to actively seeking highly qualified women and minority candidates, as well as candidates with diverse backgrounds, skills and experiences, as part of the search process for new director candidates. The Governance Committee believes that it has been able to attract and appoint directors of diverse backgrounds in the past using these criteria.

              Finally, in order to ensure that our independent directors have sufficient time to devote to overseeing the Company, our Corporate Governance Principles prohibit our directors from serving on the board of directors of more than three other publicly traded companies, unless the Board determines that such service will not impair the ability of such director to effectively perform his or her obligations as our director.

              We believe the Governance Committee has a sound director evaluation process and that such process is an effective method for determining whether a director is fit to serve on the Board. Our Governance Committee welcomes candidates recommended by shareholders and, assuming a submission is in proper form as provided under our By-Laws, it will apply the same standards described above to the evaluation of a shareholder nominee as it applies to all nominees, including those recommended by current directors, employees and others. The procedural and disclosure requirements of our By-Laws provide that shareholders who would like to propose a Board nominee for consideration by the Governance Committee must deliver written notice to our Corporate Secretary, including disclosure of: (i) the relationship between the nominating shareholder and the underlying beneficial owner, if any, and such parties' stock holdings and derivative positions in our securities; (ii) information we deem appropriate to ascertain the nominee's qualifications to serve on the Board, including disclosure of compensation arrangements between the nominee, the nominating shareholder and the underlying beneficial owner, if any; and (iii) any other information required to comply with the proxy rules and applicable law. These requirements are more fully described in Article I, Section 7 of our By-Laws, a copy of which will be provided without charge to any shareholder upon written request to our Corporate Secretary at World Fuel Services Corporation, 9800 Northwest 41st Street, Miami, Florida 33178.

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Director Resignation Policy

              We have adopted a director resignation policy for the election of directors in an uncontested election, which is generally defined as an election in which the number of nominees does not exceed the number of directors to be elected at the meeting. In uncontested elections of directors, such as this election, any director nominee who receives a greater number of votes "withheld" from his or her election than votes "for" his or her election must promptly tender his or her resignation for consideration by the Governance Committee. The Governance Committee will recommend to the Board whether the Board should accept or reject the resignation or whether other action should be taken. The Board will publicly disclose its decision regarding the tendered resignation within 90 days after certification of the election results. The director whose resignation is under consideration will not participate in the recommendation of the Governance Committee or deliberations of the Board with respect to his or her resignation. If a director's resignation is not accepted by the Board, the director will continue to serve until the next annual meeting of shareholders or until his or her successor is duly elected and qualified, or his or her earlier resignation or removal. A copy of our director resignation policy, included in our Corporate Governance Principles, is available on our website at www.wfscorp.com. Our website and information contained on our website are not part of this proxy statement and are not incorporated by reference in this proxy statement.

Sustainability and Corporate Responsibility

              We believe that conducting our operations in a safe and responsible manner, while maintaining the trust that we have built up among our key stakeholders, is vital to growing our business and continuing our success in a sustainable manner. This includes the protection of people, respect for individual rights, engaging with our communities, and working to reduce our overall impact on the environment through increased efficiency in our operations. We are committed to fostering a corporate culture of safety and conducting our business in a manner that respects the environment, benefits the communities in which we operate and promotes collaboration with our key stakeholders to develop sustainable programs that minimize the impact of our activities.

              Over the last several years, we have reinforced our focus on environmental, health and safety, sustainability, diversity and other social responsibility issues and impacts (collectively, "Sustainability Matters"), through various enhancements to our policies and processes as well as our governance structure. In 2019, we took a number of significant steps to further strengthen our commitment to operating in a sustainable manner and proactively working with the communities in which we operate, including becoming a signatory to the United Nations ("UN") Global Compact, the world's largest corporate responsibility initiative. The UN Global Compact provides a universal framework for sustainability in the areas of human rights, labor, environment and anti-corruption. We aim to incorporate the UN Global Compact and its principles in our strategy, culture and operations and intend to support and engage in collaborative projects to advance the broader UN goals, with a special focus on the UN Sustainable Development Goals (SDG) that are in line with our mission and values. As part of our participation, starting in late 2020 we will provide an annual "Communication on Progress" report, setting forth our actions to implement the UN Global Compact principles and our progress in these key areas.

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              In addition, in 2019 we commenced the development of a multi-year sustainability and corporate responsibility program designed to:

GRAPHIC

We are currently working on completing the assessment phase of this program and developing recommendations for review and consideration by our executive leadership and our Board.

              Finally, to further illustrate our commitment to increasing transparency on Sustainability Matters, we have also enhanced our Investor Relations website located at: www.wfscorp.com and launched a dedicated area for information regarding our principles, policies and actions relating to sustainability and corporate responsibility matters that we believe are relevant to our business and meet the overall needs of our shareholders and other stakeholders. Our efforts in this area will continue to evolve in the future and we welcome any shareholder feedback as we continue on our sustainability journey.

Management and Board Oversight

              As we have progressed in our approach to sustainability and corporate responsibility, our governance and oversight structure has also evolved. At the Board level, we began in 2018 by enhancing the responsibilities of our Governance Committee, which already included oversight of our corporate governance policies and practices, to also include oversight of our policies and programs related to environmental and social matters. We also established a cross-functional Sustainability Management Committee, which includes senior leaders and subject matter experts from across the Company who collaborate to identify priorities, set goals and drive the implementation of our strategy and objectives with respect to Sustainability Matters. This committee is also responsible for developing and implementing our multi-year sustainability and corporate responsibility program currently underway.

              Furthermore, as a reflection of our commitment to embedding sustainability and corporate responsibility as an integral part of our business strategy for long-term value creation, in March 2020 our Board established the Sustainability & Corporate Responsibility Committee as a standing committee of the Board responsible for overseeing the environmental and social matters previously overseen by the Governance Committee. The Governance Committee will continue to be responsible for the oversight of our corporate governance policies and practices.

              The Sustainability & Corporate Responsibility Committee is comprised solely of independent directors and responsible for overseeing and reviewing our programs, policies, risks and initiatives with respect to all Sustainability Matters not otherwise overseen by the other committees of the Board. These duties include reviewing and providing input on our strategy, goals and integration of Sustainability Matters into strategic and tactical business activities across the Company. The committee is also responsible for monitoring our progress against our goals and reviewing any disclosures

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regarding our position, approach and reporting of Sustainability Matters. Our Board's governance structure for the oversight of Sustainability Matters is reflected below and described in the "Corporate Governance" section beginning on page 12 of this proxy statement.

GRAPHIC

Our Environmental Stewardship

              Environmental stewardship is at the core of our business operations and we continuously strive to identify opportunities to make a positive contribution to protecting our environment and reducing the impact of our global business operations. We are also working to create sustainability solutions for our customers and offer renewable energy and sustainable fuel products to support our customers in managing their energy needs while reducing their environmental impact.

    Highlights of "Our Environmental Stewardship" Programs and Efforts

 

 

Getting to Zero. In September 2019, we joined the "Getting to Zero Coalition", a global alliance of private and public stakeholders within the maritime, energy, infrastructure and finance sectors focused on developing fuels, energy solutions and technology necessary to develop commercially viable deep-sea zero emission vessels powered by zero emission fuels by 2030. The Getting to Zero Coalition is a partnership between the Global Maritime Forum, the Friends of Ocean action, and the World Economic Forum.

 

 
    Reducing Greenhouse Gas (GHG) Emissions. As a member of the Coalition of Sustainable Aviation Fuel (SAF), we continue to support the business aviation industry's goal to reduce carbon emissions 50% by 2050. For example, in May 2019 we provided sustainable aviation jet fuel (SAF) at the European Business Aviation Convention and Exhibition held at TAG Farnborough Airport in the United Kingdom. Our supply of SAF was used for a demonstration showcasing the capability of SAF and the aviation industry's support for the development and adoption of sustainable fuels.    
    Sustainability Products and Services. As an energy management company, we have been focused on investing in and expanding our portfolio of sustainability products and services across the energy product spectrum to help our customers achieve their sustainability goals. Through our World Kinect Energy Services business, we offer sustainability solutions that incorporate a carbon footprint reporting tool, renewable energy solutions, alternative fuels and energy efficiency measures to lessen customers' environmental impact and reduce their carbon footprint. We have also focused on promoting the use of sustainable and renewable fuels in the aviation, marine and land transportation industries where we operate.    

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Our People

              The passion and expertise of our people differentiate us. We firmly believe the power of our differences fuel innovation and investing in our people is of upmost priority. We strive to provide our employees with an environment where they can learn and grow, build their careers, take care of their families and support their communities. We also place a high value on cultivating growth and offer opportunities to learn and development programs across every level of our organization.

    Highlights of "Our People" Programs and Efforts

 

 

Diversity & Inclusion. We have continued to focus on embedding diversity and inclusion throughout our talent acquisition, management and development practices. From recent graduates to experienced hires, we seek to attract and develop top talent to continue building a unique blend of cultures, background, skills and beliefs that mirrors the world we live in. We have focused on creating an environment that embraces diversity and encourages each employee to thrive.

 

 
    ITWomen. We have partnered with ITWomen, a non-profit organization founded in 2002 to narrow the gender gap in technology and increase the potential for innovation and economic growth through gender equality. The programs are geared to ignite a passion for technology in the next generation by reaching out to girls in middle school, high school, and college. Our technology leaders contribute their time in the ITWomen speaker series to share experiences that encourage girls in high school to pursue technology and engineering careers, including hosting them at our headquarters to experience IT careers in the corporate environment. For the fifth year in a row, we hosted a group of more than 60 high school girls at our headquarters in 2019 to participate in an interactive journey through the Agile lifecycle, where they were able to experience first-hand how a global company leverages technologies such as cloud and artificial intelligence.    

Our Community

              We believe that sustainable growth is about conducting our business to promote a healthy environment and strengthen the local communities where we operate in order to foster sustainable economic growth. We believe that this approach will enable us to deliver long-term value to all our stakeholders. As a signatory to the UN Global Compact, we endeavor to implement its key social principles, including the protection of employees, respect for individual rights, and engagement with local communities. We also respect the rights and dignity of all people and are committed to preventing modern slavery in our operations and supply chains.

    Highlights of "Our Community" Programs and Efforts

 

 

Human Rights. Our commitment to human rights is embodied in our corporate values and our policies and processes. We are a strong advocate of various human rights initiatives, such as the United Nations Declaration of Human Rights, and comply with various national and multinational efforts to enforce labor protections and individual rights, such as the United Kingdom Modern Slavery Act. We have various policies, procedures and public statements in place that support these principles. These resources, many of which have been translated into multiple languages, include our Code of Conduct, Anti-Corruption Policy and Business Partner Code of Conduct.

 

 
    Track My ElectricityTM. Track my ElectricityTM is a platform developed by our World Kinect Energy Services business that enables businesses to not only significantly reduce their organizational carbon footprint by sourcing 100% renewable energy, but to also support vulnerable communities in developing countries by combating energy poverty. For every MWh of clean energy sourced through the platform, a portion goes towards funding renewable energy projects in remote, off-grid areas to eliminate energy poverty and build sustainable communities. We have also participated in funding projects through this program. One such project included the installation of renewable energy solar panels in a community center in Mae Sot, Thailand to support around-the-clock powered activities, enabling access to educational opportunities within the community center, freshly prepared food and a safe environment to socialize. The solar panels that were installed also increased safety and visibility at night by powering streetlights in the area.    

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Board's Role in Risk Oversight

              The role of the Board is to understand the nature of the material risks we face and, based upon the information brought to its attention by management and our risk management processes, policies and procedures, evaluate whether such processes, policies and procedures are reasonably designed to respond to and mitigate the risks we face. Throughout the year, the Board and its committees receive periodic reports from management identifying and explaining key areas of risk applicable to us and an explanation of the processes, policies and procedures in place to monitor and assess those risks.

              The Board and each of its committees oversee the risks pertaining to their principal areas of focus as described in the table below:

 

 

Board or Committee


Area of Risk Oversight

 

 

Board

 

Considers strategic and operational risks associated with the annual operating plan and other current matters that may present material risks to our operations, plans, prospects or reputation and risks associated with acquisitions.

   

 

 

Audit

 

Considers risks associated with the financial reporting and disclosure process, major litigation, cybersecurity and related information technology risks, and regulation and legal compliance; and

 

 

 

 

Discusses the guidelines and policies that govern the process by which risk assessment and management is undertaken in accordance with its charter and NYSE rules.

 

 

 

Compensation

 

Considers risks associated with our compensation programs, policies and practices.

   

 

 

Governance

 

In conjunction with the Compensation Committee, considers risks associated with management development and succession.

 

 

 

Sustainability & Corporate Responsibility

 

Considers the risks and initiatives regarding our environmental, health and safety, sustainability, diversity and other social responsibility issues and impacts.

   

 

 

Technology & Operations

 

Considers risks related to technology and operations initiatives, including regulatory, environmental and other significant technology-related risks; and

 

 

 

 

Consults with the Audit Committee regarding technology and operations systems and processes that relate to or affect our internal control systems, information security, fraud and cybersecurity risks.

 

              Each committee also provides periodic reports to the Board on the risks pertaining to their principal areas of focus so that the Board is informed of our risk profile.

              Periodically, we also perform risk management assessments, both in specific areas of our business or on an enterprise wide basis. The principal purposes of these assessments are to:

    ensure that risk management efforts are focused and directly linked to the underlying strategy of the organization;

    implement a sustainable and scalable framework to identify, manage and monitor risk;

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    assign responsibility for each risk, put mitigation plans in place and assess the effectiveness of such mitigation plans; and

    enhance our risk management capabilities for priority risks and continue the development of risk management policies and action plans.

              The results of these risk assessments are regularly communicated to the Board. In addition, each year management conducts, and the Compensation Committee oversees, a risk assessment of our compensation policies and practices with respect to all employees, including NEOs. The employee population is segmented into groups based on commonalities across their reward programs. Each program is then evaluated using the key design features of the program and the applicable risk mitigation features that exist in such programs. Once the assessment is completed, management reviews the assessment data, methodology and findings with the Compensation Committee. A key goal of this process is to ensure that there are controls in place to (i) safeguard us from unwarranted exposure to particular risks that individual employees might choose to take and (ii) avoid any inadvertent incentives for employees to take inappropriate business risks by making decisions that may be in their best interests but not in the best interests of our shareholders.

Code of Conduct

              All of our employees, officers (including our principal executive, financial and accounting officers) and directors are held accountable for adherence to our Code of Conduct. Our Code of Conduct is designed to help us meet our responsibility of conducting our business in compliance with laws and good ethical practice. Our Code of Conduct is available in multiple languages on our website at www.wfscorp.com, either by clicking on About Us and then Ethics & Compliance, or by clicking on Investor Relations and then Corporate Governance. We intend to disclose any substantive amendments to our Code of Conduct and any waivers with respect to our Code of Conduct granted to our principal executive, financial and accounting officers on our website at www.wfscorp.com. We have also established a separate Business Partner Code of Conduct outlining our standards and expectations of our suppliers and other business partners, which can also be found in the Investor Relations section of our website at www.wfscorp.com.

Review and Approval of Related Person Transactions

              Related person transactions can create actual or potential conflicts of interests and can create the appearance that certain decisions may not be in the best interest of us or our shareholders. Therefore, our Board has adopted a written policy with respect to related person transactions. It is our policy that, as a general matter, we should avoid related person transactions except in circumstances where the transaction is consistent with our best interests, such as obtaining products or services that are not readily available from alternative sources or when the transaction meets the standards that apply to similar transactions with unrelated third parties.

              For purposes of our policy, we review all of the following relationships and transactions between us and:

    our directors and executive officers, including persons who have at any time since the beginning of our last fiscal year served in that role and any nominees to become a director;

    any person we know to be the beneficial owner of more than 5% of any class of our voting securities; and

    any immediate family member or any person (other than tenants or employees) sharing the household of any of the foregoing.

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              Pursuant to our policy, the Governance Committee will review any transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships in which we (including any of our subsidiaries) were, are or will be a participant and the amount involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. The foregoing rule will not be applied to those transactions exempt under Item 404(a) of Regulation S-K, such as the employment of an executive officer or compensation of a director if such executive officer's or director's compensation is required to be, or otherwise would be required to be, reported under the SEC's compensation disclosure requirements, any transaction with another entity where the related person's only relationship is as a beneficial owner of less than 1% of that corporation's publicly traded securities, or any transaction where the related person's interest arises solely from the ownership of our common stock and where all shareholders received the same benefit on a pro rata basis (e.g. dividends). In addition, the Governance Committee has determined that the following types of transactions, which involve ordinary course business transactions shall not be deemed to create or involve a direct or indirect "material" interest for a Related Person, even if the aggregate amount involved exceeds $120,000: (1) a transaction in which the related person's interests arises solely based on his or her position as an employee or executive officer of the other entity and (i) the related person was not involved in the transaction, (ii) the transaction was entered into in our ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons, and (iii) the transaction does not involve the greater of $500,000 or 2% of the recipient's total annual revenues and (2) any charitable contributions if the related person's interest arises only from (i) the person's or the person's immediate family member's position as an employee (other than an executive officer) or other position that does not involve policy-making decisions or (ii) the person's or person' immediate family member's position as an executive officer or director and the aggregate amount involved does not exceed the lesser of $1,000,000 or 2% of the charitable organization's total annual receipts.

              If the Chairman of the Governance Committee determines that a proposed transaction is a related person transaction, it will submit the proposed transaction to the Governance Committee for approval. The Governance Committee reviews any related person transactions that are not among the types described above, and determines whether to approve or ratify any such transaction. The Governance Committee will analyze the following factors, in addition to any other factors the Governance Committee deems appropriate, in determining whether to approve a related person transaction:

    the benefits to us;

    the impact on a director's independence, if relevant;

    the availability of other sources for comparable products or services;

    the terms of the transaction; and

    the terms available to unrelated third parties or to employees generally.

              The Governance Committee will only approve or ratify related person transactions that are consistent with our best interests and those of our shareholders. The Governance Committee's approval is not a directive to enter into the related person transaction, rather it is evidence that the Governance Committee does not object to the transaction based on relatedness issues. The Governance Committee will regularly review any ongoing related person transactions to determine whether it remains in our best interests and those of our shareholders to continue, modify or terminate the transactions.

              There were no reportable transactions in 2019.

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Director Compensation and Ownership Guidelines

Director Fees Earned or Paid in Cash

              Non-management directors earn fees for their services that are paid in cash on an annual basis. If a non-management director does not serve a full year in a position, such fees are paid on a pro-rated basis. The current fee structure for our non-management directors serving during the 2019-2020 term is as follows:

    the annual fee payable to non-management directors for their service on the Board is $85,000;

    the additional fee payable to the lead independent director is $40,000 per year;

    the additional fee payable to members of the Audit Committee is $15,000, while the additional fee payable to members of each of the Compensation Committee and Technology & Operations Committee is $10,000 per year for each committee served and the additional fee payable to members of the Sustainability and Corporate Responsibility Committee as well as the Nominating Subcommittee is $5,000 per year for each committee served; and

    the additional fee payable to the Chair of the Audit Committee is $35,000 per year, the additional fee payable to the Chair of each of the Compensation Committee and Technology & Operations Committee is $30,000 per year, the additional fee payable to the Chair of the Governance Committee is $20,000 per year and the additional fee payable to the Chair of each of the Sustainability and Corporate Responsibility Committee and the Nominating Subcommittee is $15,000 per year.

              Our non-management directors are also reimbursed by us for their travel, food, lodging and related expenses incurred in connection with attending Board, committee and shareholder meetings, as well as continuing education programs.

Equity Awards

              In 2019, the Board granted each non-management director $150,000 worth of restricted stock units ("RSUs") for board service and to each member of the Governance Committee, an additional $10,000 in RSUs as the fee for service on the committee. This resulted in each non-management director (other than Mr. Stebbins) receiving 5,321 RSUs and Mr. Stebbins, who does not serve on the Governance Committee, receiving 4,989 RSUs. In addition, beginning in May 2019, the Chair of each Committee was also granted $5,000 in RSUs as a portion of their fee for serving as Chair, provided, however, that where a director served as Chair of more than one committee, only one additional $5,000 equity grant was made. This resulted in each of Messrs. Bakshi, Benitez, Manley and Roddenberry receiving an additional 167 RSUs. As described in greater detail above, although Messrs. Bakshi and Benitez serve as Chair of two committees, they only received one equity grant for such service.

              The RSUs vest on the earlier of: (i) the day prior to the Annual Meeting that next follows the grant date or (ii) one year from the grant date. Upon vesting of the RSUs, 100% of the underlying shares will be issued.

              Our 2016 Omnibus Plan includes limits on equity awards that may be granted to non-management directors. The table below summarizes the compensation paid by us to our non-management directors for services rendered in 2019. Directors who are employed by us do not receive additional compensation for serving as directors.

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2019 Director Compensation Table

Name(1)   Fees
Earned or
Paid in
Cash
  Stock
Awards(2)(3)
  Total

Ken Bakshi

  $145,000   $165,024   $310,024

Jorge L. Benitez

 

128,333

 

165,024

 

293,357

Stephen J. Gold

 

90,833

 

160,002

 

250,836

Richard A. Kassar

 

114,583

 

160,002

 

274,586

John L. Manley

 

133,333

 

165,024

 

298,357

J. Thomas Presby(4)

 

37,917

 

 

37,917

Stephen K. Roddenberry

 

148,750

 

165,024

 

313,774

Paul H. Stebbins

 

80,833

 

150,019

 

230,853


(1)
Ms. Sharda Cherwoo did not join the Board until February 2020 and therefore is not included in this table.

(2)
The amounts shown in this column represent the estimated aggregate grant date fair value of the RSU awards granted to the non-management independent directors in 2019. The estimated aggregate grant date fair value of these awards is based on the grant date fair market value of our common stock, as defined in the 2016 Omnibus Plan and is computed in accordance with FASB ASC Topic 718. Assumptions used in determining the aggregate grant date fair value of RSU awards are set forth in Note 10 to the notes to the consolidated financial statements in Item 15 of our annual report on Form 10-K for the year ended December 31, 2019.

(3)
The aggregate number of RSUs and stock units held by each non-management director serving as at December 31, 2019 was as follows:
Name   Units(b)

Ken Bakshi(a)

  37,405

Jorge L. Benitez

  7,628

Stephen J. Gold

  6,687

Richard A. Kassar

  24,140

John L. Manley

  9,377

Stephen K. Roddenberry

  24,307

Paul H. Stebbins

  6,991

(a)
Includes 13,098 stock units for Mr. Bakshi, which represents stock awards he received that he previously elected to defer pursuant to our Non-Employee Director Stock Deferral Plan.

(b)
For a discussion of the applicable vesting terms of these RSUs and stock units, please see the table and related footnotes for each director beginning on page 86 of this proxy statement.

(4)
Mr. Presby retired from our Board and did not stand for re-election at the 2019 Annual Meeting.

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Director Stock Ownership Guidelines

              Each non-management director is required to accumulate, over a period of five years following election to the Board, a minimum of five times the annual fee for service on the Board, or $425,000, in our common stock. All of our non-management directors, with the exception of Ms. Cherwoo, who joined the Board on February 5, 2020, have achieved stock ownership levels in excess of the amount required. Vested RSUs and stock units that a director has elected to defer until retirement are included in the calculation of whether the minimum ownership requirement has been achieved.

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III.         INFORMATION CONCERNING EXECUTIVE OFFICERS

              The following table sets forth certain information with respect to our current executive officers and lists their current titles. A summary of the background and experience of Messrs. Birns, Smith, Crosby, Rau, and Lake are set forth in the paragraphs following the table. The background and experience of Mr. Kasbar is described above in the section titled "Proposal No. 1—Election of Directors." All executive officers serve at the discretion of the Board.

Name and Current Position   Age   Year First
Became
Executive Officer

Michael J. Kasbar
Chairman, President and Chief Executive Officer

  63   1995

Ira M. Birns
Executive Vice President and Chief Financial Officer

  57   2007

Jeffrey P. Smith
Executive Vice President and Chief Operating Officer

  58   2017

Michael J. Crosby
Executive Vice President, Global Land

  55   2016

John P. Rau
Executive Vice President, Global Aviation and Marine

  56   2016

R. Alexander Lake, Jr.
Executive Vice President, Chief Legal Officer and Corporate Secretary

  48   2017

              IRA M. BIRNS has served as our Executive Vice President and Chief Financial Officer since April 2007. From August 2004 to March 2007, Mr. Birns served as Vice-President and Treasurer and Vice President-Investor Relations of Arrow Electronics, Inc., a NYSE company and electronics distributor. From May 2002 until August 2004, he served as Vice President and Treasurer of Arrow Electronics, Inc. Prior thereto and from 1996, he served as Treasurer of Arrow Electronics, Inc. He was Assistant Treasurer of Arrow Electronics, Inc. from 1989 to 1996. Mr. Birns is a member of the Board of Trustees of the New World Symphony of Miami, Florida.

              JEFFREY P. SMITH has served as our Executive Vice President and Chief Operating Officer since October 2017. Previously, he served as Chief Information Officer of International Business Machines Corporation ("IBM") from August 2014 through May 2017, where he was responsible for global information technology ("IT") operations, including provisioning and management of all computing devices and all software solutions required to run IBM, such as Customer Relationship Management ("CRM") for sales and service and Enterprise Resource Planning ("ERP") for financials and manufacturing. Prior to joining IBM, Mr. Smith served as Chief Executive Officer of Suncorp Business Services, part of Suncorp Group Limited, from July 2010 to August 2014, and Chief Information Officer from March 2007 to July 2010. While at Suncorp, Mr. Smith was responsible for the Group's technology, analytics, real estate, finance, procurement, and customer relationship, IT and business process outsourcing operations. With more than 30 years of corporate experience, Mr. Smith has also held senior executive roles in a number of companies including Telstra Corporation and Honeywell.

              MICHAEL J. CROSBY has served as our Executive Vice President of Global Land since March 2016. Previously, he served as our Executive Vice President of Land Americas since April 2015. From January 2014 to March 2015, Mr. Crosby was the Chief Operating Officer of Next Generation Energy Logistics, a private equity-backed fuel and lubes distribution business, where he was instrumental in raising capital and executing the company's acquisition and consolidation strategy. Prior

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to that, from June 2011 to July 2013, Mr. Crosby served as President of Maxum Petroleum, Inc.'s industrial business, including the marine and rail segments, and as President, Commercial Fuel & Lubricants of SC Fuels Trading, LLC from July 2013 to December 2013 following its acquisition of Maxum Petroleum. From January 2009 to December 2010, Mr. Crosby served as Chief Executive Officer of Highlands Override Inc., a new business venture owned by Irving Oil Corporation, a company specializing in finished energy products. From June 2004 to December 2008, Mr. Crosby served as Chief Operating Officer at Irving Oil Corporation, prior to which he was its Chief Resource Officer from November 1999 to May 2004.

              JOHN P. RAU has served as our Executive Vice President of Global Aviation and Marine since March 2016. Previously, he served as our Executive Vice President of Aviation from April 2014 and as our Senior Vice President of Aviation Americas from October 2011 to April 2014. From July 1995 to October 2011, Mr. Rau served as Managing Director at American Airlines, where he was responsible for the purchase and management of jet fuel, utilities, deicing fluids, and transportation, as well as management of American's supplier diversity program. From January 1987 to July 1995, Mr. Rau served as Manager of Fuel Supply and Trading at United Airlines. Prior to that, he served as United Airlines' Operations Manager from January 1987 to November 1988. From May 1985 to January 1987, Mr. Rau was a Supply, Marketing and Distribution representative for Koch Industries.

              R. ALEXANDER LAKE, JR. has served as our Executive Vice President, Chief Legal Officer and Corporate Secretary since March 2017. Previously, he served as our Senior Vice President, General Counsel and Corporate Secretary since May 2010 and as our General Counsel and Corporate Secretary from January 2004 to May 2010. Prior to joining us, Mr. Lake served as Assistant General Counsel of America Online Latin America, Inc., a leading interactive service provider in Latin America. Prior to that, from September 1996 to January 2001, Mr. Lake served in private practice as a corporate attorney with the law firms of White & Case, Winston & Strawn and Curtis Mallet-Prevost, Colt & Mosle.

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IV.          COMPENSATION DISCUSSION AND ANALYSIS

              This Compensation Discussion and Analysis is designed to provide our shareholders with a clear understanding of our compensation philosophy and objectives, compensation-setting process, and the 2019 compensation of our named executive officers, or NEOs. As discussed in Proposal 2 of this proxy statement, we are conducting a Say-on-Pay vote this year that requests your approval, on a non-binding advisory basis, of the compensation of our NEOs as described in this section and in the tables and accompanying narrative contained below under "Executive Compensation". To assist you with this vote, you should review our compensation philosophy, the design of our executive compensation programs and how, we believe, these programs contribute to our financial performance.

              For 2019, our NEOs were:

Name   Title

Michael J. Kasbar

  Chairman, President and Chief Executive Officer

Ira M. Birns

  Executive Vice President and Chief Financial Officer

Jeffrey P. Smith

  Executive Vice President and Chief Operating Officer

Michael J. Crosby

  Executive Vice President, Global Land

John P. Rau

  Executive Vice President, Global Aviation and Marine

              Please note that the decisions with respect to the targets and incentive compensation program described in this Compensation Discussion and Analysis were made in the normal course in early 2019 and the resulting payments were thereafter made in early 2020 for the corresponding amount. The Committee is monitoring and will continue to consider the business and financial impact of the COVID-19 pandemic on the Company, our shareholders, employees and other stakeholders in evaluating 2020 performance throughout the year and into early 2021.

Executive Summary

Principles of our Compensation Program

              Our compensation program is designed to attract and retain executives and motivate them to deliver strong financial results. We structure our compensation program to directly align our compensation levels with current and future performance that creates value for our shareholders, employees, customers and other stakeholders. As a result, a significant percentage of the total target compensation for our NEOs in 2019 was a combination of short- and long-term performance-based equity awards such that the ultimate realizable value would be highly contingent upon our future operating results and stock price.

              For 2019, the portion of the total target direct compensation that was variable or "at-risk" for our Chief Executive Officer was 83% and averaged to 71% for our other NEOs, reflecting our commitment to linking compensation to Company performance and strategy.

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Target Compensation Mix

GRAPHIC

Compensation Governance Highlights

What We Do
  What We Don't Do
GRAPHIC   Executive compensation program tied to our financial and operating performance and designed to create value for
        our shareholders, employees, customers and other stakeholders

GRAPHIC   Use performance measures that are aligned with business objectives

GRAPHIC   Require minimum vesting of at least one-year under our equity plan

GRAPHIC   Monitor our compensation programs for risk-taking incentives

GRAPHIC   Maintain robust stock ownership guidelines applicable to executive officers

GRAPHIC   Maintain rigorous stock retention requirements applicable to executive officers

GRAPHIC   Prohibit hedging of shares by executive officers, directors and all other employees

  GRAPHIC   No guaranteed bonuses

GRAPHIC   No tax gross ups

GRAPHIC   No excessive perquisites

GRAPHIC   No single-trigger vesting of awards upon a change of control

GRAPHIC   No repricing of stock options

GRAPHIC   No liberal share recycling under our equity plan

GRAPHIC   No liberal definition of "change of control"

GRAPHIC   No payment of dividends on unvested equity awards

Our Performance in 2019

              In 2019, our management team continued to successfully advance our key objectives of sharpening our portfolio, driving aggressive organic growth and increasing operating leverage. We further rationalized our portfolio of businesses, exiting certain non-core business activities in our land segment, and continued to focus on our core competencies, shifting towards businesses and opportunities that we believe are capable of producing more ratable, sustainable and scalable profits that will ultimately deliver greater shareholder value over the long-term. Our marine segment also performed exceptionally well, generating some of its strongest results in years that were largely attributable to our management's efforts to right-size the business, refine the portfolio and focus on driving stronger returns. Our technical expertise also enabled us to help customers navigate increased fuel price volatility, as well as the risks related to product availability and logistics that arose as a result of the implementation of the International Maritime Organization's low sulfur fuel regulations that went into effect on January 1, 2020.

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              In addition, the cost discipline and restructuring activities that began at the end of 2017 yielded improvements in our operating leverage and market segmentation, which enabled an increase in gross profit despite a decline in volume. Our aviation segment delivered a solid increase in year-over-year results, driven by a strong contribution from government-related activity and strength in our core commercial and general aviation offerings. This was further supported by our management's focus on improving our global logistics capability, expanding our fuel operations footprint and making further enhancements to our non-fuel service offerings.

              All of the foregoing ultimately contributed to a significant increase in our earnings before interest, taxes, depreciation and amortization ("EBITDA") for 2019 as compared to the previous year, which resulted in our NEOs earning higher payouts under our annual incentive compensation program, consistent with our pay-for-performance philosophy.

Say-on-Pay Vote and Shareholder Engagement

              At our 2019 annual meeting of shareholders, we sought and received approval from 93.6% of votes cast (excluding abstentions), on a non-binding, advisory basis, of the 2018 compensation of our NEOs. We regularly engage with our shareholders to understand better their perspectives on our compensation programs. As discussed above under "Shareholder Engagement" on page 13, during 2019 we interacted with 18 of the 25 largest holders of our common stock, representing approximately 50% percent of our shares outstanding. In the past, shareholder feedback has led to changes to our incentive compensation program, such as modifying our long-term incentive compensation program to enhance predictability and shareholder alignment through the adoption of annual grants of equity with multi-year performance periods.

Executive Compensation Philosophy and Objectives

Pay for Performance Alignment

              A guiding principle of our compensation philosophy is that the compensation of our NEOs should be closely linked with, and reasonable in relation to, the level of shareholder value created through the Company's financial, operating and strategic performance. The Compensation Committee (the "Committee") believes that the use of incentive compensation, particularly equity-based awards, together with stock ownership and retention guidelines are effective methods for motivating our executives and aligning their interests with those of our shareholders.

Performance Metrics Aligned with Value Creation

              Consistent with our objective of rewarding shareholder value creation, we select performance metrics that we believe, if achieved, will translate into strong financial performance both in the short- and long-term, thereby resulting in higher share prices. As a result, we principally use annual financial metrics, such as our EBITDA and operating income ("Operating Income") for key "lines of sight", or LOS, to reward our NEOs. Our long-term incentive financial metrics consist of three-year growth in EPS ("EPS Growth") and beginning in 2019, as modified by our return on invested capital ("ROIC"). In addition, to a lesser extent, we reward achievement of individual performance strategic objectives that will drive long-term benefits and sustainable value. Due to the variability of business conditions within the industries in which we operate, we believe it is important that our compensation program be designed to measure and reward short-term, long-term and multi-year performance.

Ensuring Retention and Continued Engagement through Multi-Year Vesting Requirements

              In order to promote retention of our NEOs and provide further incentive for creating shareholder value, we believe NEOs should be required to provide services over multi-year periods in

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order to vest in equity-based awards. Consequently, all of the equity awards granted to our NEOs in 2019 vest over a three-year period.

Strong Compensation-Related Corporate Governance Policies

              To ensure continued alignment of compensation with Company performance and the creation of shareholder value without encouraging excessive risk-taking, our Committee has adopted strong compensation-related corporate governance policies, including the following:

    Negative Discretion on Annual Compensation   The Committee can use "negative discretion" to reduce payouts, such as in the event of a significant disconnect between compensation and Company and individual performance.    

 

 

Cap on Annual Incentive Awards

 

Annual cash and equity performance-based awards under our annual incentive program are subject to a maximum, which serves to limit the total direct compensation opportunity, or TDC, that can be earned by any of our NEOs.

 

 

 

 

Stock Ownership and Retention Guidelines

 

Our executive officers are subject to robust stock ownership guidelines. Our current stock ownership guidelines are as follows:

 

 

 

     

Chief Executive Officer               7x base salary

   
       

Chief Financial Officer and        5x base salary
Chief Operating Officer

   
       

All other executive officers         3x base salary

   

 

 

 

 

Furthermore, our executive officers are required to retain 50% of any net shares acquired pursuant to any equity award for three years after the shares are delivered (or until the individual ceases to be an executive officer, if earlier).

 

 

 

 

Anti-Hedging Policy

 

We have a robust anti-hedging policy that prohibits all of our directors, executive officers, employees and their respective related persons from (1) engaging in hedging or monetization transactions, or any transaction that hedges or offsets, or is designed to hedge or offset, any decrease in the market value of our securities, such as prepaid variable forward contracts, equity swaps, collars and exchange funds (which we refer to as "Hedging Transactions") or (2) buying or selling of publicly traded options based on our common stock or engaging in short sales of our securities.

 

 

The Compensation-Setting Process

              Annually, the Committee reviews and assesses:

    with respect to each NEO, his responsibilities and roles with respect to overall corporate policy-making and strategy, management, operations and administration, the importance of retaining the executive and his individual performance;

    recent and historical financial performance and forecasts for the upcoming years, recent stock price movements, current and expected business conditions and cost of capital; and

    the nature, amounts, award terms and mix of all elements of the NEOs' compensation, both individually, for internal consistency, and in the aggregate, to ensure that our executive

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      compensation programs adhere to the core principles as described above under "Executive Compensation Philosophy and Objectives."

              The Committee also reviews comprehensive detailed historical compensation analysis to ensure that it is fully informed of all the compensation and benefits each NEO has received as an employee of the Company. This analysis includes information such as the aggregate amounts realized from prior years' compensation, the potential future payout scenarios at various levels of achievement taking into account any outstanding unearned performance-based awards, and the current value (as compared to the grant date fair value) of outstanding equity awards and of each NEO's shareholdings in the Company (what some commentators call an "accumulated wealth analysis"). However, the Committee does not specifically use the accumulated wealth analysis as a material factor in determining the NEO's compensation for a given year.

              The Committee strongly believes that:

    value realized on prior years' compensation from stock appreciation is the reward for the NEO's work over that period and the achievement of our long-term goals;

    reducing current year compensation because an executive has realized gains based on a desired creation of shareholder value, or otherwise giving significant weight to an accumulated wealth analysis when making decisions regarding current compensation, is counterproductive and poses an unnecessary risk to shareholder value; and

    in order to maintain the best group of executives to lead the Company, we must provide a compensation package each year that represents a fair and reasonable reward for the Company's performance that year and the executive's role in it.

              The Committee also considers the recommendations of our Chief Executive Officer with respect to the compensation of our other executive officers. Following these reviews and assessments, the Committee determines the compensation packages for each NEO. This process is subjective and involves the exercise of discretion and judgment. While the Committee will review detailed financial models showing variations in compensation at differing levels of achievement, the Committee does not rely on a fixed formula but rather, it establishes the compensation packages based on the Committee's judgment as to what it believes is reasonable in relation to the levels of shareholder value created at each level of Company performance.

Evaluating Compensation Program Design Using Compensation Comparison Companies

              We believe we have a unique business model and that there are few, if any, companies of a similar size and complexity engaged in our same lines of business on a global scale. However, in order to ensure that the Committee has a comprehensive view of market trends in executive compensation, the Committee approved a group of compensation comparison companies that reflects multiple aspects of our complex business model and it uses this group to benchmark our executive compensation program. In forming the group, the Committee considered companies in the industry sectors listed below, taking into account their relative financial size (with a specific focus on net income and market capitalization), and maintaining a reasonable expectation these companies will have some consistency in terms of ongoing industry sector membership.

Asset-light demand aggregators;

 

Marine, land, and aviation services providers;

Energy commodity trading organizations;

 

Freight forwarding and logistics services providers; and

Wholesale diversified distributors;

 

Systems/payment processing services providers.

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              The Committee used data derived from the compensation comparison companies group shown below to inform its decisions about NEO compensation including amounts, design and mix of pay components. For 2019, the Committee maintained the same compensation comparison companies group as was utilized in 2018.

    2019 Comparison Companies

 

 

Anixter International Inc.

 

Noble Energy,  Inc.

   

 

 

Arrow Electronics,  Inc.

 

Owens & Minor,  Inc.

 

 

 

Atlas Air Worldwide Holdings, Inc.

 

Performance Food Group,  Inc.

   

 

 

C.H. Robinson Worldwide,  Inc.

 

Ryder System,  Inc.

 

 

 

Expeditors International of Washington, Inc.

 

Sysco Corporation

   

 

 

FleetCor Technologies,  Inc.

 

Tech Data Corporation

 

 

 

Henry Schein,  Inc.

 

United Natural Foods,  Inc.

   

 

 

Hub Group,  Inc.

 

W.W. Grainger,  Inc.

 

 

 

J.B. Hunt Transport Services, Inc.

 

WESCO International,  Inc.

   

 

 

Jones Lang LaSalle Incorporated

 

WEX Inc.

 

 

 

Kirby Corporation

 

XPO Logistics,  Inc.

   

 

 

Landstar System,  Inc.

 

 

              Although the Committee believes comparison compensation and performance data can be useful, the Committee does not believe that any comparison group company, whose composition is based solely on our industry classification, revenues, net income and/or market capitalization, is fully reflective of the markets in which we compete for talent. Consequently, the Committee does not set the executives' target total direct compensation, or any of the target components of such compensation, at any specific percentile of the comparison group. Rather, it considers, as part of the overall compensation discussion, base salary, as well as the target and actual short- and long-term incentive compensation of the NEOs against the 50th percentile of the comparison group.

Independent Compensation Consultant

              In connection with the setting of 2019 executive compensation, the Committee engaged and received advice and assistance from Compensation Strategies, Inc. ("Compensation Strategies"), its independent compensation consultant. Compensation Strategies provides services solely to the Committee and reports directly and exclusively to the Committee. The Committee has assessed the independence of Compensation Strategies pursuant to SEC and NYSE rules and the guidelines of its Charter and concluded that Compensation Strategies' work for the Committee does not raise any conflict of interest and that it is independent.

              For 2019, Compensation Strategies provided assistance to the Committee as follows:

    assisted in the preparation and review of quantitative analysis used in the compensation setting process;

    assisted the Committee in developing a competitive analysis of our NEO compensation;

    provided recommendations for the 2019 compensation for our NEOs;

    performed a competitive analysis of compensation levels for non-employee directors and provided recommendations for our director compensation program;

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    reviewed the Compensation Discussion and Analysis in the annual proxy statement;

    provided general advice on agreements or other documents the Committee was asked to approve;

    provided updates on regulatory developments and market trends related to executive compensation; and

    assisted the Committee with the design of the 2020 Omnibus Plan.

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Compensation Program

Elements of Compensation

              The Committee uses a variety of compensation elements to establish individual compensation programs for each of its NEOs. The table below sets forth the compensation elements that the Committee uses in its programs and the objective of each of these elements.

GRAPHIC

              In addition to the compensation elements set forth above, the Committee may grant additional equity awards, including sign-on awards, special retention awards or other discretionary awards from time to time. The Committee uses these awards to attract, reward, incentivize and retain key executives that it believes are integral to our overall long-term success, as well as to promote business continuity, drive achievement and growth and ensure proper focus on achieving our long-term strategic objectives.

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2019 Compensation Program

Overview

              In 2019, the Committee used each of the compensation elements described above in establishing the executive compensation programs for Messrs. Kasbar, Birns, Smith, Crosby and Rau and determined the amounts that could be earned for each of these elements in accordance with our pay-for-performance philosophy. Base salary was the only fixed portion of the NEOs' direct compensation. The remainder of the direct compensation for our NEOs was variable and designed to reward: (1) each of our NEOs for achieving specified levels of EBITDA, EPS and ROIC, (2) each of our NEOs for achievement of strategic operational and organizational objectives that the Committee believes would contribute to our long-term growth, and (3) for Messrs. Crosby and Rau, for achieving specified levels of Operating Income in their respective lines of sight.

              For 2019, the Committee continued the performance-based components of our annual incentive program that were first introduced in 2018. Specifically, the Committee continued the use of targeted levels of EBITDA, which we define as income from operations, excluding the impact of depreciation and amortization and adjusted for non-operational items as appropriate, for the annual incentive program. The Committee decided that based on our current strategic focus, EBITDA was the appropriate metric as it is a better indicator of our business' financial performance and each NEO can more directly impact the result. Further, it is aligned with the metrics being provided to our investors as measurements of our future operational success. Threshold, target and maximum levels were set based on the achievement of specified levels of growth in EBITDA over the previous year as well as our internal budgets. While each of these performance levels were based on EBITDA, the Committee intended, and did, adjust the actual results for items that are considered to be non-operational and are not representative of our core business, such as those associated with acquisition-related charges and restructuring-related costs.

              The Committee also continued to utilize the multi-year Performance Share Program ("PSP") in the form of Performance SSARs to serve as an overlay to the core compensation program. As in prior years, this long-term incentive was based on three-year growth in EPS. However, due in part on our shareholder engagement initiatives, including conversations with investors, the Committee decided to alter the PSP performance metric by adding our ROIC as a modifier to adjust, positively or negatively, the number of Performance SSARs earned from EPS Growth during the performance period at each level of EPS. The Committee believes that while growth in EPS reflects execution of the strategy to grow the Company, ROIC measures the efficiency with which our NEOs allocate capital resources to drive that growth, taking into account the quantity of earnings, the quality of earnings and investments that drive sustainable growth.

Base Salary

              Base salary is the only fixed portion of our compensation program for our NEOs. The base salary for each NEO is based on various factors, including position, responsibility, experience, tenure and capacity for growth. In March 2019, the Committee reviewed the base salaries for our NEOs and determined to increase Mr. Rau's salary by $50,000 to gradually make his compensation more competitive with industry levels and to reflect his experience, tenure and contribution to the Company. No other changes to NEO base salaries were made in 2019.

Annual Incentive Program

              The Committee's design of the annual incentive compensation program is intended to promote investments in near-term and long-term growth opportunities, as well as motivate and reward annual performance. As such, the annual incentive program for each of Messrs. Kasbar, Birns, Smith, Crosby and Rau consisted of a mix of performance-based incentive awards based on annual EBITDA growth

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and, for Messrs. Crosby and Rau, also growth in Operating Income for their respective lines of sight. Each NEO was also provided the opportunity to earn a strategic objective cash incentive award based on the individual's performance against certain strategic operational and organizational objectives.

      Performance-Related Incentive Awards

              In 2019, our performance-related incentive awards were structured so that they are aligned with each NEO's responsibilities. Accordingly, Messrs. Kasbar, Birns and Smith's compensation was based on EBITDA growth at the consolidated level. The Committee believes that this metric is appropriate because Messrs. Kasbar, Birns and Smith have roles that directly affect the strategic direction of the Company and our overall performance on a consolidated basis. For Messrs. Crosby and Rau, who each individually oversee a component of our operations, the Committee decided to award a portion of their performance-related incentive award based on EBITDA achievement and a portion based on the Operating Income for select lines of sight for which they have responsibility and for which the Committee believes they can impact achievement levels.

              As in prior years, the performance-related incentive award for 2019 was payable in cash and equity with the Committee establishing threshold levels at which each component would begin to be earned. The Committee then established the amount of cash and equity that would be earned at target and maximum performance levels. The Committee believes that awarding a portion of the annual performance-related incentive award in equity that vests over time once earned further aligns our NEOs interests with the interests of our shareholders and encourages executive decision-making that maximizes value creation over the long-term and leads to share price appreciation.

              In March of the subsequent year, the Committee determines the extent to which the level of financial performance was achieved and thereafter the dollar value of any cash or equity earned by each NEO. In the event that growth falls anywhere between the specified performance levels, linear interpolation is applied to determine the appropriate payout. The amount of equity awarded is calculated by dividing the dollar amount earned by the NEO for EBITDA Growth by the closing price of our common stock on the NYSE on the date of issuance in March of the year following the performance year. Once issued, the equity vests ratably in equal annual installments over the following three years, beginning on the first anniversary of the grant date.

              For 2019, the Committee established the following threshold, target and maximum opportunities for our performance-related incentive awards and the amounts that would be paid in cash and equity. As in prior years, the Committee chose to use RSUs for the equity portion of the annual performance-related incentive award rather than restricted stock based on tax considerations.

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      Company Profitability


 


 


Bonus Opportunity – EBITDA




 
           

 

 

NEO


   
Threshold

Target

Maximum

 

 

Kasbar

  Equity   $ 100,000   $ 600,000   $ 3,492,500  

 

 

  Cash   70,000   900,000   2,857,500  
             

 

 

  Total   170,000   1,500,000   6,350,000  

 

 

Birns

  Equity     50,000     240,000     1,430,000    

 

      Cash     40,000     360,000     1,170,000    
 

 

      Total     90,000     600,000     2,600,000    

 

 

Smith

  Equity   50,000   240,000   1,430,000  

 

 

  Cash   40,000   360,000   1,170,000  
             

 

 

  Total   90,000   600,000   2,600,000  

 

 

Crosby

  Equity     50,000     200,000     965,000    

 

      Cash     100,000     300,000     785,000    
 

 

      Total     150,000     500,000     1,750,000    

 

 

Rau

  Equity   50,000   200,000   965,000  

 

 

  Cash   100,000   300,000   785,000  
             

 

 

  Total   150,000   500,000   1,750,000  

The Committee then determined the performance levels of EBITDA at which the performance-related incentive awards could be earned by our NEOs, beginning with our income from operations calculated in accordance with generally accepted accounting principles, or GAAP, excluding depreciation, amortization and adjusting for non-operational items to the extent deemed appropriate by the Committee. The following EBITDA performance levels for 2019 were based on growth over the previous year and our internal budgets, with the threshold, target and maximum performance levels representing significant growth over the previous year.

 

 

Performance Level
  





EBITDA
(millions)


 

 

Threshold

 
$

364.2
   

 

 

Target

 
$

373.8

 

 

 

Maximum

 
$

467.3
   

      Line of Sight Profitability

              For each of Messrs. Crosby and Rau, a portion of their performance-related incentive award was also based on the Operating Income of select parts of our business for which they had responsibility. For Mr. Crosby, this amount was based on the Operating Income of our government-related physical operations ("Physical Operations LOS") and the Operating Income of our land segment, excluding our payment processing operations and Physical Operations LOS ("Land LOS"). For Mr. Rau, this amount was based on the combined Operating Income of our marine segment and our aviation segment, excluding our payment processing operations and Physical Operations LOS ("Aviation/Marine LOS").

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              For 2019, the Committee set the following threshold, target and maximum cash bonus opportunities for the Operating Income of Messrs. Crosby's and Rau's respective lines of sight.


 


 


Bonus Opportunity – Line of Sight Operating Income




 
           

 

 

NEO


   
Threshold

Target

Maximum
 

 

 

Crosby

  Land   $ 75,000   $ 350,000   $ 900,000  

 

 

  Physical Operations   50,000   100,000   300,000  
             

 

 

  Total   125,000   450,000   1,200,000  

 

 

Rau

  Aviation/Marine     200,000     450,000     1,200,000    
 

The Committee established the threshold, target and maximum performance levels for each line of sight based on our confidential operating plan. The threshold was set above the prior year's performance, while the target level represented significant growth and the maximum performance level was intended to be extremely challenging, representing extraordinary annual growth.

      Strategic Objectives

              As part of its annual incentive program, the Committee also rewards NEOs based on the achievement of certain strategic objectives that support key strategic and operational areas of focus for the year. In 2019, these objectives related to a number of Company initiatives, including sharpening the portfolio, digitizing the business to, among other things, enhance the customer experience and increase efficiencies, developing talent and fostering a culture of innovation, as well as driving operational efficiencies and increasing operating leverage. The Committee sets the maximum cash incentive at the beginning of the year and determines in March of the following year the percentage of cash compensation that will be awarded based on each NEO's individual achievement of their respective objectives. For 2019, the Committee set the following maximum cash incentive for each NEO based on the Committee's review of the objectives as whole and each individual NEO's contribution to achieving those objectives.

 

 


NEO









Maximum Cash Incentive





 

 

 

Kasbar

    $   750,000    

 

 

Birns

  300,000  

 

 

Smith

    300,000    

 

 

Crosby

  150,000  

 

 

Rau

    150,000    

Long-Term Incentive Program

      Performance-Based Share Plan

              As discussed above, the Committee utilized the PSP equity award in 2019 based on the achievement of EPS Growth during the three-year performance period, as modified by our ROIC, in order to incentivize long-term growth. Under the PSP, executives are granted an opportunity each year to earn a fixed-dollar target award of equity (the "PSP Opportunity") which is issued at the beginning of a three-year performance period. The PSP Opportunity can be earned based on the achievement of a specified level of EPS Growth, as modified by our ROIC, for the three-year performance period beginning January 1st of the first year of the performance period and ending on December 31st of the

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third year of the performance period. The corresponding payout for the level of EPS Growth achieved will then be modified upwards or downwards within a specified range based on our ROIC over the same three-year performance period.

              The PSP award is designed to provide our executives with appropriate incentives to balance the objectives of maximizing earnings with a minimum amount of dilution, while at the same time ensuring an effective use of our capital resources. Once a three-year performance metric is set, it cannot be changed. At the beginning of the year following the end of the three-year performance period, the Committee will determine the level of EPS Growth achieved based on our financial results, and the corresponding payout will then be modified upwards or downwards within the specified range based on our ROIC percentage for the same three-year performance period. The executive will thereafter be delivered any earned equity in March of the year following the performance period.

              Similar to 2018, the Committee utilized Performance SSARs in 2019 rather than RSUs. The exercise price of the Performance SSARs was set at $29.68 per share, which was the closing stock price on the grant date. The PSP Opportunity was then divided by the fair value of the Performance SSAR on the date of the award (based on Black Scholes) to calculate the number of SSARs to be issued. The Committee determined the threshold, target, excellence and maximum EPS Growth performance levels for the three-year performance period commencing on January 1, 2019 and ending on December 31, 2021, as modified by our ROIC over that period, based on our internal targets, with the maximum performance set at a level that could only be attained when applicable results are exceptional and justify the higher bonus payout. Once earned, the applicable number of earned Performance SSARs would vest in March 2022, the third anniversary of the grant date, and expire in March 2024, the fifth anniversary of the grant date.

              The Committee believes that this layering approach to long-term equity (1) is consistent with the practices of our compensation comparison companies and the broader market and (2) provides executives a consistent and continuous incentive to focus on our long-term growth in EPS and to share in increases in our market value, while maintaining effective use of our capital resources. For 2019, the PSP Opportunity and the target number of Performance SSARs granted by the Committee to each of our NEOs is set forth below.

 

 

  Performance SSARs
       

 

 

NEO


Target Grant Date

Target Number

 

 

  Dollar Value

of Performance SSARs

 

 

Kasbar

  $   1,000,000     109,290    

 

 

Birns

       500,000   54,645  

 

 

Smith

       500,000     54,645    

 

 

Crosby

       300,000   32,787  

 

 

Rau

       300,000     32,787    

              The Committee then established the following EPS Growth performance levels. The number of Performance SSARs earned in respect of the level of EPS Growth achieved for the three-year performance period will be adjusted upwards or downwards within the ranges set forth below based on our ROIC percentage for that period:

 

 

Performance Level
  



Payout
(% of target)


 

 

Threshold

  40% - 60%    

 

 

Target

 

80% - 120%



 

 

Excellence

 

120% - 180%

   

 

 

Maximum

 

160% - 200%



              In the event that growth falls anywhere between the foregoing performance levels, linear interpolation will be applied to determine the appropriate payout.

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Additional Equity Awards

              During the evaluation of our NEO's 2019 compensation, the Committee determined to provide additional incentive for Mr. Kasbar to drive shareholder value and long-term sustained growth and awarded Mr. Kasbar a service-based SSAR award. The Committee concluded that such incentive would be appropriate to effectively motivate, reward and retain Mr. Kasbar while further aligning his interests with our shareholders. Consequently, in March 2019, the Committee granted Mr. Kasbar service-based SSARs with a grant date fair value of $1,000,000, which vests on the third anniversary of the grant date and expires on the fifth anniversary of the grant date. For more information about the SSARs, see the "Grants of Plan-Based Awards" table below.

Determining 2019 Performance Results

              In early March of 2020, the Committee determined our financial metrics achieved and the extent to which each of our NEOs achieved their strategic objectives. As part of this determination, the Committee could use its discretion to determine on a case-by-case basis the extent to which recognition or charges to EBITDA or Operating Income are to be included or excluded from the determination of the performance level achieved. For example, the Committee could adjust for non-operational items and one-time benefits that the Committee does not believe reflect our on-going business or the efforts of the NEOs. In addition, the Committee could exercise negative discretion on the prescribed incentive awards in accordance with the terms of the 2016 Omnibus Plan, as it deemed appropriate.

      Annual Incentive Awards

              Company Profitability.    The Committee evaluated our 2019 actual financial results and decided, consistent with the foregoing, to make adjustments for certain non-operational items, such as those associated with acquisition-related charges and restructuring-related costs, which the Committee believed did not adequately reflect the on-going business and financial performance of the Company or economic trends. Based on the foregoing evaluation, the Committee determined that our EBITDA performance was above the target level, totaling $409.2 million, or 109% of target. As a result, our NEOs received the following payouts under the cash and equity portions of the annual incentive awards:

 

 

  2019 Annual Incentive Award Payout EBITDA
       

 

 

NEO


Cash
Equity*

 

 

Kasbar

  $   1,868,903   80,815    

 

 

Birns

 

     734,614

 

31,766

 

 

 

Smith

 

     734,614

 

31,766

   

 

 

Crosby

 

     535,629

 

20,391

 

 

 

Rau

 

     535,629

 

20,391

   

*
The equity portion was issued on March 15, 2020 in the form of RSUs that vest ratably on the first, second and third anniversaries of the grant date to further align the interests of our NEOs and our shareholders.

              Line of Sight Profitability.    The Committee also determined that (i) the Operating Income for the Aviation/Marine LOS was between the target and maximum level, (ii) the Operating Income for the Physical Operations LOS exceeded the maximum level and (iii) the Operating Income for the Land LOS did not meet the threshold level. Consequently, for this component of Messrs. Crosby and Rau's annual performance-based cash incentive awards, Mr. Crosby earned the maximum of $300,000 for the

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Physical Operations component and zero for the Land component and Mr. Rau earned $612,319 for the Aviation/Marine component.

              Strategic Objectives.    The NEOs were successful in accomplishing several of their 2019 objectives, including successfully divesting of certain non-core business activities, digitizing several aspects of our back office functions to improve efficiencies and reduce cost, launching the myWorld portal in several lines of business to allow customers to manage their fuel purchases online using automated functionality, and expanding our talent development program through, among other things, the implementation of various rotational and internship opportunities. However, the Committee determined that the strategic objectives had not been fully accomplished to some degree by each of the NEOs. Accordingly, the Committee decided to exercise its negative discretion by reducing the value of the strategic objective cash incentive awards, such that Mr. Kasbar received $525,000, Mr. Birns received $240,000, Mr. Smith received $195,000, Mr. Crosby received $82,500 and Mr. Rau received $120,000.

      Long-Term Incentive Awards

              Performance Share Plan.    The 2019 financial year was the final year of the three-year performance period for the PSP award granted to Messrs. Kasbar, Birns, Crosby and Rau in 2017 (the "2017 PSP"). The Committee determined that the EPS Growth for the 2017 PSP, including adjustments for non-operational items such as acquisition-related charges, restructuring-related costs, and gains or losses on business dispositions or extinguishment of debt, had been met between the threshold and target levels as set forth below:

 

 


Performance Level









EPS





 

 

 

Threshold

  $ 2.61    

 

 

Target

  $ 2.90  

 

 

Maximum

  $ 3.39    
     

 

 

Actual

  $ 2.79  

              Consequently, the Committee determined that the NEOs had earned 81% of the RSUs granted under the 2017 PSP awards. The three-year performance periods for the 2018 and 2019 PSP awards have not yet passed, therefore, the Committee did not make a determination with respect to our EPS Growth for those awards.

Employee Benefits and Executive Perquisites

              We provide only standard employee benefits and limited perquisites to our NEOs. These are described below and reflected in the "All Other Compensation" column of the "Summary Compensation Table" and the accompanying footnote. The total amount of employee benefits and executive perquisites provided to the NEOs during 2019 represents only a small percentage of each NEO's total compensation and are comprised of those benefits which we believe are necessary to attract and retain executives. We believe that these benefits and perquisites are competitive in our industry and consistent with our overall compensation philosophy

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Retirement and Deferred Compensation

              We maintain the World Fuel Services Corporation 401(k) Profit Sharing Plan, or our 401(k) Plan, to enable eligible employees to save for retirement through a tax-advantaged combination of elective employee contributions and our matching contributions. The 401(k) Plan allows eligible employees, including our NEOs, to elect to contribute a percentage of their eligible compensation on a pre-tax basis, up to the maximum dollar amounts permitted by law. In 2019, the maximum employee elective contribution to the 401(k) Plan was $19,000, plus an additional $6,000 for employees who were at least 50 years old in 2019. For 2019, we matched 50% of the first 6% of eligible compensation that each eligible participant elected to contribute to the 401(k) Plan.

              We do not maintain any pension, supplemental executive retirement plan or other defined benefit retirement plans for our NEOs. However, we do permit that our NEOs participate in the non-qualified deferred compensation plan, or NQDC, that we offer to other senior employees based in the United States ("U.S."). As discussed under "Non-Qualified Deferred Compensation" later in this proxy, pursuant to the NQDC, participants may defer up to 75% of their base salary and up to 90% of any annual bonus, on a pre-tax basis, and an additional amount equal to any "excess contributions" that are refunded to them from the 401(k) Plan. We do not match any participant deferrals under the NQDC. During 2019, only Mr. Smith contributed to the NQDC. In addition, Mr. Kasbar also has a deferred compensation balance which arose as a result of his prior employment agreement that provided that any bonus payable to him that would not be deductible under Section 162(m) of the Code ("Section 162(m)") for the year earned would be deferred until a fiscal year in which it would be deductible. Payment of the deferred bonus would be made in all events in the year in which Mr. Kasbar's employment terminates or the employment agreement expires. Any amount deferred in this manner is being credited with interest at the prime rate as published in the Wall Street Journal.

Other Benefits and Perquisites

              Our NEOs are eligible for the same health and welfare benefits as are available to all our eligible employees during active employment. These benefits include medical, dental, vision, short- and long-term disability and term life insurance and accidental death and dismemberment coverage. Our NEOs receive additional individual disability insurance coverage and are eligible for additional executive life insurance coverage. We pay the entire cost of coverage of the term life insurance and executive life insurance as well as short-term disability and for Messrs. Kasbar and Birns, a portion of the cost of coverage for medical and dental insurance. Messrs. Kasbar, Birns, Crosby and Rau are also provided with a country club membership to be used for business entertainment purposes and to facilitate business meetings. Mr. Smith was also provided relocation services for a period of two years when he joined the Company in November 2017 and transitioned to our headquarters in Miami, Florida.

Agreements with Executives

              Our Committee believes that it is important to protect our intellectual capital. Accordingly, we have agreements and an executive severance policy with respect to our NEOs that provide consideration for, and thus ensure the effectiveness of, important non-compete and other restrictive covenants and consulting obligations applicable under such agreements or policy following termination of employment. The Committee believes that these arrangements serve to encourage the continued attention and dedication of the executives to their assigned duties and mitigate the uncertainty and questions a potential change of control may raise among executives. The Committee also believes these arrangements are appropriate and necessary to attract and retain these executives.

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              Our Committee generally views the potential payments and benefits payable under a termination or change of control scenario as a separate compensation element because such payments and benefits are not expected to be paid in a particular year and serve a different purpose for the executive than other elements of compensation. Accordingly, those payments and benefits do not significantly affect decisions regarding other elements of compensation. See "Potential Payments upon Termination of Employment or Change of Control" beginning on page 60 of this proxy statement for a discussion of these arrangements and certain compensation and benefits that will be provided in the event of the termination of the employment of our NEOs.

Equity Grant Practices

              Our equity grant policy provides that equity grants made to NEOs related to prior year performance will be effective on March 15 of each year. Retention, promotion and performance share awards are typically granted in March of each year on the 15th or 31st. Annual grants of equity awards to directors are made on the date that the director is elected or re-elected to the Board. Grants made to new hires or existing employees (excluding executive officers) are made effective on one of the following quarterly dates per year: February 10, May 10, August 10 and November 10.

              Under the terms of the 2016 Omnibus Plan, we are not permitted to cancel outstanding stock options or SSARs for the purpose of re-pricing or otherwise replacing or re-granting such options or SSARs with an exercise or conversion price that is less than the exercise or conversion price of the original stock option or SSAR without shareholder consent. We do not have a program, plan or practice of timing equity award grants in order to benefit our executive officers or in coordination with the release of material non-public information.

Tax and Accounting Implications

Deductibility of Executive Compensation

              Section 162(m) generally limits the U.S. federal income tax deduction for compensation paid to each of our NEOs to a maximum of $1 million in any calendar year (the "Deduction Limit"). For fiscal years prior to 2018, we were also permitted to deduct compensation to our NEOs in excess of the Deduction Limit (other than our Chief Financial Officer, who prior to 2018 was not subject to the Deduction Limit), if the compensation qualified as "performance-based" as defined under Section 162(m). To qualify as performance-based, certain pre-established objective performance goals or certain other conditions were required to be met. The Committee generally sought to structure incentive awards for our NEOs in a manner that preserved the tax deductibility of the compensation under the performance-based exemption. However, with the enactment of the Tax Cuts and Jobs Act in December 2017, the performance-based exception was eliminated, other than with respect to payments made pursuant to certain grandfathered arrangements. We believe that the 2017 PSP awards earned by the NEOs in 2019 qualify as performance-based compensation under the applicable grandfathering rules.

              While the Committee considers tax implications as a factor in determining executive compensation, the Committee will continue to link pay with performance and consider other factors as noted above, including the long-term interests of our shareholders and other stakeholders. Accordingly, the Committee retains the flexibility to structure, where appropriate, compensation arrangements that are consistent with the goals of our executive compensation program, even if the awards are not deductible for tax purposes.

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Accounting for Share-Based Compensation

              Before granting equity-based compensation awards, the Committee considers the accounting impact of the award, including the compensation cost and the grant date fair value, as structured and under various other scenarios in order to analyze the expected impact of the award. We expense the cost of our NEOs' equity-based compensation in accordance with the fair value method contained in the Financial Accounting Standards Board Accounting Standards Codification (FASB ASC)—"Compensation—Stock Compensation".

Stock Ownership Policies

              The Committee has adopted robust stock retention requirements and stock ownership guidelines to align the interests of our NEOs with those of our shareholders and ensure that the executives responsible for overseeing operations have an ongoing financial stake in the Company's success.

Stock Retention Requirement

              Our NEOs are required to retain at least 50% of any shares acquired (net of any shares that would need to be withheld or sold to satisfy any applicable income and employment taxes relating to the award) pursuant to any equity award granted after they become an executive officer for three years after the shares are delivered (or until the individual ceases to be an executive officer of the Company, if earlier). All our NEOs are in compliance with these retention requirements.

Stock Ownership Requirement

              Our NEOs are subject to the stock ownership guidelines set forth below, which are expressed as a multiple of base salary determined by leadership level.

Position   Multiple of Base Salary  

Chief Executive Officer

    7  

Chairman of the Board (if an executive officer)

    5  

Chief Financial Officer and Chief Operating Officer

    5  

All Other Executive Officers

    3  

              The stock ownership guidelines provide that executive officers must attain the applicable ownership requirement within five years of the date such individual becomes an executive officer. Equity vehicles that count towards compliance with the ownership requirement include: common stock, unvested time-based RSUs and the earned portion of performance-based awards. Unexercised stock options or stock appreciation rights, the unearned portion of performance-based awards and any shares of common stock that are pledged as collateral do not count towards the requirement.

              The Committee uses the three-year average closing stock price on the last trading day of each fiscal year to determine compliance and to manage against the risk of the NEOs falling out of compliance due to volatility in the stock price. The Committee has discretion to determine the penalties for non-compliance, including: requiring the payment of cash incentives in equity, instituting a higher equity retention requirement and reducing or eliminating incentive compensation. Furthermore, the Committee, in its discretion, may provide waivers, additional time to regain compliance or other appropriate relief on a case-by-case basis due to hardships, dispositions due to court-ordered domestic relations orders ("DROs") or in the event of extreme volatility in the Company's stock price. All of our NEOs are in compliance with the policy, although one NEO was granted temporary relief for 2019 due

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to a required disposition of shares pursuant to a DRO. As of the date of this proxy statement, however, such NEO is in full compliance with the policy.

              Our directors are also subject to stock ownership requirements as described on page 33 of this proxy statement under "Director Stock Ownership Guidelines."

Derivatives, Hedging and Pledging Transactions

              We prohibit our directors, executive officers, employees and their respective related persons from engaging in hedging or monetization transactions, or any transaction that hedges or offsets, or is designed to hedge or offset, any decrease in the market value of the Company's securities, such as prepaid variable forward contracts, equity swaps, collars and exchange funds. We also do not allow our directors, executive officers, and employees to buy or sell publicly traded options based on our common stock or to engage in short sales of our securities. The purpose of these policies is to align the interests, including the economic risk of ownership, of directors, executive officers, employees and shareholders.

              We also discourage our directors, executive officers and employees from holding our common stock in a margin account or pledging our common stock as collateral for a loan. Any directors or executive officers who wish to pledge shares must first obtain the prior approval of our Chief Legal Officer and the Governance Committee. As noted above, any shares pledged as collateral will not count towards any executive officer's respective stock ownership requirement.

Compensation Committee Report on 2019 Executive Compensation

              The Committee is responsible for establishing and administering the executive compensation programs of the Company. The Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement on Schedule 14A.

Ken Bakshi, Chairman
Richard A. Kassar, Member
Stephen K. Roddenberry, Member

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V.            EXECUTIVE COMPENSATION TABLES

Summary Compensation Table

              The following table summarizes the "total compensation" of our named executive officers for the fiscal years ended December 31, 2019, 2018, and 2017 according to the rules promulgated by the SEC.

Name and Principal Position   Year   Salary   Stock
Awards(1)(2)
  Option
Awards(1)(2)
  Non-Equity
Incentive Plan
Compensation(3)
  Change in Non-Qualified Deferred Compensation Earnings(4)   All Other
Compensation(5)
  Total

Michael J. Kasbar

  2019   $900,000   $1,762,873   $2,000,007(6)   $2,393,903   $5,569   $37,705   $7,094,488

Chairman, President

  2018   900,000   134,247   2,000,007   1,812,748   2,059   36,041   4,883,043

and Chief Executive

  2017   900,000   1,999,985   1,999,993   562,500   1,907   37,875   5,500,354

Officer

                               

Ira M. Birns

 
2019
 
600,000
 
695,106
 
500,002
 
974,614
 
 
25,815
 
2,795,537

Executive Vice

  2018   600,000   60,423   500,002   718,397     25,117   1,903,940

President and Chief

  2017   600,000   750,013   400,000   225,000     26,943   2,001,956

Financial Officer

                               

Jeffrey P. Smith

 
2019
 
600,000
 
695,106
 
500,002
 
929,614
 
 
95,593
 
2,820,315

Executive Vice

  2018   600,000     500,002   718,397     111,211   1,929,610

President and Chief

  2017   118,077   2,999,985         25,585   3,143,648

Operating Officer

                               

Michael J. Crosby

 
2019
 
500,000
 
471,971
 
300,001
 
918,129(7)
 
 
21,660
 
2,211,762

Executive Vice

  2018   500,000   134,247   300,002   847,303     21,431   1,802,983

President, Global Land

  2017   500,000   999,993   250,001   200,000     21,209   1,971,203

John P. Rau

 
2019
 
589,583
 
471,971
 
300,001
 
1,267,948(7)
 
 
23,016
 
2,652,519

Executive Vice

  2018   539,583   134,247   300,002   1,032,673     22,198   2,028,704

President, Global Aviation

  2017   500,000   999,993   250,001   112,500     21,894   1,884,388

and Marine

                               

(1)
The amounts shown represent the estimated aggregate grant date fair value of the awards made in each fiscal year relating to RSUs and SSARs granted to the NEOs. The estimated grant date fair value of these awards is based on the grant date market value of our common stock as defined in the 2016 Omnibus Plan and is computed in accordance with FASB ASC Topic 718. Assumptions used in determining the aggregate grant date fair value of awards are set forth in Note 10 to the consolidated financial statements for each of the fiscal years presented in Item 15 of the respective annual reports on Form 10-K.

(2)
For 2019, the Stock Awards column for Messrs. Kasbar, Birns, Smith, Crosby and Rau reflects the RSUs issued in connection with the 2018 annual incentive program based on EBITDA Growth that were awarded in March 2019. For 2019, the Option Awards column reflects the three-year Performance SSARs that were awarded in March 2019 under the PSP program. A determination of the amount of the Performance SSARs, if any, that will be earned will be made in March 2022. See "Grants of Plan-Based Awards Table" for more information.

(3)
This amount reflects an annual cash incentive award earned by each NEO based on EBITDA Growth in 2019 as well as strategic objective cash incentive awards earned by each of the NEOs based upon their achieving a portion of their 2019 strategic objectives.

(4)
Reflects interest accrued in connection with a portion of the bonus earned by Mr. Kasbar for the 2002 fiscal year, which was deferred pursuant to a provision of his previous employment agreement that provided that any amount so deferred would be credited with interest at the prime rate as published in the Wall Street Journal (the "Kasbar Accrued Interest"). The portion reflected in this column is the portion of the Kasbar Accrued Interest that constitutes "above market earnings" within the meaning of the applicable SEC rules. The full amount of the Kasbar Accrued Interest is reflected in the "Non-Qualified Deferred Compensation Table" on page 60 of this proxy statement.

(5)
Details of the 2019 amounts set forth in this column are included in the "2019 All Other Compensation Table" on page 56 of this proxy statement. For Mr. Kasbar, the 2018 and 2017 amounts in this column previously included the full amount of the Kasbar Accrued Interest for such years in the amount of $10,070 and $8,027, respectively. The "above market earnings" portion of the Kasbar Accrued Interest for such years is now reflected in the "Change in Non-Qualified Deferred Compensation Earnings" column of this table.

(6)
This amount includes the grant date fair value of a service-based award to Mr. Kasbar of 109,290 SSARs, which vest in March 2022.

(7)
This amount also includes an annual cash incentive award earned by Messrs. Crosby and Rau based on Operating Income growth for their respective LOS in the amount of $300,000 and $612,319, respectively.

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2019 All Other Compensation

Name
  Insurance &
Health
Benefits(1)
  Country Club
Membership
Dues
  Matching
Contributions
to 401(k)(2)
  Short-Term
Travel and
Housing
Allowance(3)
  Total  

Michael J. Kasbar

  $ 15,305   $ 14,000   $ 8,400   $   $ 37,705  

Ira M. Birns

    11,702     5,714     8,400         25,816  

Jeffrey P. Smith

    9,993         5,600     80,000     95,593  

Michael J. Crosby

    7,800     5,460     8,400         21,660  

John P. Rau

    8,774     5,842     8,400         23,016  

(1)
The amounts shown in this column reflect premiums associated with individual disability insurance and executive life insurance, both of which are available for Company management-level employees, and for Messrs. Kasbar and Birns, certain health insurance reimbursements.

(2)
The amounts shown in this column reflect our matching contributions under our 401(k) plan, which is available for all Company employees. For more information about our 401(k) Plan, please see the discussion under "Retirement and Deferred Compensation" on page 51 of this proxy statement.

(3)
The amounts shown in this column include short-term travel and housing allowance ($8,000 per month), ending in October 2019. These payments originated in connection with Mr. Smith joining the Company in October 2017 as Executive Vice President and Chief Operating Officer.

Grants of Plan-Based Awards

              The following table provides additional information about stock awards and equity and non-equity incentive plan awards granted to our named executive officers during the year ended December 31, 2019.

 
   
   
   
   
   
   
   
   
  All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(2)
(#)
  All Other
Option
Awards:
Number of
Securities
Underlying
Options(3)
(#)
   
   
 
   
   
  Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards
  Estimated Future Payouts
Under Equity Incentive Plan
Awards(1)
   
  Grant Date
Fair Value
of Stock
and
Option
Awards(4)
($)
 
   
   
  Exercise
Price of
Option
Awards
($/share)
Name
  Grant
Date
  Committee
Approval
  Threshold
($)
  Target
($)
  Maximum
($)
  Threshold
(#)
  Target
(#)
  Maximum
(#)

Michael J. Kasbar

  n/a   3/7/2019   70,000(5)   900,000(5)   2,857,500(5)                            

  n/a   3/7/2019   (6)       750,000(6)                            

  3/15/2019   3/7/2019               43,716   109,290   218,580               1,000,004

  3/15/2019   3/7/2019                               109,290   29.68   1,000,004

  3/15/2019   3/7/2019                           59,396           1,762,873

Ira M. Birns

 
n/a
 
3/7/2019
 
40,000(5)
 
360,000(5)
 
1,170,000(5)
                           

  n/a   3/7/2019   (6)       300,000(6)                            

  3/15/2019   3/7/2019               21,858   54,645   109,290               500,002

  3/15/2019   3/7/2019                           23,420           695,106

Jeffrey P. Smith

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  n/a   3/7/2019   40,000(5)   360,000(5)   1,170,000(5)                            

  n/a   3/7/2019   (6)       300,000(6)                            

  3/15/2019   3/7/2019               21,858   54,645   109,290               500,002

  3/15/2019   3/7/2019                           23,420           695,106

Michael Crosby

 
n/a
 
3/7/2019
 
50,000(5)
 
750,000(5)
 
1,985,000(5)
                           

  n/a   3/7/2019   (6)       150,000(6)                            

  3/15/2019   3/7/2019               13,115   32,787   65,574               300,002

  3/15/2019   3/7/2019                           15,902           471,971

John Rau

 
n/a
 
3/7/2019
 
100,000(5)
 
750,000(5)
 
1,985,000(5)
                           

  n/a   3/7/2019   (6)       150,000(6)                            

  3/15/2019   3/7/2019               13,115   32,787   65,574               300,002

  3/15/2019   3/7/2019                           15,902           471,971

(1)
The amounts shown reflect the Performance SSAR awards issued under the PSP at the threshold, target and maximum levels based on the EPS Growth, as modified by our ROIC, for the three-year period beginning on January 1, 2019 and

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    ending on December 31, 2021. Depending on the percentage of ROIC achieved for the period, the range of payout based on EPS Growth will be as follows: (i) threshold—40% to 60% of target, (ii) target—80% to 120% of target, (iii) maximum—160% to 200% of target. For purposes of this table, the lowest level of the threshold range, the mid-point of the target range and the highest level of the maximum range is assumed. Please see the discussion regarding the compensation programs for the NEOs beginning on page 44 of this proxy statement for additional information.

(2)
The amounts shown reflect the RSUs issued as the 2018 annual performance-related equity incentive awards based on our 2018 adjusted EBITDA of $360.3 million. These RSUs are thereafter subject to service-based vesting and vest one-third annually beginning March 2020.

(3)
The amount shown reflects a service-based SSAR award that will vest on the third anniversary of the grant date in March 2022. Please see the discussion regarding this award on page 49 of this proxy statement for additional information.

(4)
The amounts shown reflect the estimated aggregate grant date fair value of the stock awards. The estimated aggregate fair value of our stock awards is based on the grant date market value of our common stock, as defined in the 2016 Omnibus Plan and is computed in accordance with FASB ASC Topic 718.

(5)
The amounts shown reflect the threshold, target and maximum payouts that could have been earned as 2019 annual performance related cash incentive awards. For 2019, our adjusted EBITDA was $409.2 million and as a result, Mr. Kasbar earned $1,868,903, Messrs. Birns and Smith each earned $734,614 and Messrs. Crosby and Rau each earned $535,629 for the EBITDA component of their annual incentive compensation program. For Messrs. Crosby and Rau, this also includes cash incentive awards that could be earned based on Operating Income growth for the respective LOS for which they are responsible. For 2019, the Operating Income for the Physical Operations LOS exceeded the maximum level and the Operating Income for the Land LOS did not meet the threshold level. Accordingly, Mr. Crosby earned the maximum of $300,000 for the Physical Operations component and zero for the Land component. The Operating Income for the Aviation/Marine LOS was between the target and maximum level and therefore Mr. Rau earned $612,319 for this component. Please see the discussion regarding the compensation programs for the NEOs beginning on page 44 of this proxy statement for additional information.

(6)
The amounts shown include the threshold and maximum payouts that could have been earned as strategic objective cash incentive awards. For 2019, the NEOs achieved only a portion of their strategic objectives and therefore the Committee reduced the amounts payable to the NEOs. Please see the discussion regarding the compensation programs for the NEOs beginning on page 44 of this proxy statement for additional information.

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Outstanding Equity Awards at Fiscal Year-End

              The following table sets forth the outstanding equity awards at fiscal year-end, or December 31, 2019, for our named executive officers.

 
   
   
   
   
   
  Stock Awards  
 
  Option Awards  
 
   
   
  Equity Incentive
Plan Awards
 
 
   
   
  Equity
Incentive
Plan
Awards
   
   
   
   
 
 
   
   
   
   
   
   
  Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)
  Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(1)
($)
 
 
   
   
   
   
   
  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested(1)
($)
 
 
  Number of Securities
Underlying Unexercised
Options/SSARs
(#)
  Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
   
   
  Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
 
 
  Option
Exercise
Price
($)
   
 
 
  Option
Expiration
Date
 
Name
  Exercisable   Unexercisable  

Michael J. Kasbar

    15,000                 57.48     3/31/2020     3,740(2)     162,391     44,689(3)     1,940,410  

    100,000                 48.58     3/31/2021     59,396(4)     2,578,974              

          113,507(5)           36.25     3/31/2022                          

          152,439(6)           23.93     3/15/2023                          

          109,290(7)           29.68     3/15/2024                          

                373,137(8)     27.52     3/15/2023                          

                393,444(9)     29.68     3/15/2024                          

Ira M. Birns

   
6,000
               
57.48
   
3/31/2020
   
1,684(2)
   
73,119
   
16,759(3)
   
727,671
 

                186,568(8)     27.52     3/15/2023     23,420(4)     1,016,896              

                196,722(9)     29.68     3/15/2024                          

Jeffrey Smith

               
186,568(8)
   
27.52
   
3/15/2023
   
55,949(10)
   
2,429,306
   
111,898(11)
   
4,858,611
 

                196,722(9)     29.68     3/15/2024     23,420(4)     1,016,896              

Michael J. Crosby

               
111,941(8)
   
27.52
   
3/15/2023
   
972(12)
   
42,204
   
11,172(3)
   
485,103
 

                118,033(9)     29.68     3/15/2024     13,724(13)     595,896              

                                  4,598(12)     199,645              

                                  3,740(2)     162,391              

                                  15,902(4)     690,465              

John P. Rau

               
111,941(8)
   
27.52
   
3/15/2023
   
3,239(12)
   
140,637
   
11,172(3)
   
485,103
 

                118,033(9)     29.68     3/15/2024     13,724(13)     595,896              

                                  4,598(12)     199,645              

                                  3,740(2)     162,391              

                                  15,902(4)     690,465              

(1)
The amounts in this column are based on the closing price of our common stock on December 31, 2019 of $43.42.

(2)
This amount reflects the remaining two tranches of RSUs that were earned in connection with the 2018 annual incentive program and vest one-half annually beginning in March 2020, subject to earlier vesting upon a change of control or qualifying termination of employment.

(3)
This amount reflects the actual amount of RSUs earned by the NEO in March 2020 under the 2017 PSP based on EPS Growth for 2019 of $2.79, resulting in a payout of 81% of the target level of the 2017 PSP. See "Grants of Plan Based Awards Table" for more information on the 2017 PSP and the discussion beginning on page 56 of this proxy statement.

(4)
This amount reflects the RSUs that were earned in connection with the 2019 annual incentive program and vest one-third annually beginning in March 2020, subject to earlier vesting upon a change of control or qualifying termination of employment.

(5)
This amount reflects SSARs that vest in March 2020, subject to earlier vesting upon a change of control or qualifying termination of employment.

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(6)
This amount reflects SSARs that vest in March 2021, subject to earlier vesting upon a change of control or qualifying termination of employment.

(7)
This amount reflects SSARs that vest in March 2022, subject to earlier vesting upon a change of control or qualifying termination of employment.

(8)
This amount reflects the maximum amount of Performance SSARs that would be earned by the NEO in 2021 under the PSP assuming an EPS Growth equal to the EPS Growth for the fiscal year ended December 31, 2019. Any earned portion will vest on the date after December 31, 2020 on which the Committee certifies in writing, based upon our audited financial statements, the extent to which the requisite EPS Growth level has been achieved for the performance period but in no event later than March 15, 2021.

(9)
This amount reflects the amount of Performance SSARs that would be earned by the NEO in 2022 between the target and maximum levels under the PSP assuming an EPS Growth and ROIC equal to the EPS Growth and ROIC for the fiscal year ended December 31, 2019. Any earned portion will vest on the date after December 31, 2021 on which the Committee certifies in writing, based upon our audited financial statements, the extent to which the requisite EPS Growth and ROIC levels have been achieved for the performance period but in no event later than March 15, 2022.

(10)
This amount reflects RSUs that vest one third annually beginning March 2020, subject to earlier vesting upon a change of control or qualifying termination of employment.

(11)
This amount reflects the maximum amount of RSUs that would be earned by Mr. Smith in 2021 under his performance-based equity grant assuming the maximum level of performance established by the Committee for the 2018 PSP. Any earned portion will vest on the date after December 31, 2020 on which the Committee certifies in writing, based upon our audited financial statements, the extent to which the requisite performance goal has been achieved for the performance period but in no event later than March 15, 2021.

(12)
This amount reflects shares of restricted stock or RSUs that vest in May 2020, subject to earlier vesting upon a change of control or qualifying termination of employment.

(13)
This amount reflects shares of restricted stock and RSUs that vest in one-half annually beginning in May 2020 and March 2020, respectively, subject to earlier vesting upon a change of control or qualifying termination of employment.

2019 Stock Vested

              The following table sets forth the stock vested during the year ended December 31, 2019 for our named executive officers.

 
  Stock Awards  
Name
  Number of
Shares
Acquired on
Vesting(1)
  Value
Realized on
Vesting(2)
 

Michael J. Kasbar

    24,439   $ 725,350  

Ira M. Birns

    9,869     292,912  

Michael J. Crosby

    14,300     415,255  

John P. Rau

    18,372     535,623  

(1)
The amounts shown in this column reflect the number of shares of restricted stock or RSUs that vested for each NEO. Upon vesting, we withheld a sufficient number of shares to cover the NEOs tax liability associated with the vesting. Thereafter, each of the NEOs received the following number of net shares of common stock: Mr. Kasbar—14,822, Mr. Birns—6,257, Mr. Crosby—8,764, and Mr. Rau—11,140.

(2)
The amount shown in this column reflects the value realized upon vesting which is calculated by multiplying (a) the closing price of our common stock on the vesting date by (b) the number of shares of restricted stock or RSUs that vested. The value realized does not represent cash received by the NEO, such amount will depend on the price at which the acquired shares are ultimately disposed of by the NEO.

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Non-Qualified Deferred Compensation

              The following table sets forth non-qualified deferred compensation during the year ended December 31, 2019 for the named executive officers set forth below.

              We offer our executives and other senior employees based in the U.S. an opportunity to defer compensation under our non-qualified deferred compensation plan, or NQDC. Pursuant to the NQDC, participants may defer up to 75% of their base salary and up to 90% of any annual bonus, on a pre-tax basis, and an additional amount equal to any "excess contributions" that are refunded to them from the 401(k) Plan. We do not match any participant deferrals under the NQDC. Participants can elect from a variety of investment choices for their deferred compensation and gains and losses on these investments are credited to their respective accounts. Participants may elect, depending on whether their termination is in connection with retirement or otherwise, to receive deferred amounts in a lump sum, in annual installments over a period of up to ten years, or in a partial lump sum with the balance paid in installments. However, these payments are accelerated upon a change in control or the death of the participant.

Name
  Executive
Contributions in
Last Fiscal Year
  Aggregate
Earnings in
Last Fiscal Year
  Aggregate
Balance at Last
Fiscal Year-End

Michael J. Kasbar(1)

  $    —   $12,680   $241,951

Jeffrey P. Smith

  1,096,557(2)   218,540   1,738,646

(1)
Mr. Kasbar's prior employment agreement provided that any bonuses payable to him that would not be deductible under Section 162(m) for the year earned would be deferred until a fiscal year in which it would be deductible (or until the year in which Mr. Kasbar's employment terminates or the employment agreement expires), and that any amount so deferred would be credited with interest at the prime rate as published in the Wall Street Journal. A portion of the bonus earned by Mr. Kasbar for the 2002 fiscal year, equal to $109,375, was deferred pursuant to that provision of his employment agreement and remains unpaid. The portion of these earnings in the last fiscal year that constitute "above market earnings" within the meaning of the applicable SEC rules, is reflected in the "Summary Compensation Table" on page 55 of this proxy statement.

(2)
Represents the amount Mr. Smith contributed to the NQDC during 2019. For more information on the NQDC, see "Retirement and Deferred Compensation" on page 51 of this proxy statement.

Potential Payments upon Termination of Employment or Change of Control

              Our employment agreement with Mr. Kasbar (the "Kasbar Agreement") and executive severance agreement with Mr. Birns (the "Birns Agreement") each provides for the payment of certain compensation and benefits in the event of the termination of the executive's employment, the amount of which varies depending upon the reason for such termination. In lieu of entering into separate executive severance agreements with each of Messrs. Crosby and Rau in connection with their promotions to executive officers, our Board adopted an Executive Severance Policy ("ESP") applicable to Messrs. Crosby and Rau and other executives that the Committee may subsequently designate as participating executives. Upon his appointment as our Executive Vice President and Chief Operating Officer in October 2017, Mr. Smith was designated a participating executive. The ESP provides for the payment of certain severance payments and benefits in the event of a termination of such executives' employment in certain specified circumstances.

              Each of the Kasbar Agreement, the Birns Agreement and the ESP provides for certain benefits (1) if the NEO's employment is terminated due to Death or Disability, (2) if the NEO's employment is

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terminated by the Company without "Cause" (as that term is defined in the relevant agreement or arrangement) or (3) if the NEO terminates his employment with "Good Reason" (as that term is defined in the relevant agreement or arrangement, which for Messrs. Crosby and Rau is within two (2) years after a Change of Control has occurred). If the employment of any of the four covered NEOs is Terminated without Cause or for Good Reason within two (2) years after a Change of Control then the severance benefits are slightly higher. The actual amounts of such payments are set forth in the table below the relevant definitions.

Termination Without Cause

              Kasbar Agreement—Under the Kasbar Agreement, "cause" means (i) any act of fraud, misappropriation, embezzlement or material dishonesty by Mr. Kasbar, which results in his personal enrichment at our expense; (ii) willful misconduct that results in material economic harm to us; (iii) a felony conviction or conviction for a crime involving moral turpitude; (iv) the willful and continued material failure of Mr. Kasbar to perform his duties under the Kasbar Agreement; (v) a willful and material breach by Mr. Kasbar of his non-compete, non-solicitation, non-disparagement or cooperation obligations under the Kasbar Agreement (and in the case of (i) through (v) the failure to cure such breach); or (vi) a material breach by Mr. Kasbar of our Code of Conduct, Securities Trading Policy or any other related corporate and personnel policies generally applicable to our executives or employees.

              Birns Agreement—Under the Birns Agreement, "cause" means (i) the willful, material failure by Mr. Birns to perform the duties consistent with his position or to comply with the obligations of the Birns Agreement, or his willful, material failure to carry out the reasonable and lawful directions of our CEO, President or Board and not curing such failure; (ii) any willful and material breach of our Code of Conduct or any other Company policy; (iii) Mr. Birns' gross negligence or willful misconduct which is harmful to us, monetarily or otherwise, including but not limited to fraud, misappropriation or embezzlement; (iv) use of alcohol, drugs or other similar substances during work hours, other than at a Company sanctioned event, or at any time in a manner that adversely affects his work performance; (v) being charged with a criminal offense that is a felony or misdemeanor involving moral turpitude; or (vi) a material breach of the Birns Agreement that cannot be cured.

              ESP—Under the ESP, "cause" means (i) the failure by the executive to perform, in a reasonable manner, his or her duties as assigned by the Company or any subsidiary (or any successor company); (ii) any violation or breach by the executive of his or her employment agreement, consulting or other similar agreement with the Company or any subsidiary (or successor company), if any; (iii) any actual or threatened violation or breach by the executive of any non-competition, non-solicitation, non-disclosure and/or other similar agreement with the Company or any subsidiary (or successor company); (iv) any violation or breach by the executive of any Company policy; (v) any act by the executive of dishonesty or fraud that injures the reputation or business of, or causes harm to, the Company or any subsidiary (or successor company); (vi) the conviction of, or entry of a plea of guilty or nolo contendere to, a felony or a crime involving moral turpitude; or (vii) the executive's impeding of, interfering with, or failing to reasonably cooperate with an investigation authorized by the Company or any subsidiary or affiliate. In the event of a change of control, upon and during the two years following such change of control, clauses (i)-(v) above will be deemed to have the term "materiality" inserted as a qualifier to each instance of violation, breach or other misconduct by the executive.

              None of the agreements or arrangements provide for any payment of severance or other benefits in the case of a Termination With Cause, although our Deferred Compensation Plan requires repayment of prior earnings that have been deferred irrespective of the basis for employment being terminated and our paid-time-off policy provides that all employees are entitled to their accrued but unused vacation upon termination.

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Termination for Good Reason

              Kasbar Agreement—Under the Kasbar Agreement, "good reason" means (i) any reduction in the annual base salary of Mr. Kasbar to a level that is less than 85% of Mr. Kasbar's base salary for the immediately preceding year or our failure to pay or provide any material compensation or benefit other than an insubstantial and inadvertent reduction that is remedied by us; (ii) following a change of control, our failure to provide Mr. Kasbar his total annual cash compensation, including bonus, total aggregate value of perquisites, total aggregate value of benefits or total aggregate value of long-term compensation equal to or higher than the highest level received by Mr. Kasbar in the preceding 6 months or 1 year, in certain cases, other than an insubstantial and inadvertent failure that is remedied by us; (iii) if we require Mr. Kasbar to be based at a location outside of Miami-Dade County, Florida; (iv) our failure to obtain any successor's agreement to perform and assume the Kasbar Agreement; (v) without the express prior written consent of Mr. Kasbar, assigning Mr. Kasbar any duties that are materially inconsistent with his current position (including titles and reporting relationships) or making any other material adverse change in his position, authority, responsibilities or status; and (vi) a voluntary termination by Mr. Kasbar for any reason within 30 days following the first anniversary of a change of control.

              Birns Agreement—The definition of "good reason" in the Birns Agreement means the occurrence of any of the following (i) the assignment to the executive of any duties materially inconsistent with his position, authority, duties or responsibility or any other action by us that results in a material diminution in his position, authority, duties or responsibilities, excluding any action not taken by us in bad faith that is remedied; (ii) any reduction in, or failure to pay the executive's base salary other than a reduction or failure remedied by us; (iii) within two years after the occurrence of a change of control, any failure by us to provide the executive his bonus and equity opportunities, or employee benefits and perquisites in the aggregate, that are not less than those provided to the executive in the calendar year immediately preceding the change of control, other than a failure not occurring in bad faith that is remedied by us; or (iv) if we require the executive to be based at any office or location outside of Miami-Dade or Broward County.

              ESP—The definition of "good reason" under the ESP is substantially the same as the definition included in the Birns Agreement, except that the events have to have occurred within two years after a "Change of Control" (as defined in the ESP). Specifically, an executive will have the ability to terminate his employment with "Good Reason" upon the happening of any of the following within two years after a "Change of Control": (i) the assignment to the executive of any duties materially inconsistent with his position, authority, duties or responsibility or any other action by us that results in a material diminution in his position, authority, duties or responsibilities, excluding any action not taken by us in bad faith that is remedied; (ii) any reduction in, or failure to pay the executive's base salary other than a reduction or failure remedied by us; (iii) any failure by us to provide the executive his bonus and equity opportunities, or employee benefits and perquisites in the aggregate, that are not less than those provided to the executive in the calendar year immediately preceding the change of control, other than a failure not occurring in bad faith that is remedied by us; or (iv) if we require the executive to be based at any office or location outside of Miami-Dade or Broward County.

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Change of Control

              Under the Kasbar Agreement, the Birns Agreement and the ESP, a "change of control" is deemed to have occurred if (i) any person or "group" (as defined in Section 13(d)(3) of the Exchange Act), excluding any employee benefit plans, becomes the beneficial owner of at least (a) 30% (in the case of the ESP) or (b) 20% (in the case of the Kasbar Agreement or the Birns Agreement) of the combined voting power of our outstanding common stock; (ii) we merge, consolidate, reorganize or carry out any similar event which results in the holders of our common stock prior to the event owning less than 51% of the total voting power of the capital stock of the surviving company; (iii) our current Board ceases to make up at least 2/3 of our Board, the board of the surviving company or the board of the controlling company, as the case may be, with the exception that any director approved by a vote of at least 2/3 of our current Board will be considered to be a member of our current Board; or (iv) we are liquidated or dissolved or we sell all or substantially all of our assets. In addition, the Kasbar Agreement provides that a change of control is deemed to have occurred if we enter into an agreement or our Board passes a resolution to do any of the items listed in (i)-(iv) above and Mr. Kasbar's employment is terminated after the execution of any such agreement or the passage of any such resolution, but before the event takes place.

Severance Payments and Benefits

              Kasbar Agreement—As set forth in the table below, upon the occurrence of a termination by Mr. Kasbar for good reason, by the Company without cause, following a change of control or non-renewal, we will make the following payments:

(i)
the Accrued Obligations (as defined in the Kasbar Agreement);

(ii)
an annualized amount of $750,000 ($1,250,000 for termination following a change of control) per year for a two-year period immediately following the termination date;

(iii)
(a) continued health insurance coverage in effect as of the termination date for Mr. Kasbar and his immediate family until Mr. Kasbar is no longer eligible for coverage under our health plans through COBRA or he becomes eligible for health insurance coverage through employment or services provided to another person or entity; and

(b) after Mr. Kasbar is no longer eligible for coverage through COBRA, reimbursement for the cost of obtaining private health insurance coverage that is comparable to the coverage provided to Mr. Kasbar and his immediate family until Mr. Kasbar turns 65 or, if earlier, the date on which neither Mr. Kasbar nor his surviving spouse is living, subject to certain exclusions, provided that the aggregate amount the Company is required to pay for such coverage does not exceed $150,000 in the aggregate; and

(iv)
a lump sum in the amount of $1,500,000 ($2,500,000 for termination following a change of control) within 5 business days of the last day of the restricted period.

              Upon the occurrence of a termination by Mr. Kasbar without good reason, by the Company for cause or by the Company due to Mr. Kasbar's death or disability, Mr. Kasbar will be entitled to the payments specified in (i) above.

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              Birns Agreement and ESP—As set forth in the table below, under the Birns Agreement and the ESP, upon the occurrence of a termination by the Company without Cause or by the executive for good reason we will make the following payments:

(i)
an amount equal to accrued but unpaid base salary and benefits (including accrued vacation) through the date of termination, in the case of Mr. Birns, or Accrued Obligations (as defined in the ESP) such Accrued Obligations to be paid no later than 60 days after the date of termination;

(ii)
any unpaid bonus for the year prior to the year of termination to be paid on the same date that bonuses are paid to our other senior executive officers;

(iii)
a prorated bonus for the calendar year in which the executive's employment is terminated, however, no pro-rated bonus will be paid if the executive's termination date occurs before the payment of bonuses for the prior calendar year. Any such bonus will be prorated based on the bonus the executive would have earned if he or she had remained employed by us for the entire year. Any such bonus will be paid on the same date that bonuses are paid to our other senior executive officers;

(iv)
continued health insurance coverage in effect as of the termination date for the executive and his immediate family, or covered dependents in the case of the ESP, for a period of up to 18 months. Such coverage will terminate earlier if the executive becomes eligible for health insurance coverage through employment or services provided to another person or entity, or, in the case of the ESP, if the executive attains the age of 65; and

(v)
in the case of Mr. Birns, a severance payment in an amount equal to two times base salary as of the termination date and, in the case of the ESP, a multiple (one or two times as determined by the Compensation Committee) of the executive's base salary as of the termination date, which will be paid to each executive in regular payroll installments over a 24-month period following termination.

              Upon the occurrence of a termination due to death or disability, Mr. Birns will be entitled to the payments specified in (i)-(iii) above and, under the ESP, Messrs. Smith, Crosby and Rau will be entitled to the payments specified in (i)-(iv) above.

Potential Payments Upon Termination Table

              The estimated payments and benefits that would be provided to each of the NEOs pursuant to their respective agreements or the ESP, as the case may be, as a result of (1) Termination by Company for Cause or by Executive Without Good Reason, (2) Termination by Company Without Cause, (3) Termination by Executive for Good Reason, (4) Termination by Company Without Cause or by Executive for Good Reason within two (2) years of a Change of Control, and (5) Termination of employment due to death or disability are set forth in the table below. Calculations for this table are based on the assumption that the termination took place on December 31, 2019. In order to receive the benefits set forth below, an executive must satisfy certain restrictive covenants for a specified period of time after the termination event before any cash severance payment is made. We have the right to

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Table of Contents

not pay or provide these benefits or discontinue the payment and provision of these benefits if the executive fails to satisfy such obligations.

 
  Severance
Payment(1)
  Pro-Rata
Bonus(2)
  Medical
Benefits(3)
  Total(4)  

Mr. Kasbar

                 

Termination by Company for Cause or by Executive Without Good Reason

  $—   $—   $—   $—  

Termination by Company Without Cause(5) or by Executive for Good Reason

  3,000,000   4,225,969   28,627   7,254,596  

Termination by Company Without Cause or by Executive for Good Reason within two (2) years of a Change of Control

  5,000,000   4,225,969   28,627   9,254,596  

Death or Disability

    4,225,969     4,225,969  

Mr. Birns

                 

Termination by Company for Cause or by Executive Without Good Reason

         

Termination by Company Without Cause or by Executive for Good Reason

  1,200,000   1,694,745   38,665   2,933,411  

Termination by Company Without Cause or by Executive for Good Reason within two (2) years of a Change of Control

  1,200,000   1,694,745   38,665   2,933,411  

Death or Disability

    1,694,745     1,694,745  

Mr. Smith

                 

Termination by Company for Cause or by Executive Without Good Reason

         

Termination by Company Without Cause

  600,000   734,614   38,665   1,373,280  

Termination by Company Without Cause or by Executive for Good Reason(6) within two (2) years of a Change of Control

  600,000   1,034,614   38,665   1,673,280  

Death or Disability

    1,034,614   38,665   1,073,280  

Mr. Crosby

                 

Termination by Company for Cause or by Executive Without Good Reason

         

Termination by Company Without Cause

  1,000,000   835,629   45,745   1,881,374  

Termination by Company Without Cause or by Executive for Good Reason(6) within two (2) years of a Change of Control

  1,000,000   985,629   45,745   2,031,374  

Death or Disability

    985,629   45,745   1,031,374  

Mr. Rau