Sealed Air Corporation
Shareholder Annual Meeting in a DEF 14A on 04/06/2021   Download
SEC Document
SEC Filing
DEF 14A 1 d848130ddef14a.htm DEF 14A DEF 14A

 

 

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

Filed by the Registrant                                                           Filed by a Party other than the Registrant  

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Definitive Proxy Statement

 

    

 

 

 

Definitive Additional Materials

 

    

 

 

 

Soliciting Materials Under § 240a-12

 

    

 

 

Sealed Air Corporation

 

(Name of Registrant as Specified In Its Charter)

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LOGO


 

LOGO  

April 6, 2021

Dear Fellow Stockholder:

It is my pleasure to invite you to attend the Annual Meeting of Stockholders of Sealed Air Corporation to be held on Tuesday, May 18, 2021, at 9:00 a.m., Eastern daylight time. This year’s Annual Meeting will again be a “virtual meeting” conducted via live audio webcast, as a best practice in light of the continuing COVID-19 pandemic as well as in an effort to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no cost. Each stockholder will be able to participate in the Annual Meeting by accessing a live webcast at www.virtualshareholdermeeting.com/SEE2021 and entering the 16-digit control number included on the stockholder’s Notice of Internet Availability of Proxy Materials or proxy card. Stockholders will also be able to vote their shares and submit questions via the Internet during the meeting by participating in the webcast.

During the Annual Meeting, stockholders will be asked to elect the entire Board of Directors, to amend and restate our 2014 Omnibus Incentive Plan and to ratify the appointment of PricewaterhouseCoopers LLP as our independent auditor for 2021. We also will be asking stockholders to approve, by an advisory vote, our 2020 executive compensation as disclosed in the Proxy Statement for the Annual Meeting. These matters are important, and we urge you to vote in favor of the election of each of the director nominees, the amendment and restatement of the 2014 Omnibus Incentive Plan, the ratification of the appointment of our independent auditor, and the approval of our 2020 executive compensation.

We are again furnishing proxy materials to our stockholders over the Internet. This e-proxy process expedites stockholders’ receipt of proxy materials, lowers our costs and reduces the environmental impact of the Annual Meeting. Today we sent to most of our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our Proxy Statement for the Annual Meeting and our 2020 Annual Report to Stockholders, as well as how to vote via the Internet. Other stockholders will receive copies of the Proxy Statement, a proxy card and the 2020 Annual Report by mail or e-mail.

It is important that you vote your shares of common stock at the virtual meeting or by proxy, regardless of the number of shares you own. You will find the instructions for voting on your Notice of Internet Availability of Proxy Materials or proxy card. We appreciate your prompt attention.

The Board of Directors invites you to participate in the Annual Meeting so that management can discuss business trends with you, listen to your suggestions and answer your questions. Thank you for your continuing support, and we look forward to joining you at Sealed Air’s 2021 Annual Meeting.

 

 

LOGO

  

Sincerely,

 

 

LOGO

Edward (Ted) L. Doheny II

President & Chief Executive Officer


LOGO

Notice of Annual Meeting of Stockholders

Sealed Air Corporation, a Delaware corporation (“Sealed Air”), will hold its Annual Meeting of Stockholders (the “Annual Meeting”) on May 18, 2021, at 9:00 a.m., Eastern daylight time. The Annual Meeting will again be conducted as a virtual meeting via live audio webcast. Each stockholder may participate in the Annual Meeting, including casting votes and submitting questions, by accessing the live audio webcast at www.virtualshareholdermeeting.com/SEE2021 and then using the 16-digit control number provided on the Notice of Internet Availability of Proxy Materials or proxy card being delivered to the stockholder. Online check-in to the Annual Meeting webcast will begin at 8:45 a.m., Eastern daylight time, and stockholders are encouraged to allow ample time to log in to the meeting webcast and test their computer audio system. There will be no physical location for the Annual Meeting.

The purposes for the Annual Meeting are to consider and vote upon:

 

  1.

Election of each of the following nominees as Directors:

 

Zubaid Ahmad

  

Françoise Colpron

  

Edward L. Doheny II

Michael P. Doss

  

Henry R. Keizer

  

Harry A. Lawton III

Neil Lustig

  

Suzanne B. Rowland

  

Jerry R. Whitaker

 

  2.

Amendment and restatement of the 2014 Omnibus Incentive Plan

 

  3.

Ratification of the appointment of PricewaterhouseCoopers LLP as Sealed Air’s independent auditor for the year ending December 31, 2021

 

  4.

Approval, as an advisory vote, of 2020 executive compensation as disclosed in the attached Proxy Statement

 

  5.

Such other matters as properly come before the Annual Meeting

The Board of Directors has fixed the close of business on March 22, 2021 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. Sealed Air is making available or mailing its 2020 Annual Report to all stockholders of record as of the record date. Additional copies of the 2020 Annual Report are available upon written request to the Corporate Secretary at Sealed Air Corporation, 2415 Cascade Pointe Boulevard, Charlotte, North Carolina 28208.

Because it is important that as many stockholders as possible be represented at the Annual Meeting, stockholders should review the attached Proxy Statement promptly and carefully and then vote. A stockholder may vote by following the instructions for voting set forth on the Notice of Internet Availability of Proxy Materials or proxy card. A stockholder who receives a paper copy of the proxy card by mail will also receive a postage-paid, addressed envelope that can be used to return the completed proxy card. A stockholder who joins the Annual Meeting may vote electronically at the Annual Meeting.

Sealed Air will maintain a list of stockholders of record as of the record date at Sealed Air’s corporate headquarters, 2415 Cascade Pointe Boulevard, Charlotte, North Carolina, for a period of ten days prior to the Annual Meeting.

On behalf of the Board of Directors,

Angel S. Willis

Vice President, General Counsel and Secretary

Charlotte, North Carolina

April 6, 2021

 

 

Important Notice Regarding Availability of Proxy Materials for Annual Meeting on May 18, 2021:

Sealed Air’s Notice of Annual Meeting of Stockholders, Proxy Statement and 2020 Annual Report

to Stockholders are available at https://ir.sealedair.com/reports-filings/annual-meeting.

 

 


 

    

Participation in the Virtual Annual Meeting

 

Date and Online
Check-In Time
May 18, 2021
8:45 a.m., EDT

 

  

 

Virtual Meeting Webcast Address

 

www.virtualshareholdermeeting.com/SEE2021

 

The Board of Directors considers the appropriate format of our annual meeting of stockholders on an annual basis. This year the Board again chose a virtual meeting format for the Annual Meeting, as a best practice in light of the continuing COVID-19 pandemic as well as in an effort to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no cost. The virtual meeting format will allow our stockholders to engage with us at the Annual Meeting from any geographic location, using any convenient internet-connected devices, including smart phones and tablets, as well as laptop or desktop computers. We will be able to engage with all stockholders as opposed to just those who can afford to travel to an in-person meeting. The virtual format allows stockholders to submit questions and comments during the meeting.

The live audio webcast of the Annual Meeting will be available for listening by the general public, but participation in the Annual Meeting, including voting shares and submitting questions, will be limited to stockholders. To ensure they can participate, stockholders and proxyholders should visit www.virtualshareholdermeeting.com/SEE2021 and enter the 16-digit control number included on their Notice of Internet Availability of Proxy Materials or proxy card. If you wish to participate in the meeting and your shares are held in street name, you must obtain, from the broker, bank or other organization that holds your shares, the information required, including a 16-digit control number, in order for you to be able to participate in, and vote at, the Annual Meeting.

 

 

 

 

 

 

  

If you have any questions or concerns regarding meeting access or procedures prior to the Annual Meeting, please call: 1-704-503-8841 or send emails to investor.relations@sealedair.com. For technical support during the check in or at meeting time, please call: 1-844-986-0822 (toll-free) or 1-303-562-9302 (toll line).

Stockholders can vote their shares and submit questions via the Internet during the Annual Meeting by accessing the annual meeting website at www.virtualshareholdermeeting.com/SEE2021. We will answer any timely submitted questions on a matter to be voted on at the Annual Meeting before voting is closed on the matter. Following adjournment of the formal business of the Annual Meeting, we will address appropriate general questions from stockholders regarding Sealed Air in the order in which the questions are received. All questions received during the Annual Meeting will be presented as submitted, uncensored and unedited, except that we may omit certain personal details for data protection issues and we may edit profanity or other inappropriate language. If we receive substantially similar questions, we will group those questions together and provide a single response to avoid repetition. Additional information regarding the submission of questions during the Annual Meeting can be found in our 2021 Rules of Conduct and Procedure, available at www.virtualshareholdermeeting.com/SEE2021.


LOGO

  

Sealed Air Corporation

2415 Cascade Pointe Boulevard

Charlotte, North Carolina 28208

Proxy Statement Dated April 6, 2021

2021 Annual Meeting of Stockholders

Sealed Air Corporation, a Delaware corporation, is furnishing this Proxy Statement and related proxy materials in connection with the solicitation by its Board of Directors of proxies to be voted at its 2021 Annual Meeting of Stockholders and any adjournments. Sealed Air Corporation is providing these materials to the holders of record of its common stock, par value $0.10 per share, as of the close of business on March 22, 2021 and is first making available or mailing the materials on or about April 6, 2021.

The Annual Meeting is scheduled to be held by webcast as follows:

 

Date   Tuesday, May 18, 2021
Time   9:00 a.m., Eastern daylight time
Meeting Website Address   www.virtualshareholdermeeting.com/SEE2021

Your vote is important. Please see the detailed information that follows.


Contents

 

2021 Proxy Summary

     1  

Questions and Answers about the Annual Meeting

     12  

Vote Required for Election or Approval

     17  

Corporate Governance

     19  

Board of Directors Overview

     19  

Board Meetings, Committee Membership and Attendance

     21  

Audit Committee

     21  

Nominating and Corporate Governance Committee

     22  

Organization and Compensation Committee

     23  

Compensation Committee Interlocks and Insider Participation

     24  

Board and Committee Evaluations

     24  

Hedging Policy

     24  

Corporate Governance Materials

     24  

Communicating with Directors

     25  

Certain Relationships and Related-Person Transactions

     26  

Director Compensation

     27  

Proposal 1. Election of Directors

     31  

Director Qualifications

     31  

Identifying and Evaluating Nominees for Directors

     32  

Information Concerning Nominees

     32  

Nominees for Election as Directors

     33  

Beneficial Ownership Table

     40  

Executive Compensation

     42  

Compensation Discussion and Analysis

     42  

Compensation Committee Report

     62  

Board Oversight of Compensation Risks

     62  

Executive Compensation Tables

     64  

CEO Pay Ratio

     75  

Equity Compensation Plan Information

     76  

Proposal 2. Amendment and Restatement of 2014 Omnibus Incentive Plan

     77  

Proposal 3. Ratification of Appointment of Independent Auditor for 2021

     87  

Proposal 4. Approval of Executive Compensation on Advisory Basis

     89  

Principal Independent Auditor Fees

     90  

Audit Committee Pre-Approval Policies and Procedures

     90  

Report of Audit Committee

     91  

Stockholder Proposals and Business for 2022 Annual Meeting

     93  

Delivery of Documents to Security Holders Sharing an Address

     94  

Other Matters

     94  

Amended and Restated 2014 Omnibus Incentive Plan

     Annex A  
 

 

Cautionary Statement Regarding Forward-Looking Statements. Certain statements contained in this Proxy Statement are or may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. We use words such as “anticipate,” “believe, “expect,” “future,” “intend” “strive,” “seek,” “goal,” “may,” “will,” “continue,” “target” and similar expressions to identify forward-looking statements. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements other than purely historical information, including statements regarding our operating model, plans and strategies and our environmental, social and governance goals, made in this document are forward-looking. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual outcomes and results may differ materially from those expressed in, or implied by, forward-looking statements due to a variety of factors, including the uncertainties and risks discussed in our 2020 Annual Report on Form 10-K and subsequent Securities and Exchange Commission (“SEC”) filings. You should not place undue reliance on any forward-looking statement, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements.

Information Referenced in this Proxy Statement. Website references throughout this document are provided for convenience only, and the content of the referenced websites, including the content on our Company website, is not, and shall not be deemed to be, part of this Proxy Statement or incorporated into this Proxy Statement or into any of our other filings with the SEC.


2021 Proxy Summary

This summary highlights information about Sealed Air and the Annual Meeting. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. References in this Proxy Statement to “Sealed Air,” and to “we,” “us,” “our” and similar terms, refer to Sealed Air Corporation.

Annual Meeting of Stockholders

 

 

Time and Date:

9:00 a.m., Eastern daylight time,
on May 18, 2021

 

  

 

Meeting Webcast Address

www.virtualshareholdermeeting.com/
SEE2021

  

 

Record Date

Close of business on

March 22, 2021

 

Voting:

 

Holders will be entitled to one vote at the Annual Meeting for each of the outstanding shares of our common stock they hold of record as of the record date.

Votes Eligible to be Cast:

 

A total of 153,224,325 votes are eligible to be cast on each proposal at the Annual Meeting.

Annual Meeting Agenda

 

Proposal

   Board Recommendation            
1    Election of Directors    For each nominee
2    Amendment and Restatement of 2014 Omnibus Incentive Plan    For
3    Ratification of Appointment of Independent Auditor for 2021    For
4    Approval of 2020 Executive Compensation on an Advisory Basis    For

How to Cast Your Vote

You can vote by any of the following methods:

 

 

Until 11:59 p.m., EDT, on May 17, 2021

 

  LOGO    

Internet:

www.proxyvote.com

  LOGO    

Telephone:

+1-800-454-8683 if you beneficially own
shares held in “street name”

+1-800-690-6903 if you are the stockholder
of record

  LOGO    

By Mail:

Completed, signed and returned proxy card

 

At the Annual Meeting on May 18, 2021

 

  LOGO    

Internet:

By joining the Annual Meeting at www.virtualshareholdermeeting.com/SEE2021 if you are the stockholder of record or if you hold a proxy from the broker, bank or other nominee holding your shares in street name

 

 

If you participate in our 401(k) and Profit-Sharing Plan, you may use the proxy card to provide voting instructions to Fidelity Management Trust Company, as trustee, and your completed, signed card must be delivered to the trustee by 11:59 p.m., Eastern daylight time, on May 15, 2021.

 

 

 

2021 Proxy Statement

 

  

 

 

 

 

1

 

 

 

 


2021 Proxy Summary    

 

About Sealed Air

 

Our Purpose    We are in business to protect,
to solve critical packaging challenges, and
to make our world better than we found it.

We are a leading global provider of packaging materials, equipment and services. Our portfolio of packaging solutions includes Cryovac® brand food packaging, Sealed Air® brand protective packaging, Autobag® brand automated systems, Bubble Wrap® brand packaging and SEE Automation solutions. Our packaging solutions are sold to an array of end markets including protein, foods, fluids, medical and life sciences, petcare, e-Commerce and logistics, and industrials. Our automated equipment, materials and services maximize food safety and security and product protection while minimizing waste.

 

Vision   

 

 

 

Transforming Sealed Air

 

to a world-class company providing sustainable, automated packaging solutions

 

 

Strategies   

 

 

Generate profitable growth

 

Drive One SEE operational excellence

 

Develop a One SEE high performance culture

 

Deliver sustainable long-term value to our stakeholders and society

 

 

 

Tactics &   

Actions   

 

 

 

Reinvent SEE transforming business from Innovate to Solve

 

 

2020   

Results   

 

Net

Sales

 

Adj

EBITDA

 

Adj

EPS

  Free Cash Flow
  $4.9B   $1.05B   $3.19   $556M
 

+2%

 

+9%

21.4% margin

  +13%   +73%

Refer to pages 32 through 44 and page 54 of our Annual Report on Form 10-K filed on February 25, 2021 for additional information about our key accomplishments in 2020 and for important information about the use of non-U.S. GAAP financial measures, including applicable reconciliations to U.S. GAAP financial measures.

 

 

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      2021 Proxy Summary  

 

Environmental, Social and Governance Highlights

 

 

 

Our Values Guide Us

  Integrity     Determined     Collaborative     Innovative   
 

Intentionally choosing

to do the right thing

every day

   

Empowered to deliver on

our commitments

   

Operating based on mutual

trust and encouraging

diverse thinking to achieve common objectives

 

   

Thinking without

limits to solve customer,

Company, and societal

challenges

  

Sustainability Is in Everything We Do and Fueling Our Growth

At Sealed Air, we are focused on creating packaging that can be recovered and recycled, contributes to consumer waste diversion efforts, reduces greenhouse gases, and increases the supply of material for future reuse. We have reduced climate-related emissions, water use, energy use, and waste in our operations while innovating and manufacturing high-performance packaging solutions and automated systems.

Investing in Circular Economy

We are making investments in the innovation and development of end-to-end packaging solutions, including materials and technologies that bolster recyclability and reusability. Some of these investments are part of our recently announced SEE Ventures initiative, under which we will make selective entrepreneurial investments that present opportunities to accelerate innovation and increase speed to market, while creating a sustainable competitive advantage. In 2020 we participated in a closed-loop pilot project that turned used flexible plastic collected from a retail chain into new food-grade plastic that went back onto that same chain’s shelves instead of in a landfill.

2025 Sustainability and Plastics Pledge

In late 2018 Sealed Air committed to a 2025 Sustainability and Plastics Pledge to increase plastics circularity in the packaging industry through the following key initiatives:

Investment in Innovation. Dedicating significant R&D resources to design and advance packaging solutions to be recyclable or reusable and contain more recycled and/or renewable content.

Eliminate Plastic Waste. Achieving ambitious targets of recycled content across all packaging solutions which maximize post-consumer recycled content.

Collaborate for Change. Aligning with strategic partners to combine resources, expertise, and corporate voices to find impactful ways to create a circular economy.

The partnerships include technology investments to facilitate the reuse, collection, and recycling of plastic. Two of our leading partners are the Alliance to End Plastic Waste and the Materials Recovery for the Future project.

SEE Operational Excellence

In 2014 Sealed Air established the 2020 Sustainability Goals to reduce the intensity of greenhouse gas emissions, energy and water use in its operations by 25%, and divert 100% product and process waste from landfills. The Company exceeded the greenhouse gas emissions, energy and water use goals in 2019, one year earlier than planned, while significant progress has been made towards the waste diversion goal.

 

 

2021 Proxy Statement

 

  

 

 

 

 

3

 

 

 

 


2021 Proxy Summary    

 

Net-Zero Carbon Emissions by 2040

Sealed Air has set a goal to reach net-zero carbon emissions for its global operations by 2040. The Company will continue to reduce Scope 1 and 2 carbon emissions through investments in renewable energy and by increasing efficiencies across its operations.

High-Performance and Socially Responsible Culture

At Sealed Air, we are developing a high-performance and socially responsible culture that is guided by our purpose and focuses on creating long-term value for our stakeholders and society. In 2020 we launched the SEE Culture Model for the design and execution of our company-wide people and social impact strategy. The Culture Council, co-chaired by our CEO and our Chief Human Resources Officer, is responsible for overseeing the implementation of the SEE Culture Model.

Diversity, Equity and Inclusion Strengthening Our Culture

We are a global company with an employee population representing a broad diversity of cultures, languages, ethnicities and races. We strive to improve our workplace diversity and support an inclusive culture across the globe under the leadership of our CEO. These are recent examples of our commitment:

CEO Action for Diversity & Inclusion: Sealed Air is a signatory of the CEO Action for Diversity & Inclusion initiative, a corporate commitment to advance diversity and inclusion in the workplace.

Diversity, Equity and Inclusion Council: In late 2020, Sealed Air formed the Diversity, Equity and Inclusion Council to promote a diverse, trusting and inclusive culture for all employees. The Council is chaired by the Company’s Vice President, General Counsel and Secretary.

Unconscious Bias Training Program: Sealed Air’s unconscious bias training focuses on highlighting various dimensions of diversity, including age, race, ethnicity, gender, and sexual orientation. Since its launch in 2019, the program has reached more than 1,100 employees, including the executive leadership team, international senior leaders, U.S. managers, and employees at our Charlotte, North Carolina headquarters.

Gender Diversity: Sealed Air has increased the number of females across different roles, functions, and levels at the Company and remains strongly committed to continuing this effort on a global basis. The Gender Equity Network (formerly known as The Women’s Initiative Network) promotes gender diversity and inclusion at Sealed Air. This employee resource group has been in place at Sealed Air for over ten years and was active in over 18 countries as of December 31, 2020.

Commitment to Pay Equity: We seek to drive pay equity based on experience and performance across the organization by using a structured global compensation framework. In 2019 we conducted a comprehensive global pay equity analysis and resolved all identified cases of inequity in 2020.

Zero Harm and a Culture for Employee Health, Safety and Well-being

As a company with manufacturing operations across the world, protecting the health, safety, and well-being of our employees is critical. We have a goal of zero harm and regularly track, report, and manage our operations to provide employees with a safe and healthy working environment. Our global safety program includes behavioral-based safety training, hazard recognition and remediation, and driver safety training.

During the COVID-19 crisis Sealed Air has followed the recommendations and guidance of health authorities and local governments across the globe and instituted precautionary measures at all its sites worldwide, including enhanced cleaning procedures, quarantine and testing protocols, employee temperature checks, personal protective equipment for location-dependent workers, social distancing, remote work arrangements for non-location dependent employees, restricted visitor access, and travel limitations. Sealed Air has supported the well-being of essential

 

 

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      2021 Proxy Summary  

 

employees and their families during the pandemic through actions such as providing additional compensation, personal protective equipment and hygiene kits, food, safe transportation and other forms of appreciation and support.

Continuous Learning and Development

We invest in the development of our people through a number of initiatives such as an online learning portal, role-specific technical skills training, management and leadership training, and executive succession planning.

Enhancing Employee Engagement and Retention

Employee Engagement: We conduct pulse surveys to solicit valuable and timely feedback from our employees on specific topics. We use the results of the pulse surveys for initiatives related to employee engagement, including increased communication from managers, targeted training opportunities, and other methods to improve the employee experience. In 2020, we conducted a global pulse survey to assess employee well-being and the effectiveness of leadership during the pandemic.

Change Champions: Sealed Air’s new Change Champions network is comprised of employees throughout the Company who serve as communicators and engagement drivers for strategic changes and culture initiatives.

Evaluating Performance: Full-time employees participate in an annual goal-setting and performance evaluation process. We maintain a pay-for-performance compensation structure in which calibrated performance ratings directly inform compensation and incentive recommendations at all levels.

SEE Ethical Standards Extend to Our Partners

Sealed Air partners are expected to know and follow our Code of Conduct (and any other Sealed Air policies or requirements that may apply to their organization) and hold their suppliers and sub-suppliers to those standards. It is up to us to hold our partners accountable and ensure they operate ethically, in compliance with the law and in a way that is consistent with our Code of Conduct, our policies, and our values.

Taking Our Purpose to the Communities Where We Live and Work

Across the globe, our employees are strengthening communities and making an impact by leveraging their expertise in sustainability, food safety, food security, technology, and innovation to protect and solve critical challenges. In 2020 Sealed Air and its employees partnered with and donated to nonprofit programs that provided disaster relief and helped to mitigate the impact of the COVID-19 pandemic.

 

 

2021 Proxy Statement

 

  

 

 

 

 

5

 

 

 

 


2021 Proxy Summary    

 

Governance Best Practices

 

We operate on a strong governance foundation

  

 

Annual election of all directors

 

Eight of nine director nominees are independent, including the Chairman of the Board

 

Independent Audit, Nominating and Corporate Governance, and Organization and Compensation Committees

 

Oversight of environmental, social and governance matters assigned to the Nominating and Corporate Governance Committee

 

Oversight of matters relating to corporate culture, employee engagement, diversity and inclusion assigned to the Organization and Compensation Committee

 

Robust risk oversight by the Board and its committees

 

Annual Board and committee self-evaluations

 

Regular executive sessions of independent directors

 

Mandatory retirement policy for directors

 

Proxy access rights

 

Stock ownership guidelines for directors and executives

 

Orientation for all new directors and ongoing director education programs

 

Pro-Active Stockholder Engagement

The Company regularly engages with current and prospective stockholders. In 2020 our engagement efforts reached stockholders representing more than 60% of our outstanding shares, and we discussed subjects such as long-term strategy, financial information, acquisitions and divestitures, major trends and issues affecting the Company’s businesses, industry dynamics, executive compensation, sustainability, and environmental, social and governance matters. The Nominating and Corporate Governance Committee oversees the Company’s stockholder engagement activities.

Code of Conduct and Ethics as the Foundation of Our Culture

In 2019 we refreshed our Code of Conduct which employees must review annually and affirm their adherence in writing. Employees receive regular online education as part of enhanced global ethics and compliance programs. This training includes required and monitored courses for employees in specific roles based on associated risk and function. The topics of online courses include the Code of Conduct, anti-bribery, anti-corruption, conflicts of interest, workplace respect and others. The Integrity Committee, with executive and senior leader membership, oversees the Company’s ethics and integrity programs. The Audit Committee regularly receives updates on matters relating to such programs.

Additional information on our environmental, social and governance efforts are available on our website at www. sealedair.com/company/sustainability.

 

 

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      2021 Proxy Summary  

 

Proposal 1. Election of Directors

Nominees

We are asking stockholders to elect the following nine director nominees. Each of the nominees currently serves as a director of Sealed Air. Information in the table is as of April 6, 2021.

 

    Name   Occupation  

Director

Since

     Independent  

Other
Public Co. or

Registered

Investment Co. Boards

 

LOGO

 

 

Zubaid Ahmad

 

Age 59

 

 

Founder and Managing Partner at Caravanserai Partners, LLC

 

 

2020

    

 

 

 

0

 

LOGO

 

 

Françoise Colpron

 

Age 50

 

 

Group President, North America of

Valeo SA

 

 

2019

    

 

 

 

0

 

LOGO

 

 

Edward L. Doheny II

 

Age 58

 

 

President and CEO of Sealed Air

 

 

2017

      

 

1

 

LOGO

 

 

Michael P. Doss

 

Age 54

 

 

President and CEO of Graphic Packaging Holding Company

 

 

2020

    

 

 

 

1

 

LOGO

 

 

Henry R. Keizer

 

Age 64

 

 

Retired Deputy Chairman and COO of KPMG

 

 

2017

    

 

 

 

2

 

LOGO

 

 

Harry A. Lawton III

 

Age 46

 

 

President and CEO of Tractor Supply Company

 

 

2019

    

 

 

 

1

 

LOGO

 

 

Neil Lustig

 

Age 59

 

 

President and CEO of GAN Integrity Inc.

 

 

2015

    

 

 

 

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Suzanne B. Rowland

 

Age 59

 

 

Retired Group Vice President, Industrial Specialties, of Ashland Global Holdings, Inc.

 

 

2020

    

 

 

 

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Jerry R. Whitaker

 

Age 70

 

 

Retired President of Electrical Sector-Americas, Eaton Corporation

 

 

2012

    

 

 

 

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2021 Proxy Statement

 

  

 

 

 

 

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2021 Proxy Summary    

 

Nominee Composition

 

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Nominee Skills and Experience

 

          LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO
                     
LOGO   Executive Leadership                  
                     
LOGO   Global Business                  
                     
LOGO   Finance and Accounting                    
                     
LOGO   Manufacturing and Industry Experience                      
                     
LOGO   Environmental and Sustainability                            
                     
LOGO   Strategic Planning                  
                     
LOGO   Corporate Governance                  
                     
LOGO   Risk Management                  
                     
LOGO   Technology, Science and Innovation                      

 

 

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      2021 Proxy Summary  

 

Proposal 2. Amendment and Restatement of 2014 Omnibus Incentive Plan

We are asking stockholders to approve the amendment and restatement of our 2014 Omnibus Incentive Plan to, among other things, add 3,000,000 shares to the number of shares available for awards under the plan and to extend the term of the plan by three years, ending May 2031.

Proposal 3. Ratification of Appointment of Independent Auditor for 2021

We are asking stockholders to ratify the Audit Committee’s retention of PricewaterhouseCoopers LLP, an independent registered public accounting firm, as our independent auditor to examine and report on our consolidated financial statements and the effectiveness of our internal control over financial reporting for the fiscal year ending December 31, 2021.

Proposal 4. Approval of 2020 Executive Compensation on an Advisory Basis

We are asking for stockholder approval, on an advisory basis in accordance with Securities and Exchange Commission, or SEC, rules, of the 2020 compensation of our “named executive officers” as disclosed under “Executive Compensation” in this Proxy Statement, including the disclosures set forth thereunder in “—Compensation Discussion and Analysis” and the compensation tables and related narrative discussion.

2020 Executive Total Target Direct Compensation Mix

* “Performance-Based” means AIP + PSU

 

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2021 Proxy Statement

 

  

 

 

 

 

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2021 Proxy Summary    

 

Key Elements of Our Executive Compensation Program

The following table summarizes the main components of our executive compensation program for our named executive officers.

 

Compensation
Element

   Description    Objectives

Base Salary

  

Fixed cash compensation based on role and duties

  

Appropriate level of market based fixed pay

 

Assist with recruitment and retention

Annual Incentive

  

Annual cash award based on company financial performance with 0%-200% payout

 

Company, business unit and individual goals may also be considered

  

Reward executives for driving superior operating and financial results over a one-year timeframe

 

Create a direct correlation between business success and financial reward

Long-Term Incentives

  

70% PSUs earned based on performance, typically over three-year period with 0%-200% payout

 

30% Time-vesting RSUs vesting annually over three years

  

Reward achievement of longer-term goals and value creation

 

Create direct correlation between longer-term business success and financial reward

 

Encourage retention and ownership

Retirement Plans

  

401(k) and Profit-Sharing Plan

 

Non-qualified deferred compensation plan

  

Provide retirement income and wealth creation for participants

 

Assist with recruitment and retention

Severance Benefits

  

Executive Severance Plan, with reasonable severance benefits

  

Assist with recruitment and retention

Other Benefits

  

Health care and life insurance programs

 

Limited perquisites

  

Competitive with peer companies

 

Assist with recruitment and retention

 

Additional travel-related perks included for 2020 only to address unique pandemic-related circumstances

 

 

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      2021 Proxy Summary  

 

Key Compensation Policies and Practices

The Organization and Compensation Committee believes that our executive compensation program follows best practices aligned to long-term stockholder interests, as summarized below:

 

What We Do  

    

  Majority of Compensation is
Performance-Based

 

65% of total target direct compensation for CEO, and 56% of total target direct compensation for other named executive officers, is performance-based

  Performance Goals for Both Annual
and Long-Term Awards

 

Use multiple, balanced measures, including use of both absolute and relative measures for long-term awards

 

  Stock Ownership Policy

 

Multiple of base salary must be held in common stock — 6x for CEO and 3x for other named executive officers; 50%-100% of after-tax shares must be held until ownership goal is met

  Compensation Recoupment
(Clawback) Policy

 

Recovery of annual or long-term incentive compensation based on achievement of financial results that were subsequently restated due to error or misconduct, regardless of whether named executive officer was responsible for the error or misconduct

  Receive Advice from Independent
Compensation Consultant

 

Compensation consultant (FW Cook) provides no other services to Sealed Air

  Double-Trigger Vesting of Equity
Compensation Upon a Change in Control

 

Under our equity compensation plans, vesting following a change in control requires involuntary termination of employment

What We Don’t Do  

    

×   No Supplemental Executive Retirement Plans for Named Executive Officers

 

Consistent with focus on performance-oriented environment; reasonable and competitive retirement programs offered

×   No Change in Control Excise Tax
Gross-Ups

 

Consistent with focus on performance-oriented environment and commitment to best practices aligned to long-term stockholder interests

×   No Excessive Perquisites or Severance Benefits

 

Consistent with focus on performance-oriented environment and commitment to best practices aligned to long-term stockholder interests

×   No Hedging or Pledging of Company
Stock

 

Applies to all executive officers and directors

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Questions and Answers About the Annual Meeting

 

Q:

When and where will the Annual Meeting be held?

 

A:

This year the Annual Meeting of Stockholders of Sealed Air Corporation, which we refer to below as the Annual Meeting, will be held via live audio webcast at www.virtualshareholdermeeting.com/SEE2021, beginning at 9:00 a.m., Eastern daylight time, on Tuesday, May 18, 2021.

 

  

This year’s annual meeting will again be a virtual meeting of stockholders conducted solely via live audio webcast. Each stockholder may participate in the Annual Meeting, including casting votes and submitting questions during the Annual Meeting, by accessing a live webcast at www.virtualshareholdermeeting.com/SEE2021 and then using the 16-digit control number provided on the Notice of Internet Availability of Proxy Materials or proxy card being delivered to the stockholder. There will be no physical location for the Annual Meeting.

Online check-in to the Annual Meeting webcast will begin at 8:45 a.m., Eastern daylight time. We encourage you to allow ample time to log in to the meeting webcast and test your computer audio system.

 

Q:

Who may join the Annual Meeting?

 

A:

The live audio webcast of the Annual Meeting will be available for listening by the general public, but participation in the Annual Meeting, including voting shares and submitting questions, will be limited to stockholders. To ensure they can participate, stockholders and proxyholders should visit www.virtualshareholdermeeting.com/SEE2021 and enter the 16-digit control number included on their Notice of Internet Availability of Proxy Materials or proxy card.

 

Q:

What materials have been prepared for stockholders in connection with the Annual Meeting?

 

A:

We are furnishing stockholders of record with the following proxy materials:

 

   

our 2020 Annual Report to Stockholders, which includes our audited consolidated financial statements;

 

   

this Proxy Statement for the 2021 Annual Meeting, which also includes a letter to stockholders from our President and Chief Executive Officer and a Notice of Annual Meeting of Stockholders; and

 

   

for stockholders receiving printed copies of the 2020 Annual Report and Proxy Statement by mail, a proxy card for the Annual Meeting.

These materials were first made available on the Internet or mailed to stockholders on or about April 6, 2021.

 

Q:

Why was I mailed a Notice of Internet Availability of Proxy Materials rather than a printed set of proxy materials?

 

A:

In accordance with rules and regulations adopted by the SEC, we are furnishing the proxy materials to most stockholders by providing access via the Internet, instead of mailing printed copies. This e-proxy process expedites our stockholders’ receipt of proxy materials, lowers our costs and reduces the environmental impact of the Annual Meeting.

The Notice of Internet Availability of Proxy Materials tells you how to access and review the proxy materials on the Internet and how to vote on the Internet. The Notice also provides instructions you may follow to request paper or e-mailed copies of our proxy materials.

 

Q:

Are the proxy materials available via the Internet?

 

A:

You can access the proxy materials for the Annual Meeting at https://ir.sealedair.com/reports-filings/annual-meeting.

 

 

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      Questions and Answers about the Annual Meeting  

 

Q:

What is a proxy?

 

A:

Because it is important that as many stockholders as possible be represented at the Annual Meeting, the Board of Directors is asking that you review the Proxy Statement carefully and then vote by following the instructions set forth on the Notice of Internet Availability of Proxy Materials or proxy card. In voting prior to the Annual Meeting, you will deliver your proxy to the Proxy Committee, which means you will authorize the Proxy Committee to vote your shares at the Annual Meeting in the way you instruct. The Proxy Committee consists of Edward L. Doheny II, Christopher J. Stephens, Jr. and Angel S. Willis. All shares represented by valid proxies will be voted in accordance with the stockholder’s specific instructions.

 

Q:

What matters will the stockholders vote on at the Annual Meeting?

 

A:     Proposal 1.   Election of the following nine director nominees:
    Zubaid Ahmad   Françoise Colpron   Edward L. Doheny II
    Michael P. Doss               Henry R. Keizer   Harry A. Lawton III
    Neil Lustig   Suzanne B. Rowland               Jerry R. Whitaker
  Proposal 2.   Amendment and Restatement of 2014 Omnibus Incentive Plan.
  Proposal 3.   Ratification of appointment of our independent auditor for 2021.
  Proposal 4.   Approval, as an advisory vote, of 2020 executive compensation as disclosed in this Proxy Statement.

 

Q:

Who can vote at the Annual Meeting?

 

A:

Stockholders of record of our common stock at the close of business on March 22, 2021, the record date, will be entitled to vote at the Annual Meeting. A total of 153,223,585 shares of common stock were outstanding as of the record date. Each share outstanding on the record date will be entitled to one vote on each proposal. In addition, holders of record of W.R. Grace & Co. common stock issued prior to March 31, 1998 and outstanding at the record date will have an aggregate of 740 votes on each proposal.

As a result, a total of 153,224,325 votes will be eligible to be cast on each proposal at the Annual Meeting.

 

Q:

What is a stockholder of record?

 

A:

A stockholder of record is a stockholder whose ownership of stock is reflected directly on the books and records of our transfer agent, Broadridge.

 

Q:

What does it mean for a broker or other nominee to hold shares in “street name”?

 

A:

If you beneficially own shares held in an account with a broker, bank or similar organization, that organization is the stockholder of record and is considered to hold those shares in “street name.”

An organization that holds your beneficially owned shares in street name will vote in accordance with the instructions you provide. If you do not provide the organization with specific voting instructions with respect to a proposal, under the rules of the New York Stock Exchange the organization’s authority to vote your shares will depend upon whether the proposal is considered a “routine” or non-routine matter.

 

   

The organization generally may vote your beneficially owned shares on routine items for which you have not provided voting instructions to the organization. The only routine matter expected to be voted on at the Annual Meeting is the ratification of the appointment of our independent auditor for 2021 (Proposal 3).

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Questions and Answers about the Annual Meeting    

 

   

The organization generally may not vote on non-routine matters, including Proposals 1, 2 and 4. Instead, it will inform the inspector of election that it does not have the authority to vote on those matters. This is referred to as a “broker non-vote.”

For the purpose of determining a quorum, we will treat as present at the Annual Meeting any proxies that are voted on any of the four proposals to be acted upon by the stockholders, including abstentions or proxies containing broker non-votes.

 

Q:

How do I vote my shares if I do not attend the Annual Meeting?

 

A:

If you are a stockholder of record, you may vote your shares of our common stock prior to the Annual Meeting as follows:

 

   

Via the Internet: You may vote via the Internet at www.proxyvote.com, in accordance with the voting instructions printed on the Notice of Internet Availability of Proxy Materials and the proxy card. Internet voting is available 24 hours a day until 11:59 p.m., Eastern daylight time, on May 17, 2021. You will be given the opportunity to confirm that your instructions have been recorded properly. If you vote via the Internet, you do not need to return a proxy card.

 

   

By Telephone: If you receive a proxy card by mail, you may vote by calling +1-800-690-6903 and following the instructions provided on the telephone line. Telephone voting is available 24 hours a day until 11:59 p.m., Eastern daylight time, on May 17, 2021. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been recorded properly. If you vote by telephone, you do not need to return a proxy card.

 

   

By Mail: If you receive a proxy card by mail, you may vote by returning the completed and signed proxy card in the postage-paid return envelope provided with the proxy card.

If you hold shares in street name, you may vote your shares of our common stock by following the voting instructions provided by your bank, broker or other nominee. In most instances, you will be able to do submit your voting instructions to your bank, broker or other nominee on the Internet, by telephone or by mail. Please refer to information from your bank, broker or other nominee on how to submit voting instructions.

For your information, voting via the Internet is the least expensive to Sealed Air, followed by telephone voting, with voting by mail being the most expensive. Also, you may help us to save the expense of a second mailing if you vote promptly.

 

Q:

How do I vote if I participate in Sealed Air’s 401(k) and Profit-Sharing Plan?

 

A:

If you are a participant in our 401(k) and Profit-Sharing Plan, you can vote via the Internet or by using the proxy card to provide voting instructions to Fidelity Management Trust Company, or Fidelity, the trustee for the 401(k) and Profit-Sharing Plan, for the shares of common stock allocated to your plan account or accounts. Fidelity will vote your allocated shares in the plan in accordance with directions you provide by 11:59 p.m., Eastern daylight time, on May 15, 2021. If you do not provide timely voting instructions to Fidelity, the terms of the plan provide that Fidelity will vote your shares in the same proportion as shares it votes on behalf of participants who do provide timely voting instructions.

 

Q:

Can I vote at the Annual Meeting?

 

A:

If you are a stockholder of record, you generally will be able to vote during the Annual Meeting, whether or not you previously voted. If your shares are held in street name, you must obtain, from the broker, bank or other organization that holds your shares, the information required, including a 16-digit control number, in order for you to be able to participate in, and vote at, the Annual Meeting. You cannot vote shares allocated to your Sealed Air 401(k) and Profit-Sharing Plan account at the Annual Meeting.

 

 

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      Questions and Answers about the Annual Meeting  

 

Q:

Can I ask questions at the Annual Meeting?

 

A:

You may submit questions via the Internet during the Annual Meeting by participating in the webcast at www.virtualshareholdermeeting.com/SEE2021. We will answer any timely submitted questions on a matter to be voted on at the Annual Meeting before voting is closed on the matter. Following adjournment of the formal business of the Annual Meeting, we will address appropriate general questions from stockholders regarding Sealed Air in the order in which the questions are received. All questions received during the Annual Meeting will be presented as submitted, uncensored and unedited, except that we may omit certain personal details for data protection issues and we may edit profanity or other inappropriate language. If we receive substantially similar questions, we will group those questions together and provide a single response to avoid repetition. Additional information regarding the submission of questions during the Annual Meeting can be found in our 2021 Rules of Conduct and Procedure, available at www.virtualshareholdermeeting.com/SEE2021.

 

Q:

Why is the Annual Meeting being conducted as a virtual meeting?

 

A:

The Board of Directors considers the appropriate format of our annual meeting of stockholders on an annual basis. This year the Board again chose a virtual meeting format for the Annual Meeting as a best practice in light of the continuing COVID-19 pandemic as well as in an effort to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no cost. The virtual meeting format will allow our stockholders to engage with us at the Annual Meeting from any geographic location, using any convenient internet-connected devices, including smart phones and tablet, laptop or desktop computers. We will be able to engage with all stockholders as opposed to just those who can afford to travel to an in-person meeting. The virtual format allows stockholders to submit questions and comments during the meeting.

We are utilizing technology from Broadridge Financial Solutions, Inc., or Broadridge, a leading virtual meeting solution provider. The Broadridge platform is expected to accommodate most, if not all, stockholders. Both we and Broadridge will test the platform technology before going “live” for the Annual Meeting.

 

Q:

What should I do if I have questions about meeting access or procedures prior to the Annual Meeting?

 

A:

If you have any questions or concerns regarding meeting access or procedures prior to the Annual Meeting, you should call 1-704-503-8841 or send emails to investor.relations@sealedair.com.

 

Q:

What should I do if, during check-in or the meeting, I have technical difficulties or trouble accessing the virtual meeting website?

 

A:

Online check-in to the Annual Meeting webcast will begin at 8:45 a.m., Eastern daylight time. You should allow ample time to log in to the meeting webcast and test your computer audio system. During online check-in and continuing through the length of the Annual Meeting, we will have technicians standing by to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the Annual Meeting during check-in or the meeting time, you should call 1-844-986-0822 (toll-free) or 1-303-562-9302 (toll line).

 

Q:

If I am unable to participate in the live audio webcast of the Annual Meeting, may I listen at a later date?

 

A:

An audio replay of the Annual Meeting will be posted and publicly available at https://ir.sealedair.com/events-and-presentations following the Annual Meeting and will remain publicly available for approximately one year. This audio replay will cover the entire Annual Meeting, including each stockholder question addressed during the Annual Meeting.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Questions and Answers about the Annual Meeting    

 

Q:

May I change my vote or revoke my proxy?

 

A:

If you are a stockholder of record, you may later change or revoke your proxy at any time before it is exercised by:

 

   

voting via the Internet or telephone at a later time;

 

   

submitting a completed and signed proxy card with a later date; or

 

   

voting via the Internet at the Annual Meeting.

If you are a beneficial owner of shares held in street name, you should contact your bank, broker or other nominee for instructions as to whether, and how, you can change or revoke your proxy.

 

Q:

What happens if I do not give specific voting instructions?

 

A:

If you are a stockholder of record and you return a proxy card without giving specific voting instructions, the Proxy Committee will vote your shares in the manner recommended by the Board of Directors on all four proposals presented in this Proxy Statement and as the Proxy Committee may determine in its discretion on any other matters properly presented for a vote at the Annual Meeting.

If you are a beneficial owner of shares held in street name and do not provide specific voting instructions to the broker, bank or other organization that is the stockholder of record of your shares, the organization generally may vote on routine matters but not on non-routine matters. The only routine matter expected to be voted on at the Annual Meeting is the ratification of the appointment of our independent auditor for 2021 (Proposal 3). If the organization does not receive instructions from you on how to vote your shares on any of Proposals 1, 2 and 4, your shares will be subject to a broker non-vote and no vote will be cast on those matters. See “Q. What does it mean for a broker or other nominee to hold shares in ‘street name’?” above.

 

Q:

What if other matters are presented at the Annual Meeting?

 

A:

If a stockholder of record provides a proxy by voting in any manner described in this Proxy Statement, the Proxy Committee will have the discretion to vote on any matters, other than the four proposals presented in this Proxy Statement, that are properly presented for consideration at the Annual Meeting. We do not know of any other matters to be presented for consideration at the Annual Meeting.

 

 

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Vote Required for Election or Approval

Introduction

As of the record date, which is the close of business on March 22, 2021, 153,223,585 shares of common stock were outstanding, each of which is entitled to one vote at the Annual Meeting. In addition, holders of record of W.R. Grace & Co. common stock issued prior to March 31, 1998 and outstanding at the record date will have an aggregate of 740 votes on each proposal at the Annual Meeting, which means there will be a total of 153,224,325 votes eligible to be cast at the Annual Meeting. Holders who are present virtually or represented by proxy and who hold shares representing a majority of the votes eligible to be cast will constitute a quorum for the transaction of business at the Annual Meeting. For the purpose of determining a quorum, we will treat as present at the Annual Meeting any proxies that are voted on any matter to be acted upon by the stockholders, as well as abstentions or any proxies containing broker non-votes.

Proposal 1. Election of Directors

Each director will be elected by a vote of the majority of the votes cast with respect to that director, where a majority of the votes cast means that the number of shares voted “for” a director must exceed the number of votes cast “against” the director. We will not count shares voted to “abstain” for the purpose of determining whether a director is elected. Similarly, broker non-votes will not have any effect on the outcome of the election of directors since broker non-votes are not counted as “votes cast.”

Under our Certificate of Incorporation, our Bylaws and the Delaware General Corporation Law, a director holds office until a successor is elected and qualified or until his or her earlier resignation or removal. Each of the nine nominees currently serves as a director. If any of the nominees who are currently in office is not elected at the Annual Meeting, then our Bylaws provide that the director shall offer to resign from the Board of Directors. The Nominating and Corporate Governance Committee will make a recommendation to the Board whether to accept or reject the resignation, or whether other actions should be taken. The Board will consider and act on the recommendation of the Nominating and Corporate Governance Committee and publicly disclose its decision and the rationale behind it within ninety days from the date of the certification of the election results. The director who offers his or her resignation will not participate in the decision of the Nominating and Corporate Governance Committee or the Board. If the Board accepts such resignation, then the Board may fill the vacancy resulting from that resignation or may reduce the number of directors that constitutes the entire Board so that no vacancy exists.

Proposal 2. Amendment and Restatement of 2014 Omnibus Incentive Plan

Approval of the amendment and restatement of our 2014 Omnibus Incentive Plan requires the affirmative vote of a majority of the votes entitled to be cast and present virtually or represented by proxy at the Annual Meeting. Abstentions will count as votes against this proposal, since shares with respect to which the holder abstains will be deemed present and entitled to vote. Broker non-votes will have no effect on the outcome of this proposal, since broker non-votes are not counted as “votes entitled to be cast.”

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Vote Required for Election or Approval    

 

Proposal 3. Ratification of Appointment of Independent Auditor for 2021

The ratification of PricewaterhouseCoopers LLP as our independent auditor for the year ending December 31, 2021 requires the affirmative vote of a majority of the votes entitled to be cast and present virtually or represented by proxy at the Annual Meeting. Abstentions will be deemed present and, therefore, will count as votes against this proposal. Because this proposal is considered a routine matter, discretionary votes by brokers will be counted.

Proposal 4. Approval of 2020 Executive Compensation on an Advisory Basis

The approval, on an advisory basis, of our 2020 executive compensation requires the affirmative vote of a majority of the votes entitled to be cast and present virtually or represented by proxy at the Annual Meeting. Abstentions will count as votes against this proposal, since shares with respect to which the holder abstains will be deemed present and entitled to vote. Broker non-votes will have no effect on the outcome of this proposal, since broker non-votes are not counted as “votes entitled to be cast.”

 

 

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Corporate Governance

Board of Directors Overview

Under our Bylaws and the Delaware General Corporation Law, our business and affairs are managed by or under the direction of the Board of Directors, which delegates some of its responsibilities to its Committees. The Nominating and Corporate Governance Committee of the Board periodically reviews the size of the Board to ensure that the number of directors most effectively supports our Company. We have a strong commitment to diversity of background and experience among our directors, as described below under “Proposal 1. Election of Directors — Director Qualifications.”

Board Leadership Structure

 

 

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Jerry R. Whitaker

Age: 70

Director Since: 2012

Occupation: Retired

President of Electrical

Sector-Americas, Eaton Corporation

 

  

Jerry R. Whitaker was elected as the Chairman of the Board of Directors in 2018. The Chairman presides at meetings of the Board at which he or she is present and leads the Board in fulfilling its responsibilities as specified in the Bylaws. The Chairman has the right to call special and emergency meetings. The Chairman serves as the liaison for interested parties who request direct communications with the Board.

 

Notwithstanding the appointment of a Chairman, the Board considers all of its members responsible and accountable for oversight and guidance of its activities. All directors have the opportunity to request items to be included on the agendas of upcoming meetings.

 

The Board believes having an independent Chairman is beneficial because it ensures that management is subject to independent and objective oversight and the independent directors have an active voice in the governance of Sealed Air. The leadership structure is reviewed annually as part of the Board’s self-assessment process, and changes may be made in the future to reflect the Board’s composition as well as our needs and circumstances.

Independence of Directors

Under our Corporate Governance Guidelines adopted by the Board and the requirements of the New York Stock Exchange, or NYSE, the Board of Directors must consist of a majority of independent directors. The Board annually reviews the independence of all non-employee directors. The Board has established categorical standards consistent with the corporate governance standards of the NYSE to assist it in making determinations of the independence of Board members. We have posted a copy of our Standards for Director Independence on our website at https://ir.sealedair.com/corporate-governance/highlights. These categorical standards require that, to be independent, a director may not have any material relationship with Sealed Air. Even if a director meets all categorical standards for independence, the Board reviews other relationships with Sealed Air in order to conclude that each independent director has no material relationship with Sealed Air either directly or indirectly.

The Board has determined that the following director nominees are independent: Zubaid Ahmad, Françoise Colpron, Michael P. Doss, Henry R. Keizer, Harry A. Lawton III, Neil Lustig, Suzanne B. Rowland and Jerry R. Whitaker. The Board has also determined that Jacqueline B. Kosecoff, who is a current director who is retiring effective as of the 2021 Annual Meeting, is independent.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Corporate Governance    

 

Board Oversight of Strategy

Oversight of Sealed Air’s business strategy and planning is a key responsibility of the Board. The Board has dedicated one Board meeting each year to an in-depth review of Sealed Air’s long-term strategic plan. The Board also regularly reviews strategy-related matters at other Board meetings throughout the year, such as key market trends, innovation and the competitive landscape. To monitor management’s execution of Sealed Air’s strategic goals, the Board receives regular updates and is actively engaged in dialogues with senior management.

Board Oversight of COVID-19 Response

The Board has been actively engaged in overseeing management’s response to the COVID-19 pandemic. Since the onset of the pandemic, COVID-19 has been a recurring topic at Board meetings, and the Board held two special meetings during 2020 to review the impacts of and the Company’s responses to the pandemic. The Board also receives updates from management between Board meetings.

Board Oversight of Sustainability and Environmental, Social and Governance (ESG) Matters

We recognize sustainability and ESG as strategic business imperatives at Sealed Air. The Board is highly engaged in assessing sustainability and ESG matters affecting Sealed Air. The Board regularly receives updates on Sealed Air’s sustainability performance, innovations and challenges.

Recognizing the importance of these matters, the Board recently designated the Nominating and Corporate Governance Committee with the responsibility of overseeing our sustainability strategies and other matters concerning ESG and public policy issues affecting Sealed Air. The Board also designated the Organization and Compensation Committee with the responsibility of overseeing our workforce and people management strategies, including matters relating to corporate culture, employee engagement, diversity and inclusion in furtherance of our ESG related strategies. The Board and its committees regularly receive updates on sustainability and ESG matters from management. For highlights of our ESG initiatives, see “2021 Proxy Summary—Environmental, Social and Governance Highlights.”

Board Oversight of Risk

The Board of Directors is actively involved in oversight of risks that could affect Sealed Air. The Board has delegated oversight of certain specific risk areas to Committees of the Board. For example, the Audit Committee oversees cybersecurity risk management as well as our major financial risk exposures and the steps we have taken to monitor and control such exposures, while the Organization and Compensation Committee considers risks arising in connection with the design of the Company’s compensation programs and succession planning. The risk oversight responsibility of each Board Committee is described in its committee charter available at https://ir.sealedair.com/corporate-governance/committee-composition. The Board as a whole, however, is responsible for oversight of our risk management processes and our enterprise risk management program. The Board regularly discusses risk management with management and among the directors during meetings.

Cybersecurity risk oversight is a top priority for the Board. While the Board has delegated the specific responsibility of cybersecurity risk oversight to the Audit Committee, the Board is actively involved in overseeing cybersecurity risk management, both through presentations given by management during Board meetings as well as regular reports from the Audit Committee on its cybersecurity risk oversight activities. Management updates the Board and the Audit

 

 

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Committee once a year on average. Sealed Air maintains a security awareness program that includes annual mandatory training, frequent phishing simulations, and acknowledgment of information security and acceptable use policies. Furthermore, individuals supporting the information security program are required to hold certifications demonstrating proficiency in the support of relevant technologies and controls.

Board Meetings, Committee Membership and Attendance

The Board generally holds five regular meetings per year and meets on other occasions when circumstances require. Directors spend additional time preparing for Board and Committee meetings, and we may call upon directors for advice between meetings. We encourage our directors to attend director education programs.

Under our Corporate Governance Guidelines, we expect directors to attend regularly meetings of the Board and of all Committees on which they serve and to review the materials sent to them in advance of those meetings. We also expect nominees for election at each annual meeting of stockholders to attend the annual meeting. All of our directors attended the 2020 Annual Meeting of Stockholders except Neil Lustig, who was unable to attend due to health reasons.

Our Corporate Governance Guidelines provide that the Board will meet regularly in executive session without management in attendance. The Chairman of the Board presides at each executive session. The Chairman’s designee or the chair of the Nominating and Corporate Governance Committee serves as the presiding director if the Chairman of the Board is unable to serve.

During 2020 the Board held seven meetings. Each current director attended at least 85% of the aggregate number of meetings of the Board and all committees of the Board on which he or she served during 2020.

The Board maintains an Audit Committee, a Nominating and Corporate Governance Committee, and an Organization and Compensation Committee. The members of these Committees consist only of independent directors. The Board has adopted charters for each of the Committees, which are reviewed annually by the Committees and the Board. The Committee charters are available on our website at https://ir.sealedair.com/corporate-governance/committee-composition.

 

Audit Committee

   9 Meetings in 2020

 

The Audit Committee’s oversight responsibilities include:

  

Our internal control system, including information technology security and control;

 

Our public reporting processes;

 

The performance of our internal audit function;

 

The annual independent audit of our consolidated financial statements and related disclosure;

 

The quality and integrity of our consolidated financial statements;

 

Our legal and regulatory compliance;

 

Major financial risk exposure and cybersecurity risk management;

 

The retention, performance, qualifications, rotation of personnel and independence of our independent auditor; and

 

Related person transactions involving Sealed Air and members of the Board and executive officers.

 

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Corporate Governance    

 

Our independent auditor is ultimately accountable to the Audit Committee. The Audit Committee has the ultimate authority and responsibility to select, evaluate, approve terms of retention and compensation of, and, where appropriate, replace the independent auditor. The Audit Committee evaluates the performance of our independent auditor and interviews and has direct involvement in the selection of the lead audit partner in connection with the mandated rotation of such position.

The current members of the Audit Committee are Henry R. Keizer, who serves as chair, Zubaid Ahmad, Françoise Colpron, Neil Lustig and Suzanne B. Rowland, as well as Jerry R. Whitaker, who serves ex officio. The Board has determined that each current member of the Audit Committee is independent, as defined in the listing standards of the NYSE, and is financially literate. The Board has also determined that each of Messrs. Ahmad and Keizer is an audit committee financial expert in accordance with the standards of the SEC. No director is eligible to serve on the Audit Committee if that director simultaneously serves on the audit committees of more than two other public companies, unless, in accordance with NYSE rules, the Board determines that such simultaneous service would not impair the ability of the director to effectively serve on the Audit Committee and such determination is disclosed in the Proxy Statement.

 

Nominating and Corporate Governance Committee

   5 Meetings in 2020

The Nominating and Corporate Governance Committee is responsible for:

  

Identifying individuals qualified to become Board members, consistent with criteria approved by the Board, recommending to the Board director nominees for the next annual meeting of stockholders and filling vacancies or newly-created directorships at other times;

 

Providing oversight of the corporate governance affairs of the Board and Sealed Air, including developing and recommending to the Board the Corporate Governance Guidelines;

 

Assisting the Board in overseeing Sealed Air’s sustainability strategies and other material matters concerning environmental, social and governance and public policy issues affecting Sealed Air;

 

Assisting the Board in evaluating the Board and its Committees; and

 

Recommending to the Board the compensation of non-employee directors.

 

The current members of the Nominating and Corporate Governance Committee are Neil Lustig, who serves as chair, Zubaid Ahmad, Henry R. Keizer, Jacqueline B. Kosecoff and Suzanne B. Rowland, as well as Jerry R. Whitaker, who serves ex officio. The Board has determined that each current member of the Nominating and Corporate Governance Committee is independent, as defined in the listing standards of the NYSE.

The Nominating and Corporate Governance Committee has the sole authority to retain, oversee and terminate any consulting or search firm to be used to identify director candidates or assist in evaluating director compensation and to approve any such firm’s fees and retention terms. Since 2010 the Nominating and Corporate Governance Committee has engaged Frederic W. Cook & Co., Inc., or FW Cook, to advise the Nominating and Corporate Governance Committee on director compensation. FW Cook also advises the Organization and Compensation Committee regarding executive compensation.

 

 

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The Nominating and Corporate Governance Committee will consider director nominees recommended by our stockholders in accordance with our Policy and Procedure for Stockholder Recommendations for Nominations to the Board adopted by the Committee and approved by the Board, a copy of which is posted on our website at https://ir.sealedair.com/corporate-governance/highlights. Recommendations should be submitted to our Corporate Secretary in writing at Sealed Air Corporation, 2415 Cascade Pointe Boulevard, Charlotte, North Carolina 28208, along with additional required information about the nominee and the stockholder making the recommendation. Information on qualifications for nominations to the Board and procedures for stockholder nominations to the Board is included below under “Proposal 1. Election of Directors—Director Qualifications” and “—Identifying and Evaluating Nominees for Directors.”

 

Organization and Compensation Committee

   8 Meetings in 2020

 

 

The Organization and Compensation Committee’s oversight responsibilities include:

 

  

Compensation of the executive officers;

 

Stockholder review and action regarding executive compensation matters;

 

Performance of our CEO and executive management;

 

Succession planning;

 

Sealed Air-sponsored incentive compensation plans, equity-based plans and tax-qualified retirement plans; and

 

Workforce and people management strategies, including matters relating to corporate culture, employee engagement, diversity and inclusion in furtherance of the Company’s environmental, social and governance-related strategies.

 

The current members of the Organization and Compensation Committee, which we refer to as the Compensation Committee, are Jacqueline B. Kosecoff, who serves as chair, Françoise Colpron, Michael P. Doss and Harry A. Lawton III, as well as Jerry R. Whitaker, who serves ex officio. The Board has determined that each current member of the Compensation Committee is independent, as defined in the listing standards of the NYSE.

The Compensation Committee oversees and provides strategic direction to management with respect to our executive compensation plans and programs. The Compensation Committee reviews our CEO’s performance and compensation with the other non-employee directors. Based on that review, the Compensation Committee evaluates the performance of our CEO and makes all compensation decisions for our CEO. The Compensation Committee may also recommend certain CEO compensation decisions to the Board for further approval by the non-employee members of the Board. The Compensation Committee also reviews and approves the compensation of the other executive officers. The Compensation Committee makes most decisions regarding changes in salaries and bonuses during the first quarter of the year based on company and individual performance during the prior year, as well as relevant commercially available proxy and survey data of peer group companies and companies of comparable size. The Compensation Committee also has authority to grant equity compensation awards under our 2014 Omnibus Incentive Plan, as amended and restated effective May 17, 2018 (the “2014 Incentive Plan”). This award authority has been delegated on a limited basis for awards to employees who are not subject to the requirements of Section 16 of the Securities Exchange Act of 1934 to the Equity Award Committee, comprised of our CEO.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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The Compensation Committee has the sole authority to retain, oversee and terminate any compensation consultant to be used to assist in the evaluation of executive compensation and to approve the consultant’s fees and retention terms. Since November 2006, the Compensation Committee has retained FW Cook as its executive compensation consultant. FW Cook also advises the Nominating and Corporate Governance Committee regarding director compensation but does not provide any other services to Sealed Air. Sealed Air pays FW Cook’s fees. Additional information on the executive compensation services performed in 2020 by FW Cook is included in “Executive Compensation—Compensation Discussion and Analysis—Governance of Our Executive Compensation Program—Role of Independent Compensation Consultant.”

Compensation Committee Interlocks and Insider Participation

Each of Dr. Kosecoff, Ms. Colpron, Mr. Doss and Mr. Lawton, as well as Michael Chu, who retired from the Board effective as of the 2020 Annual Meeting of Stockholders, served on the Compensation Committee during fiscal 2020. During 2020 none of the members of the Compensation Committee was an officer or employee of Sealed Air or any of its subsidiaries, and no executive officer of Sealed Air served on the board of directors of any entity whose executive officers included a director of Sealed Air.

Board and Committee Evaluations

The Board and each committee annually conduct a self-evaluation to review and assess the overall effectiveness of the Board and each committee, including with respect to strategic oversight, board structure and operation, interactions with and evaluation of management, governance policies and committee structure and composition. Committee self-assessments of performance are shared with the full Board. The Nominating and Corporate Governance Committee also reviews the Corporate Governance Guidelines each year in light of changing conditions and shareholders’ interests and recommends appropriate changes to the Board for consideration and approval. Matters with respect to Board composition, the nomination of directors, Board processes and topics addressed at Board and committee meetings are also considered as part of our self-assessment process. As appropriate, these assessments result in updates or changes to our practices as well as commitments to continue existing practices that our directors believe contribute positively to the effect functioning of our Board and its committees.

Hedging Policy

Under our Corporate Governance Guidelines and other policies, all Sealed Air Corporation directors, executive officers and certain other key executives are prohibited from hedging and speculative trading of Sealed Air securities. They may not purchase or sell puts, calls, options or other derivative securities based on Sealed Air securities and may not enter hedging or monetization transactions such as zero-based collars and forward sale contracts, in which the holder continues to own the underlying security without all the risks or rewards of ownership. In addition, other than permitted loans from our 401(k) plan, such persons may not purchase Sealed Air securities on margin or borrow against any account in which Sealed Air securities are held, subject, in the case of executive officers and other key executives, to exceptions as may be granted by the Organization and Compensation Committee.

Corporate Governance Materials

The Board of Directors has adopted and operates under Corporate Governance Guidelines that reflect our current governance practices in accordance with applicable statutory and regulatory requirements, including those of the SEC and the NYSE. The Corporate Governance Guidelines are available on our website at https://ir.sealedair.com/corporate-governance/highlights.

 

 

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In addition to our Corporate Governance Guidelines, other information relating to corporate governance at Sealed Air is available on our website at https://ir.sealedair.com/corporate-governance/highlights, including our: (i) Bylaws; (ii) Code of Conduct applicable to all directors, officers and employees of Sealed Air and its subsidiaries; (iii) Code of Ethics for Senior Financial Executives; (iv) Related-Person Transactions Policy and Procedures; (v) Standards for Director Independence; (vi) Qualifications for Nomination to the Board; and (vii) Policy and Procedure for Stockholder Recommendations for Nominations to the Board.

Communicating with Directors

Stockholders and other interested parties may communicate directly with the non-management directors of the Board of Directors by writing to

Non-Management Directors

c/o Corporate Secretary at Sealed Air Corporation

2415 Cascade Pointe Boulevard

Charlotte, North Carolina 28208

or by sending an email to directors@sealedair.com. In either case, the Chairman of the Board will be notified of all such correspondence as appropriate and will communicate with the other directors as appropriate about the correspondence. We have posted information on how to communicate with the non-management directors on our website at https://ir.sealedair.com/corporate-governance/contact-the-board.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Certain Relationships and Related-Person Transactions

Under our Corporate Governance Guidelines, the Board of Directors reviews any relationships or transactions that might constitute a conflict of interest for a director. Under its charter, the Audit Committee reviews and, if appropriate, approves conflicts of interest or potential conflicts of interest involving our senior financial executives, as well as oversees the investigation of and acts, or recommends action of the Board, on any other violations or potential violations of our Code of Conduct or Code of Ethics for Senior Financial Executives by executive officers.

The Board has adopted a Related-Person Transactions Policy and Procedures, which we refer to below as the Related-Person Policy. The current Related-Person Policy is posted on Sealed Air’s website at https://ir.sealedair.com/corporate-governance/highlights. The Related-Person Policy provides for the review of all relationships and transactions in which Sealed Air and any of its executive officers, directors and five-percent stockholders or their immediate family members are participants to determine whether to approve or ratify such relationships or transactions, as well as whether such relationships or transactions might affect a director’s independence or must be disclosed in our Proxy Statement. All such transactions or relationships are covered if the aggregate amount may exceed $120,000 in a calendar year and the person involved has a direct or indirect interest other than solely as a director or a less than 10 percent beneficial ownership interest in another entity. The Related-Person Policy includes a list of certain types of pre-approved relationships and transactions. Determinations whether to approve or ratify any other relationship or transaction are based on the terms of the transaction, the importance of the relationship or transaction to Sealed Air, whether the relationship or transaction could impair the independence of a non-employee director, and whether the relationship or transaction would present an improper conflict of interest for any director or executive officer of Sealed Air, among other factors. Information on relationships and transactions is requested in connection with annual questionnaires completed by each of our executive officers and directors.

Under the Related-Person Policy, the Audit Committee has the responsibility to review and, if appropriate, approve or ratify all relationships and transactions covered under the Related-Person Policy, although the Board has delegated to the chair of the Audit Committee and to our CEO the authority to approve or ratify specified transactions. In making determinations under the Related-Person Policy, the Audit Committee shall consult with the Nominating and Corporate Governance Committee as it deems appropriate. No director can participate in any discussion or approval of a relationship or transaction involving himself or herself (or one of his or her immediate family members). The Related-Person Policy provides that if material information about a previously reviewed transaction changes, our management must convey such information to the Audit Committee at its next meeting. In addition, if management becomes aware of a transaction that should have been reviewed under the Related-Person Policy, management must report the information to the Audit Committee promptly, and the Audit Committee will review the transaction in accordance with the Related-Party Policy and evaluate all options, including approving, ratifying, amending, terminating or rescinding such transaction.

 

 

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Director Compensation

During 2020 annual compensation for non-employee directors consisted of the following components: annual or interim retainers paid at least 50% in shares of common stock; committee fees paid in cash; and other fees for special assignments or director education programs paid in cash. A director may defer payment of annual or interim retainers until retirement from the Board of Directors, as described below. The following table shows the total compensation for non-employee directors during 2020:

 

Director

 

Fees Earned or

Paid in Cash1

($)

Stock Awards2
($)
Total
($)

Zubaid Ahmad

 

82,583

 

105,399

 

187,982

Michael Chu*, **

 

18,750

 

 

18,750

Françoise Colpron

 

112,500

 

125,010

 

237,510

Michael P. Doss

 

5,000

 

220,020

 

225,020

Patrick Duff**

 

7,500

 

 

7,500

Henry R. Keizer*

 

131,500

 

125,010

 

256,510

Jacqueline B. Kosecoff*

 

122,500

 

125,010

 

247,510

Harry A. Lawton III

 

105,000

 

125,010

 

230,010

Neil Lustig*

 

116,250

 

125,010

 

241,260

Suzanne B. Rowland

 

103,750

 

125,010

 

228,760

Jerry R. Whitaker

 

152,000

 

200,010

 

352,010

 

*

Chair of committee during 2020.

 

**

Retired from the Board as of our 2020 Annual Meeting of Stockholders.

 

 

Chairman of the Board.

 

1 

The amounts shown consist of cash compensation paid in 2020. Mr. Keizer’s cash compensation included $4,000 for attending director education programs, as described below under “Other Fees and Arrangements”.

 

2 

The amounts shown represent the aggregate grant date fair value of stock awards granted in 2020 in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation, or FASB ASC Topic 718, for the stock portion of the annual retainers for 2020 and, in the case of Mr. Ahmad, an interim retainer for 2020, under the 2014 Incentive Plan, described below under “Board Retainers” and “Form and Payment of Retainers.” For additional information, refer to Note 21, “Stockholders’ Equity (Deficit)” of Notes to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Mr. Ahmad, Mr. Doss, Ms. Rowland and Mr. Whitaker received stock units under the Deferred Compensation Plan described below. All other directors listed in the table received shares of common stock. The number of shares or stock units paid was determined by dividing the amount of the annual retainer or interim retainer, as applicable, so paid by the closing price of a share of common stock on (a) in the case of the annual retainer, May 21, 2020, the date of the 2020 Annual Meeting of Stockholders, at which meeting all of the non-employee directors were elected, and (b) in the case of the interim retainer paid to Mr. Ahmad, July 17, 2020, the date he was appointed to the Board, in each case, rounding up to the nearest whole share. In addition, Mr. Doss elected to have the cash portion of his annual retainer paid in stock units, with the number of stock units similarly determined by dividing the amount of his annual retainer by the closing price of a share of common stock on May 21, 2020. All shares and stock units paid as all or part of annual or interim retainers in 2020 are fully vested. Directors are credited with dividend equivalents on stock units, as described under “Deferred Compensation Plan” below, which are not included in the table above.

Director Compensation Processes

Our director compensation program is intended to enhance our ability to motivate, retain and attract non-employee directors of exceptional ability and to promote the common interest of directors and stockholders in enhancing the value of our common stock.

The Board of Directors reviews director compensation at least annually based on recommendations by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee has the sole authority to engage a consulting firm to evaluate director compensation and since 2010 has engaged FW Cook to assist in establishing director compensation. The Nominating and Corporate Governance Committee and the Board base their determinations on director compensation on recommendations from FW Cook and based on reviewing

 

 

2021 Proxy Statement

 

  

 

 

 

 

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commercially available survey data related to general industry director compensation trends at companies of comparable size and our peer group companies. FW Cook also serves as the independent consultant to the Compensation Committee on executive compensation.

Board Retainers

Under the 2014 Incentive Plan, each director who is neither an officer nor an employee of Sealed Air and who is elected at an annual meeting of stockholders receives an annual retainer for serving as a director. The Board of Directors sets the amount of the annual retainer prior to the annual meeting based on the recommendation of the Nominating and Corporate Governance Committee.

The 2014 Incentive Plan gives the Board the flexibility to set annual retainers based on a fixed number of shares of common stock, a fixed amount of cash, or a combination of shares of common stock and cash. In late 2019, based on peer company data provided by FW Cook, the Nominating and Corporate Governance Committee recommended and the Board approved 2020 annual retainers in the amount of (a) $200,000 payable in shares of common stock and $152,000 payable in cash (or in shares of common stock at the election of the Chairman of the Board) for the independent Chairman of the Board, and (b) $125,000 payable in shares of common stock and $95,000 payable in cash (or in shares of common stock at the election of each director) for each other non-employee director.

The chair of the Audit Committee received an annual fee of $25,000, and other members of the Audit Committee received annual fees of $10,000. The chair of the Nominating and Corporate Governance Committee received an annual fee of $15,000, and other members of the Nominating and Corporate Governance Committee received annual fees of $7,500. The chair of the Compensation Committee received an annual fee of $20,000, and other members of the Compensation Committee received annual fees of $10,000. Committee fees are paid in quarterly installments in cash.

A non-employee director who is elected other than at an annual meeting is entitled to an interim retainer on the date of election. The interim retainer is a pro rata portion of the annual retainer to reflect less than a full year of service.

Form and Payment of Retainers

We pay at least half of each annual or interim retainer in shares of common stock or deferred stock units and the remainder in cash, except that each non-employee director may elect, prior to becoming entitled to the retainer, to receive the entire retainer in shares of common stock. For any portion of an annual or interim retainer denominated in cash but paid in shares of common stock, we calculate the number of shares of common stock to be issued by dividing the amount payable in shares of common stock by the fair market value per share. With respect to an annual retainer, the fair market value per share is the closing price of the common stock on the Annual Meeting date or, if no sales occurred on that date, the closing price on the most recent prior day on which a sale occurred. The number of shares issued as all or part of an interim retainer is determined based on the closing price of the common stock on the date of the director’s election to the Board of Directors or, if no sales occurred on that date, the closing price on the most recent prior day on which a sale occurred. If any calculation would result in a fractional share of common stock being issued, then we round the number of shares to be issued up to the nearest whole share.

We issue shares of common stock in payment of the stock portion of a retainer to the non-employee director promptly after he or she becomes entitled to receive it. We pay the cash portion of an annual retainer in a single payment shortly after the end of the calendar quarter during which the director is elected. We pay the cash portion of an interim retainer shortly after the end of the calendar quarter in which the non-employee director is elected, except that if the non-employee director is elected between April 1 and the next annual meeting of stockholders, then we pay the cash portion of the interim retainer shortly after the non-employee director is elected.

 

 

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Deferred Compensation Plan

Our Deferred Compensation Plan for Directors permits a non-employee director to elect to defer all or part of the director’s annual retainer until the director retires from the Board of Directors. Each non-employee director has the opportunity to elect to defer the stock portion of the annual retainer. If a non-employee director makes that election, he or she may also elect to defer the cash portion, if any, of the annual retainer. We hold deferred shares of common stock as stock units in a stock account. Such stock units may not be transferred by a director. We do not issue these shares until we pay the director, normally after retirement from the Board, so the director cannot vote the stock units. We consider deferred shares, when issued, as issued under the 2014 Incentive Plan. In 2013, the Board amended our Deferred Compensation Plan for Directors to allow for directors to be credited with additional full or fractional stock units for cash dividends received with respect to their outstanding stock units. We credit deferred cash to an unfunded cash account that earns interest quarterly at the prime rate less 50 basis points until paid. During 2020 none of the non-employee directors who participated in the Deferred Compensation Plan for Directors received above market earnings on the cash or stock units credited to his or her account. A non-employee director may elect to receive the balances in his or her stock and cash accounts in a single payment during January of the year after retirement or in five annual installments starting during January of the year after retirement.

Restrictions on Transfer

A non-employee director may not sell, transfer or encumber shares of common stock issued under the 2014 Incentive Plan while the director serves on the Board of Directors, except that a non-employee director may make gifts of shares issued under the 2014 Incentive Plan to family members or to trusts or other forms of indirect ownership so long as the non-employee director would be deemed a beneficial owner of the shares with a direct or indirect pecuniary interest in the shares and would retain voting and investment control over the shares while the non-employee director remains a director of Sealed Air. During this period, the director, or the director’s account under the Deferred Compensation Plan for Directors, is entitled to receive or be credited with any dividends or other distributions in respect of the shares. The director has voting rights in respect of the shares issued to the director under the 2014 Incentive Plan. Since we hold deferred shares of common stock as stock units in a stock account, with no shares issued until payment is made to the non-employee director, directors cannot vote stock units representing deferred shares of common stock. The restrictions on the disposition of shares issued pursuant to the 2014 Incentive Plan terminate upon the occurrence of specified events related to a change in control of Sealed Air.

Other Fees and Arrangements

During 2020 non-employee directors who attended director education programs received a fee of $2,000 per day. All directors are entitled to reimbursement for expenses incurred in connection with Board service, including attending Board or Committee meetings. We pay these fees and reimbursements in cash; these payments are not eligible for deferral under the Deferred Compensation Plan for Directors described above.

2021 Director Compensation

In late 2020, based on peer company data provided by FW Cook, the Nominating and Corporate Governance Committee recommended, and the Board approved, 2021 annual retainers in the amount of (a) $224,000 payable in shares of common stock and $160,000 payable in cash (or in shares of common stock at the election of the Chairman of the Board) for the independent Chairman of the Board, and (b) $140,000 payable in shares of common stock and $100,000 payable in cash (or in shares of common stock at the election of each director) for each other non-employee director. No changes were made in any of the other fees payable to directors for 2021 as described in “Board Retainers” above.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Director Stock Ownership Guidelines

In order to align the interests of directors and stockholders, we believe that our directors should have a significant financial stake in Sealed Air. To further that goal, we maintain stock ownership guidelines for non-employee directors. The current stock ownership guidelines for non-employee directors, which are part of our Corporate Governance Guidelines, specify that non-employee directors hold shares of common stock and stock units under our Deferred Compensation Plan for Directors equal in aggregate value to five times the amount of the annual retainer payable in cash, which equaled (a) for the Chairman of the Board, $760,000 for 2020 and $800,000 for 2021, and (b) for other directors, $475,000 for 2020 and $500,000 for 2021. Directors first elected after February 18, 2010 have five years following first election to achieve the guidelines. In the event of an increase in the amount of the annual retainer payable in cash, directors serving when the increase is approved by the Board of Directors have two years after such approval to achieve the increased guideline. As of March 22, 2021, all directors were in compliance with the guidelines for 2020, other than Mses. Colpron and Rowland and Messrs. Ahmad, Doss and Lawton, who are within the initial five-year period allowed under the policy.

 

 

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Proposal 1. Election of Directors

The Board has designated as nominees for election as directors the nine persons named below. Jacqueline B. Kosecoff, who currently is a director, is not standing for re-election to the Board at the Annual Meeting. As a result, she will step down from the Board and the size of the Board will be reduced to nine directors, effective at the Annual Meeting.

Each of the director nominees currently serves as a director of Sealed Air. Zubaid Ahmad, who was appointed to the Board in July 2020, initially was identified by a third party search firm hired by the Nominating and Corporate Governance Committee, and was appointed to the Board following evaluation and nomination by the Nominating and Corporate Governance Committee. All other nominees were elected by stockholders at our 2020 Annual Meeting of Stockholders. Each nominee presented below was recommended by the Nominating and Corporate Governance Committee and nominated by the Board. Each director elected at the Annual Meeting will serve until our 2022 Annual Meeting of Stockholders or until a successor is duly elected and qualified. Each director nominee has consented to being named in the Proxy Statement and to serving as a director, if elected.

Shares that are voted as recommended by the Board will be voted in favor of the election as directors of the nominees named below. If any nominee becomes unavailable for any reason or if a vacancy should occur before the election, which we do not anticipate, the shares represented by a duly completed proxy may be voted for a substitute nominee designated by the Board, unless the Board chooses to reduce its size.

Director Qualifications

The Board has adopted Qualifications for Nomination to the Board, a copy of which is posted on our website at https://ir.sealedair.com/corporate-governance/highlights. The Qualifications provide that, in selecting directors, the Board of Directors should seek to achieve a mix of directors that enhances the diversity of background, skills and experience on the Board, including with respect to age, gender, international background, race, ethnicity and specialized experience. Directors should have relevant expertise and experience and be able to offer advice and guidance to our CEO based on that expertise and experience. Also, a majority of directors should be independent under applicable NYSE listing standards, Board and Committee guidelines, and applicable laws and regulations. Each director is also expected to:

 

   

be of the highest ethical character and share the values of Sealed Air as reflected in its Code of Conduct;

 

   

be highly accomplished in his or her field, with superior credentials and recognition;

 

   

have sound business judgment, be able to work effectively with others, have sufficient time to devote to our affairs, and be free from conflicts of interest; and

 

   

be independent of any particular constituency and able to represent all of our stockholders.

The Board has determined that, as a whole, it must have the right mix of characteristics, skills and diversity to provide effective oversight of Sealed Air. In connection with the Board’s annual self-assessment process, it reviews the diversity of skills and characteristics needed by the Board in its oversight of Sealed Air, as well as the effectiveness of the diverse mix of skills and experience. As part of the review process, the Board considers the skill areas represented on the Board, those skill areas represented by directors expected to retire or leave the Board in the near future, and recommendations of directors regarding skills that could improve the ability of the Board to carry out its responsibilities.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Proposal 1. Election of Directors    

 

Identifying and Evaluating Nominees for Directors

When the Board or its Nominating and Corporate Governance Committee has identified the need to add a new director with specific qualifications or to fill a vacancy on the Board, the chair of the Nominating and Corporate Governance Committee will initiate a search to identify candidates who meet the Company’s “Qualifications for Nomination to the Board.” Such search may include seeking input from other directors and senior management, reviewing any candidates that the Nominating and Corporate Governance Committee has previously identified, and, if necessary, hiring an external search firm. The Board is committed to a policy of inclusiveness, and, as such, the Nominating and Corporate Governance Committee, in performing its responsibilities to review director candidates and recommend candidates to the Board for election, considers in each search diversity of age, gender, international background, race, ethnicity and specialized experience, in addition to the other criteria set forth above under “—Director Qualifications” and such other factors as the Nominating and Corporate Governance Committee deems appropriate. Similarly, in conducting its annual self-assessment, as described above, the Board considers these same characteristics, criteria and other factors. Our director searches are conducted consistent with these priorities, and search firms with which we work are instructed accordingly.

The Nominating and Corporate Governance Committee will identify the initial list of candidates who satisfy the above criteria and otherwise qualify for membership on the Board. At least one member of the Nominating and Corporate Governance Committee (preferably the chair) and our Chairman of the Board and Chief Executive Officer will interview each qualified candidate; other directors will also interview the candidate if practicable. Based on a satisfactory outcome of those interviews, the Nominating and Corporate Governance Committee will make its recommendation on the candidate to the Board.

Our Bylaws include a procedure that stockholders must follow in order to nominate a person for election as a director at an annual meeting of stockholders, other than a nomination submitted by a stockholder to the Nominating and Corporate Governance Committee in accordance with our Policy and Procedure for Stockholder Nominations to the Board, as described above under “Corporate Governance—Nominating and Corporate Governance Committee.” The Bylaws require that timely notice of the nomination in proper written form, including all required information, be provided to the Corporate Secretary of Sealed Air. A copy of our Amended and Restated Bylaws is posted on our website at https://ir.sealedair.com/corporate-governance/highlights.

Information Concerning Nominees

The information appearing in the following table sets forth, as of April 6, 2021, for each nominee for election as a director:

 

   

The nominee’s business experience for at least the past five years;

 

   

The year in which the nominee first became a director of Sealed Air;

 

   

The nominee’s age;

 

   

Directorships held by each nominee presently and at any time during the past five years at any public company or registered investment company; and

 

   

The reasons the Board of Directors concluded that the nominee should serve as one of our directors in light of our business and structure.

There are no family relationships among any of our directors, nominees for director and officers.

 

 

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      Proposal 1. Election of Directors  

 

Nominees for Election as Directors

 

 

 

LOGO

 

Director Since

2020

 

Age

59

 

Committees

Audit

 

Nominating and Corporate Governance

 

    Zubaid Ahmad   
 

 

Mr. Ahmad is the Founder and Managing Partner of Caravanserai Partners LLC, a merchant banking firm focused on M&A and sovereign advisory, strategic capital raising, and private equity transactions, which he established in 2017. Previously, Mr. Ahmad served at Citigroup Inc., where he was Vice Chairman, Institutional Clients Group, since joining the firm in 2010, and held a number of senior leadership roles, including Co-Head of Global Asset Managers group from 2016 to 2017 and Chief Operating Officer of the Global Corporate and Investment Banking division. Before Citigroup, Mr. Ahmad held senior roles at Standard Chartered, J.P. Morgan and Credit Suisse, among other firms. He also serves as a Senior Advisor (US) for CPP Investments, a global investment organization that invests the assets of Canada Pension Plan, and a Senior Advisor for Muzinich & Co., a corporate credit manager.

 

Mr. Ahmad received a Bachelor of Science degree in business administration from Georgetown University and a Master of Business Administration degree from Harvard University.

 

Mr. Ahmad brings more than 35 years of global experience in corporate and investment banking having served corporate, asset management and government clients. His strong background in global financial and investment markets, as well as his understanding of finance and accounting, are of great value to the Board.

 

 

 

 

LOGO

 

Director Since

2019

 

Age

50

 

Committees

Audit

 

Organization and Compensation

 

 

    Françoise Colpron   
 

 

Ms. Colpron is Group President, North America of Valeo SA, responsible for the activities of the group in the United States, Mexico and Canada since 2008. She joined Valeo in 1998 in the legal department and has had several roles, first as Legal Director for the Climate Control branch in Paris, and most recently as General Counsel for North and South America from 2005 to 2015. Before joining Valeo, Ms. Colpron began her career as a lawyer at Ogilvy Renault in Montreal, Canada (now part of the Norton Rose Group). Ms. Colpron’s global business experience includes prior work assignments in Europe, Asia and North America.

 

Ms. Colpron earned a Civil Law degree in 1992 from the University of Montreal, Canada. She was admitted to the Quebec bar in 1993 and to the Michigan bar in 2003. In 2015, Ms. Colpron was recognized by Automotive News as one of the “100 Leading Women in the North American Auto Industry” and, in 2016, by Crain’s Detroit Business as one of the “100 Most Influential Women in Michigan,” a list that includes leaders in business, academia, nonprofits and public policy. Ms. Colpron was inducted into the French Légion d’Honneur in 2015.

 

Sealed Air benefits from Ms. Colpron’s international background as well as her business and legal experience.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Proposal 1. Election of Directors    

 

 

 

LOGO

 

Director Since

2017

 

Age

58

 

    Edward L. Doheny II   
 

 

Mr. Doheny is the President and Chief Executive Officer of Sealed Air. Mr. Doheny joined Sealed Air as Chief Operating Officer and CEO-Designate and a director in September 2017. He became President and CEO effective January 1, 2018. Mr. Doheny previously served at Joy Global Inc. since 2006, where he was President and Chief Executive Officer and a director from December 2013 through May 2017. Prior to joining Joy Global, Mr. Doheny had a 21-year career with Ingersoll-Rand Co., where he held a series of senior executive positions of increasing responsibility, including President of Industrial Technologies from 2003 to 2005 and President of the Air Solutions Group from 2000 to 2003.

 

Mr. Doheny currently serves as a director of Eastman Chemical Corporation, where he serves on the audit, the finance and the environmental, safety and sustainability committees. From 2012 to 2019, Mr. Doheny served as a director of John Bean Technologies Corporation, where he served on the compensation and the nominating and governance committees.

 

Mr. Doheny earned a Bachelor of Science degree in engineering from Cornell University and a Master of Science degree in Management from Purdue University’s Krannert School of Management.

 

Mr. Doheny brings more than 30 years of experience leading global manufacturers of highly mechanized equipment and systems, including a keen focus on solutions, service and operational excellence and a proven ability to drive profitable innovation-based growth strategies.

 

 

 

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Director Since

2020

 

Age

54

 

Committees

Organization and Compensation

 

    Michael P. Doss   
 

 

Mr. Doss has served as the President and Chief Executive Officer and a director of Graphic Packaging Holding Company since January 2016. Prior to that time, he held the position of President and Chief Operating Officer from May 2015 through December 2015 and Chief Operating Officer from January 2014 until May 2015. Prior to these positions, Mr. Doss held various positions with Graphic Packaging Holding Company, including Executive Vice President, Commercial Operations; Senior Vice President, Consumer Packaging Division; Senior Vice President, Consumer Products Packaging; Vice President of Operations, Universal Packaging Division; and Director of Web Systems for the Universal Packaging Division. Since joining Graphic Packaging International Corporation in 1990, Mr. Doss has held positions of increasing management responsibility, including Plant Manager at the Gordonsville, TN and Wausau, WI plants. Mr. Doss serves on the Board of Directors for the American Forest & Paper Association, the Sustainable Forest Initiative, the Paper Recycling Coalition, the Atlanta Area Council of the Boy Scouts of America and the Paper & Packaging Check-Off Board. He is also active in the Metro Atlanta Chamber of Commerce.

 

Mr. Doss received a Bachelor of Science degree in industrial marketing and a Master of Business Administration degree in finance from Western Michigan University. He also is a graduate of the Harvard University General Manager Program.

 

Mr. Doss’ financial and business management experience, including his service as a public company chief executive officer, and his knowledge of the packaging industry greatly benefit Sealed Air.

 

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Proposal 1. Election of Directors    

 

 

 

LOGO

 

Director Since

2017

 

Age

64

 

Committees

Audit (Chair)

 

Nominating and Corporate Governance

 

    Henry R. Keizer   
 

 

Mr. Keizer formerly served as Deputy Chairman and Chief Operating Officer of KPMG, the U.S.-based and largest individual member firm of KPMG International, or KPMGI, a role from which he retired in December 2012. KPMGI is a professional services organization that provides audit, tax and advisory services in 152 countries. Mr. Keizer previously held a number of key leadership positions throughout his 35 years at KPMG, including Global Head of Audit from 2006 to 2010 and U.S. Vice Chairman of Audit from 2005 to 2010.

 

Mr. Keizer currently serves as Chairman of the Board and as a director of Hertz Global Holdings, Inc., where he chairs the audit committee and serves on the financing committee and the nominating and governance committee. He is a trustee of BlackRock Funds, and serves as a director of Park Indemnity Ltd., a privately held Bermuda captive insurer affiliated with KPMGI. He previously served as a director and audit committee chair of WABCO Holdings Inc. until it was sold in May 2020, as a director of MUFG Americas Holdings, Inc. and MUFG Union Bank, a financial and bank holding company, and as a director of Montpelier Re Holdings, Ltd., a global property and casualty reinsurance company until it merged with Endurance Specialty Holdings Ltd. in July 2015. Mr. Keizer was also a director of the American Institute of Certified Public Accountants from 2008 to 2011.

 

Mr. Keizer holds a Bachelor’s degree in Accounting, summa cum laude, from Montclair State University, New Jersey.

 

Mr. Keizer has significant management, operating and leadership skills gained as Deputy Chairman and Chief Operating Officer of KPMG and as a director of multiple public and private companies. Mr. Keizer, a certified public accountant, has extensive knowledge and understanding of financial accounting, internal control over financial reporting and auditing standards from his many years of experience and key leadership positions he held with KPMG. Mr. Keizer also has over four decades of diverse industry perspective gained through advising companies engaged in manufacturing, banking, insurance, consumer products, retail, technology and energy, providing him with perspective on the issues facing major companies and the evolving global business environment.

 

Mr. Keizer’s extensive leadership experience at KPMG provides the Board with expertise in risk management and oversight over our domestic and international operations.

 

 

 

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LOGO

 

Director Since

2019

 

Age

46

 

Committees

Organization and Compensation

 

    Harry A. Lawton III   
 

 

Mr. Lawton has served as President and CEO and as a director of Tractor Supply Company since January 2020. Mr. Lawton previously served as President of Macy’s, Inc., from September 2017 to December 2019. As President of Macy’s, Mr. Lawton was responsible for all aspects of the Macy’s brand, including merchandising, marketing, stores, operations, technology, and consumer insights and analytics. Previously, Mr. Lawton was senior vice president of eBay North America since April 2015. In that role, Mr. Lawton oversaw all aspects of eBay’s Americas business unit, including marketing, merchandising, operations, business selling, consumer selling, and advertising, as well as global responsibility for shipping, payments, risk, and trust. Prior to joining eBay, Lawton spent 10 years in various leadership roles at Home Depot, where he most recently was senior vice president for merchandising. Mr. Lawton was responsible for accelerating the growth of Home Depot’s Internet business and building it to nearly $2 billion. Prior to that, Mr. Lawton was an associate principal at McKinsey & Co., providing strategic advice to executive teams in consumer packaged goods and manufacturing industries.

 

Mr. Lawton previously served on the board of Buffalo Wild Wings, Inc. He currently serves on the corporate advisory board for The University of Virginia’s Darden School of Business and is a member of the CEO Roundtable for the American Heart Association. He holds a Master of Business Administration degree from the University of Virginia and dual Bachelor’s degrees in Chemical Engineering, and Pulp and Paper Technology from North Carolina State University.

 

Mr. Lawton’s education, business management experience and knowledge of the e-commerce and retail industries greatly benefit Sealed Air.

 

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Proposal 1. Election of Directors    

 

 

 

LOGO

 

Director Since

2015

 

Age

59

 

Committees

Audit

 

Nominating and Corporate Governance (Chair)

 

    Neil Lustig   
 

 

Mr. Lustig has served as President and CEO of GAN Integrity Inc. since March 2019. Mr. Lustig served as President and CEO of Sailthru, Inc. from March 2015 until its acquisition by The CM Group in January 2019. Mr. Lustig served at Vendavo Inc., where he was Senior Vice President Global Sales from August 2007 to September 2010 before becoming President and CEO in September 2010. After retiring as President and CEO in October 2014, Mr. Lustig served as an advisor to Vendavo from October 2014 to October 2015. Mr. Lustig worked at Ariba, Inc. from 2001 to 2007, serving in multiple managerial roles in Ariba’s U.S. and European businesses, and started his career in technology at IBM, where he held a variety of engineering, sales and management roles over a sixteen year period.

 

Mr. Lustig received a Bachelor of Science degree in computer science and applied mathematics from the State University of New York at Albany.

 

Mr. Lustig has more than 25 years of experience in software, hardware and cloud technology industries. His education, business management experience and knowledge of software, hardware and cloud technology industry are valuable to Sealed Air, including in connection with our innovation strategies.

 

 

 

 

LOGO

 

Director Since

2020

 

Age

59

 

Committees

Audit

 

Nominating and Corporate Governance

 

    Suzanne B. Rowland   
 

 

Ms. Rowland is the former Group Vice President, Industrial Specialties, at Ashland Global Holdings, Inc., a position she held from June 2016 through March 2019 during the final phase of Ashland’s transformation from a holding company to a specialty chemicals company. Prior to joining Ashland, Ms. Rowland held senior executive positions at Tyco International including Vice President and General Manager, Fire Products and Vice President, Business Excellence, Flow Control. Previously, she worked at Rohm and Haas for over 20 years, where she served in senior executive roles including Vice President, Procurement and Vice President & Global Business Director, Adhesives.

 

Ms. Rowland currently serves on the board of L.B. Foster Company, where she is chair of the nomination and governance committee and is on the strategy committee, on the board of SPX FLOW, Inc., where she is on the audit, compensation, and nominating and governance committees, and was recently appointed to the board of James Hardie Industries, plc., where she serves on the audit committee.

 

Ms. Rowland received a Bachelor of Science degree in chemical engineering from the University of Pennsylvania and a Master of Science degree in business studies from the London Business School.

 

Ms. Rowland’s extensive operational and leadership experience in global industrial material markets provide valuable insight into strategic and operational issues for Sealed Air. Her comprehensive knowledge of lean principles, strategic sourcing, and mergers and acquisitions are also beneficial assets to the Board.

 

 

 

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      Proposal 1. Election of Directors  

 

 

 

LOGO

 

Director Since

2012

Chairman of the Board of Directors

 

Age

70

 

Committees

Ex Officio, Non-Voting Member of Audit, Nominating and Corporate Governance, and Organization and Compensation Committees

 

    Jerry R. Whitaker   
 

 

Mr. Whitaker worked at Eaton Corporation, a global manufacturer of highly engineered products, as President of Electrical Sector Americas, until his retirement in June 2011, as President of Power Components & Systems Group from 2004 through 2009, and in various other management positions from 1994 to 2004. Prior to joining Eaton Corporation, Mr. Whitaker spent 22 years with Westinghouse Electric Corp.

 

Mr. Whitaker currently serves as a director of Matthews International Corporation, where he is the chair of the nominating and corporate governance committee and a member of the executive committee and the audit committee. Mr. Whitaker also serves on the advisory board for The Syracuse University School of Engineering.

 

Mr. Whitaker received a Bachelor of Science degree from Syracuse University and a Master of Business Administration degree from George Washington University.

 

Mr. Whitaker’s extensive experience and knowledge as an executive in global manufacturing industries are valuable resources to Sealed Air.

 

The Board of Directors recommends a vote “FOR” each of the nine nominees for election as directors.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Beneficial Ownership Table

The following table sets forth, as of the record date of March 22, 2021 (or as otherwise indicated), the number of outstanding shares and the percentage of common stock beneficially owned:

 

   

by each person known to us to be the beneficial owner of more than five percent of the then-outstanding shares of common stock;

 

   

directly or indirectly by each current director, nominee for election as a director, and named executive officer who is included in “Executive Compensation—Executive Compensation Tables—2020 Summary Compensation Table”; and

 

   

directly or indirectly by all of our current directors and executive officers as a group.

The number of shares of common stock owned by each person is determined under the rules of the SEC. Under these rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares that the individual has the right to acquire within sixty days after the record date of March 22, 2021, or May 18, 2021, through the conversion of a security or other right. Unless otherwise indicated, each person has sole investment and voting power, or shares such power with a family member, with respect to the shares set forth in the following table. The inclusion in this table of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares for any other purpose.

 

 Beneficial Owner

   Shares of Common
Stock Beneficially
Owned
  Percentage of
Outstanding
Shares of Common
Stock

The Vanguard Group, Inc.

100 Vanguard Blvd

Malvern, PA 19355

       17,279,297  1        11.28 %

T. Rowe Price Associates, Inc.

100 E. Pratt Street

Baltimore, MD 21202

       16,503,647  2        10.77 %

Janus Henderson Group plc

201 Bishopsgate, London

EC2M 3AE, United Kingdom

       10,628,522  3        6.94 %

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

       10,181,553  4        6.64 %

Zubaid Ahmad

       0  5        *

Emile Z. Chammas

       179,045  6, 8        *

Françoise Colpron

       7,137       *

Karl R. Deily

       157,037  6, 8        *

Edward L. Doheny II

       161,332  6, 7, 8        *

Michael P. Doss

       0  5        *

Henry R. Keizer

       14,156       *

Jacqueline B. Kosecoff

       45,104  5, 9        *

Harry A. Lawton III

       9,362       *

Neil Lustig

       21,523       *

Suzanne B. Rowland

       0  5        *

James R. Sullivan

       19,557  6, 8        *

Jerry R. Whitaker

       10,021  5, 9        *

Angel S. Willis

       8,834  6, 8        *

All current directors and executive officers as a group (16 persons)

       520,534  10        *

 

 

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      Beneficial Ownership Table  

 

*

Less than 1%.

 

1 

The ownership information set forth in the table is based on information contained in a Schedule 13G/A, filed with the SEC on February 10, 2021 by The Vanguard Group, Inc., with respect to ownership of shares of common stock, which indicated that The Vanguard Group, Inc. had shared voting power with respect to 237,819 shares, sole dispositive power with respect to 16,700,585 shares and shared dispositive power with respect to 578,712 shares.

 

2 

The ownership information set forth in the table is based on information contained in a Schedule 13G/A, filed with the SEC on February 16, 2021 by T. Rowe Price Associates, Inc., with respect to ownership of shares of common stock, which indicated that T. Rowe Price Associates, Inc. had sole voting power with respect to 6,595,420 shares and sole dispositive power with respect to 16,503,647 shares.

 

3 

The ownership information set forth in the table is based on information contained in a Schedule 13G/A, filed with the SEC on February 11, 2021 by Janus Henderson Group PLC, with respect to ownership of shares of common stock, which indicated that Janus Henderson Group PLC had shared voting power with respect to 10,628,522 shares and shared dispositive power with respect to 10,628,522 shares.

 

4 

The ownership information set forth in the table is based on information contained in a Schedule 13G/A, filed with the SEC on February 1, 2021 by BlackRock, Inc., with respect to ownership of shares of common stock, which indicated that BlackRock, Inc. had sole voting power with respect to 8,885,339 shares and sole dispositive power with respect to 10,181,553 shares.

 

5 

The number of shares of common stock listed in the table does not include 58,239 stock units held in the stock accounts of the non-employee directors under our Deferred Compensation Plan for Directors. Each stock unit represents one share of common stock. Holders of stock units cannot vote the shares represented by the units or transfer such units; see “Director Compensation—Deferred Compensation Plan” above. The stock units so held by non-employee directors are as follows:

 

Zubaid Ahmad

     2,893  

Michael P. Doss

     7,454  

Jacqueline B. Kosecoff

     8,887  

Suzanne B. Rowland

     4,235  

Jerry R. Whitaker

     34,770  

Total

     58,239  

 

6 

This figure does not include restricted stock units awarded under the 2014 Omnibus Incentive Plan. The number of such restricted stock units held by the named executive officers and by the current directors and executive officers as a group are as follows:

 

Emile Z. Chammas

     17,747  

Karl R. Deily

     9,740  

Edward L. Doheny II

     130,883  

James M. Sullivan

     6,662  

Angel S. Willis

     13,000  

Current directors and executive officers as a group

     221,686  

 

7 

This figure does not include restricted stock units in the form of stock leverage opportunity awards. Under our Annual Incentive Plan, our executive officers have the opportunity to designate a portion of their annual bonus to be received as SLO awards. The numbers of such restricted stock units held by the named executive officers and by the current directors and executive officers as a group are as follows:

 

Edward L. Doheny II

     137,874  

Current directors and executive officers as a group

     137,874  

 

8 

This figure includes shares of common stock held under our 401(k) and Profit-Sharing Plan with respect to which our executive officers individually and as a group may, by virtue of their participation in the plan, be deemed to be beneficial owners. The approximate numbers of share equivalents held by the named executive officers and by the current directors and executive officers as a group under the plan are as follows:

 

Emile Z. Chammas

     4,848  

Karl R. Deily

     7,653  

Edward L. Doheny II

     1,585  

James M. Sullivan

     942  

Angel S. Willis

     942  

Current directors and executive officers as a group

     14,923  

 

9 

The number of shares of common stock listed for Dr. Kosecoff includes 45,104 shares that she holds indirectly through a certain estate planning vehicle and for which she shares voting and investment power with a family member. The number of shares of common stock listed for Mr. Whitaker includes 3,000 shares for which he shares voting and investment power with a family member.

 

10 

This figure includes, without duplication, the outstanding shares of common stock referred to in Notes 8 and 9 above held by our current directors and executive officers, and does not include stock units referred to in Notes 5, 6 and 7 above held by our current directors and executive officers.

The address of all individuals listed above is c/o Sealed Air Corporation, 2415 Cascade Pointe Boulevard, Charlotte, North Carolina 28208.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Executive Compensation

 

Compensation Discussion and Analysis

Our Compensation Discussion and Analysis, or CD&A, describes the key features of our executive compensation program and the Compensation Committee’s approach in deciding 2020 compensation for our named executive officers:

 

Name

  Title (As of December 31, 2020)

 

Edward L. Doheny II

 

 

 

President and Chief Executive Officer

 

 

James M. Sullivan

 

 

 

Senior Vice President, Chief Financial Officer

 

 

Emile Z. Chammas

 

 

 

Senior Vice President, Chief Manufacturing and Supply Chain Officer

& Chief Transformation Officer

 

 

Karl R. Deily

 

 

 

Senior Vice President, Chief Commercial Officer

 

 

Angel S. Willis

 

 

 

Vice President, General Counsel and Secretary

 

 

  We Have Divided this CD&A into Five Parts:    
  2020 Overview     page 43    
  Executive Compensation Program Design and Objectives     page 45    
  2020 Compensation Decisions and Results     page 48    
  Governance of Our Executive Compensation Program     page 57    
 

Other Features and Policies

 

   

 

page 59

 

 

 

 

 

 

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      Executive Compensation  

 

2020 Overview

Key Business Accomplishments in 2020

Throughout 2020, we focused on executing our strategies and delivering on our purpose. Despite the many challenges presented by COVID-19, the resiliency and commitment of our people coupled with our broad portfolio and global scale enabled us to exceed our 2020 commitment on sales, earnings, EPS and cash flow while delivering strong operational and cultural results.

 

Net Sales   Adj EBITDA   Adj EPS    Free Cash Flow
$4.9B   $1.05B   $3.19    $556M

+2%

 

+9%

21.4% margin

  +13%    +73%

COVID-19 Challenges

COVID-19 presented new challenges for Sealed Air and our operations around the world. Our zero harm focus for the health and safety of our people and serving our customers have continued to be our top priorities. Our local, regional and corporate crisis management teams remain active and business continuity plans remain in effect with minimal disruptions throughout the pandemic.

SEE Automation Strategy

We launched our SEE Automation strategy with the goal to provide differentiated, world-class integrated solutions including automated equipment, services and sustainable materials. We seek opportunities to help customers eliminate waste, simplify processes, remove people from harm’s way and drive ‘touchless’ operations.

SEE Operating Model

We continued to execute our Reinvent SEE business transformation, focused on the 4P’S: Performance, People, Products, Process and Sustainability. Operational disciplines are becoming embedded in the organization and demonstrating sustained results. During the year, Reinvent SEE delivered incremental Adjusted EBITDA benefits of $118 million. Reinvent SEE is transitioning to our continuous improvement SEE Operating Model which is rooted in economic value add with the goal to drive profitable, above market organic growth, and attractive returns on invested capital.

Sustainability Fueling Our Growth Strategy

We focused on reducing greenhouse gas, energy and water intensity in our operations and at our customers’ operations. We continued to design our packaging solutions to be recyclable, reusable and consist of renewable and/or recycled content. We are progressing towards our 2025 Sustainability and Plastics Pledge aimed to increase plastics circularity in the packaging industry through investing in innovation, reducing plastic waste and collaborating for change.

SEE High Performance Culture

We are a global company with an employee population representing a broad diversity of cultures, languages, ethnicities, and races. In 2020 we launched the SEE Culture Model for the design and execution of our company-wide people and social impact strategy. Our Culture Council, co-chaired by the CEO and the Chief Human Resources Officer, is responsible for overseeing the implementation of the SEE Culture Model. As part of our SEE Culture Model initiative, we formed the Diversity, Equity and Inclusion Council in late 2020, which is chaired by the Vice President, General Counsel and Secretary, to promote a diverse, trusting and inclusive culture for all employees.

 

 

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Executive Compensation    

 

Refer to pages 32 through 44 and page 54 of our Annual Report on Form 10-K filed on February 25, 2021 for additional information about our key accomplishments in 2020 and for important information about the use of non-U.S. GAAP financial measures, including applicable reconciliations to U.S. GAAP financial measures.

Key 2020 Compensation Decisions and Results

Decisions by the Compensation Committee for 2020 demonstrate the direct link between the compensation opportunities for our named executive officers and performance for our stockholders:

 

   

The Compensation Committee established performance goals for 2020 annual incentive awards under the Annual Incentive Plan, focused on a balanced mix of Adjusted EBITDA, profitable growth ratio (operating leverage) and free cash flow goals. The Compensation Committee also considered certain strategic and operational goals established for the executive leadership team, including progress in 2020 towards achieving our 2025 Sustainability and Plastics Pledge.

 

   

The Compensation Committee structured compensation opportunities for our named executive officers for 2020 consistent with the design of our compensation program for 2019, with an emphasis on performance-based annual and long-term incentive compensation opportunities. For the named executive officers, 70% of the long-term incentive compensation opportunity was in the form of an award of performance share units, or PSUs, and 30% was in the form of time-vesting restricted stock units, or RSUs.

 

   

The Compensation Committee established performance goals for the PSUs awarded in early 2020 based on our performance over a three-year performance period, 2020-2022. Performance for the PSUs is measured by a combination of our return on invested capital, or ROIC, the compound annual growth rate, or CAGR, for Adjusted EBITDA, and our relative total stockholder return, or TSR, compared against a group of peer companies. In the prior year, the PSUs included a goal related to Adjusted EBITDA margin for the final year in the performance period, which was replaced by the Adjusted EBITDA CAGR goal in 2020. The Compensation Committee introduced Adjusted EBITDA CAGR to focus the Company on long-term profitable business growth over the performance period. Additionally, this goal better reflects the way we evaluate and pursue growth opportunities consistent with the SEE Operating Model to drive above market growth.

Details regarding the performance measures and targets used for the 2020 annual incentive awards and 2020-2022 PSUs can be found below under “2020 Compensation Decisions and Results.”

The following summarizes the 2020 compensation results for the named executive officers based on annual and three-year performance results through 2020:

 

 

Summary of 2020 Incentive Award Results

 

Award Type

   Performance Measures    Performance Results    Compensation Outcomes

2020 Annual Incentive Awards

  

Adjusted EBITDA

 

Profitable growth ratio

 

Free cash flow

   At or above-target on all three financial goals    Awards earned at 152.3% of target

2018-2020 PSUs

  

2018-2020 Relative TSR

 

2020 Adjusted EBITDA Margin

 

Net Trade Sales CAGR

  

Relative TSR below target

 

2020 Adjusted EBITDA Margin above target

 

Net Trade Sales CAGR below threshold

   Awards earned at 54.6% of target

Details about these 2020 compensation results can be found below under “2020 Compensation Decisions and Results.”

 

 

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2020 Say-on-Pay Vote

In the “say-on-pay” vote at the Annual Meeting held on May 21, 2020, the compensation of our named executive officers was approved by approximately 93% of the stockholders that voted. This result reflected improvement from our 2019 vote and is more consistent with the strong support for our program that we have received in prior years:

 

 

Say-on-Pay Vote Results (% Approving)

 

2016

   2017    2018    2019    2020

97%

   96%    74%    85%    93%

The Compensation Committee reviewed the say-on-pay vote result and did not make any changes to the named executive officer compensation program based on that result. The Company continues to engage with current and prospective stockholders regularly. In 2020 our engagement efforts reached stockholders representing more than 60% of our outstanding shares, and we discussed subjects such as long-term strategy, financial information, acquisitions and divestitures, major trends and issues affecting the Company’s businesses, industry dynamics, executive compensation, sustainability, and environmental, social and governance matters.

Executive Compensation Program Design and Objectives

Our executive compensation program is designed to motivate, retain and attract the right leaders for the Company, to create a performance based culture and environment while executing the business strategy of the Company, and to align with the Company’s business purpose and commitment to long-term sustainable growth and stockholder value creation.

The Compensation Committee believes that our executive compensation program follows best practices with a focus on providing:

 

   

A majority of compensation in performance-based, at-risk compensation

 

   

Pay for performance based on goals for both annual and long-term incentive awards

 

   

A balanced mix of incentive awards tied to annual and long-term performance

Compensation Mix – Pay for Performance Alignment

The at-risk and performance-based components of our 2020 executive compensation program are (i) the annual cash incentive opportunity, and (ii) the PSUs awards, which together are more than 50% of the compensation opportunity for the named executive officers.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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The following charts show the mix of base salary, target annual incentives and target long-term incentives (PSUs and RSUs) for the named executive officers for 2020:

2020 Executive Total Target Direct Compensation Mix

* “Performance-Based” means AIP + PSU

 

LOGO    LOGO

 

Compensation Components

The following table summarizes the key components of our executive compensation program for our named executive officers. A more detailed description is provided in the following sections of this CD&A.

 

Compensation Element

   Description    Objectives

Base Salary

  

Fixed cash compensation based on role and duties

  

Appropriate level of market based fixed pay

 

Assist with recruitment and retention

Annual Incentive

  

Annual cash award based on company financial performance with 0%-200% payout1

 

Company, business unit and individual goals may also be considered

  

Reward executives for driving superior operating and financial results over a one-year timeframe

 

Create a direct correlation between business success and financial reward

Long-Term Incentives2

  

70% PSUs earned based on performance, typically over three-year period with 0%-200% payout

 

30% Time-vesting RSUs vesting annually over three years

  

Reward achievement of longer-term goals and value creation

 

Create direct correlation between longer-term business success and financial reward

 

Encourage retention and ownership

Retirement Plans

  

401(k) and Profit-Sharing Plan

 

Non-qualified deferred compensation plan

  

Provide retirement income and wealth creation for participants

 

Assist with recruitment and retention

Severance Benefits

  

Executive Severance Plan, with reasonable severance benefits3

  

Assist with recruitment and retention

Other Benefits

  

Health care and life insurance programs

 

Limited perquisites

  

Competitive with peer companies

 

Assist with recruitment and retention

 

Additional travel-related perks included for 2020 only to address unique pandemic-related circumstances

 

1 

Some executives may elect payout in RSUs.

 

2 

New hire and retention awards may also be granted, as needed.

 

3 

Subject to negotiated severance provisions for Mr. Doheny and Mr. Sullivan per offer letter agreements.

 

 

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Under our executive compensation program, the Compensation Committee establishes each principal element of compensation for our named executive officers—i.e., base salary, annual incentive targets and long-term incentive compensation targets—taking into account the median range based on data from peer companies (discussed below). The level of the total compensation opportunity for each named executive officer may vary above or below the median range depending on the individual’s role, experience, and other factors. This design addresses one of our key goals: to ensure we provide competitive compensation opportunities so that we can attract and retain executives with the necessary skills to successfully manage a business of our size, scope and complexity. The Compensation Committee has not set any fixed relationship between the compensation of the CEO and that of any other named executive officer.

Named executive officers earn annual incentive and long-term incentive awards based on achievement of performance goals, which we establish to support our annual and longer-term financial and strategic goals. Because annual and long-term incentives make up a significant portion of each named executive officer’s total compensation, these incentive award opportunities address another of our key goals: to provide a performance-oriented environment where above-target compensation can be realized when performance goals are exceeded, and below-target compensation will be paid when performance goals are not achieved.

Key Compensation Policies and Practices

 

What We Do  

    

  Majority of Compensation is Performance-Based

 

65% of total target direct compensation for CEO, and 56% of total target direct compensation for other named executive officers, is performance-based

  Performance Goals for Both Annual and Long-Term Awards

 

Use multiple, balanced measures, including use of both absolute and relative measures for long-term awards

  Stock Ownership Policy

 

Multiple of base salary must be held in common stock — 6x for CEO and 3x for other named executive officers; 50%-100% of after-tax shares must be held until ownership goal is met

  Compensation Recoupment
(Clawback) Policy

 

Recovery of annual or long-term incentive compensation based on achievement of financial results that were subsequently restated due to error or misconduct, regardless of whether named executive officer was responsible for the error or misconduct

  Receive Advice from Independent Compensation Consultant

 

 

Compensation consultant (FW Cook) provides no other services to Sealed Air

  Double-Trigger Vesting of Equity Compensation Upon a Change in Control

 

 

Under our equity compensation plans, vesting following a change in control requires involuntary termination of employment

What We Don’t Do  

    

×   No Supplemental Executive Retirement Plans for Named Executive Officers

 

 

Consistent with focus on performance-oriented environment; reasonable and competitive retirement programs offered

×   No Change in Control Excise Tax Gross-Ups

 

Consistent with focus on performance-oriented environment and commitment to best practices aligned to long-term stockholder interests

×   No Excessive Perquisites or Severance Benefits

 

Consistent with focus on performance-oriented environment and commitment to best practices aligned to long-term stockholder interests

×   No Hedging or Pledging of Company Stock

 

Applies to all executive officers and directors

 

 

2021 Proxy Statement

 

  

 

 

 

 

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2020 Compensation Decisions and Results

Compensation decisions by the Compensation Committee for 2020 continued to demonstrate the direct link between the compensation opportunities for our named executive officers and company performance aligned to increase stockholder value.

The following summarizes the 2020 incentive metrics. A more detailed description of each is provided in the following sections of this CD&A.

 

Annual Incentive

Compensation

     

Long Term Incentive

Compensation

 

Metric

 

   

PSU 70%

Metric

 

   

RSU 30%

    

 

Adjusted

EBITDA

 

Profitable Growth

Ratio

 

Free Cash

Flow

     

Adjusted EBITDA

CAGR

  ROIC  

Relative

TSR

       
LOGO       LOGO

 

Target

 

   

Target

 

   
        $1,020M           24%   $368M             6.0%       14.8%   50th Percentile    

Base Salary

Base salary, as a fixed component of compensation, is an important part of a competitive compensation package. The Compensation Committee establishes salary levels for named executive officers primarily based on consideration of the median range for the peer companies for similar roles and responsibilities. The Compensation Committee also considers broad-based surveys of compensation trends and practices at other industrial companies in the United States, as well as performance and overall role and responsibilities.

In 2020, the Compensation Committee set the base salaries of each of the named executive officers as follows:

 

Name

2019 Salary 2020 Salary         % Increase        

Edward L. Doheny II

 

$1,178,750

          

 

$1,214,113

          

3%

James Sullivan

 

$650,000

 

$682,500

5%

Emile Z. Chammas

 

$646,760

 

$679,098

5%

Karl R. Deily

 

$685,888

 

$706,465

3%

Angel S. Willis1

 

 

$448,050

 

1 

Ms. Willis is a named executive officer for the first time in 2020.

Annual Incentive Compensation

   

Based on a balanced mix of objective financial measures and consideration of other strategic and operational goals

 

   

2020 corporate financial achievement for all three goals was at or above target, resulting in above-target payouts

 

 

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A significant portion of each named executive officer’s total annual compensation opportunity is made in the form of a target annual incentive opportunity under the Annual Incentive Plan. The Annual Incentive Plan is intended to drive high performance results based on the achievement of our strategic goals, with emphasis on performance and alignment of the interests of our named executive officers with our stockholders. The program provides the opportunity to earn a significantly higher annual incentive award (up to 200%) if target performance is exceeded, as well as the risk of a significantly lower annual incentive award, or even no annual incentive award, if target performance is not achieved.

Annual Incentive Compensation Awards Process

 

 

LOGO

For any named executive officer who is eligible to and elects to have all or a portion of the annual incentive award delivered as a “stock leverage opportunity,” or SLO, there is a fifth step related to applying the SLO award rules. Each of these steps is discussed further below.

Setting Target Award Levels

The Compensation Committee determines the target level of annual incentive award for each named executive officer as a percentage of the named executive officer’s base salary. The target percentages established for 2020 were based on each named executive officer’s role with consideration of the median ranges established through peer group and general industry survey data on compensation trends and practices. The following table shows the calculation of the target annual incentive award for each named executive officer:

 

Name

2020 Salary Target%   Target Annual Award     

Edward L Doheny II

$1,214,113

120%

=

$1,456,936     

James Sullivan

$682,500

80%

=

$546,000     

Emile Z. Chammas

$679,098

80%

=

$543,278     

Karl R. Deily

$706,465

75%

=

$529,849     

Angel S. Willis

$448,050

60%

=

$268,830     

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Setting Performance Goals

Awards under the Annual Incentive Plan are based primarily on achievement against pre-established financial performance goals, resulting in a “Financial Achievement Factor,” but may also be adjusted by the Compensation Committee for performance against other operational and strategic goals. For 2020, the Compensation Committee established three financial performance goals to determine the Financial Achievement Factor:

 

 

Metric: 2020 Adjusted EBITDA1 – weighted 50%

    

Achievement

 

   Consolidated Adjusted
    EBITDA Goal Achieved    
  

                    Payout %                 

 

   LOGO

Below Threshold (less than 93% of Target)

  

Less than $949M

  

0%

Threshold (93% of Target)

  

$949M

  

50%

Target

  

$1,020M

  

100%

Max (107% or more of Target)

  

$1,091M and above

  

200%

        

 

Metric: 2020 Profitable Growth Ratio2 – weighted 25%*

    

Achievement

 

   Profit to Growth Ratio Goal
Achieved
  

                Payout %                 

 

   LOGO

Below threshold

  

Less than 15.0%

  

0%

Threshold

  

15.0%

  

50%

Target

  

24.0%

  

100%

Max

  

40.0% and above

  

200%

        

 

Metric: 2020 Free Cash Flow3 – weighted 25%**

    

Achievement

   Free Cash Flow                    Payout %                     LOGO

Below Threshold (less than 80% of Target)

  

Less than $294M

  

0%

Threshold (80% of Target)

  

$294M

  

50%

Target

  

$368M

  

100%

Max (120% or more of Target)

  

$442M and above

  

200%

 

*  

There is no funding for the 2020 profitable growth ratio metric if 2020 Adjusted EBITDA is less than 2019 Adjusted EBITDA (measured at 2020 annual operating plan foreign exchange rates) of $965 million. In addition, payout will be capped at 100% if year over year net trade sales growth in 2020 is less than 3% (measured at 2020 annual operating plan foreign exchange rates).

 

**  

The 2020 free cash flow metric will be capped at 100% of target if the Company achieves a days-on-hand inventory (calculated on 13-month basis) that is less than what was achieved in 2019.

 

1   

Adjusted EBITDA is defined as 2020 adjusted net earnings plus interest expense, taxes and depreciation and amortization. Consolidated Adjusted EBITDA is a non-U.S. GAAP financial measure and excludes the impact of specific items approved by the Compensation Committee as noted below.

 

2   

Profitable growth ratio measures the ratio between year over year change in Adjusted EBITDA and the year over year change in net trade sales. Net trade sales is defined as consolidated revenues from external third parties and excluding intercompany sales.

 

3   

Free cash flow is calculated as net cash provided by operating activities less capital expenditures, calculated on a 13-month average to mitigate the impact of year-end fluctuations in working capital balances.

The Compensation Committee believes that achieving these goals will improve the quality of our earnings, profitability and cash flow, all of which are aligned with the long-term interest of our stockholders. The Adjusted EBITDA goal required higher targeted achievement than 2019 performance. The goals for profitable growth ratio and free cash flow represented challenging but attainable levels of performance determined based on consideration of our annual operating plan and external guidance.

In order to ensure that achievement of these measures represents the performance of the core business, Adjusted EBITDA and profitable growth ratio were calculated at 2020 budgeted foreign exchange rates and adjusted for specific items approved by the Compensation Committee, consistent with our calculation of Adjusted EBITDA

 

 

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disclosed in the Company’s Form 10-K, including restructuring charges, restructuring associated charges, the effect of certain charges related to acquisition and divestiture activity, and the effect of certain other items considered to be Special Items and disclosed in the Company’s Form 10-K. Free cash flow for the purposes of determining payout on the Annual Incentive Plan is based on a 13-month average. These adjustments resulted in 2020 Adjusted EBITDA and free cash flow used for compensation purposes that were higher than 2020 Adjusted EBITDA and free cash flow as disclosed in the Company’s Form 10-K.

2020 Performance Results

In early 2021, the Compensation Committee reviewed the financial performance of our company to determine the 2020 Financial Achievement Factor. The following chart summarizes the results of this analysis:

 

Metric

   Weighting      Threshold      Target      Maximum      Actual      Payout%    

Adjusted EBITDA

    

 

50%

 

      

 

$949M

 

      

 

$1,020M

 

      

 

$1,091M

 

      

 

$1.059M

 

    

154.6%    

 

Profitable Growth Ratio

    

 

25%

 

      

 

15.0%

 

      

 

24.0%

 

      

 

40.0%

 

      

 

57.0%

 

    

200.0%    

Free Cash Flow

    

 

25%

 

      

 

$294M

 

      

 

$368M

 

      

 

$442M

 

      

 

$581M

 

    

100.0%1    

 

Financial Achievement Factor

 

    

152.3%    

 

 

1 

The free cash flow payout percentage was capped at 100% because there was no improvement in days on hand inventory on a 13-month average compared to 2019.

2020 AIP Payouts

The following table summarizes the annual incentive awards determined for each of the named executive officers for 2020:

 

Name

  Target Annual Award     x   Financial Achievement
Factor
  =   Annual Incentive
Award
 

Edward L. Doheny II

 

              $

1,456,935

 

 

x

 

152.3%

 

=

 

        $

2,218,912

 

James Sullivan

 

              $

546,000

 

 

x

 

150.0%1

 

=

 

        $

819,000

 

Emile Z. Chammas

 

              $

543,278

 

 

x

 

152.3%

 

=

 

        $

827,413

 

Karl R. Deily

 

              $

529,849

 

 

x

 

152.3%

 

=

 

        $

806,960

 

Angel S. Willis

 

              $

268,830

 

 

x

 

152.3%

 

=

 

        $

409,428

 

 

1

Payout for Mr. Sullivan is capped at 150% of target per his offer letter agreement.

The Compensation Committee also considered the collective performance of the named executive officers towards certain strategic and operational goals, including progress towards our 2025 Sustainability and Plastics Pledge. The Compensation Committee decided that achievement towards these goals in 2020 warranted payouts under the Annual Incentive Plan based on the full Financial Achievement Factor without further adjustment.

SLO Awards

Under the Annual Incentive Plan, some of our named executive officers also have the opportunity each year to designate a portion of their annual incentive award to be received as an equity award under our equity compensation plan, called stock leverage opportunity, or SLO, awards. The portion to be denominated in SLO awards, in increments of 25% of the annual incentive award, may be given a premium to be determined by the Compensation Committee each year. The stock price used to calculate the number of shares that can be earned is the average closing price of Sealed Air stock for the first 15 trading days of the performance year ($38.50 for 2020). Therefore, the value of the SLO award incorporates changes in stock price during the performance year after the dates used to determine the number of RSUs granted. Once the amount of the earned annual incentive award has been determined for each named executive officer following the end of the year, the cash portion is paid out shortly thereafter, and the SLO award is provided in the form of an award of restricted stock or RSUs under our equity compensation plan with a

 

 

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two-year restriction period. The Compensation Committee believes that SLO awards provide an additional means to align the interests of our named executive officers with those of our stockholders using performance-based compensation.

SLO awards also provide a means for named executive officers to more quickly meet their stock ownership requirements under our stock ownership guidelines discussed later in this CD&A. In 2017, the Compensation Committee began limiting eligibility for SLO awards to an individual’s first five years in an executive officer position, which, the Compensation Committee believes, provides an appropriate period to achieve stock ownership requirements. Beginning in 2020, no new executive officers will be offered this election. Mr. Doheny was the only named executive officer eligible to make an SLO election for 2020 based on these requirements.

For 2020, the Compensation Committee established a 25% premium for any portion of the annual incentive award elected as an SLO award. Mr. Doheny made the following SLO election for 2020:

 

Name

   Cash Award %                   SLO Award %                       

Edward L. Doheny II

  

0.0%

 

100.0%        

The allocation of the final 2020 annual incentive award between cash and the SLO award for Mr. Doheny was as follows:

 

Name

   Cash Award ($)    SLO Award (# of Shares)

Edward L. Doheny II

  

  

72,043

The SLO award is shown in “—Executive Compensation Tables—2020 Summary Compensation Table” under the “Stock Award” column based on the grant date fair value assuming target performance.

Long-Term Incentive Compensation

 

   

70% of 2020 award in the form of PSUs earned based on 2020-2022 performance goals (Adjusted EBITDA CAGR, ROIC, and Relative TSR)

 

   

30% of 2020 award in the form of time-vesting RSUs vesting ratably over three years

 

   

2018-2020 PSUs earned below target based on above-target performance for the Adjusted EBITDA Margin goal, below-threshold performance for the Net Trade Sales CAGR goal, and below-target performance for the Relative TSR goal

Our long-term incentive award program is intended to further link compensation to the achievements of the Company’s long-term financial objectives. Long-term incentive award opportunities for our named executive officers for 2020 were provided 70% in PSUs and 30% in time-vesting RSUs. The Compensation Committee believes this mix provides a proper balance between the goals of encouraging long-term performance and retention, while still keeping the emphasis on three-year measurable performance results.

 

 

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During the first quarter of 2020, the Compensation Committee established target award levels generally based on a percentage of base salary, with the percentage of salary set taking into account the median range for long-term incentive compensation for executives with similar positions and responsibilities. The Compensation Committee and the Board approved Mr. Doheny’s 2020 target award based on a specified dollar amount rather than a percentage of salary based on the amount included in his original offer letter agreement with the Company dated September 5, 2017 (the “2017 Offer Letter”) and competitive market data. The following table shows the total target value of the long-term incentive awards for 2020 established by the Compensation Committee for the named executive officers:

 

Name

   Target % of Salary   LTI Target Value                           

Edward L. Doheny II

  

 

$

6,330,000                             

 

James M. Sullivan

  

175%

 

$

1,194,375                             

 

Emile Z. Chammas

  

175%

 

$

1,188,422                             

 

Karl R. Deily

  

175%

 

$

1,236,314                             

 

Angel S. Willis

  

125%

 

$

560,063                             

 

2020-2022 PSU Awards

PSU awards provide for three-year performance periods with a targeted number of shares to be earned if performance during the period meets goals set during the first 90 days of the period. During the first quarter of 2020, the Compensation Committee established PSU award target levels for the performance period starting January 1, 2020 for the named executive officers. We refer to these as the 2020-2022 PSUs.

If performance is below defined threshold levels, no units will be earned. If performance exceeds defined maximum levels, a maximum number of units (above the target number) will be earned and settled by issuance of shares (one share per unit earned). In this manner, PSUs are intended to align named executive officer compensation closely to our performance while giving the named executive officers the opportunity for exceptional value if performance targets are exceeded. The vesting conditions for the PSUs also encourage the retention of our named executive officers.

70% of the long-term incentive award dollar amount was assigned to the PSUs and allocated to each of the weighted performance metrics for the award, as follows:

 

Performance Measure

     Weighting                                     

2020-2022 Relative TSR

    

34%                                     

2020-2022 Adjusted EBITDA CAGR

    

33%                                     

2020-2022 ROIC

    

33%                                     

 

 

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The target number of PSUs for the Relative TSR portion was determined by dividing the allocated portion of the target dollar amount by the accounting value per share for that portion of the award (based on the Monte Carlo simulation value as of the grant date).The target number of PSUs for the Adjusted EBITDA CAGR and ROIC portions were determined by dividing the allocated portion of the target dollar amount by the closing price of our common stock on the grant date. In each case, the target number of PSUs was rounded up to the next whole unit.    

 

               

Target Award (# of PSUs)

 

Name

     Total PSU Target Value        Relative TSR       

ADJ. EBITDA

CAGR

       ROIC  

Edward L. Doheny II

    

                    $

4,431,000                    

 

    

 

44,206    

 

    

 

42,507    

 

    

 

42,507    

 

James M. Sullivan

    

                    $

836,063                    

 

    

 

7,314    

 

    

 

7,694    

 

    

 

7,694    

 

Emile Z. Chammas

    

                    $

831,895                    

 

    

 

7,277    

 

    

 

7,656    

 

    

 

7,656    

 

Karl R. Deily

    

                    $

865,420                    

 

    

 

7,570    

 

    

 

7,964    

 

    

 

7,964    

 

Angel S. Willis

    

                    $

392,044                    

 

    

 

3,430    

 

    

 

3,608    

 

    

 

3,608    

 

Collectively, these metrics are intended to drive accountability for Sealed Air’s Operating Model, rooted in economic value add with the goal to drive profitable, above-market organic growth and attractive returns on invested capital. The Compensation Committee selected Relative TSR as a metric to balance achievement of internal goals with performance against our peers in an easily measurable metric that directly demonstrates value creation for our stockholders. In prior years, we used goals related to Adjusted EBITDA margin for the final year in the performance period rather than Adjusted EBITDA CAGR. For 2020, the Compensation Committee introduced Adjusted EBITDA CAGR to focus the Company on long-term profitable business growth over the three-year period. Additionally, this goal better reflects the way we evaluate and pursue growth opportunities. The Compensation Committee chose ROIC as a metric for the PSUs to measure the growth and transformation in the business and ensure accountability of investments in the Company. The results of each metric will determine the number of shares earned for that metric. The total award will be the addition of the total number of shares earned for each of the three performance metrics.

Relative TSR Performance Goal

TSR represents the percent change in the share price from the beginning of the performance period to the end of the performance period and assumes immediate reinvestment of dividends when declared at the closing share price on the date declared. The beginning share price will be calculated as an average of 31 data points: the closing share price on January 2, 2020 and the closing share price +/-15 trading days from January 2, 2020. The ending share price will be calculated as an average of 31 data points: the closing share price on December 30, 2022 and the closing share price +/-15 trading days from December 30, 2022.

The performance on this metric will be assessed based on Sealed Air’s percentile rank within the approved peer group of companies, which is the same peer group described below used for other named executive officer compensation purposes for 2020. The lowest ranked company will be the 0% rank, the middle ranked company will be the 50th percentile rank and the top ranked company will be the 100th percentile rank. If a company is acquired or otherwise is no longer publicly traded and its share price is no longer available, it will be excluded from the peer group.

 

 

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The three-year Relative TSR percentile rank at threshold, target and maximum for the performance period follows:

 

2020-2022 PSUs Relative TSR Performance Goal    LOGO

Achievement

  TSR Percentile Rank   % of Target Earned     

Below Threshold

 

Below 25th percentile

 

0%

Threshold

 

25th percentile

 

25%

Target

 

50th percentile

 

100%

Maximum

 

75th percentile and above

 

200%

The number of shares earned for an achievement of this metric between any two levels would be calculated on a pro-rata basis, and no shares will be earned for three-year Relative TSR percentile rank below the 25th percentile.

Adjusted EBITDA CAGR Goal

The Adjusted EBITDA CAGR metric measures the cumulative average growth rate (using the base year of 2019) of Adjusted EBITDA achieved at the end of the performance period. For this purpose, Adjusted EBITDA is our earnings before interest, taxes, depreciation and amortization for calendar year 2022, derived from our U.S. GAAP net earnings, subject to certain specified adjustments.

Adjusted EBITDA CAGR performance levels at threshold, target and maximum are as follows:

 

2020-2022 PSUs Adjusted EBITDA CAGR Goal    LOGO

Achievement

  Adjusted EBITDA CAGR   % of Target Earned     

Below Threshold

 

Less than 3.5%

 

0%

Threshold

 

3.5%

 

50%

Target

 

6.0%

 

100%

Maximum

 

8.5% and above

 

200%

The number of shares earned for an achievement of this metric between any two levels would be calculated on a pro-rata basis, and no shares will be earned for Adjusted EBITDA CAGR below the threshold goal.

Return on Invested Capital Goal

The ROIC metric measures the percentage of invested assets which are converted to income. ROIC is the result of dividing the Company’s net adjusted operating profit after tax by total capital. Total capital excludes cash. ROIC achievement will be calculated as the average of the 12 quarter-end calculations of ROIC from January 1, 2020 through December 31, 2022. The calculation will include an adjustment for acquisitions and divestitures, made after the grant date, and accounting standards adopted which impact total capital.

The ROIC performance levels at threshold, target and maximum are as follows:

 

2020-2022 PSUs ROIC Goal   LOGO

Achievement

  ROIC   % of Target Earned     

Below Threshold

 

Less than 13.8%

 

    0%

Threshold

 

13.8%

 

  50%

Target

 

14.8%

 

100%

Maximum

 

15.8% and above

 

200%

The number of shares earned for an achievement of this metric between any two levels would be calculated on a pro-rata basis, and no shares will be earned for ROIC below the threshold goal.

 

 

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2020 RSU Awards

RSU awards vest in equal annual installments over the three-year period following the date of grant in February 2020. The named executive officer generally must remain employed with us through each vesting date to earn the shares vesting on that date, other than in case of termination of employment for death or disability, or an involuntary termination within two years after a change in control, although certain special rules apply to the awards to Mr. Sullivan in accordance with his original offer letter agreement. In this manner, RSUs encourage retention of our named executive officers, while also aligning their interests with those of our long-term stockholders.

The number of RSUs was determined by dividing 30% of the long-term incentive award dollar amount by the closing price of our common stock on the grant date (rounded up to the next whole share).

 

Name

  Total RSU Target Value   # of RSUs         

Edward L. Doheny II

   

$

1,899,000

   

 

55,204         

James M. Sullivan

   

$

358,313

   

 

9,992         

Emile Z. Chammas

   

$

356,527

   

 

9,943         

Karl R. Deily

   

$

370,894

   

 

10,343         

Angel S. Willis

   

$

168,019

   

 

4,686         

Performance Results for Prior Year PSU Award

The Compensation Committee determined the performance results for the 2018-2020 PSUs granted in early 2018. The 2018-2020 PSUs were earned at 54.6% of target, based on achievement of each of the three goals measured over the 2018-2020 performance period, as follows:

 

2018-2020 PSUs

Metric (Weighting)

  Metric Target   Achievement   Payout%

Adjusted EBITDA Margin1 (33%)

  21.1%   21.6%   120.6%

Net Trade Sales CAGR2 (33%)

  4.3%   1.6%   0.0%

Relative TSR3 (34%)

  50th percentile   31st percentile   43.6%
      Total   54.6%

 

1 

Adjusted EBITDA margin metric measured 2020 Adjusted EBITDA as a percentage of 2020 net sales, subject to certain exclusions. For this purpose, (a) “2020 Adjusted EBITDA” is our earnings before interest, taxes, depreciation and amortization for calendar year 2020, derived from our U.S. GAAP net earnings, adjusted to exclude certain specified items, and (b) “2020 net sales” is our net sales for 2020 as reported in our Annual Report on Form 10-K for 2020, less the impact from acquired companies during the performance period.

 

2 

The Net Trade Sales CAGR metric measures the CAGR for Net Sales for the 2018-2020 performance period against the baseline of 2017 Net Sales. 2020 Net Sales are measured at 2018 Annual Operating Plan foreign exchange rates. The calculation excludes the impact of acquisitions made since targets were originally set.

 

3 

The Relative TSR metric measures the percent change in share price from the beginning of the performance period to the end of the performance period and assumes immediate reinvestment of dividends when declared at the closing share price on the date declared. The beginning share price was calculated as an average of 31 data points: the closing share price on January 2, 2018 and the closing share price +/- 15 trading days from January 2, 2018. The ending share price was calculated as an average of 31 data points: the closing share price on December 31, 2020 and the closing share price +/- 15 trading days from December 31, 2020. The performance of this metric was assessed in comparison of the percentile rank to the approved peer group of companies. The lowest ranked company was the 0th percentile rank, the middle ranked company was the 50th percentile rank and the top ranked company was the 100th percentile rank. If a company was acquired or otherwise is no longer publicly traded and its share price no longer available, it was excluded from the peer group.

Modifications to Mr. Doheny’s 2017 New Hire Award

In December 2020, Mr. Doheny and the Company entered into a letter agreement (the “Letter Agreement”) adjusting certain compensation arrangements that were included in his 2017 Offer Letter.

Under the 2017 Offer Letter, Mr. Doheny was granted 70,000 performance-vesting restricted stock units (the “new hire PSUs”), which were scheduled to vest on December 31, 2020 if either of the following two performance conditions were achieved: (i) the Company’s cumulative total stockholder return for 2018-2020 is in the top 33% of its

 

 

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peers (using the same peers and methodology under the Company’s annual PSU awards) and the Company’s stock price as of December 31, 2020 equals at least $60/share, or (ii) the Company’s stock price as of December 31, 2020 equals at least $75/share. The 2017 Offer Letter provides that the stock price as of December 31, 2020 for this purpose will be determined using a 30-day arithmetic mean of closing prices. The Board determined that the new hire PSUs should be modified in light of business disruptions caused by the pandemic and to further encourage Mr. Doheny’s continued retention and focus on future stock price performance. As a result, the Letter Agreement provided that the new hire PSUs were adjusted as follows:

 

   

Half of the award – 35,000 units – were converted to an award of time-vesting RSUs vesting on September 18, 2022 (i.e., the fifth anniversary of his original start date).

 

   

The remaining half of the award – 35,000 units – will remain PSUs that are subject to the original performance conditions, but measured as of September 18, 2022 rather than December 31, 2020 (with the Company’s stock price for that purpose determined using a 30-day arithmetic mean of closing prices as of September 18, 2022).

Vesting of the adjusted RSUs and PSUs is subject to Mr. Doheny’s continued employment with the Company through September 18, 2022, subject to treatment upon termination of employment consistent with the 2017 Offer Letter.

Because the modifications resulted in an incremental accounting charge under applicable accounting rules, the modified awards appear as 2020 grants in the Summary Compensation Table and Grants of Plan-Based Awards Table later in this Proxy Statement.

Governance of Our Executive Compensation Program

Oversight by the Compensation Committee

The Compensation Committee is responsible for establishing and implementing our executive compensation philosophy and for ensuring that the total compensation paid to our named executive officers and other executives is fair and competitive and motivates high performance.

Under our executive compensation philosophy, we provide compensation in the forms and at levels that will permit us to retain and motivate our existing executives and to attract new executives with the skills and attributes that we need. The compensation program is intended to provide appropriate and balanced incentives toward achieving our annual and long-term strategic objectives, to support a performance-oriented environment based on the attainment of goals and objectives intended to benefit our Company and our stockholders, and to create an alignment of interests between our executives and our stockholders. The compensation program is designed to place a greater weight on rewarding the achievement of our longer-term objectives and financial performance.

Role of Independent Compensation Consultant

FW Cook advised the Compensation Committee on the selection of peer companies, provided comparative industry trends and peer group data regarding salary, annual incentive and long-term incentive compensation levels for our executive officers and other key executives, and advised on recommended compensation levels for our management. FW Cook assisted the Compensation Committee in selecting metrics and goals for the 2020 annual bonus program and the 2020-2022 PSUs. FW Cook also conducted a risk analysis of the Company’s incentive compensation plans. The Compensation Committee has assessed the independence of FW Cook pursuant to SEC rules and concluded that no conflict of interest exists that would prevent FW Cook from serving as an independent consultant to the Compensation Committee.

Role of CEO and Management

The Compensation Committee from time to time directs members of management to work with FW Cook to provide executive compensation information or recommendations to the Compensation Committee. However, the

 

 

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Compensation Committee has not delegated any of its authority to determine executive compensation programs, practices or other decisions to our management. As noted above, the current executive compensation program was developed and approved by the Compensation Committee with advice and support from FW Cook after consulting with the CEO and our compensation and legal professionals. The CEO and other executive officers and compensation professionals attend portions of meetings as requested by the Compensation Committee.

While the Compensation Committee approved metrics for the 2020 annual bonus and long-term incentive programs, FW Cook, the CEO and other members of our management also were consulted in developing the metrics and establishing the goals for the 2020 programs.

The CEO submits salary and bonus recommendations to the Compensation Committee for the other named executive officers as well as for the other executives whose compensation is set by the Compensation Committee. In addition, the Compensation Committee has delegated to the CEO limited authority to make equity awards to employees who are not executive officers. The CEO does not provide input regarding his own compensation and does not participate in any related Compensation Committee deliberations. Following a review of those recommendations with FW Cook, the Compensation Committee approves compensation decisions for our named executive officers. In making compensation decisions for named executive officers other than the CEO, the Compensation Committee relies on the CEO’s recommendations but makes independent adjustments and is not bound by those recommendations.

Use of Peer Group Data

The Compensation Committee uses data from a peer group as a factor in setting executive compensation levels and in designing executive compensation programs. The peer group is reviewed annually by the Compensation Committee. The Compensation Committee includes companies primarily in the materials sector that are comparable to Sealed Air based on sales, percentage of sales outside of the United States, number of employees and market capitalization. The table below sets forth the peer group of companies that the Compensation Committee considers in setting executive compensation levels and in designing compensation programs.

Peer Group Companies

 

AptarGroup, Inc.

   Crown Holdings, Inc.

Ashland Global Holdings Inc.

   Graphic Packaging Holding Co.

Avery Dennison Corporation

   Greif, Inc.

Avient Corporation1

   Maple Leaf Foods Inc.3

Axalta Coating Systems Ltd.

   Owens-Illinois, Inc.

Ball Corporation

   Packaging Corporation of America

Bemis Company, Inc.2

   Silgan Holdings Inc.

Berry Global Group, Inc.

   Sonoco Products Co.

Celanese Corporation

  

 

  1 

Avient Corporation was previously included in our peer group as PolyOne Corporation.

  2 

Bemis Company, Inc, was included for purposes of setting 2020 target total direct compensation for the named executive officers but was automatically removed thereafter due to its acquisition during 2019 by Amcor Ltd.

  3 

For 2021, Maple Leaf Foods, Inc. has been replaced with H.B. Fuller Co.

The Compensation Committee considers comparative executive compensation levels and practices based on information from the peer companies as well as other data provided by FW Cook related to general industry executive compensation trends.

 

 

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Other Features and Policies

Stock Ownership Guidelines

In order to align the interests of named executive officers and stockholders, we believe that our named executive officers should have a significant financial stake in Sealed Air. To further that goal, we have stock ownership guidelines that apply to our named executive officers and other key executives. The guidelines for our named executive officers are as follows:

 

   

Executive officers are required to hold a multiple of their salary: 6 for the CEO, 3 for the other members of the executive leadership team (including all other named executive officers); and 2 for all other executive officers;

 

   

Share equivalents held in our tax-qualified retirement plans are included, but unvested awards under our equity compensation plans are excluded;

 

   

Until the minimum stock ownership has been reached, executive officers are expected to retain a percentage of the shares received as awards under our equity compensation programs after payment of applicable taxes (100% for awards that vested before August 12, 2020; 75% for awards to the CEO and 50% for all other awards that vested on or after August 12, 2020); and

 

   

The Compensation Committee can approve exceptions to the stock ownership guidelines for executive officers in the event of financial hardship.

As of March 22, 2021, all of our named executive officers had met the ownership guidelines or will have shares retained at vesting as required by the guidelines.

Savings, Retirement and Health and Welfare Benefits

Our named executive officers participate in the retirement programs available generally to employees in the countries in which they work because we believe that participation in these programs and in the other health and welfare programs mentioned below is an important part of a competitive compensation package. In the United States, our named executive officers participate in a tax-qualified defined contribution retirement plan, the Sealed Air Corporation 401(k) and Profit-Sharing Plan. As a result of participating in this broad-based retirement plan, our executive officers are eligible to receive profit-sharing and matching contributions paid by us, up to IRS limits applicable to tax-qualified plans.

Mr. Deily also participates in the Sealed Air Corporation Restoration Plan for Cryovac Employees, a component plan of the Sealed Air Combined Pension Plan and a tax-qualified defined benefit plan that covers the employees of our Cryovac operations who participated in a defined benefit plan maintained by a previous employer immediately prior to March 31, 1998. The Restoration Plan for Cryovac Employees is described under “—Executive Compensation Tables—Pension Benefits in 2020” below. The plan was amended to freeze benefit accruals as of December 31, 2016, and as a result, no additional benefits will be accrued under the plan after 2016. Mr. Deily currently does not have any cumulative benefit under that plan.

U.S.-based named executive officers may elect to defer a portion of salary or cash incentive awards under our nonqualified deferred compensation plan. The Compensation Committee believes that this plan is appropriate because executives are limited in the amount that they can save for retirement under the 401(k) and Profit-Sharing Plan due to IRS limits applicable to tax-qualified retirement plans. No employer contributions are provided under the deferred compensation plan.

We do not offer any other nonqualified excess or supplemental benefit plans to our named executive officers in the United States.

All of our named executive officers participate in the health, life insurance, disability benefits and other welfare programs that are provided generally to employees in the countries in which they work.

 

 

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Perquisites and Other Personal Benefits

Consistent with our performance-oriented environment, we generally provide limited perquisites to our named executive officers, as included under the “All Other Compensation” column in “—Executive Compensation Tables—2020 Summary Compensation Table.”

The COVID-19 pandemic, including state shelter-in-place orders, evolving Centers for Disease Control recommendations, and uncertainty about the safety of public air travel, created a challenging work environment in 2020. To allow continued travel in a safe manner, the Compensation Committee established guidelines permitting certain named executive officers to use private jet services, including for travel between Charlotte and the location where the executive’s family was sheltered in place. This policy ended December 31, 2020. As a result of this policy, certain named executive officers received a personal benefit related to that private jet travel. In addition, to assist those named executive officers with anticipated heightened personal costs related to remote work and required travel driven by the Company’s pandemic response, the Compensation Committee authorized a one-time perk allowance for those executives. See “All Other Compensation” for 2020 in the Summary Compensation Table for additional detail.

In addition, under the 2017 Offer Letter, Mr. Doheny is eligible to receive a reimbursement for 100% of the loss on sale of his home in Milwaukee, WI, capped at $300,000, should he choose to sell that home by September 18, 2020 (i.e., within three years after his original start date). The Letter Agreement discussed earlier extends the period for this home sale loss protection until September 18, 2022 (i.e., within five years after his original start date). The Board of Directors of the Company believes that the extension of this home sale loss protection was appropriate given the disruptions to real estate markets caused by the pandemic.

These perquisites are intended to provide a competitive compensation package for retention and in light of then current circumstances.

Compensation Recoupment (Clawback) Policy

Our compensation recoupment (clawback) policy, or the Recoupment Policy, requires each executive officer to reimburse us for all or a portion of any annual or long-term incentive compensation paid to the executive officer based on achievement of financial results that were subsequently the subject of a restatement due to error or misconduct regardless of whether the executive officer was responsible for the error or misconduct so long as no payment or award or a lower payment or award would have been made to the officer based on the restated results. The Board of Directors will make the determination whether to seek recovery. The Recoupment Policy is part of our overall risk management practices to ensure that compensation programs do not encourage manipulation of financial results.

In addition, the Recoupment Policy provides that our CEO and CFO must reimburse us for any compensation or profits from the sale of securities under Section 304 of the Sarbanes-Oxley Act of 2002. The Recoupment Policy has been incorporated into our equity award documents.

Employment, Severance and Change in Control Arrangements

Employment Agreements

We do not generally enter into employment agreements with executive officers or other employees except in countries outside the United States where such agreements are customary or as necessary for recruitment.

We entered into the 2017 Offer Letter with Mr. Doheny in connection with his recruitment. We received guidance from FW Cook in the negotiation of the agreement. The 2017 Offer Letter includes provisions regarding Mr. Doheny’s position and duties, compensation, post-employment covenants and other matters, including provisions regarding certain new-hire equity awards described above and certain severance benefits described under “—Executive Compensation Tables—Payments Upon Termination or Change in Control” below. The Compensation Committee believes that the terms of the 2017 Offer Letter are reasonable and were necessary to cause him to accept a significant leadership role with Sealed Air.

 

 

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We also entered into an offer letter agreement with Mr. Sullivan, dated June 14, 2019, in connection with his recruitment. The offer letter agreement includes provisions regarding Mr. Sullivan’s position and duties, compensation, post-employment covenants and other matters, including provisions regarding a sign-on bonus (in the amount of $500,000), an initial equity award, and certain special equity vesting terms in lieu of severance benefits described under “—Executive Compensation Tables—Payments Upon Termination or Change in Control” below. The Compensation Committee believes that the terms of the offer letter agreement are reasonable and were necessary to cause him to accept a significant leadership role with Sealed Air. In November 2020, the Compensation Committee approved an amendment to the offer letter agreement to extend Mr. Sullivan’s employment with the Company through March 31, 2021 (or any earlier date in 2021 as Mr. Sullivan and the Company may mutually agree). Under this agreement, Mr. Sullivan continued to serve as the Senior Vice President and Chief Financial Officer until Christopher J. Stephens assumed that role, which occurred on February 26, 2021. After that date through March 31, 2021, Mr. Sullivan will be employed in a non-executive role, assisting Mr. Stephens with the transition of his duties, receiving the following compensation:

 

   

Base salary at his current annual rate,

 

   

A completion bonus in the amount of $167,000, paid in a lump sum after the end of his employment, and

 

   

Continued participation in the Company’s employee benefit plans in accordance with their terms.

Mr. Sullivan will not receive any long-term incentive awards in 2021. The other terms and provisions of his original offer letter will remain in effect, including the special equity vesting terms.

Executive Severance Plan

In early 2014, the Compensation Committee established the Executive Severance Plan. This plan provides for reasonable severance benefits in the case of an executive’s involuntary termination of employment, either by us without “cause” or by the executive for “good reason.” The Compensation Committee believes that the Executive Severance Plan serves the interests of stockholders by encouraging the retention of a stable management team.

Under the Executive Severance Plan, in the case of an involuntary termination of employment without cause or with good reason, the executive is eligible for severance benefits equal to one year of base salary and target annual bonus payable in installments over 12 months and health and welfare benefits for a period of 12 months.

If the qualifying termination occurs upon or within two years after a change in control of Sealed Air, the executive is instead entitled to receive (1) a lump sum payment equal to two years of the sum of base salary and target annual bonus, (2) continued health and welfare benefits for up to 18 months, and (3) accelerated vesting of all outstanding equity compensation awards.

Severance benefits are conditioned upon the executive giving us a general release of claims at the time of separation. Benefits are also conditioned upon the executive’s compliance with certain restrictive covenants regarding non-disparagement, confidentiality and non-competition (in addition to any other restrictive covenants to which an employee may be subject). No tax gross-ups are provided to any participant under the plan in case of any excise taxes under Sections 280G and 4999 of the Internal Revenue Code as a result of payments under the plan in connection with a change in control.

If an executive covered by the plan is also entitled to severance under an existing agreement with us, the terms of the individual severance agreement will control instead of the plan. Mr. Sullivan’s offer letter, for example, includes certain special equity vesting provisions in lieu of Mr. Sullivan’s participation in the Executive Severance Plan.

Timing of Equity Grants

PSU and RSU awards made to our executive officers under our equity compensation plans are made during the first 90 days of each year, either at the regularly-scheduled meeting of the Compensation Committee held in February of

 

 

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each year or at a special meeting held later but during the first 90 days of the year. In addition, SLO awards are made effective on a date set by the Compensation Committee in advance but no later than March 15 to those executive officers who have elected to receive a portion of their annual incentive award as an SLO award. The date is selected based on when the Compensation Committee expects that all annual incentive awards will be determined and to allow our staff sufficient time to assist executive officers to make required SEC filings for the SLO awards on a timely basis.

To the extent that other awards of restricted stock or RSUs may be made to executive officers, they are generally made at regular or special meetings or by unanimous written consents of the Compensation Committee. Awards are generally effective on the date of such meeting or unanimous written consent. Dates for Compensation Committee meetings are usually set during the prior year, and the timing of meetings and awards is unrelated to the release of material non-public information.

Section 162(m) Considerations

Internal Revenue Code Section 162(m) limits the deductibility of compensation in excess of $1 million paid to certain covered employees (generally including the named executive officers) in any calendar year. As a result, compensation paid in excess of $1 million to our named executive officers generally will not be deductible. The Compensation Committee designs compensation programs that are intended to be in the best long-term interests of Sealed Air and our stockholders, with deductibility of compensation being one of a variety of considerations taken into account.

Compensation Committee Report

The Organization and Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on its review and discussions with management, the members of the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Sealed Air’s 2021 Proxy Statement and incorporated by reference into Sealed Air’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Organization and Compensation Committee

Jacqueline B. Kosecoff, Chair

Françoise Colpron

Michael P. Doss

Harry A. Lawton III

Board Oversight of Compensation Risks

We believe that risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on Sealed Air. In 2020 as in prior years, at the request of the Compensation Committee and with the assistance of FW Cook, we evaluated our incentive compensation plans relative to our enterprise risks and determined that there were no significant changes to the compensation risks identified below. We determined, taking into account advice from FW Cook, that there were no significant risk areas from a compensation risk perspective.

With respect to our executive compensation programs, a number of risk mitigation features were in place in 2020, including the following:

 

   

The primary metric for the Annual Incentive Plan focused on earnings (Adjusted EBITDA, profitable growth ratio and free cash flow), and the Compensation Committee had discretion to adjust bonus pool funding and individual award payouts.

 

 

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The principal long-term incentive program for executives is PSU awards that vest based on achievement of measurable financial three-year goals balanced by relative stockholder return performance. No stock options were used.

 

   

The Compensation Committee has discretion in extraordinary circumstances to reduce payout on PSU awards below the amount otherwise earned.

 

   

Pay leverage is reasonable and generally does not exceed 200% of target.

 

   

The Recoupment Policy, which applies to executive officers and other key executives, discourages excessive risk taking and manipulation of financial results.

 

   

Our stock ownership guidelines require executives to hold at least a portion of vested equity awards during employment, thus discouraging excessive risk taking.

 

   

Different metrics are used for annual and long-term incentive plans for executives, thus not placing too much emphasis on a single metric.

 

 

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Executive Compensation Tables

2020 Summary Compensation Table

The following table shows compensation for our named executive officers for the years indicated.

 

Name and
Principal Position
Year Salary
($)
Bonus
($)
Stock
Awards1
($)
Non-Equity
Incentive Plan
Compensation2
($)
All Other
Compensation3
($)
Total
($)

Edward L. Doheny II

President and CEO

 

2020

 

1,205,272

 

 

10,183,694

 

 

375,233

 

11,764,199

 

2019

 

1,171,562

 

 

7,772,975

 

 

28,000

 

8,972,537

 

2018

 

1,150,000

 

 

7,725,109

 

 

59,118

 

8,934,227

James M. Sullivan4

SVP, CFO

 

2020

 

674,375

 

 

1,194,422

 

819,000

 

122,046

 

2,809,843

 

2019

 

338,542

 

500,000

 

500,004

 

345,184

 

28,000

 

1,711,730

Emile Z. Chammas

SVP, Chief Manufacturing and Supply

Chain Officer & Chief

Transformation Officer

 

2020

 

671,013

 

 

1,188,501

 

827,413

 

64,937

 

2,751,864

 

2019

 

635,479

 

 

1,131,989

 

656,300

 

28,000

 

2,451,768

 

2018

 

595,852

 

 

992,778

 

501,711

 

24,750

 

2,115,092

Karl R. Deily

SVP, Chief Commercial Officer

 

2020

 

701,321

 

 

1,236,324

 

806,960

 

28,500

 

2,773,105

 

2019

 

663,522

 

 

1,200,343

 

696,005

 

37,409

 

2,597,279

 

2018

 

590,690

 

 

984,147

 

497,364

 

32,350

 

2,104,551

Angel S. Willis5

VP, General Counsel and Secretary

 

2020

 

444,788

 

 

560,130

 

409,428

 

28,500

 

1,442,846

 

1 

The Stock Awards column shows the value of equity awards granted during the year indicated. The amounts do not correspond to the actual amounts that may be earned by the named executive officers. Equity awards granted during each year may include: (a) awards of restricted stock, or RSAs, and restricted stock units, or RSUs, under the 2014 Incentive Plan; (b) SLO awards under the Annual Incentive Plan; and (c) PSU awards granted under the 2014 Incentive Plan. RSA and RSU awards are valued at the grant date fair value computed in accordance with FASB ASC Topic 718. SLO awards are valued at the fair value at the service inception date based on the percentage of the target bonus to be paid as an SLO award, increased by the 25% premium, using the average closing price of our common stock for the first 15 trading days of the calendar year, where the service inception date is the beginning of the calendar year. PSU awards are valued based on the grant date fair value on the date on which the PSU award was granted by the Compensation Committee. In valuing the SLO awards and PSU awards, we assumed the probable achievement of the target levels for the primary performance goals. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures. For the portion of PSU awards earned based on relative TSR, the grant date fair value is based on a Monte Carlo simulation that determines the likely payout of the award (which were $43.40 per share for the PSU granted on February 13, 2018; $59.15 and $57.34 per share for the PSUs granted on February 13, 2019 and February 14, 2019, respectively; and $38.87 and $34.08 per share for the PSUs granted on February 12, 2020 and February 13, 2020, respectively). For the December 2020 modification to the 2017 new hire PSU award for Mr. Doheny, the grant date fair value for the portion modified to extend the performance period to September 2022 was based on a Monte Carlo simulation value determined as of the modification date (which was $12.67 per share). For additional assumptions made in valuing these awards and other information, see Note 21, “Stockholders’ Equity (Deficit),” of Notes to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. For the PSU awards granted in February 2020, the value of the awards as of the grant date, assuming that the highest level of performance conditions would be achieved (which is 200% of target for the 2020-2022 PSUs), is as follows:

 

Name

  

Maximum

2020-2022 PSU Award ($)

Mr. Doheny

  

8,862,044

Mr. Sullivan

  

1,672,218

Mr. Chammas

  

1,663,891

Mr. Deily

  

1,730,848

Ms. Willis

  

  784,180

 

2 

The amounts in the Non-Equity Incentive Compensation column for 2020 reflect the cash portion of annual bonuses earned by the named executive officers for 2020. Mr. Doheny received an SLO award for the entirety of his annual bonus for 2020. The value of the SLO award portion of annual bonuses at the service inception date is included in the Stock Awards column. For further discussion regarding annual bonus awards in 2020, see “—Compensation Discussion and Analysis—2020 Compensation Decisions and Results—Annual Incentive Compensation.”

 

 

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3 

The amounts shown in the All Other Compensation column for 2020 are attributable to the following:

 

Name

Company Profit-
Sharing Contribution*
($)
Company Matching
Contributions* ($)
Other Perquisites**
($)
Total ($)

Mr. Doheny

 

17,100

 

11,400

 

346,733

 

375,233

Mr. Sullivan

 

17,100

 

11,400

 

93,546

 

122,046

Mr. Chammas

 

17,100

 

11,400

 

36,437

 

64,937

Mr. Deily

 

17,100

 

11,400

 

 

28,500

Ms. Willis

 

17,100

 

11,400

 

 

28,500

 

  *

Made to the Sealed Air Corporation 401(k) and Profit-Sharing Plan.

 

  **

The perquisites include the following amounts: (i) cost to the Company for commuting using private jet services to allow travel in a safe manner during the COVID-19 pandemic: Mr. Doheny, $236,733; Mr. Sullivan, $68,546; and Mr. Chammas, $21,437; and (ii) a one-time perk allowance to assist with anticipated heightened personal costs related to remote work and required travel driven by the Company’s pandemic response: Mr. Doheny, $90,000; Mr. Sullivan, $25,000; and Mr. Chammas, $15,000. For Mr. Doheny, also includes $20,000 for reimbursement of certain legal fees as provided in his 2017 Offer Letter. See “—Compensation Discussion and Analysis—Other Features and Policies—Perquisites and Other Personal Benefits” for additional information.

 

4

Mr. Sullivan began employment with the Company in June 2019. Under his offer letter agreement entered into in June 2019, he received a $500,000 sign-on bonus and an initial stock award of RSUs valued at $500,000, vesting annually over three years.

 

5 

Ms. Willis first became a named executive officer for 2020, and therefore compensation for prior years is not reported.

Grants of Plan-Based Awards in 2020

The following table sets forth additional information concerning stock awards granted during 2020 under the 2014 Incentive Plan and the cash and SLO portions of the annual bonus targets for 2020 performance under our Annual Incentive Plan.

 

      Estimated
Possible
Payouts
Under
Non-Equity
Incentive Plan
Awards2
Estimated Future Payouts
Under Equity Incentive Plan
Awards3

All Other
Stock
Awards,
Number of
Shares of
Stock or
Units
(#)

Grant
Date
Fair
Value of
Stock
Awards4
($)

Name

Type of
Award1
Grant
Date
Target
($)
Threshold
(#)
Target
(#)
Maximum
(#)

Mr. Doheny

20PSU

 

2/13/2020

 

53,560

 

129,220

 

258,440

 

4,431,022

20RSU

 

2/13/2020

 

55,204

 

1,899,018

20SLO

 

1/2/2020

 

47,304

 

1,821,204

17RSU(mod)

 

12/10/2020

 

35,000

 

1,589,000

17PSU(mod)

 

12/10/2020

 

35,000

 

443,450

Mr. Sullivan

20PSU

 

2/12/2020

 

9,523

 

22,702

 

45,404

 

836,109

20RSU

 

2/12/2020

 

9,992

 

358,313

Cash

 

1/2/2020

 

546,000

Mr. Chammas

20PSU

 

2/12/2020

 

9,476

 

22,589

 

45,178

 

831,945

20RSU

 

2/12/2020

 

9,943

 

356,556

Cash

 

1/2/2019

 

543,278

Mr. Deily

20PSU

 

2/12/2020

 

9,857

 

23,498

 

46,996

 

865,424

20RSU

 

2/12/2020

 

10,343

 

370,900

Cash

 

1/2/2020

 

529,849

Ms. Willis

20PSU

 

2/12/2020

 

4,466

 

10,646

 

21,292

 

392,090

20RSU

 

2/12/2020

 

4,686

 

168,040

Cash

 

1/2/2020

 

268,830

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Executive Compensation    

 

1    Type of Award    Description
  Cash    Cash portion of 2020 annual bonus
  20SLO    SLO award portion of 2020 annual bonus
  20PSU    Three-year PSU award for the performance period beginning January 1, 2020
  20RSU    Time-vesting RSU award granted as part of 2020 long-term incentive awards
  17RSU(mod)    Portion of 2017 new hire PSU that was modified in 2020 to a time-vesting RSU award
  17PSU(mod)    Portion of 2017 new hire PSU award that was modified in 2020 as a PSU award with extended performance period

 

2 

This column shows the target awards established in early 2020 for the cash portion of 2020 annual bonuses for each of the named executive officers under our Annual Incentive Plan. While the overall funded bonus sub-pool applicable to the named executive officers has a 25% of target threshold level and a 200% of target maximum funding limit, individual bonus awards can vary as long as the total of all bonus awards is within the overall funded sub-pool. Actual payouts for 2020 are shown in the “Non-Equity Incentive Plan Compensation” column in “—2020 Summary Compensation Table.”

 

3 

These columns show (i) target awards established in early 2020 for the SLO portion of 2020 annual bonuses for Mr. Doheny under our Annual Incentive Plan, (ii) the threshold, target and maximum awards for PSU awards granted in 2020 for each of the named executive officers under the 2014 Incentive Plan, and (iii) the target PSU award under Mr. Doheny’s in 2017 new hire award that was modified in 2020 to extend the performance period through September 2022.

 

  

The threshold number of shares for 2020-2022 PSU awards is 25% of the target number of shares for the relative TSR portion plus 50% of the target number of shares for the Adjusted EBITDA CAGR and ROIC portions, and the maximum number of shares for such awards is 200% of the target number of shares. Shares, to the extent earned, will be issued in 2023 for the 2020-2022 PSU awards. See “—Compensation Discussion and Analysis—2020 Compensation Decisions and Result—Long-Term Incentive Compensation.”

 

4 

This column shows the fair value on the grant date or service inception date of the equity awards shown in the table computed in accordance with FASB ASC Topic 718. The manner in which grant date fair value was determined for awards granted in 2020 is discussed in Note 1 under “—2020 Summary Compensation Table.” The amounts shown exclude the impact of estimated forfeitures.

Additional Information about Annual and Long-Term Incentive Awards

Annual Incentive Plan: Cash Bonuses and SLO Awards

Each of the named executive officers has a target bonus that is established by the Compensation Committee during the first quarter of the year. Also, certain of the named executive officers have the opportunity at a time determined by the Compensation Committee (generally prior to the start of the performance year) to designate a portion of his or her annual bonus to be received as a SLO award under the 2014 Incentive Plan. The portion to be denominated as SLO awards, in increments of 25% of the annual bonus, may be given a premium to be determined by the Compensation Committee each year. The stock price used to calculate the number of shares that can be earned is the average closing price for the first 15 trading days of the performance year, thereby reflecting stock price changes during the performance year in the value of the SLO award. Beginning in 2019, no new executive officers may make this election.

Once the amount of the annual bonus has been determined for each named executive officer following the end of the year, the cash portion is paid out shortly thereafter, and the SLO award is provided in the form of an award of RSUs under the 2014 Incentive Plan. These RSUs are granted on a date determined by the Compensation Committee, but no later than March 15 following the end of the performance year, and vest on the second anniversary of the RSU grant date. For example, the RSUs awarded for a 2020 SLO award are granted in early 2021 and vest in early 2023. For the “principal portion” of the award that would have otherwise been paid in cash, the SLO awards may vest earlier upon any termination of employment, other than for cause. For the “premium portion” of the award equal to the additional 25%, the award may vest earlier only in case of death, disability or retirement. Except as described above, if the recipient ceases to be employed by us prior to vesting, then the award is forfeited, except for certain circumstances following a change in control. SLO awards in the form of RSUs have no voting rights until shares are issued to them but do receive a cash payment in the amount of the dividends (without interest) on the shares they have earned at about the same time that shares are issued to them following vesting.

 

 

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Retirement for the purpose of SLO awards and the PSU awards described below means (i) for PSU awards granted before 2018 and SLO awards through 2018 performance year, termination of employment after five or more years of employment and with years of employment plus age equal to 70 or more, and (ii) for PSU awards granted beginning in 2018 and SLO awards beginning for the 2019 performance year, termination of employment after at least age 55 with at least 10 years of employment, and in each case excluding termination for cause.

Performance Share Unit Awards

PSU awards, which were awarded under the 2014 Incentive Plan, generally provide for a three-year performance period with a targeted number of shares to be earned if performance during the period meets goals set by the Compensation Committee during the first 90 days of the period. If performance is below defined threshold levels, then no units will be earned, and if performance exceeds defined maximum levels, then a maximum number of units (above the target number) will be earned. PSU awards are not transferable by the recipient until the end of the performance period and certification by the Compensation Committee with respect to each performance measure used for the award. If a recipient terminates employment during the performance period due to death, disability or retirement, then the recipient (or his or her estate) will receive a pro rata payout following the end of the performance period based on the portion of the performance period during which the recipient was employed and based on the number of units that would have been earned by the recipient if he or she had remained employed for the entire performance period. If the recipient leaves employment during the performance period for any other reason, then the units are forfeited, except for certain circumstances following a change in control. At about the same time that shares are issued to recipients following the performance period, recipients also receive a cash payment in the amount of the dividends (without interest) that would have been paid during the performance period on the number of shares that they have earned. Holders of PSU awards have no voting rights as stockholders until shares of common stock are issued after the end of the performance period.

Restricted Stock Units

As part of the 2020 long-term incentive award, awards of RSUs vest in equal installments annually over three years. RSU awards may vest earlier in the event of the recipient’s death or disability. If a recipient terminates employment prior to vesting, then the award of RSUs is forfeited, except for certain circumstances following a change in control. Within 90 days following the date of termination, the Compensation Committee can waive the forfeiture of all or a portion of an award. During the vesting period, holders of unvested RSUs have no voting rights. We do not pay dividends on unvested RSUs. Instead, following vesting, holders receive a cash payment in the amount of dividends (without interest) that would have been paid during the vesting period.

 

 

2021 Proxy Statement

 

  

 

 

 

 

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Executive Compensation    

 

Outstanding Equity Awards at 2020 Fiscal Year-End

The following table shows, as of December 31, 2020, outstanding and unvested stock awards under the 2014 Incentive Plan for the named executive officers. All market or payout values in the table shown for stock awards are based on the closing price of common stock on December 31, 2020 of $45.79 per share.

 

    Stock Awards

Name

Type of Awards1 Number of
Shares or Units
of Common
Stock
That Have Not
Vested2
(#)
Market Value of
Shares or Units of
Common Stock
That Have Not
Vested3
($)
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not  Vested4
(#)
Equity Incentive
Plan Award: Market
or Payout Value of
Unearned Shares,
Units or Other
Rights  That Have
Not Vested3
($)

Mr. Doheny

17PSU(mod)

 

35,000

 

1,602,650

17RSU(mod)

 

35,000

 

1,602,650

18RSA

 

14,382

 

658,552

19RSU

 

28,504

 

1,305,198

20RSU

 

55,204

 

2,527,791

19PSU

 

90,749

 

4,155,397

20PSU

 

129,220

 

5,916,984

18SLO

 

38,103

 

1,744,736

19SLO

 

65,831

 

3,014,401

Mr. Sullivan

20PSU

 

22,702

 

1,039,525

20RSU

 

9,992

 

457,534

Mr. Chammas

19PSU

 

16,945

 

775,912

20PSU

 

22,589

 

1,034,350

18RSA

 

2,380

 

108,980

19RSU

 

5,364

 

245,618

20RSU

 

9,943

 

455,290

Mr. Deily

19PSU

 

17,968

 

822,755

20PSU

 

23,498