UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Section 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of: March, 2019
Commission File Number: 001-38336
NUTRIEN LTD.
(Name of registrant)
Suite 500, 122 1st Avenue South
Saskatoon, Saskatchewan
S7K 7G3 Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☐ Form 40-F ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Exhibit 99.2 to this report on Form 6-K shall be incorporated by reference into and as an exhibit to the registrants Registration Statements on Form S-8 (File Nos. 333-222384, 333-222385 and 333-226295) and on Form F-10 (File No. 333-223273) under the Securities Act of 1933, as amended.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NUTRIEN LTD. | ||||
Date: March 29, 2019 | By: | /s/ Robert A. Kirkpatrick | ||
Name: | Robert A. Kirkpatrick | |||
Title: | VP & Corporate Secretary |
EXHIBIT INDEX
Exhibit |
Description of Exhibit |
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99.1 | Notice of Meeting | |
99.2 | Management Proxy Circular | |
99.3 | Form of Proxy | |
99.4 | Certificate of Abridgment |
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Exhibit 99.1
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Notice of Meeting
The annual meeting of shareholders of Nutrien Ltd.
Where: Remai Modern Art Gallery, 102 Spadina Crescent East Saskatoon, Saskatchewan S7K 0L3
When: Thursday, May 9, 2019 4:00 p.m. (Saskatoon time) |
Items of business
The following items of business will be
covered, as more fully described in the accompanying
1. receive our audited annual consolidated financial statements and the auditors reports
thereon
2. elect the directors;
3. re-appoint the auditor for the 2019 financial year;
4. vote on a
non-binding
advisory basis on a resolution to accept the Corporations approach
5. transact any other business as may properly be brought before the meeting or any
adjournment
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Who has the right to receive notice and vote
You are entitled to receive notice of and to vote at the meeting if you are a shareholder of record at the close of business on March 22, 2019.
Your vote is important
The accompanying management proxy circular includes important information about the meeting and the voting process. Please read it carefully and remember to vote.
To be used at the meeting, completed proxies must be returned to AST Trust Company (Canada), Attention: Proxy Department, P.O. Box 721, Agincourt, Ontario M1S 0A1 so that they arrive by 4:00 p.m. (Saskatoon time) on Tuesday, May 7, 2019 or, if the meeting is adjourned or postponed, by not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time and date of the adjourned or postponed meeting. The time limit for the deposit of proxies may be waived or extended by the chair of the meeting at his or her discretion, without notice, and the chair of the meeting is under no obligation to accept or reject any particular late proxy.
Non-registered (beneficial) shareholders should follow the instructions on the voting instruction form or other form of proxy provided by their intermediaries with respect to the procedures to be followed for voting.
Questions
If you have any questions or need assistance to vote, please contact our strategic shareholder advisor and proxy solicitation agent, Kingsdale Advisors, by toll-free telephone in North America at 1-866-581-0507 or collect call at 1-416-867-2272 outside North America, or by email at contactus@kingsdaleadvisors.com .
By Order of the Board of Directors
Robert A. Kirkpatrick, Q.C. Vice President & Corporate Secretary
March 22, 2019 |
Exhibit 99.2
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Message from Chair and Chief Executive Officer
Dear Shareholder:
The annual meeting of shareholders of Nutrien Ltd. ( Nutrien or the Corporation ) will be held on Thursday, May 9, 2019 at Remai Modern Art Gallery, 102 Spadina Crescent East, Saskatoon, Saskatchewan, at 4:00 p.m. (Saskatoon time).
The items of business to be considered at the meeting are described in the notice of annual meeting of shareholders of the Corporation and the accompanying management proxy circular. The board of directors of the Corporation has approved the contents and the dissemination of this circular.
We encourage you to vote on the items of business to be conducted at the meeting, which can easily be done by following the instructions enclosed with this circular. Following the formal portion of the meeting, we will provide a business update.
This is the second annual meeting of Nutrien, which was formed on January 1, 2018 when the businesses of Agrium Inc. ( Agrium ) and Potash Corporation of Saskatchewan Inc. ( PotashCorp ), our two legacy companies, were combined in a merger of equals. As a world-class integrated provider of crop nutrients and services, Nutrien plays a critical role in helping growers increase food production sustainably. We are the worlds largest provider of crop nutrients, inputs and services and the third largest natural resource company in Canada. We produce and distribute approximately 27 million tonnes of potash, nitrogen and phosphate products for agricultural, industrial and feed customers worldwide, and we have an extensive global agriculture retail network. Moreover, we have demonstrated success in driving integration and optimization across all business units, by achieving target synergies set at the onset of the merger one year ahead of schedule. The scale and diversity of our integrated portfolio and multiple growth platforms provide a stable earnings base that generates strong cash flow and the opportunity to return capital to shareholders. We take a long-term view and aim to make positive contributions where we operate, taking into account our economic, environmental and social priorities.
Over the last year, the board has had considerable discussion about board composition and board leadership succession planning, and our senior leadership structure. The results of these discussions can be seen in our robust framework for ongoing corporate stewardship described in this circular.
All of our director nominees come from diverse educational and professional backgrounds as detailed in their biographies starting on page 10. 58 percent of our nominees are under the age of 60, 33 percent reside outside of Canada and 33 percent are women. In keeping with our prior year plan, we will be decreasing the number of directors from 16 to 12. The talent and diversity of our nominees, their knowledge of the legacy companies and their collective skills, perspectives, experience and expertise will continue to help Nutrien drive shareholder value at this important stage in its evolution.
In keeping with our plan to eliminate the Executive Chair structure, Jochen Tilk (who served as the President and Chief Executive Officer of PotashCorp before the merger) stepped down as Executive Chair and as a director of the Corporation on September 30, 2018, and Nutriens Lead Director, Derek G. Pannell who is retiring and will not be standing for re-election, assumed the board leadership role as non-executive (independent) Board Chair through to our 2019 annual meeting. After careful consideration, the board believes that Mayo Schmidt is the individual to lead the board into our future. Mr. Schmidt has enjoyed a distinguished 32-year career with significant leadership roles in the agri-business industry, including in Saskatchewan and globally, and has demonstrated a commitment to Nutriens core values in those roles and during his six years as a director of Nutrien and its predecessors. As a result of this structural change in the board, all of our board nominees are independent with the exception of Chuck Magro, our President & CEO.
Many of our public documents are available on our website under Investors at www.nutrien.com . We encourage you to visit our website for information about our company. To ensure you receive all the latest news on the Corporation, you can use the email alerts subscribe feature on the Corporations website. Additional information relating to the Corporation is available on SEDAR at www.sedar.com or EDGAR at www.sec.gov/edgar.shtml .
We thank you for your ongoing support of Nutrien.
Yours sincerely, |
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Derek G. Pannell Chair of the Board March 22, 2019 |
Chuck Magro President & Chief Executive Officer March 22, 2019 |
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Notice of Meeting
The annual meeting of shareholders of Nutrien Ltd.
Where: Remai Modern Art Gallery, 102 Spadina Crescent East Saskatoon, Saskatchewan S7K 0L3
When: Thursday, May 9, 2019 4:00 p.m. (Saskatoon time) |
Items of business
The following items of business will be
covered, as more fully described in the accompanying
1. receive our audited annual consolidated financial statements and the auditors reports
thereon
2. elect the directors;
3. re-appoint the auditor for the 2019 financial year;
4. vote on a
non-binding
advisory basis on a resolution to accept the Corporations approach
5. transact any other business as may properly be brought before the meeting or any
adjournment
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Who has the right to receive notice and vote
You are entitled to receive notice of and to vote at the meeting if you are a shareholder of record at the close of business on March 22, 2019.
Your vote is important
The accompanying management proxy circular includes important information about the meeting and the voting process. Please read it carefully and remember to vote.
To be used at the meeting, completed proxies must be returned to AST Trust Company (Canada), Attention: Proxy Department, P.O. Box 721, Agincourt, Ontario M1S 0A1 so that they arrive by 4:00 p.m. (Saskatoon time) on Tuesday, May 7, 2019 or, if the meeting is adjourned or postponed, by not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time and date of the adjourned or postponed meeting. The time limit for the deposit of proxies may be waived or extended by the chair of the meeting at his or her discretion, without notice, and the chair of the meeting is under no obligation to accept or reject any particular late proxy.
Non-registered (beneficial) shareholders should follow the instructions on the voting instruction form or other form of proxy provided by their intermediaries with respect to the procedures to be followed for voting.
Questions
If you have any questions or need assistance to vote, please contact our strategic shareholder advisor and proxy solicitation agent, Kingsdale Advisors, by toll-free telephone in North America at 1-866-581-0507 or collect call at 1-416-867-2272 outside North America, or by email at contactus@kingsdaleadvisors.com .
By Order of the Board of Directors
Robert A. Kirkpatrick, Q.C. Vice President & Corporate Secretary
March 22, 2019 |
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Voting Instructions
TO BE COUNTED PROXIES MUST BE RECEIVED NO LATER THAN 4:00 P.M. (SASKATOON TIME) ON TUESDAY, MAY 7, 2019
In order to ensure that your proxy is received in time for Nutriens annual meeting of shareholders to be held on Thursday, May 9, 2019, we recommend that you vote in the following ways:
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BENEFICIAL SHAREHOLDERS
If your shares are held with a broker, bank or other intermediary |
Go to www.proxyvote.com and enter your 16-digit control number located on your voting instruction form. |
Canadian: Call 1-800-474-7493
U.S.: Call 1-800-454-8683 and provide your 16-digit control number located on your voting instruction form. If you vote by telephone, you cannot appoint anyone other than the appointees named on your voting instruction form as your proxyholder.
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Canadian: Fax your voting instruction form to 1 -905 -507-7793 or toll-free to 1 -866 -623 -5305 in order to ensure that your vote is received before the deadline.
U.S.: N/A |
Complete, sign and date your voting instruction form and return it in the envelope provided. | ||||||||||||
REGISTERED SHAREHOLDERS
If your shares are held in your name and represented by a physical certificate |
Go to www.astvotemyproxy.com and follow the instructions. You will need your 13-digit control number, which is on your proxy form. |
Call 1-888-489-5760 (toll-free in North America) from a touch-tone phone and follow the voice instructions. You will need your 13-digit control number, which is on your proxy form. If you vote by telephone, you cannot appoint anyone other than the appointees named on your proxy form as your proxyholder.
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Complete, sign and date your proxy form and send it by fax to AST Trust Company (Canada) at 1 -866 -781 -3111 (toll-free in North America) or 1 -416 -368 -2502 (outside North America). | Complete, sign and date your proxy form and return it in the envelope provided. |
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Management Proxy Circular
This circular, dated March 22, 2019, solicits proxies by or on behalf of management of Nutrien Ltd. for use at the annual meeting of shareholders to be held on Thursday, May 9, 2019, or any adjournment or postponement of the meeting, at the Remai Modern Art Gallery, 102 Spadina Crescent East, Saskatoon, Saskatchewan, S7K 0L3, at 4:00 p.m. (Saskatoon time) for the purposes set forth in the accompanying notice of meeting.
In this circular, unless the context requires otherwise:
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board means the board of directors of Nutrien; |
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board committee or committee means a committee of the board; |
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circular means this management proxy circular, including the schedules to this circular; |
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common shares means common shares of Nutrien; |
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meeting or 2019 annual meeting means the annual meeting of shareholders of Nutrien to be held on Thursday, May 9, 2019, or any adjournment or postponement of the meeting; |
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notice of meeting means the notice of meeting accompanying this circular; |
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Nutrien , the Corporation , we , us or our means Nutrien Ltd.; and |
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shareholders or you means the holders of common shares. |
SECTION TWO: BUSINESS OF THE MEETING
SECTION THREE: BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
SECTION FOUR: EXECUTIVE COMPENSATION
SECTION FIVE: GENERAL INFORMATION
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VOTING INFORMATION
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Section One: Voting Information
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WHERE TO FIND IT |
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1 |
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You have one vote per common share held on March 22, 2019, the record date. A simple majority of votes (50 percent plus one vote) cast at the meeting in person or by proxy is required to approve all matters.
As of the record date, to the knowledge of Nutriens directors and executive officers, there are no shareholders that beneficially own or control, or direct, directly or indirectly, common shares carrying more than 10 percent of the votes attached to the common shares that may be voted at the meeting.
There were 597,481,016 common shares outstanding on March 22, 2019, the record date. |
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A quorum for the transaction of business at the meeting is two shareholders present in person or by duly appointed proxy, together holding not less than 33 percent of the votes attached to the common shares that may be voted at the meeting. If a quorum is present at the opening of the meeting, shareholders present may proceed with the business of the meeting even if a quorum is not present throughout the meeting. If a quorum is not present at the opening of the meeting or within a reasonable time thereafter as the shareholders may determine, the shareholders present may adjourn the meeting to a fixed time and place but may not transact any other business.
How you vote depends on whether you are a non-registered (beneficial) or registered shareholder. You are a non-registered (beneficial) shareholder if the shares you own are registered for you in the name of an intermediary such as a bank, trust company, securities broker or other nominee. You are a registered shareholder if the shares you own are registered directly in your name. You can vote in person or you can appoint someone to attend the meeting and vote your shares for you (called voting by proxy). Please read these instructions carefully.
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VOTING INFORMATION
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Non-registered (beneficial) shareholders
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Registered shareholders
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If you do not plan to attend the meeting |
Complete the voting instruction form and return it to your intermediary.
You can either mark your voting instructions on the voting instruction form or you can appoint another person (called a proxyholder) to attend the meeting and vote your shares for you.
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You can either mark your voting instructions on the proxy form and return it to AST Trust Company (Canada) using one of the methods outlined below or you can appoint another person (called a proxyholder) to attend the meeting and vote your shares for you.
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Returning the proxy form |
The voting instruction form tells you how to return it to your intermediary.
Remember that your intermediary must receive your voting instructions in sufficient time to act on them, generally one day before the proxy deadline below.
AST Trust Company (Canada) must receive your voting instructions from your intermediary by no later than the proxy deadline, which is 4:00 p.m. (Saskatoon time) on Tuesday, May 7, 2019. |
The enclosed proxy tells you how to submit your voting instructions.
AST Trust Company (Canada) must receive your proxy, including any amended proxy, by no later than the proxy deadline which is 4:00 p.m. (Saskatoon time) on Tuesday, May 7, 2019.
You may return your proxy in one of the following ways:
by mail, in the envelope provided;
by fax, to 1-866-781-3111 (toll-free in North America) or 1-416-368-2502 (outside North America);
using the internet, at: www.astvotemyproxy.com and follow the instructions online; or
by telephone, call 1-888-489-5760 (toll-free in North America) from a touch-tone phone and follow the voice instructions. If you vote by telephone, you cannot appoint anyone other than the appointees named on your proxy form as your proxyholder.
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Changing your mind |
If you have provided voting instructions to your intermediary and change your mind about how you want to vote, or you decide to attend the meeting and vote in person, contact your intermediary to find out what to do. |
If you want to revoke your proxy, you must deliver a signed written notice specifying your instructions to one of the following:
our Corporate Secretary, by depositing an instrument in writing at our registered head office at the following address any time up to and including the last business day before the meeting:
Nutrien Ltd. Suite 500, 122- 1st Avenue South Saskatoon, SK Canada S7K 7G3 Attention : Corporate Secretary Email: corporatesecretary@nutrien.com
the chair of the meeting, before the meeting starts or any adjourned or postponed meeting reconvenes.
The instrument in writing can be from you or your attorney, if he or she has your written authorization. If the common shares are owned by a corporation, the instrument in writing must be from its authorized officer or attorney. You can also revoke your proxy in any other way permitted by law. |
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VOTING INFORMATION
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If you have any questions or need help voting, please contact our strategic shareholder advisor and proxy solicitation agent,
Kingsdale Advisors, by
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Persons Making the Solicitation
This solicitation is made on behalf of management of the Corporation. In addition to soliciting proxies by mailing this circular, directors, officers, employees and agents of the Corporation may solicit proxies personally, by telephone or by other means of communication. All costs of soliciting, preparing and mailing the notice of meeting, this circular and the proxy enclosed with this circular will be paid by us. We are not sending proxy-related materials using notice and access. We pay for our proxy-related materials to be sent indirectly to all non-registered (beneficial) shareholders.
The persons named in the enclosed proxy are directors and/or executive officers of the Corporation. You have the right to appoint another person or company (who need not be a shareholder) to represent you at the meeting. To do so, insert the name of that other person or company in the space provided in the proxy and strike out the other names, or complete and submit another appropriate form of proxy. Your proxy must then be deposited at the place and within the time specified in this circular for the deposit of proxies. If you appoint a proxyholder who is not a director or executive officer of the Corporation, please make them aware that they must attend the meeting for your vote to count.
If you want to vote by proxy you must ensure that your proxy is deposited so that it arrives by 4:00 p.m. (Saskatoon time) on Tuesday, May 7, 2019 or, if the meeting is adjourned or postponed, by not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time and date at which the meeting is reconvened. The time limit for the deposit of proxies may be waived or extended by the chair of the meeting at his or her discretion, without notice, and the chair of the meeting is under no obligation to accept or reject any particular late proxy.
The Corporation may use the Broadridge QuickVote service to help non-registered shareholders vote their shares. Non-registered shareholders are contacted by Kingsdale Advisors to conveniently obtain voting instructions directly over the telephone. Broadridge Financial Solutions then tabulates the results of all instructions received and provides the appropriate instructions respecting the voting shares to be represented at the meeting.
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VOTING INFORMATION
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Financial and other information about the Corporation is available under Nutriens profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml . Certain information is also available on our website at www.nutrien.com .
In addition, any shareholder who would like to receive a copy of this circular and our 2018 annual report may do so free of charge by contacting our registered head office at the following address:
Nutrien Ltd. |
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Suite 500, 122- 1 st Avenue South Saskatoon, SK Canada S7K 7G3 |
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Attention: |
Corporate Secretary |
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Email: |
corporatesecretary@nutrien.com |
Any documents referred to in this circular, and any information or documents available on SEDAR, EDGAR or any other website including our own, are not incorporated by reference into this circular unless otherwise specified.
All dollar amounts are expressed in U.S. dollars unless otherwise specified.
The information contained in this circular is given as of Friday, March 15, 2019 unless otherwise specified.
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BUSINESS OF THE MEETING
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Section Two: Business of the Meeting
Matters to be Voted On |
WHERE TO FIND IT |
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5 |
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You will be asked to vote on the following items of business:
1. the election of each director;
2. the re-appointment of the auditor;
3. our approach to executive compensation, on a non-binding advisory basis; and
4. such other business as may properly be brought before the meeting. |
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Election of Directors | 5 | |||||
Financial Statements | 5 | |||||
Re-Appointment of Auditor | 5 | |||||
Advisory Vote on Executive Compensation
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There are 12 directors standing for election to the board for a one-year term ending at the next annual meeting. Shareholders can vote for , or withhold their vote from , each individual nominee. If a nominee does not receive a majority of votes for , our Director Majority Voting Policy applies.
The board unanimously recommends that shareholders vote FOR the election of each nominee as a director. Unless instructed otherwise, the persons named in the enclosed proxy will vote FOR the election of all of our nominees as directors. |
See Section Three: Board
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Our 2018 audited consolidated financial statements and the auditors reports on those financial statements will be placed before the meeting.
Copies will be available at the meeting. You may also obtain copies under Nutriens profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml , or from our website at www.nutrien.com . Shareholders may also get a copy of our 2018 annual report free of charge by contacting our head office as described on page 4.
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BUSINESS OF THE MEETING
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The following table sets out the following fees for professional services billed by KPMG LLP and by Deloitte LLP, PotashCorps external auditor since 1989.
Year | 2018 | 2018 | 2017 | 2017 | 2017 | |||||||||||||||
Company | Nutrien | Nutrien | Nutrien | Agrium | PotashCorp | |||||||||||||||
Auditor | KPMG LLP | Deloitte LLP |
KPMG LLP /
Deloitte LLP (8) |
KPMG LLP | Deloitte LLP | |||||||||||||||
U.S. $ | U.S. $ | U.S. $ | CAD $ | U.S. $ | ||||||||||||||||
Category | ||||||||||||||||||||
Audit Fees |
$ | 5,942,200 | (1) | $ | 958,200 | (4) | Nil | $ | 4,201,500 | (9) | $ | 2,013,962 | (13) | |||||||
Audit-Related Fees |
$ | 325,900 | (2) | $ | 488,000 | (5) | Nil | $ | 10,000 | (10) | $ | 305,734 | (14) | |||||||
Tax Fees |
$ | 362,400 | (3) | $ | 182,000 | (6) | Nil | $ | 440,200 | (11) | $ | 362,078 | (15) | |||||||
All Other Fees |
Nil | $ | 24,400 | (7) | Nil | $ | 65,000 | (12) | $ | 39,877 | (16) | |||||||||
Total |
$ | 6,630,500 | $ | 1,652,600 | $ | 4,716,700 | $ | 2,721,651 |
Notes:
(1) |
For professional services rendered by KPMG LLP for the audit and review of Nutriens 2018 annual consolidated financial statements, review of 2018 interim financial statements and other services that are normally provided by KPMG LLP in connection with statutory and regulatory filings or engagements. |
(2) |
For professional services rendered by KPMG LLP for specified audit procedures regarding financial assurances issued to certain government agencies, and services which are reasonably related to the performance of the audit of Nutriens financial statements which are not included in Audit Fees. |
(3) |
For professional services rendered by KPMG LLP for tax compliance, tax advice and tax planning with respect to Canadian, U.S. and key international jurisdictions; review of tax filings; assistance with the preparation of tax filings; tax advice relating to asset dispositions; and other tax planning, compliance, and transaction services. These amounts include fees paid to KPMG LLP specifically for tax compliance and preparation services rendered in 2018 in the amount of $289,200. |
(4) |
For professional services rendered by Deloitte LLP for the review of Nutriens interim financial statements, the provision of consent letters and the provision of comfort letters. |
(5) |
For professional services rendered by Deloitte LLP for employee benefit plan audits, audits of individual statutory financial statements, verification letters issued for certain of Nutriens environmental liabilities, and specified procedure engagements. |
(6) |
For professional services rendered by Deloitte LLP for general tax compliance and advice. |
(7) |
For professional services rendered by Deloitte LLP for operational consulting and subscription-based services for human resource related literature. |
(8) |
KPMG LLP and Deloitte LLP provided services to the Corporation in January 2018 in connection with the joint audit of Nutriens consolidated financial statements for the financial year ended December 31, 2017 but neither of them billed the Corporation any fees in 2017. |
(9) |
For professional services rendered by KPMG LLP for the audit and review of Agriums 2017 annual consolidated financial statements, review of 2017 interim financial statements and other services that are normally provided by KPMG LLP in connection with statutory and regulatory filings or engagements. |
(10) |
For professional services rendered by KPMG LLP for specified audit procedures regarding financial assurances issued to certain government agencies and other services which are reasonably related to the performance of the audit of Agriums 2017 financial statements, which are not included in Audit Fees. |
(11) |
For professional services rendered by KPMG LLP for tax compliance, tax advice and tax planning with respect to Canadian, U.S. and key international jurisdictions; review of tax filings; assistance with the preparation of tax filings; tax advice relating to potential asset and business acquisitions/combinations; and other tax planning, compliance, and transaction services. These amounts include fees paid to KPMG LLP specifically for tax compliance and preparation services rendered to Agrium in 2017 in the amount of $326,200. |
(12) |
For professional services rendered by KPMG LLP for cyber security risk assessment. |
(13) |
For professional services rendered by Deloitte LLP for the audit of PotashCorps 2017 annual consolidated financial statements, review of 2017 interim financial statements, the provision of consent letters and the provision of comfort letters. |
(14) |
For professional services rendered by Deloitte LLP for employee benefit plan audits, audits of individual statutory financial statements, verification letters issued for certain of the companys environmental liabilities, and specified procedure engagements. |
(15) |
For professional services rendered by Deloitte LLP for general tax compliance and advice. |
(16) |
For professional services rendered by Deloitte LLP for operational consulting, subscription based services for human resource related literature, and subscription based service for accounting literature. |
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BUSINESS OF THE MEETING
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Accordingly, the board has determined to provide shareholders with the opportunity to vote FOR or AGAINST our approach to executive compensation through the following resolution: |
RESOLVED , on an advisory basis and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept Nutriens approach to executive compensation as described in the Corporations management proxy circular for the annual meeting of shareholders of the Corporation scheduled to be held on May 9, 2019.
As this is an advisory vote, the results will not be binding upon the board. However, the board will consider the outcome of the vote as part of its ongoing review of executive compensation and, if there is a significant proportion of votes against the Say on Pay resolution, the board will take steps to better understand any shareholder concerns that might have influenced the voting.
The board unanimously recommends that the shareholders vote FOR the approach to executive compensation described in this circular. Unless instructed otherwise, the persons named in the enclosed proxy will vote FOR the approach to executive compensation described in this circular.
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Section Three: Board of Directors and Corporate Governance
Section Index
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Report of the Safety, Health, Environment + Security Committee |
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Key Information About Our Board
At the meeting, 12 candidates have been nominated for election to the board for a one-year term that expires at the next annual meeting.
The nominees have the right skills, perspectives, experience and expertise necessary for proper oversight and effective decision-making, and have diverse qualifications.
All of our nominees were elected at the Corporations 2018 annual meeting of shareholders. We believe that each nominee will be able to serve as a director.
Changes in Our Board and Leadership Structure
On January 1, 2018, when the business combination of Agrium and PotashCorp to form Nutrien was completed, we implemented a transitional board and senior leadership structure to preserve the institutional knowledge of the directors and the CEOs of the legacy companies.
Under the transitional board structure, 16 directors were elected to the board of Nutrien at the Corporations 2018 annual meeting of shareholders. Eight directors had served on the board of Agrium and eight directors had served on the board of PotashCorp.
At Nutriens senior leadership level, Chuck Magro, Agriums CEO, was appointed President & Chief Executive Officer of Nutrien, and Jochen Tilk, PotashCorps CEO, was appointed Executive Chair.
Mr. Magro and Mr. Tilk served on the board as executive directors, and were jointly accountable to the board for attaining synergies from the merger and integrating employee teams and operations.
To reinforce effective, independent leadership on the board, Derek Pannell served as Lead Director, responsible for seeing that the board functioned effectively and independently of management and the executive directors.
In June 2018, the board agreed to reduce the board size from 16 to 12 and to eliminate the Executive Chair and Lead Director board leadership structure at the 2019 annual meeting of shareholders.
However, by the third quarter of 2018, Mr. Tilks key business objectives were achieved on an accelerated basis and Mr. Tilk agreed to step down as Executive Chair and as a director on September 30, 2018.
On October 1, 2018, the transitional Executive Chair and Lead Director positions were eliminated and replaced with a conventional board leadership structure led by an independent Board Chair, and Mr. Pannell, our former Lead Director, assumed leadership of the board as Board Chair.
Three of our directors, Derek Pannell, Gerald Grandey and A. Anne McLellan, will be retiring from the board in connection with the 2019 annual meeting, leaving a total of 12 nominees for election to the board. Given Mr. Pannells departure, Mayo Schmidt is expected to become Board Chair following the meeting. For more information about Board Chair succession, see page 17.
Board and Committee Meeting Attendance
Number of Meetings
Held During 2018 |
Average Director
Attendance |
|||
Board Meetings |
8 | 98.4% | ||
Corporate Governance & Nominating Committee (CG&N Committee) |
9 | 96.3% | ||
Audit Committee |
11 | 97.7% | ||
Human Resources & Compensation Committee (HR&C Committee) |
5 | 100% | ||
Safety, Health, Environment + Security Committee (SHE+S Committee) |
5 | 100% |
9
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Age: 57
Calgary, Alberta, Canada
Director Since: 2018 (PotashCorp from 2009 2018)
Independent
Key Skills and Experience Finance Mergers & Acquisitions Strategy |
Christopher M. Burley
Christopher Burley is a Corporate Director and the former Managing Director and Vice Chairman of Energy for Merrill Lynch Canada Inc., an investment banking firm. He serves as the Vice Chair and a director of WestJet Airlines Ltd. Mr. Burley is a graduate of the Institute of Corporate Directors Directors Education Program. He holds a Bachelor of Science with a Certificate of Honours Standing (Geophysics) and a Master of Business Administration from the University of Western Ontario. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
8 of 8 | |||||||
Audit Committee |
11 of 11 | |||||||
CG&N Committee |
9 of 9 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 98.71% | |||||||
Equity Ownership Interest as of December 31, 2018 |
|
|||||||
Common Shares | 32,000 | |||||||
DSUs | 13,361 | |||||||
Total Value of Securities Held in U.S. Dollars (1) | $2,131,967 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) | ✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
|||||||
WestJet Airlines Ltd., an airline company (TSX) |
2015 to present | |||||||
Parallel Energy Inc., a natural resource company (TSX) (3) | 2011 to 2016 |
Age: 60
New York, New York, United States
Director Since: 2018 (Agrium from 2016 2018)
Independent
Key Skills and Experience Finance Mergers & Acquisitions International Business Experience |
Maura J. Clark
Maura Clark is a Corporate Director and the former President of Direct Energy Business, the commercial and industry energy business unit of Direct Energy L.P., a North American energy and energy-related services provider. Previously she was Executive Vice President of North American Strategy and Mergers and Acquisitions for Direct Energy. Ms. Clark is a designated Chartered Professional Accountant and holds a Bachelor of Arts (Economics) from Queens University. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
8 of 8 | |||||||
Audit Committee (Chair) |
11 of 11 | |||||||
HR&C Committee |
5 of 5 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 99.35% | |||||||
Equity Ownership Interest as of December 31, 2018 |
|
|||||||
Common Shares | 2,230 | |||||||
DSUs | 8,725 | |||||||
Total Value of Securities Held in U.S. Dollars (1) | $514,885 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) | ✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
|||||||
Garrett Motion Inc., an automotive parts company (NYSE) | 2018 to present | |||||||
Fortis Inc., an electric and gas utility company (TSX) | 2015 to present | |||||||
Elizabeth Arden Inc., a fragrance and beauty company (NASDAQ) | 2005 2016 |
10
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Age: 68
Glenview, Illinois, United States
Director Since: 2018 (PotashCorp from 2003 2018)
Independent
Key Skills and Experience Operations Human Resources Strategy |
John W. Estey
John Estey is the Executive Chairman of S&C Electric Company, a global provider of equipment and services for electric power systems. He serves as a director of the American Writers Museum, and as a member of the Board of Trustees of the Alder Planetarium & Astronomy Museum. He holds a Bachelor of Science (Engineering) from Queens University and a Master of Business Administration from the University of Chicago. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
8 of 8 | |||||||
HR&C Committee |
5 of 5 | |||||||
SHE+S Committee (Chair) |
5 of 5 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 98.76% | |||||||
Equity Ownership Interest as of December 31, 2018 |
|
|||||||
Common Shares | 18,380 | |||||||
DSUs | 50,449 | |||||||
Total Value of Securities Held in U.S. Dollars (1) | $3,234,963 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) | ✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
|||||||
None |
Age: 66
Marco Island, Florida, United States
Director Since: 2018 (Agrium from 2013 2018)
Independent
Key Skills and Experience
Innovation/Technology &
Retail Business Experience Agri-Business Experience |
David C. Everitt
David Everitt is a Corporate Director and former interim chief executive officer of Harsco Corporation, a global industrial company. Previously he was President, Agriculture and Turf Division North America, Asia, Australia, and Sub-Saharan and South Africa, and Global Tractor and Turf Products of Deere & Company, a farm equipment manufacturer. He serves as a director of the National Business Aviation Association and the Kansas State University Foundation. Mr. Everitt holds a Bachelor of Science (Engineering) from Kansas State University. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
7 of 8 | |||||||
Audit Committee |
11 of 11 | |||||||
HR&C Committee |
5 of 5 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 96.87% | |||||||
Equity Ownership Interest as of December 31, 2018 |
|
|||||||
Common Shares | 6,402 | |||||||
DSUs | 19,920 | |||||||
Total Value of Securities Held in U.S. Dollars (1) | $1,237,134 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) | ✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
|||||||
Harsco Corporation, an industrial company (NYSE) |
2010 to present | |||||||
Brunswick Corporation, a manufacturing company (NYSE) | 2012 to present | |||||||
Allison Transmission Holdings, Inc, a manufacturing company (NYSE) |
|
2014 to present
|
|
11
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Age: 52
Toronto, Ontario, Canada
Director Since: 2018 (Agrium from 2016 2018)
Independent
Key Skills and Experience Finance Mergers & Acquisitions International Business Experience |
Miranda C. Hubbs
Miranda Hubbs is a Corporate Director and the former Executive Vice President and Managing Director of McLean Budden Limited, one of Canadas largest institutional asset managers. She serves as a director of Imperial Oil Limited, the Canadian Red Cross and PSP Investments. Ms. Hubbs is a National Association of Corporate Directors Governance Fellow. She is a designated Chartered Financial Analyst and holds a Bachelor of Science (Biology) from the University of Western Ontario and a Master of Business Administration from the Schulich School of Business. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
8 of 8 | |||||||
CG&N Committee |
9 of 9 | |||||||
SHE+S Committee |
5 of 5 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 99.37% | |||||||
Equity Ownership Interest as of December 31, 2018 |
||||||||
Common Shares | 5,000 | |||||||
DSUs | 16,983 | |||||||
Total Value of Securities Held in U.S. Dollars (1) | $1,033,201 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) |
✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
|||||||
Imperial Oil Limited, a petroleum company (TSX) |
2018 to present | |||||||
Spectra Energy, a natural gas company (NYSE) |
2015 2017 |
12
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Age: 63
Vancouver, British Columbia, Canada
Director Since: 2018 (PotashCorp from 2003 2018)
Independent
Key Skills and Experience Finance Human Resources Innovation/Technology & Security (including Cyber Security) |
Alice D. Laberge
Alice Laberge is a Corporate Director and the former President and Chief Executive Officer of Fincentric Corporation, a global provider of software solutions to financial institutions. Previously she was Senior Vice President and Chief Financial Officer of MacMillan Bloedel Ltd. She serves as a director of the Canadian Public Accountability Board. Ms. Laberge is a Fellow of the Institute of Corporate Directors, and holds a Bachelor of Science (Speech Pathology & Audiology) from the University of Alberta and a Master of Business Administration from the University of British Columbia. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
8 of 8 | |||||||
Audit Committee |
10 of 11 | |||||||
CG&N Committee |
8 of 9 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 98.79% | |||||||
Equity Ownership Interest as of December 31, 2018 |
|
|||||||
Common Shares | 6,800 | |||||||
DSUs | 37,577 | |||||||
Total Value of Securities Held in U.S. Dollars (1) |
$2,085,719 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) |
✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
|||||||
Royal Bank of Canada, a financial services provider (TSX, NYSE) | 2005 to present | |||||||
Russel Metals Inc., a metal distribution company (TSX) | 2007 to present |
Age: 58
Destin, Florida, United States
Director Since: 2018 (PotashCorp from 2014 2018)
Independent
Key Skills and Experience Agri-Business Experience International Business Experience Retail Business Experience |
Consuelo E. Madere
Consuelo Madere is the President and Founder of Proven Leader Advisory, LLC, a management consulting and executive coaching firm. Previously she was Vice President, Global Vegetables and Asia Commercial of Monsanto Company, a global provider of agricultural products. Ms. Madere is a member of the Latin Corporate Directors Association and the Hispanic Association on Corporate Responsibility. Ms. Madere is a National Association of Corporate Directors Board Leadership Fellow, and holds a NACD/Carnegie-Melon certification in Cyber-Security. She holds a Bachelor of Science (Chemical Engineering) from Louisiana State University and a Master of Business Administration from the University of Iowa. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
8 of 8 | |||||||
CG&N Committee |
9 of 9 | |||||||
SHE+S Committee |
5 of 5 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 99.36% | |||||||
Equity Ownership Interest as of December 31, 2018 |
|
|||||||
Common Shares | 6.600 | |||||||
DSUs | 7,245 | |||||||
Total Value of Securities Held in U.S. Dollars (1) | $650,715 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) | ✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
|||||||
Lindsay Corporation, an agriculture irrigation and transportation infrastructure company (NYSE) | 2018 to present | |||||||
S&W Seed Company, an agriculture seed company (NASDAQ) | 2018 to present |
13
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Age: 56
Saskatoon, Saskatchewan, Canada
Director Since: 2018 (PotashCorp from 2007 2018)
Independent
Key Skills and Experience Finance Public Policy & External Relations Human Resources |
Keith G. Martell
Keith Martell is the Chief Executive Officer and director of First Nations Bank of Canada, a Canadian chartered bank providing financial services with focus on the First Nations marketplace. He serves as a director of River Cree Enterprises Ltd. and as a trustee of the National Indian Brotherhood Trust and the Primrose Lake Trust. He previously served as a director of the Canadian Chamber of Commerce, Public Sector Pension Investment Board of Canada and The North West Company Inc. Mr. Martell is a designated Chartered Professional Accountant and holds a Bachelor of Commerce from the University of Saskatchewan. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
8 of 8 | |||||||
Audit Committee |
11 of 11 | |||||||
HR&C Committee (Chair) |
5 of 5 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 98.60% | |||||||
Equity Ownership Interest as of December 31, 2018 |
|
|||||||
Common Shares | 3,800 | |||||||
DSUs | 21,944 | |||||||
Total Value of Securities Held in U.S. Dollars (1) | $1,209,968 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) | ✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
|||||||
None |
14
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Age: 53
Toronto, Ontario, Canada
Director Since: 2018 (PotashCorp from 2015 2018)
Independent
Key Skills and Experience Mining, Energy & Exploration Finance
International Business
|
Aaron W. Regent
Aaron Regent is the Founding Partner of Magris Resources Inc., a private equity firm specializing in the mining sector, and Chairman and Chief Executive Officer of Niobec Inc., a niobium mining company. Previously he was President and Chief Executive Officer of Barrick Gold Corporation, Senior Managing Partner of Brookfield Asset Management, Co-Chief Executive Officer of the Brookfield Infrastructure Group and President and Chief Executive Officer of Falconbridge Limited. Mr. Regent is a designated fellow of the Chartered Professional Accountants (Ontario) and holds a Bachelor of Arts (History) from the University of Western Ontario. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
8 of 8 | |||||||
Audit Committee |
11 of 11 | |||||||
HR&C Committee |
5 of 5 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 99.14% | |||||||
Equity Ownership Interest as of December 31, 2018 |
|
|||||||
Common Shares | 23,420 | |||||||
DSUs | 16,801 | |||||||
Total Value of Securities Held in U.S. Dollars (1) | $1,890,387 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) | ✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
|||||||
The Bank of Nova Scotia, a financial services provider (TSX, NYSE) | 2013 to present |
Age: 61
Toronto, Ontario, Canada
Director Since: 2018 (Agrium from 2013 2018)
Independent
Key Skills and Experience Agri-Business Experience Retail Business Experience Distribution |
Mayo M. Schmidt
Mayo Schmidt is a Corporate Director and former director, President and Chief Executive Officer of Hydro One Limited, an electricity transmission and distribution company. Previously he served as director, President and Chief Executive Officer of Viterra Inc., a global agri-business company. (4) He serves as a member of Washburn Universitys Board of Trustees and the Lincoln Society. Mr. Schmidt holds a Bachelor of Business Administration and an Honorary Doctorate of Commerce from Washburn University. |
|
||||||
Board & Committee Membership |
2018 Meeting Attendance | |||||||
Board of Directors |
8 of 8 | |||||||
CG&N Committee (Chair) |
9 of 9 | |||||||
SHE+S Committee |
5 of 5 | |||||||
Past Annual Meeting Results |
Percentage of Votes Cast For Nominee | |||||||
2018 | 99.14% | |||||||
Equity Ownership Interest as of December 31, 2018 |
|
|||||||
Common Shares | 3,548 | |||||||
DSUs | 23,573 | |||||||
Total Value of Securities Held in U.S. Dollars (1) | $1,274,687 | |||||||
Director Equity Ownership Requirement (U.S.$720,000) (2) | ✓ | |||||||
Other Public Issuer Directorships During the Last Five Years |
|
Hydro One Limited, an electricity transmission and distribution company (TSX) | 2015 to 2018 |
15
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Notes:
(1) |
As of Nutriens closing share price on the NYSE on December 31, 2018 of U.S.$47.00. |
(2) |
See page 28 for more information on our director equity ownership requirements. Directors have five years to comply with equity ownership requirements. Nutrien considers the requirement met if the target is achieved on a prorated basis. Amounts reported include DSUs credited as dividend equivalents. |
(3) |
Mr. Burley was a director of Parallel Energy Inc., administrator of Parallel Energy Trust (Parallel Energy). On or about November 9, 2015, Parallel Energy and its affiliates filed applications for protection under the Companies Creditors Arrangement Act (Canada) and voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code. Mr. Burley resigned from the board of directors of Parallel Energy Inc. on March 1, 2016. The Canadian entities of Parallel Energy each filed an assignment in bankruptcy under the Bankruptcy and Insolvency Ac t on March 3, 2016. In 2015, securities regulators for the Provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec, Saskatchewan and New Brunswick issued cease trade orders in relation to the securities of Parallel Energy for the failure by Parallel Energy to timely file financial statements as well as related continuous disclosure documents. Such cease trade orders continue to be in effect. The TSX delisted the trust units and debentures of Parallel Energy at the close of business on December 11, 2015. |
(4) |
In May 2004, Saskatchewan Wheat Pool Inc. (SWP), the predecessor of Viterra, disposed of its hog operations, which had been carried on through certain of its subsidiaries, through a court-supervised process under the Companies Creditors Arrangement Act (Canada). On April 12, 2005, the Saskatchewan Financial Services Commission issued a cease trade order against four of these subsidiaries of SWP for failing to file the required annual continuous disclosure documents. The cease trade order was revoked on October 18, 2010 pursuant to Viterras application to effect a reorganization of the entities in question. Mr. Schmidt served as an officer and/or director of these entities. |
We are committed to setting the tone from the top to create a culture of integrity throughout the organization by engraining good corporate governance systems and principles in our business operations and culture. We believe that this plays an important role in our long term success. See Nutriens website at www.nutrien.com for more information about our governance policies, including our Corporate Governance Framework, Code of Ethics and Board Chair position description.
Some highlights of our corporate governance practices are as follows:
Corporate Governance ✓ 11 of 12 director nominees are independent ✓ Strong risk oversight ✓ Board Diversity Policy ✓ All committees independent ✓ Board, committee and director evaluations annually ✓ Board orientation and education program ✓ Code of Ethics ✓ Supplier Code of Conduct ✓ In camera sessions at every board and committee meeting ✓ Audit Committee whistleblower procedures ✓ Written CEO, Board Chair and Committee Chair Position Descriptions
|
Shareholder Rights ✓ Annual election of directors ✓ Individual director elections ✓ Directors Majority Voting Policy ✓ Active shareholder engagement ✓ Advisory vote on Say on Pay ✓ Advance Notice By-Law
|
Compensation Governance ✓ Independent advice ✓ Recoupment Policy ✓ Prohibition on hedging ✓ Director equity ownership requirement of 3x the board annual retainer ✓ Double-trigger change in control provisions ✓ Executive equity ownership requirements: 5x base salary (President & CEO) 2-3x base salary (Executive Vice Presidents) |
||
Each directors independence is assessed annually against the independence standards set out in the NYSE Listing Standards, the rules of the Canadian Securities Administrators relating to governance practices and audit committees, including National Policy 58-201 Corporate Governance Guidelines , National Instrument 58-101 Disclosure of Corporate Governance Practices and National Instrument 52-110 Audit Committees ( NI 52-110 ), and our Corporate Governance Framework. For these purposes, independent means the director does not have a material relationship (direct or indirect) which could, in the view of the board, be reasonably expected to interfere with the exercise of the directors independent judgment. The board has determined that all of the proposed nominees, with the exception of Chuck Magro, are independent for purposes of the independence standards described above. Mr. Magro is not independent because he is our President & CEO.
Director Majority Voting Policy
A nominee who does not receive a majority of the votes cast at the meeting must immediately tender his or her resignation to the Board Chair, to be effective upon acceptance by the board. The CG&N Committee then recommends to the board whether to accept or reject the resignation. Unless there are exceptional circumstances, the board will accept the resignation. The board will make its decision within 90 days following the meeting and will announce its decision in a press release.
16
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
The Director Majority Voting Policy does not apply to contested director elections. A contested meeting is a meeting at which the number of directors nominated for election is greater than the number of seats available on the board.
Under the boards retirement policy, a directors retirement age is normally 72 years.
We do not limit the time that a director can serve on the board. While director term limits can assist with board refreshment, there may be circumstances where the board does not want to lose the deeper knowledge of the business and the experience of a longer-serving director.
Board performance evaluations, the boards retirement policy and our director succession planning program that includes updated assessments of our board competencies and skills matrix are all mechanisms used by the board to achieve board refreshment.
Board Interlocks and Overboarding
Under the terms of the Corporate Governance Framework, a board interlock arises when two of the Corporations directors also serve together on the board of another public company. As of the date of this circular, there are no board interlocks among board members. The Corporate Governance Framework describes Nutriens policy on overboarding.
The CG&N Committee has primary responsibility for board succession planning and for developing a list of nominees for election as directors at each annual meeting. The CG&N Committee Chair regularly reports to the board on the board succession planning process.
The board updates its skills matrix annually, with a view in particular to take into account the Corporations strategic plan and the needs of the board. The committee then reviews overall board composition to assess whether the board has the right mix of skills, perspectives, experience and expertise necessary for proper oversight and effective decision making, benchmarked against the skills matrix and the boards diversity objectives.
The committee also considers expected turnover and board refreshment. Working with the Board Chair, the committee considers the expected term of office of each director and how close they are to retirement age in order to plan for potential departures.
The committee also reviews the annual board assessment results to determine whether changes are needed, and reviews each candidates independence in light of legal and regulatory requirements.
The Board Chair, CEO, committee chairs and other directors interview any suitable candidates and the Corporation conducts background checks.
The board regularly evaluates our committee membership, but has not instituted a strict rotation schedule as there may be reasons to keep a certain director on a committee for a longer period. Any changes are made by the board taking into account the recommendations of the Board Chair and the CG&N Committee.
The HR&C Committee has primary responsibility for overseeing managements planning process for executive development and succession. The HR&C Committee Chair regularly reports to the board on executive succession planning. |
With Derek Pannells planned retirement at the meeting, the CG&N Committee formed a subcommittee of five independent directors, chaired by Russ Girling, to execute the Board Chair succession plan. The committee constructed a profile of the leadership qualities and other personal characteristics of a future Board Chair, taking into account Nutriens strategic plan and the needs of the Corporation including the board. The subcommittee considered the possibility of an external candidate but determined that there were sufficient candidates with the right qualifications and experience within the pool of incumbent directors.
After careful consideration, the board, based on, among other things, the recommendation of the CG&N subcommittee, identified Mayo Schmidt as the individual to lead the board following the 2019 annual meeting if elected as a director by shareholders. Mr. Schmidt has enjoyed a distinguished 32-year career with significant leadership roles in the agri-business industry, including in Saskatchewan and globally, and has demonstrated a commitment to Nutriens core values in those roles and during his six years as a director of Nutrien and its predecessors. |
|||
17
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
At least annually, the HR&C Committee reviews succession planning, the management structure and executive development. It also reviews succession planning and leadership development below the senior executive level, which grows the pipeline of high performing executives to facilitate senior leadership renewal and orderly senior leadership transitions. The Corporation also uses succession planning as a tool to progress diversity and inclusion on the management team, including with respect to gender and ethnic diversity.
Each year, the Chief Human Resources and Administrative Officer presents a succession plan report to the HR&C Committee, covering a number of critical positions and the Corporations bench strength against each. Where a talent gap or risk is observed, the Corporation considers potential lateral movements within the organization and tests the market to research external talent options. On a monthly basis, the Executive Leadership Team reviews the Corporations talent pool and pipeline for critical roles, and monitors development of candidates, to diversify exposure, leadership training, mentoring and business and functional skills.
In addition, the CEO identifies internal high potential successors for senior management positions throughout the Corporation to the HR&C Committee and the Corporations human resources group.
The HR&C Committee Chair actively participates in ongoing discussions with the Corporations human resources group relating to succession planning over the year. High potential candidates identified in the succession plans are encouraged to have direct interactions with the board so that it can get to know the candidates and appreciate their skills and expertise first hand, including through presentations by these individuals at regular meetings, annual training sessions and at social events.
Our CEO succession plan has two phases. The first phase, which is ongoing, is to lay a strong foundation for CEO succession. A CEO profile, which is aligned with the Corporations direction, strategy and culture as well as its projected needs over the next five to ten years, is developed and approved by the HR&C Committee. High potential internal candidates are identified and assessed, and leadership development plans are established. As a key part of establishing CEO readiness, internal candidates are given opportunities to manage complex challenges so that the board can evaluate their performance.
The second phase is triggered closer to the planned exit of the CEO. At least one year before transition, the board approves the actual succession plan process. The pool of internal candidates is narrowed, informed by the boards and CEOs assessment of performance, and an external search firm is retained to bring forward quality and diverse candidates. The in-depth assessment process involves interviews, psychometric tests and interviews with the HR&C Committee, the board and senior management. The board makes the final selection, taking into account the recommendation of the HR&C Committee, and the transition plan to the new CEO is executed.
We recognize that a board comprised of qualified directors from varied backgrounds and who reflect the evolving demographic of the markets in which the Corporation operates enhances decision-making by the board.
The Board Diversity Policy provides that, although the selection of candidates for nomination to the board will be based on merit, the CG&N Committee will seek to fill board vacancies taking into account the appropriate level of diversity, including gender diversity, on the board. The Board Diversity Policy includes a target that women comprise not less than 30 percent of the Corporations directors. The policy further provides that should the percentage of female directors on the board fall below 30 percent at any time, the CG&N Committee will work to re-achieve such target.
The implementation of the Board Diversity Policy is the responsibility of the CG&N Committee. The CG&N Committee considers the level of representation of women on the board by overseeing the director identification and nominating process. In order to effectively implement the policy, the CG&N Committee requires that sufficient numbers of women and other diverse candidates are included in the slate of candidates for consideration by the board. The CG&N Committee is also responsible for annually assessing the Board Diversity Policys effectiveness in promoting a diverse board. To measure the effectiveness of this policy, the CG&N Committee annually considers the progress made in achieving the diversity objectives set forth in the policy.
18
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
The diversity of our nominees is illustrated in the charts below:
As of the date of this circular, five female directors serve on Nutriens board. As there are currently a total of 15 directors serving on the board, women account for one-third of our directors. Further, as four of our 12 nominees are women, women will continue to account for one-third of our directors if all of our nominees are elected. Accordingly, the number of female directors at the date of this circular and the number of female director nominees both meet the target included in the Board Diversity Policy.
Diversity is commonly defined as a variety of experiences and perspectives that arise from differences in ethnicity, culture, religion, heritage, age, gender and other characteristics. Diversity in the workplace creates value by:
|
aligning Nutriens business perspectives with an increasingly diverse customer base; |
|
building capability to operate in international markets; |
|
introducing new perspectives to the way we manage the business; |
|
enabling Nutrien to recruit from a larger pool of talent; and |
|
empowering all board members and employees, regardless of background, to optimize his or her contribution. |
The legacy companies have pursued diversity in the workplace for a number of years among both board members and employees.
We are committed to placing qualified female talent in senior leadership positions (which includes executive officers, Vice Presidents and roles reporting to Vice Presidents), with a goal of increasing our overall female numbers in Nutriens leadership. While we have not established a target for female executives due to the overarching importance of promotion by merit, Nutrien takes into account the existing number of women in senior leadership positions in making senior leadership appointments. As of December 31, 2018, the number of women that were in senior leadership roles was 17 percent (58 of 333) of the total number of senior leaders within the Corporation, representing a 3 percent increase over that reported in our circular for the 2018 annual meeting. Additionally, 23 percent (11 of 47) of the Corporations Vice Presidents are female, with a goal to increase this number over the next two years.
To increase our gender representation, Nutrien:
|
identifies and interviews a diverse slate of candidates, including women, during the recruiting process; |
|
provides high potential candidates, including female candidates, with diverse responsibilities to enhance their capabilities and their opportunities for more senior positions; |
|
offers high potential women below the senior level specialized learning/development opportunities through tailored programming which includes a combination of mentorship, action learning opportunities, conference involvement, coaching and training; and |
|
promotes an inclusive and supportive work environment. |
19
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Our Board Charter provides that the board is responsible for the stewardship of the Corporation and the oversight of management and the activities of the Corporation. The boards principal duties include appointment and oversight of the CEO, oversight and approval of the Corporations business strategy and strategic planning process and oversight and approval as appropriate of the Corporations policies, procedures and systems for implementing strategy and managing risk.
The board exercises its duties directly and through its committees. The board has four standing committees: the CG&N Committee, the Audit Committee, the HR&C Committee and the SHE+S Committee. Our board and committee charters are available on our website at www.nutrien.com .
The independent directors and each committee (composed of independent directors) meet separately at their meetings without any members of management present. The independent directors met in camera six times in 2018.
In evaluating nominees for membership on the board, our CG&N Committee expects every director of the Corporation to possess the following core qualities and competencies: integrity, ethical behaviour and independent-mindedness, as well as leadership competencies related to corporate governance, leading growth, risk management and corporate social responsibility. Nutrien also looks for the following skills and experience specific to the Corporations strategy and business operations to be represented on the board:
Skills/Experience
|
Definition
|
|||
Former/Current CEO or CFO | Experience as a CEO or CFO or similar position for a large organization | |||
Agri-Business Experience | Agricultural experience related to markets, regulatory and business environments | |||
Distribution | Logistics, transportation and distribution experience | |||
Finance | Experience as a professional accountant, corporate controller, investment banker or financial professional with respect to a financial or treasury function with an understanding of and responsibility for financial transactions and corporate finance | |||
Human Resources | Experience in leadership continuity, succession planning, compensation programs and management of compensation-related risks | |||
Innovation/Technology & Security (including Cyber Security) | Experience with technology tools and platforms to enhance business operations, products, services, solutions and security | |||
International Business Experience | Experience within an organization with global operations outside of North America | |||
Mergers & Acquisitions | Experience with mergers, acquisitions, integrations or other business combinations | |||
Mining, Energy & Exploration | Experience in or with the mining, energy or exploration industry | |||
Operations | Operations experience, including operational optimization, safety, health, environmental and security of operations | |||
Public Policy & External Relations | Broad regulatory, political and public policy experience including government relations, sustainability and diversity | |||
Retail Business Experience | Experience working with a retailer or distributor of products, services or solutions | |||
Strategy | Experience with and responsibilities for the development and implementation of business growth and optimization strategies |
20
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
The board maintains a skills matrix to assess board composition to ensure the board has the necessary mix of skills and competencies to effectively carry out its mandate and align with the Corporations strategy. The following tables sets forth the skills and experience that are important to Nutrien and the competencies of our nominees relative to those criteria:
Christopher Burley |
Maura Clark |
John Estey |
David Everitt |
Russell Girling |
Miranda Hubbs |
Alice Laberge |
Consuelo Madere |
Chuck Magro |
Keith Martell |
Aaron Regent |
Mayo Schmidt |
|||||||||||||
Former/Current Chief Executive or Chief Financial Officer | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
Agri-Business Experience | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||||
Distribution | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
Finance | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
Human Resources | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||
Innovation/Technology & Security (including Cyber Security) | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
International Business Experience | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||
Mergers & Acquisitions | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
Mining, Energy & Exploration | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
Operations | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
Public Policy & External Relations | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||
Retail Business Experience | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||
Strategy | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
✓ |
Key skills and experience |
The CG&N Committee is responsible for developing and implementing the board performance evaluation program, under the Board Chairs oversight.
Nutriens first board performance evaluation was completed towards the end of 2018. The board evaluation process was executed by Derek Pannell, our independent Board Chair, who was well-positioned to perform this role given his long service as a director of Nutrien (and before that Agrium) and rich experience as a director and senior executive at other public companies. Mr. Pannell, supported by the Corporate Secretary, reviewed each directors attendance and participation in board and board committee meetings, and considered their contribution to the boards collective performance. Mr. Pannell then conducted one-on-one interviews with each director and with members of the executive leadership team, and reported the results of the interviews to the CG&N Committee. This process informed the committees development of actionable recommendations for ongoing enhancement of the boards effectiveness, and the results were used to inform the director nomination process.
Going forward, the committee anticipates that it will carry out a more structured annual board performance evaluation program, under the Board Chairs oversight, with the objective of improving board performance and providing the Board Chair and the committee with information concerning possible changes to board composition in light of our strategic plan and individual performance. Our annual board evaluation process will include formal questionnaires to be completed by each director, covering overall board and committee performance, a self-evaluation and an evaluation of the Board Chair and each Committee Chair. Personal interviews will also take place, and we plan to engage the services of an external facilitator.
21
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Based on the practices of our legacy companies, we anticipate that the 2019 board evaluation process will include the components summarized in the following table :
Review of
|
By
|
Action
|
||
Whole Board | All Directors |
Board members complete a questionnaire which seeks subjective opinions and quantitative ratings of board performance.
Each board member participates in interviews to supplement the questionnaire. |
||
Whole Board | Management |
Relevant members of senior management provide input. |
||
Board Chair | All Directors |
Board members, including the CEO, provide feedback on the Board Chairs performance. |
||
Board Committees | Committee Members and Senior Management |
Members of each committee complete a questionnaire to evaluate their respective committee.
Each committee member participates in interviews to supplement the questionnaire.
Relevant members of senior management provide input. |
||
Committee Chairs | Committee Members and Board Chair |
Members of each committee complete a questionnaire assessing their Committees Chairs performance. |
||
Individual Directors |
All Directors
(self-evaluation) |
Board members complete a questionnaire which seeks subjective opinions and quantitative ratings of their own performance.
Each board member participates in interviews to supplement the questionnaire. |
Board Orientation and Continuing Education
It is imperative that directors understand our business, including the size, complexity and risk profile of the Corporation, and stay current with corporate governance, regulatory, industry and other key issues to be effective members of our board. The CG&N Committee is responsible for the orientation and continuing education of directors.
Our orientation program helps new directors increase their understanding of their responsibilities and the Corporations operations as quickly as possible, so that they can be fully engaged and contribute meaningfully to the board and its committees. The orientation program is tailored to the skills, experience, education, knowledge and needs of each new director and consists of a combination of written materials, one-on-one meetings with senior management, site visits and other briefings and training as appropriate. Current directors may also participate in the orientation program to augment their knowledge or to re-familiarize themselves with the Corporations facilities through the site visits. As part of the orientation program, the Code of Ethics is reviewed and affirmed.
Our continuing education program provides regular and ongoing education to our director nominees, advancing their knowledge of our business, industry, regulatory environment, as well as other topical areas of interest, to enhance their effectiveness as directors and stewards of the Corporation. The CG&N Committee, with support from our Corporate Secretary, regularly solicits input from directors and members of management with respect to key education priorities for the board.
22
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
During 2018, board and committee members attended the following board orientation or education meetings.
Date | Event/Topic | Presented/Hosted By | Attended by | |||
January 9 to 11 |
National Association of Corporation Directors Consumer Electronic Show Experience |
National Association of Corporate Directors ( NACD )
Consumer Technology Association |
Christopher M. Burley Miranda C. Hubbs |
|||
January 18 |
Intelligent Automation and Governing for the Long-Term | Canadian Directors Network | Alice D. Laberge | |||
February 9 |
CEO Oversight | Institute of Corporate Directors ( ICD ) | Alice D. Laberge | |||
April 9 |
Effective Board Oversight in the Era of #MeToo | ICD | A. Anne McLellan | |||
April 17 |
Board Oversight of Responsible Investing | ICD | Alice D. Laberge | |||
May 3 |
Disclosure Effectiveness & Shareholder Engagement in a Digital Era | NACD | A. Anne McLellan | |||
May 15 |
Artificial Intelligence and Cybersecurity | Canadian Directors Network | Alice D. Laberge | |||
May 30 to 31 |
Annual Conference Boldness in the Boardroom | ICD |
Christopher M. Burley Alice D. Laberge |
|||
May |
Compensation Committee Series Webinar | NACD | Consuelo E. Madere | |||
June 7 |
Corporate Governance 2018 Understanding the Changing Agenda |
Jim Cramer The Deal |
Maura J. Clark | |||
June 18 to 20 |
Deep Dive into Nutrien Ag Solutions Strategy and Execution | Nutrien |
John W. Estey Alice D. Laberge |
|||
August 8 |
The Seven Deadly Sins of Executive Pay Data | NACD | Miranda C. Hubbs | |||
August |
Compensation Committee Series Webinar | NACD | Consuelo E. Madere | |||
September 21 to 24 |
Global Board Leaders Summit | NACD | Consuelo E. Madere | |||
October 17 |
Cybersecurity in Canada and the Rest of the World | Ernst and Young | Gerald W. Grandey | |||
November 12 |
Global Investor Conference | The Carlyle Group | Miranda C. Hubbs | |||
November 13 |
Successful Dynamics on International Boards | ICD | Gerald W. Grandey | |||
December 4 |
Not-for-Profit Governance | ICD | Alice D. Laberge | |||
December 6 to 7 |
Master Class Various Governance Topics | NACD | Consuelo E. Madere | |||
December 12 |
Corporate Governance Guidelines Update | Office of the Superintendent for Financial Institutions | Aaron W. Regent | |||
December |
PwC Corporate Directors Exchange | PricewaterhouseCoopers | Maura J. Clark | |||
Various |
CERT Certificate in Cybersecurity Oversight |
NACD Carnegie-Mellon University |
John W. Estey Miranda C. Hubbs Consuelo E. Madere |
23
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
The board has four standing committees:
|
the Corporate Governance & Nominating Committee ( CG&N Committee ); |
|
the Audit Committee; |
|
the Human Resources & Compensation Committee ( HR&C Committee ); and |
|
the Safety, Health, Environment + Security Committee ( SHE+S Committee ). |
Each committee member qualifies as an independent director under our director independence standards described on page 16.
Corporate Governance & Nominating Committee
|
||||
Mayo M. Schmidt, Chair Christopher M. Burley Russell K. Girling Miranda C. Hubbs Alice D. Laberge Consuelo E. Madere
|
The board has determined that each member of the CG&N Committee is independent within the meaning of NI 52-110. All of the members also meet additional independence standards for audit committees under applicable U.S. and Canadian laws and stock exchange rules.
Our CG&N Committee Charter is available on our website at www.nutrien.com . |
The CG&N Committee has responsibility for the oversight of the Corporations governance and board committees, board succession planning and director recruitment, director orientation and continuing education, board and committee evaluations and director compensation. The committee met nine times in 2018.
Key Responsibilities | Key Activities | |
Corporate Governance Framework and related policies |
Conducted annual review of the Corporate Governance Framework and related policies and recommended changes for approval.
Advised the board on committee charters, structure, functions and qualifications for membership. |
|
Board succession planning and director recruitment processes |
Updated the board skills matrix, with a view in particular to take into account the Corporations strategic plan and the needs of the board, and discussed possible candidates for upcoming vacancies.
Led the implementation of a new board succession planning process, Board Chair succession planning process and director recruiting procedure.
Completed the selection process for Board Chair, as described on page 17.
Recommended committee membership and Chair appointments to independent directors. |
|
Director orientation and education program |
Updated the policies and processes relating to director orientation and continuing education; developed the agenda for the director education program.
Oversaw the 2018 board evaluation process and designed the 2019 board evaluation process as described starting on page 21. |
|
Board Diversity Policy |
Reviewed the implementation, efficacy and compliance with the Board Diversity Policy.
Monitored compliance with applicable law relating to diversity disclosure. |
|
Director compensation |
With the assistance of Willis Towers Watson, recommended to the board for approval the individual directors compensation.
Monitored compliance with individual directors equity ownership requirements. |
|
Governance compliance |
Monitored corporate governance trends and developments, assessing current corporate governance practices against emerging best practices and other applicable requirements.
Reviewed and approved for recommendation to the board the Corporations disclosure documents containing significant corporate governance information, including this circular.
Monitored compliance with applicable laws relating to corporate governance.
Reviewed shareholder proposals and/or requisitions received by the Corporation and recommended an appropriate response. |
24
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Audit Committee
|
||||
Maura J. Clark, Chair Christopher M. Burley David C. Everitt Russell K. Girling Alice D. Laberge Derek G. Pannell Keith G. Martell Aaron W. Regent
|
The board has determined that each member of the Audit Committee is independent and financially literate within the meaning of NI 52-110. Maura J. Clark is an audit committee financial expert for the purpose of the Sarbanes-Oxley Act of 2002 and has accounting and related financial management experience or expertise for the purposes of the NYSE Listing Standards. All of the members also meet additional independence standards for audit committees under applicable U.S. and Canadian laws and stock exchange rules.
Our Audit Committee Charter is available on our website at www.nutrien.com .
|
The Audit Committee has responsibility for oversight of the Corporations accounting and financial reporting processes and the reviews and audits of the Corporations financial statements. The committee met 11 times in 2018. At these meetings, the committee met with senior members of the Corporations financial management team as well as the Corporations external auditors. Additionally, the committee had multiple private sessions with the CEO, CFO, Internal Audit, Chief Compliance Officer and Chief Legal Officer (among others). At these meetings, the committee had candid discussions regarding Nutriens financial disclosures, financial and risk management practices and other legal, accounting, auditing and internal control matters.
Key Responsibilities | Key Activities | |
Financial statements and related disclosures |
Approved (or recommended to the board) significant financial disclosure as per the mandate.
Discussed with management and the external auditors their analysis of significant reporting issues, critical accounting policies and practices (and areas where judgment was applied) and other financial measures used in connection with the financial disclosure. |
|
Systems of internal controls over financial reporting |
Reviewed the effectiveness of the Corporations internal control systems and disclosure controls and procedures, including cybersecurity controls and information technology strategies.
Reviewed managements report and the external auditors related attestation of the Corporations internal controls over financial reporting.
Reviewed reports from the Corporations disclosure committee, and discussed with the CEO and CFO disclosures made during the certification processes relating to internal controls. |
|
Material financial and other risks |
On an ongoing basis, reviewed with management the financial and other risks within the committees mandate and discussed how such risks were assessed, mitigated and disclosed.
Reviewed with management processes that identify, assess, monitor and manage such risks. |
|
Internal audit function |
Reviewed with management, the external auditors and internal audit the charter, plans, activities and organizational structure of the internal audit function, with a view to internal audits effectiveness, objectivity and independence.
Reviewed the adequacy of resources of the internal audit function. |
|
External auditors |
Engaged with external auditors and key related employees to assist, monitor and review the annual audit process.
Assessed the external auditors annual qualification report.
Reviewed the formal written statements of independence from the external auditors and assessed their independence, taking into account applicable auditor independence standards.
In accordance with the Corporations Pre-Approval Policy for Audit and Non-Audit Services Policy, approved all proposed external audit and permitted non-audit services for the coming year, and all audit and non-audit services during the year outside of previous approvals.
Completed external auditor selection process following merger. |
|
Significant compliance policies and procedures |
Established and monitored both standard and confidential procedures for receiving complaints within the committees mandate.
Reviewed with the Chief Legal Officer significant compliance policies, reviewed the effectiveness of anti-fraud and anti-bribery laws and reviewed procedures relating to the communication of and compliance with the Corporations Code of Ethics. |
25
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Human Resources & Compensation Committee
|
||||
Keith G. Martell, Chair Maura J. Clark John W. Estey David C. Everitt Gerald W. Grandey A. Anne McLellan Aaron W. Regent
|
The board has determined that each member of the HR&C Committee is independent within the meaning of NI 52-110. All of the members have human resources literacy as defined in the HR&C Committee charter, and also meet additional independence and financial literacy standards for audit committees under applicable U.S. and Canadian laws and stock exchange rules. Maura J. Clark has accounting and related financial management experience or expertise for the purposes of the NYSE Listing Standards.
None of Nutriens executive officers serve as a member of a compensation committee (or equivalent) of any other entity that employs a member of the HR&C Committee, and no member of the HR&C Committee is currently an active CEO of a publicly-traded company.
Our HR&C Committee Charter is available on our website at www.nutrien.com .
|
The HR&C Committee has responsibility for the oversight of the Corporations executive compensation, broad-based employee compensation, retirement and benefit programs and executive development and succession. The committee met five times in 2018.
Key Responsibilities | Key Activities | |
Executive compensation |
Reviewed and approved compensation performance goals and individual objectives for the CEO and former Executive Chair, assessed the performance of the CEO and former Executive Chair in light of their performance goals and objectives and recommended their compensation to the board for approval.
Reviewed and approved the compensation structure and evaluation process for other executive officers, including parameters for salary adjustments.
Reviewed the independence of our compensation consultant, Willis Towers Watson. |
|
Compensation philosophy |
Oversaw the implementation of a new compensation philosophy for 2018, including recommending the Compensation Peer Group for board approval.
Assessed elements of the executive compensation program to align with the Corporations compensation philosophy, taking into account the Corporations risk tolerance. |
|
Incentive and equity- based compensation program |
Designed and finalized the new Annual Incentive Program.
Approved the 2018 KPI Scorecard, monitored progress against the 2018 KPIs and associated projected payouts and approved annual incentive payout budgets for 2018 performance.
Developed and finalized the new Long-Term Incentive Program, the PSU metrics applicable to the 2018 PSU awards and the PSU Peer Group.
Recommended the 2018 long-term incentive grants for board approval.
Established mandatory equity ownership guidelines and monitored executive officer compliance. |
|
Retirement and benefit programs |
Reviewed a summary of the level and distribution of plan assets for each of the North American Pension and Savings plans for each legacy organization, including recent investment returns relative to benchmarks.
Reviewed new retirement and benefit programs to be implemented in 2019 and 2020. |
|
Succession plan for senior executives |
Executed transformational changes at the senior leadership level, including the elimination of the Executive Chair structure and implementation of the CFO succession plan. |
|
Executive diversity program |
Reviewed diversity and inclusion initiatives, including Aboriginal outreach efforts. |
|
Disclosure of significant executive compensation information |
Reviewed and approved the executive compensation disclosures contained in this circular. |
|
Executive compensation compliance |
Reviewed trends in executive compensation and oversaw compliance with applicable laws. |
26
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Safety, Health , Environment + Security Committee
|
||||
John W. Estey, Chair Gerald W. Grandey Miranda C. Hubbs A. Anne McLellan Consuelo E. Madere Mayo M. Schmidt
|
The board has determined that each member of the SHE+S Committee is independent within the meaning of NI 52-110. All of the members also meet additional independence standards for audit committees under applicable U.S. and Canadian laws and stock exchange rules.
Our SHE+S Committee Charter is available on our website at www.nutrien.com . |
The SHE+S Committee has responsibility for the oversight of the Corporations activities with respect to safety, health, the environment and security, sustainability and the integrity of the Corporations safety, health, environmental, security and sustainability policies. The committee met five times in 2018.
Key Responsibilities | Key Activities | |
Significant policies and management systems within the committees mandate |
Oversaw implementation of a new SHE+S vision and strategy reviewed the five-year strategy and annual objectives.
Oversaw policies relating to sustainability and progress towards sustainability goals.
Reviewed safety, health, environmental and security performance summaries to identify any performance issues.
Reviewed safety, health, environment and security audit plan for the current and upcoming year.
Reviewed with management the safety, environmental and security emergency response planning processes. |
|
Risk and compliance requirements that come within the committees mandate |
Reviewed the Corporations remediation projects, environmental provisions and significant legal and regulatory developments as per the mandate.
Reviewed risks (including insurance risks) related to safety, health, environment and security.
Studied cybersecurity risk in conjunction with the Audit Committee.
Reviewed disclosure containing significant information within the committees mandate. |
Nutriens director compensation program for our independent directors is designed to:
|
attract and retain board members with the necessary skills, perspectives, experience and expertise; |
|
reflect the responsibilities, commitments and risks that accompany board membership; and |
|
align the interests of our board members with those of shareholders by requiring them to have a significant equity ownership interest in the Corporation. |
The CG&N Committee annually reviews director compensation using the Compensation Peer Group, which is the same peer group used to benchmark executive compensation based on the advice of our independent compensation consultant, Willis Towers Watson. Director compensation is generally targeted near the median of the Compensation Peer Group.
Our executive directors (the President & CEO and the former Executive Chair) participate in the Corporations executive compensation program and are not entitled to additional compensation for director duties.
Our independent directors cannot participate in the Corporations executive compensation program or receive pensions, benefits or other perquisites. |
See Section Four: Executive Compensation for information about our Compensation Peer Group and compensation paid to our executive directors.
|
|||
27
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
Compensation is paid to our independent directors in the form of annual retainers, which are payable in cash and deferred share units ( DSUs ) as follows:
ANNUAL RETAINER |
Fees Earned (U.S.$) |
|||
Board Members |
||||
Board Member |
$ | 240,000 | ||
Lead Director (until September 30, 2018) (1) |
$ | 300,000 | ||
Board Chair (starting October 1, 2018) (1) |
$ | 440,000 | ||
Additional Retainer for Committee Positions |
||||
Committee Member |
$ | 10,000 | ||
CG&N Committee Chair |
$ | 15,000 | ||
Audit Committee Chair |
$ | 20,000 | ||
HR&C Committee Chair |
$ | 20,000 | ||
SHE+S Committee Chair |
$ | 15,000 | ||
Travel Allowance for Attending Board and Committee Meetings |
||||
Travel Allowance (per meeting requiring travel out of the directors province or state of residence) |
$ | 1,000 |
Notes :
(1) |
Derek Pannells annual retainer as Lead Director was prorated from January 1, 2018 until September 30, 2018 and as Board Chair from October 1, 2018. |
Directors can redeem their DSUs for cash only when they leave the board for an amount equal to the market value of the common shares at the time of redemption. DSUs earn dividend equivalents in the form of additional DSUs at the same rate as dividends are paid on our common shares, but do not give the holder voting or other shareholder rights. The following is a summary of the Nutrien DSU Plan:
Eligible Participants |
Authorizes the board to grant such number of DSUs to independent directors as it may determine. |
|
Credit to DSU Account |
DSUs granted to the director are credited to his or her DSU account.
The number of DSUs issued for a cash portion of the directors remuneration is calculated by dividing the cash portion of the remuneration by the average closing price of the common shares on the NYSE over the 10 trading days prior to the date such cash portion is converted into DSUs (generally, the last business day of each quarter).
Whenever cash dividends are paid on the common shares, equivalent DSUs are credited to holders.
|
|
Vesting |
DSUs fully vest upon grant. |
|
Redemption |
Payouts of DSUs are made after the date on which the holder ceases to be a director of the Corporation for any reason including retirement or death.
DSU payouts are equal to the market value of the redeemed DSUs on the date of redemption elected by the director or mandated by the Nutrien DSU Plan (less withholdings).
|
28
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
2018 Summary of Director Compensation
Director Summary Compensation Table
The following director compensation table sets out the compensation earned by each individual who served as an independent director of Nutrien during the year ended December 31, 2018 in their capacity as independent directors:
Director |
Fees Earned (1) (U.S.$) |
All Other Compensation (U.S.$) |
Total (U.S.$) |
||||||||||||
Christopher Burley |
$ | 264,000 | Nil | $ | 264,000 | ||||||||||
Maura Clark |
$ | 281,000 | Nil | $ | 281,000 | ||||||||||
John Estey |
$ | 271,000 | Nil | $ | 271,000 | ||||||||||
David Everitt |
$ | 266,000 | Nil | $ | 266,000 | ||||||||||
Russell Girling |
$ | 264,000 | Nil | $ | 264,000 | ||||||||||
Gerald Grandey |
$ | 264,000 | Nil | $ | 264,000 | ||||||||||
Miranda Hubbs |
$ | 266,000 | Nil | $ | 266,000 | ||||||||||
Alice Laberge |
$ | 268,000 | Nil | $ | 268,000 | ||||||||||
Consuelo Madere |
$ | 266,000 | Nil | $ | 266,000 | ||||||||||
Keith Martell |
$ | 276,000 | Nil | $ | 276,000 | ||||||||||
A. Anne McLellan |
$ | 265,000 | Nil | $ | 265,000 | ||||||||||
Derek Pannell |
$ | 362,000 | Nil | $ | 362,000 | ||||||||||
Aaron Regent |
$ | 266,000 | Nil | $ | 266,000 | ||||||||||
Mayo Schmidt |
$ | 270,000 | Nil | $ | 270,000 |
Notes:
(1) |
Fees earned consists of the directors annual retainers and travel allowances paid in cash or DSUs. The grant date fair value of the DSUs is the average closing price of a common share on the NYSE over the 10 trading days prior to the conversion date. For the 2018 grants, the DSU grant date fair value was U.S.$47.93 (Q1), U.S.$53.42 (Q2), U.S.$57.53 (Q3) and U.S.$45.75 (Q4). The number of DSUs granted is calculated by dividing the value of the board member annual retainer to be paid in DSUs and the grant date fair value. Amounts reported exclude DSUs credited as dividend equivalents. |
The following table provides a breakdown of the annual retainers and travel allowances paid to directors in respect of service provided in 2018 as identified in the Fees Earned column of the director compensation table (above):
Director |
Board,
Committee and Committee Chair Retainers (U.S.$) |
Board and
Committee Attendance Fees (U.S.$) |
Travel
Allowance (U.S.$) |
Total Payable
(U.S.$) |
Percentage
of Fees and Retainers Taken in DSUs (%) |
Total Fees and
Retainers Taken in Cash (U.S.$) |
Grant Date Fair
Value of Total Fees and Retainers Taken in DSUs (1) (U.S.$) |
||||||||||||||||||||||||||||
Christopher Burley |
$ | 260,000 | Nil | $ | 4,000 | $ | 264,000 | 50% | $ | 132,000 | $ | 132,000 | |||||||||||||||||||||||
Maura Clark |
$ | 270,000 | Nil | $ | 11,000 | $ | 281,000 | 50% | $ | 140,500 | $ | 140,500 | |||||||||||||||||||||||
John Estey |
$ | 265,000 | Nil | $ | 6,000 | $ | 271,000 | 50% | $ | 135,500 | $ | 135,500 | |||||||||||||||||||||||
David Everitt |
$ | 260,000 | Nil | $ | 6,000 | $ | 266,000 | 50% | $ | 133,000 | $ | 133,000 | |||||||||||||||||||||||
Russell Girling |
$ | 260,000 | Nil | $ | 4,000 | $ | 264,000 | 100% | Nil | $ | 264,000 | ||||||||||||||||||||||||
Gerald Grandey |
$ | 260,000 | Nil | $ | 4,000 | $ | 264,000 | 100% | Nil | $ | 264,000 | ||||||||||||||||||||||||
Miranda Hubbs |
$ | 260,000 | Nil | $ | 6,000 | $ | 266,000 | 100% | Nil | $ | 266,000 | ||||||||||||||||||||||||
Alice Laberge |
$ | 260,000 | Nil | $ | 8,000 | $ | 268,000 | 50% | $ | 134,000 | $ | 134,000 | |||||||||||||||||||||||
Consuelo Madere |
$ | 260,000 | Nil | $ | 6,000 | $ | 266,000 | 25% | $ | 206,000 | $ | 60,000 | |||||||||||||||||||||||
Keith Martell |
$ | 270,000 | Nil | $ | 6,000 | $ | 276,000 | 25% (2) | $ | 189,375 | $ | 86,625 | |||||||||||||||||||||||
A. Anne McLellan |
$ | 260,000 | Nil | $ | 5,000 | $ | 265,000 | 30% (3) | $ | 172,100 | $ | 92,900 | |||||||||||||||||||||||
Derek Pannell |
$ | 355,000 | Nil | $ | 7,000 | $ | 362,000 | 25% | $ | 302,000 | $ | 60,000 | |||||||||||||||||||||||
Aaron Regent |
$ | 260,000 | Nil | $ | 6,000 | $ | 266,000 | 100% | Nil | $ | 266,000 | ||||||||||||||||||||||||
Mayo Schmidt | $ | 265,000 | Nil | $ | 5,000 | $ | 270,000 | 100% | Nil | $ | 270,000 |
Notes:
(1) |
Amounts reported are the total annual retainers and travel allowances paid in cash and the grant date fair value of DSUs. See note (1) to the Director Summary Compensation Table for a description of the calculation of grant date fair value of DSUs. Amounts reported exclude DSUs credited as dividend equivalents. |
(2) |
Mr. Martells DSU Election was 50% in Q1 and changed to 25% in Q2. |
(3) |
Ms. McLellans DSU Election was 50% in Q1 and changed to 30% in Q2. |
29
|
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
The following table provides details regarding the aggregate value as at December 31, 2018 of DSUs granted to individuals who served as independent directors of Nutrien during 2018 in their capacity as independent directors:
Director |
Number of Unredeemed
DSUs
(1)
(#) |
Market Value of Unredeemed
DSUs
(2)(3)
(U.S.$) |
||||||||
Christopher Burley |
13,361 | $ | 627,964 | |||||||
Maura Clark |
8,725 | $ | 410,070 | |||||||
John Estey |
50,449 | $ | 2,371,126 | |||||||
David Everitt |
19,920 | $ | 936,225 | |||||||
Russell Girling |
92,934 | $ | 4,367,921 | |||||||
Gerald Grandey |
22,960 | $ | 1,079,135 | |||||||
Miranda Hubbs |
16,983 | $ | 798,212 | |||||||
Alice Laberge |
37,577 | $ | 1,766,121 | |||||||
Consuelo Madere |
7,245 | $ | 340,495 | |||||||
Keith Martell |
21,944 | $ | 1,031,360 | |||||||
A. Anne McLellan |
55,802 | $ | 2,622,708 | |||||||
Derek Pannell |
56,575 | $ | 2,659,044 | |||||||
Aaron Regent |
16,801 | $ | 789,659 | |||||||
Mayo Schmidt | 23,573 | $ | 1,107,932 |
Notes:
(1) |
All DSUs vest on the date of grant. Amounts reported include DSUs credited as dividend equivalents. |
(2) |
Amounts reported consist of vested but unredeemed DSUs as of December 31, 2018 and include DSUs credited as dividend equivalents. |
(3) |
Market value of unredeemed DSUs was determined by reference to Nutriens closing share price on the NYSE on December 31, 2018 of U.S.$47.00. |
DSU Awards Value Vested or Redeemable During the Year
The following table provides details regarding the outstanding DSUs that vested and were redeemed or redeemable during the year ended December 31, 2018 for individuals who served as independent directors of Nutrien during 2018. The figures below are in reference to DSUs earned in their capacity as independent directors. DSUs are only redeemable when the director leaves the board of directors.
Director |
DSUs Value vested and
earned during the year (1)(2) (U.S.$) |
DSUs Value redeemed or
(U.S.$) |
||||||||
Christopher Burley |
$ | 137,472 | Nil | |||||||
Maura Clark |
$ | 139,990 | Nil | |||||||
John Estey |
$ | 188,587 | Nil | |||||||
David Everitt |
$ | 148,854 | Nil | |||||||
Russell Girling |
$ | 370,667 | Nil | |||||||
Gerald Grandey |
$ | 270,030 | Nil | |||||||
Miranda Hubbs |
$ | 265,538 | Nil | |||||||
Alice Laberge |
$ | 170,847 | Nil | |||||||
Consuelo Madere |
$ | 64,041 | Nil | |||||||
Keith Martell |
$ | 121,299 | Nil | |||||||
A. Anne McLellan |
$ | 163,837 | Nil | |||||||
Derek Pannell |
$ | 134,143 | Nil | |||||||
Aaron Regent |
$ | 263,823 | Nil | |||||||
Mayo Schmidt | $ | 278,382 | Nil |
Notes:
(1) |
The value of DSUs was determined by reference to Nutriens closing share price on the NYSE on December 31, 2018 of U.S.$47.00. |
(2) |
Amounts reported consist of the value of DSUs that vested but were not redeemed as of December 31, 2018 and include DSUs credited as dividend equivalents. |
30
|
EXECUTIVE COMPENSATION
|
Section Four: Executive Compensation
Section Index
|
|
|||
34 | ||||
34 | ||||
34 | ||||
36 | ||||
37 | ||||
38 | ||||
38 | ||||
40 | ||||
40 | ||||
41 | ||||
41 | ||||
42 | ||||
44 | ||||
44 | ||||
45 | ||||
45 | ||||
45 | ||||
46 | ||||
46 | ||||
46 | ||||
47 | ||||
48 | ||||
48 | ||||
50 | ||||
50 | ||||
Incentive Plan Awards Value Vested or Earned During the Year |
52 | |||
Number of Securities Issuable and Issued as at December 31, 2018 |
53 | |||
53 | ||||
54 | ||||
54 | ||||
55 | ||||
56 | ||||
56 | ||||
57 | ||||
58 | ||||
63 |
31
|
EXECUTIVE COMPENSATION
|
Letter from the Chair of the HR&C Committee
Dear Shareholder:
Nutrien was created by the merger of equals of our two legacy companies, Agrium and PotashCorp, on January 1, 2018. Our vision is to be the leading global integrated agriculture solutions provider. We are both the worlds largest crop nutrient company and the third largest natural resource company in Canada. Our business lines are strengthened by the worlds premier agricultural retail network. We have the right portfolio of agricultural products, services and solutions and the global platform to deliver them.
The central role of the HR&C Committee is to align executive compensation with shareholder value creation, to plan CEO succession and to contribute to the development of the senior leadership team.
In 2018 we acted quickly and delivered on our strategic priorities. We created a unified work force and culture, achieved synergy targets, maximized value from required divestitures and took a disciplined approach to capital allocation.
|
We put in place a team of people who share our safety culture and launched a new sustainability strategy with a focus on advancing sustainable agricultural practices and minimizing our footprint. |
|
We exceeded our annual run-rate synergy target of $500 million at the end of 2018, one year ahead of schedule. We boosted our run-rate synergy target by 20% to $600 million by the end of 2019. |
|
We generated $2.0 billion in free cash flow, received $5.3 billion in net proceeds from the sale of equity investments and returned $2.8 billion to shareholders through dividends paid and share repurchases. We continue to maintain a strong balance sheet to allow Nutrien to invest in growth. |
At the beginning of the year, we designed the principles of Nutriens new executive compensation program, and approved Nutriens annual and long-term executive compensation plans. We have created a performance-based executive compensation structure that conforms to current good corporate governance practices, meets investor expectations and recognizes that our executives have heightened responsibilities at a larger, more complex global company.
We also approved a new executive employment agreement with the CEO and certain other senior executive officers, which replaces legacy agreements. This is an important step in human resources risk management.
In June 2018, it was expected that the benefits of maintaining a transitional leadership structure which separated the roles of President & Chief Executive Officer (Chuck Magro) and Executive Chair (Jochen Tilk) would be achieved by the 2019 annual meeting, at which time Mr. Tilk would step down. However, by the third quarter of 2018, it became evident that Mr. Tilks key business objectives were achieved on an accelerated timeframe, and that a more conventional corporate governance leadership structure could be implemented earlier than expected. Accordingly, Mr. Tilk stepped down as Executive Chair and as a director on September 30, 2018.
On behalf of the board and the Corporation, we expressly thank Jochen Tilk for his strong and effective leadership in guiding the Corporation through a complex merger of equals as President & Chief Executive Officer of PotashCorp. We thank him for his many contributions to the strong financial performance of the Corporation as Executive Chair of Nutrien and for supporting a smooth transition in the Corporations leadership. Mr. Tilks dedication, hard work and industry knowledge were key to our success last year, including our achievement of annual run-rate synergy targets well in advance of schedule.
We would also like to thank Wayne Brownlee, who stepped down as Chief Financial Officer of Nutrien effective October 31, 2018 following an exceptional career at PotashCorp.
On November 15, 2018 we announced that Mr. Brownlee would be replaced by Pedro Farah, who joined us from Walmart Inc. Mr. Farah joined Walmart in 2011, where he progressed to more senior positions, most recently that of Executive Vice President and Treasurer, Walmart, responsible for overseeing the companys Global Risk Management, Global Tax and Global Technology and Transformation Finance Teams. Mr. Farah assumed the position of Executive Vice President & Chief Financial Officer of Nutrien, effective February 1, 2019. He brings significant corporate finance, treasury, retail, strategic development and risk management experience to the Corporation, and is a member of our Executive Leadership Team that reports directly to Chuck Magro.
32
|
EXECUTIVE COMPENSATION
|
Effectively balancing and managing risk and reward is an important and integrated part of Nutriens approach to executive compensation. The HR&C Committee will continue to monitor evolving corporate governance and competitive practices to ensure that our programs are aligned with shareholder interests and our corporate philosophy of continuous improvement.
Yours sincerely,
Keith G. Martell
Chair of the Human Resources & Compensation Committee
33
|
EXECUTIVE COMPENSATION
|
Compensation Discussion & Analysis
The six named executive officers, or NEOs , of Nutrien and its subsidiaries for the year ended December 31, 2018 include our CEO, CFO and the next three highest-paid executive officers, along with the interim CFO. The six NEOs are as follows:
Executive | Position | |
Chuck Magro |
President & Chief Executive Officer | |
Michael (Mike) J. Frank |
Executive Vice President & Chief Executive Officer, Retail | |
Steve J. Douglas (1) |
Executive Vice President & Chief Integration Officer | |
Fredrick (Fred) R. Thun (2) |
Interim Chief Financial Officer | |
Jochen E. Tilk (3) |
Former Executive Chair | |
Wayne R. Brownlee (3) |
Former Executive Vice President & Chief Financial Officer |
Notes:
(1) |
Mr. Douglas stepped down on January 31, 2019. |
(2) |
Mr. Thun became Interim Chief Financial Officer on November 1, 2018. |
(3) |
As part of our organizational transformation following the successful integration of our two legacy organizations, Mr. Tilk and Mr. Brownlee stepped down on September 30 and October 31, 2018, respectively. |
As the worlds largest provider of crop inputs and services, Nutrien plays a critical role in Feeding the Future by helping growers to increase food production in a sustainable manner.
We need to attract, motivate and retain the brightest talent with skills across a diverse set of capabilities. This allows us to keep innovating, which is essential for achieving shared success with our customers, investors and other stakeholders that rely on the long-term success of our business. Compensation is a critical tool that helps us accomplish this objective.
Our programs have been designed with a focus on sustainable performance using measures tied to both financial and operational performance with foundations in safety, health and the environment.
34
|
EXECUTIVE COMPENSATION
|
The following principles guide the HR&C Committee and management in the design and administration of Nutriens executive compensation programs, while supporting the core value of our compensation philosophy of pay-for-performance:
|
link to our business strategy and long-term value creation |
|
achieve market competitiveness |
|
align with good governance practices |
|
mitigate compensation risk |
The following summarizes how we achieve our compensation principles, and highlights key risk-mitigating features incorporated into our processes and programs:
Compensation Plan Design |
||
✓ |
Compensation program is simple and transparent |
|
✓ |
Balance between fixed and variable compensation, with most executive total direct compensation being at-risk |
|
✓ |
Level of fixed compensation is designed to promote retention |
|
✓ |
Performance targets derived from Nutriens annual business plan and longer-term strategic business plan objectives |
|
✓ |
Multiple performance objectives to capture a broader view of performance |
|
✓ |
Multiple time horizons (from one to ten years) to balance the achievement of short- and long-term performance and risk |
|
✓ |
Annual and long-term incentive plans have threshold performance levels (below which payouts are not made) and capped at two times target payout/units |
|
✓ |
Benchmark total direct compensation versus relevant peers while also considering internal equity |
|
✓ |
Post-retirement vesting of long-term incentive awards to encourage a long-term view of performance and risk |
|
✓ |
Apply judgment to address extenuating circumstances |
|
Corporate Governance |
||
✓ |
HR&C Committee oversees all aspects of executive compensation to assess potential impact on business risk (including human resource risk) |
|
✓ |
HR&C Committee retains an external compensation consultant to provide independent advice |
|
✓ |
Recoupment Policy applies to incentive compensation |
|
✓ |
Mandatory executive equity ownership requirements |
|
✓ |
Anti-hedging policy that applies to directors and officers |
|
✓ |
Double trigger change-of-control provisions requiring both a change of control and termination of the executive are embedded in employment contracts and long-term incentive plans (with the exception of a limited number of legacy arrangements entered into before 2013 that provided for single trigger vesting of stock options) |
|
✓ |
Severance arrangements limited to two years |
|
✓ |
Review pay-for-performance sensitivity, payout modelling and back testing of compensation plan design |
|
✓ |
No stock option repricing or granting stock options at a discount |
|
✓ |
Shareholders have an annual say on pay vote |
35
|
EXECUTIVE COMPENSATION
|
The HR&C Committee reviews and recommends to the board the compensation philosophy, strategy and principles, and program design, as well as oversees the administration of executive compensation plans, policies and programs. |
HR&C Committee
|
|||||
Keith G. Martell, Chair | ||||||
Maura J. Clark | Gerald W. Grandey | |||||
John W. Estey | A. Anne McLellan | |||||
David C. Everitt | Aaron W. Regent | |||||
The HR&C Committee is composed of independent directors who have been determined by the HR&C Committee to possess human resources literacy, meaning an understanding of compensation theory and practice, personnel management and development, succession planning and executive development. Such knowledge and capability includes: (i) current or prior experience working as a chief executive or senior officer of a major organization (which provides significant financial and human resources experience), (ii) involvement on board compensation committees of other entities, and (iii) experience and education pertaining to financial accounting and reporting, which is integral to managing executive incentive compensation, and familiarity with internal financial controls.
This knowledge and experience, in conjunction with a comprehensive compensation decision process and the support of its independent compensation consultant, enables the HR&C Committee to formulate informed compensation recommendations for board approval.
|
One of the primary purposes of the committee is to assist the board in fulfilling its oversight responsibilities for executive compensation. Together with the board, the HR&C Committee is committed to getting Nutriens approach to human resources matters and compensation right, both for shareholders and for the Corporations long-term success.
The executive compensation elements of our committees charter focus on:
|
evaluating executives performance and recommending appropriate compensation in light of that performance; |
|
overseeing the instruments that deliver pay-for-performance; |
|
mitigating compensation risk; and |
|
putting in place a process to determine competitive compensation levels and overseeing the execution of this process. |
To support the decision-making process, the HR&C Committee receives input from management and independent advice from external advisors.
The HR&C Committee reviews the performance goals for the CEO, assesses the CEOs performance and makes compensation recommendations for the CEO to the independent members of the board for approval. In 2018, this same process was followed for the former Executive Chair. With respect to the other executive officers, the CEOs assessment of their performance is taken into account when making compensation decisions. The HR&C Committee reviews and approves the compensation structure and evaluation process for these other executives.
The HR&C Committee has appointed Willis Towers Watson as an independent compensation consultant.
Willis Towers Watson was engaged by both legacy companies in 2017 and by Nutrien in 2018. In addition, in 2017 they were engaged jointly by both legacy companies as part of the integration process to assist in the development of Nutriens executive compensation program. Below is a summary of the work that was conducted in 2018:
|
completed a competitive compensation review for executive positions; |
|
evaluated the appropriateness of peer companies used in Nutriens compensation programs; |
|
conducted an assessment of the risks inherent in Nutriens compensation programs; |
|
reported on executive compensation best practices and evolving corporate governance trends; |
|
facilitated the development of short-term and long-term incentive plan designs; |
|
conducted research, prepared studies and provided advice on matters as assigned by Nutriens HR&C Committee; |
|
supported the development and review of Nutriens proxy circular; and |
|
analyzed the pay-for-performance alignment for Nutriens CEO on both a retrospective and prospective basis. |
Other distinct and separate teams at Willis Towers Watson serve as managements consultant with respect to Nutriens pension and benefits programs and occasionally on broad-based employee compensation projects. The following represents the fees billed in 2017 and 2018 for work performed for director and executive compensation projects related
36
|
EXECUTIVE COMPENSATION
|
to Nutrien (and the legacy companies) on behalf of the HR&C Committee, as well as other fees associated with pension and benefits projects:
Billed in 2017 | Billed in 2018 | |||||||||||||||
Agrium
(CAD$) |
PotashCorp
(U.S.$) |
Nutrien
(CAD$) |
Nutrien
(CAD$) |
|||||||||||||
Director and Executive Compensation Related Fees:
|
$ | 412,604 | $ | 178,113 | $ | 665,088 | $ | 931,724 | ||||||||
All Other Fees:
|
$ | 991,936 | $ | 175,000 | Nil | $ | 1,007,619 |
The HR&C Committee considers the data provided by and advice of Willis Towers Watson, as well as many other factors. Ultimately, all decisions and recommendations to the board are the committees own.
The HR&C Committee is aware of the potential conflict of interest associated with Willis Towers Watsons non-executive compensation services and diligently ensures processes are followed to preserve the consultants independence. All work performed is and must be pre-approved by the committee, taking into account whether or not the work would compromise their independence. To date, the HR&C Committee is satisfied that Willis Towers Watson continues to provide the committee with impartial advice independent of direct or indirect influence of management. However, the committee may from time to time seek second opinions on substantive issues.
The HR&C Committee based its 2018 decision concerning the independence of Willis Towers Watson on the following:
|
members of the executive compensation consulting team are not responsible for selling other services to Nutrien and receive no incentive or other compensation based on the fees charged to Nutrien for other services provided; |
|
the executive compensation consulting team is separate and distinct from the teams that assist Nutriens management with the other services provided; |
|
the executive compensation consultants do not have a business or personal relationship with any of the committee members or management, and do not own Nutrien shares other than possibly through mutual funds; and |
|
Willis Towers Watson has strict protocols and processes to mitigate conflicts of interests and all consultants are required to adhere to a code of conduct. |
Compensation Decision Processes
37
|
EXECUTIVE COMPENSATION
|
Compensation Program Risk Management
We mitigate executive compensation risk through appropriate corporate governance oversight and executive compensation plan design (as outlined above) and corporate governance policies. We also motivate certain behaviours that encourage appropriate risk-taking to drive performance in accordance with our risk profile.
As part of its mandate, the HR&C Committee:
|
actively engages with the senior leaders to understand the connection between the executive compensation program and business strategy; |
|
governs compensation plan design, the selection of peer groups, the elements of compensation, the level of executives that participate and award distribution, in order to assess potential impact on business risk (including human resource risk); |
|
retains an external compensation consultant to provide independent advice on market data, plan design and current good corporate governance practices, and regularly commissions an independent risk assessment; |
|
oversees a robust process to assess performance; and |
|
considers the implications of the potential risks associated with Nutriens compensation policies and practices. |
In fulfilling its mandate related to risk management, the HR&C Committee worked with Willis Towers Watson to conduct a compensation program risk assessment. The HR&C Committee concluded that there are no risks arising from Nutriens compensation policies and practices that are reasonably likely to have a material adverse effect on the Corporation.
Specific corporate governance policies related to risk management include:
|
Recoupment Policy . Our Recoupment Policy allows for the discretionary recovery from current and former executive officers of any excess incentive compensation granted or paid to the executive officer where the original award was contingent on the achievement of certain financial results that were later subject to a financial restatement by reasons of non-compliance with securities laws and the need for the restatement was caused by the executive officers intentional misconduct, dishonesty or fraud. |
|
Mandatory executive equity ownership requirements . Our executives are expected to meet their mandatory executive equity ownership requirements of five times salary for the President & CEO and two to three times salary for our Executive Vice Presidents. |
|
Securities Trading Policy. Our Securities Trading Policy prohibits directors and officers from entering into derivative or similar transactions with respect to their securities of the Corporation, holding their securities in a margin account or pledging their securities as collateral for loans, because such arrangements could reduce the risk of equity ownership by directors and officers and negate the alignment of interests of directors and officers with those of shareholders. |
In accordance with our compensation philosophy, the salary, benefits, perquisites and retirement arrangements for executives provide the secure fixed compensation component necessary to retain key executive talent. The combination of annual incentives and long-term incentives is designed to motivate the execution of our business strategy in a manner that creates shareholder value while retaining executive talent and aligning executive interests with those of our shareholders.
The combination of the fixed and variable/at-risk compensation components provides our executives with a competitive compensation package that is designed to meet Nutriens needs and shareholders expectations.
38
|
EXECUTIVE COMPENSATION
|
Element | Objective | Design | Term/Vesting | Form | ||||||||
Total Direct Compensation | ||||||||||||
Fixed
|
Short-term
|
Base salary |
Attraction and retention tool to maintain competitiveness
Reflect knowledge, skills and responsibilities of the executive |
Reviewed annually with changes effective April 1 st
Set to reflect market value, individual performance and experience, as well as recognize internal equity |
One year | Cash | ||||||
Variable / At-Risk |
Annual Incentive | At-risk compensation to motivate successful execution of annual goals related to Nutriens strategy |
Metrics, weighting and performance standards determined annually based on annual and strategic business plans
Payouts are determined based on actual performance relative to pre-determined goals and are not guaranteed
Maximum upside opportunity of two times target incentive |
One Year | Cash | |||||||
Long-term Incentives
|
Performance Share Units ( PSUs ) | Align the interests of executives and shareholders and reward achievement of sustained long-term performance relative to peers |
Represents 50% of long-term incentives
Performance multiplier based on Total Shareholder Return ( TSR ) relative to PSU Peer Group
Overlapping awards align executives with the creation of shareholder value over successive three-year periods
Payouts are based on share price at the end of the performance period and the resulting performance multiplier
Performance multiplier has a threshold level of performance required (no guaranteed payout) and a maximum multiplier of two times target
Performance multiplier capped at target if TSR over the performance period is negative |
Three years
Vesting contingent on performance at the end of the three-year performance period |
Cash | |||||||
Stock Options | Align compensation with the creation of shareholder value |
Represents 50% of long-term incentives
Potential value based on increase in share price from the date of grant |
Ten year term
Vest 25% per year over four years on anniversary of grant |
Equity | ||||||||
Indirect Compensation | ||||||||||||
Fixed |
Other Compensation Elements
|
Retirement Arrangements | Attraction and retention tools focused on the well-being of the executives |
Defined Benefit and/or Defined Contribution/401(k) Plans with substantially the same terms as available to other employees
Supplemental retirement plans provided to select executives
|
||||||||
Benefits |
Insurance, health, welfare and post-retirement benefits with substantially the same terms as available to other employees
|
|||||||||||
Perquisites |
Generally limited to an automobile allowance, financial counseling and an annual health examination
|
39
|
EXECUTIVE COMPENSATION
|
Nutriens target total direct compensation for the NEOs has an emphasis on variable/at-risk compensation, supporting our strong pay-for-performance culture and creating alignment with shareholders.
Nutrien benchmarks NEO compensation levels using a peer group of companies (the Compensation Peer Group ).
The HR&C Committee annually commissions its independent consultant to review the criteria and composition of the peer group. The criteria for inclusion in the Compensation Peer Group consists of:
✓ |
autonomous, publicly traded companies |
✓ |
companies in similar industries headquartered, or with their executive team based in Canada or the U.S. |
✓ |
companies of a similar size, measured by revenue (generally one half to two times Nutriens size) with consideration to assets, enterprise value and market capitalization |
The Compensation Peer Group utilized in making the compensation decisions described in this CD&A was comprised of the following companies:
Overall, Nutrien targets the 50 th percentile of the total direct compensation (salary plus annual incentive plus long-term incentive) of the Compensation Peer Group, with the flexibility to recognize the unique roles and responsibilities of Nutriens incumbents and their particular expertise relative to market.
Base salaries are reviewed every year and adjusted (as needed) to maintain market competitiveness with the Compensation Peer Group and to reflect the distinct skill set of the individual executives. The HR&C Committee decided in early 2018 that for Nutriens first year, only minimal changes would be made to our NEOs base salaries, focusing changes (as applicable) on incentive compensation.
NEO | Position | Currency | 2017 | 2018 |
Percentage Change |
|||||||||
Chuck Magro |
President & CEO | CAD$ | $1,600,000 | $1,600,000 | 0% | |||||||||
Mike Frank |
EVP & CEO, Retail | US$ | $ 900,000 | $ 900,000 | 0% | |||||||||
Steve Douglas |
EVP & Chief Integration Officer | CAD$ | $ 750,000 | $ 750,000 | 0% | |||||||||
Fred Thun |
Interim CFO | CAD$ | $ 380,000 | $ 391,400 | 3% | |||||||||
Jochen Tilk |
Former Executive Chair | CAD$ | $1,200,600 | $1,200,600 | 0% | |||||||||
Wayne Brownlee |
Former EVP & CFO | US$ | $ 635,000 | $ 635,000 | 0% |
40
|
EXECUTIVE COMPENSATION
|
Our Annual Incentive Plan is a key element in supporting our pay-for-performance philosophy. Each NEOs annual incentive opportunity is determined by performance in up to four components, with an emphasis on key operating and financial metrics:
1. |
safety, health and environmental ( SHE ) performance at the corporate level (for each NEO other than Mike Frank) or business unit level (for Mike Frank only); |
2. |
Nutrien corporate performance (all NEOs); |
3. |
Nutrien business unit performance (Mike Frank only); and |
4. |
individual performance (all NEOs). |
Annual incentive targets are set as a percentage of salary, with actual payouts based on a performance multiplier dependent on the achievement of predetermined annual goals.
The HR&C Committee and the board have the ability to apply informed judgment to adjust outcomes based on market, operational and other realities that may not have been contemplated in the scorecard formula.
Category
|
Performance Metric
|
|
Safety, Health & Environmental Performance | Leader Safety Commitment Completion | |
Total Recordable Injury Frequency ( TRIF ) | ||
Lost Time Injury Frequency ( LTIF ) | ||
Environmental Incident Frequency ( EIF ) | ||
Nutrien Corporate Performance |
Adjusted Net Earnings per Share ( EPS ) (1) | |
Free Cash Flow ( FCF ) (1) | ||
Synergies Run Rate | ||
Nutrien Business Unit Performance | Operating Segment (Business Unit) EBITDA | |
Business Unit Growth |
Notes:
(1) |
We use non-GAAP financial measures to supplement our financial statements, which are presented in accordance with the International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board unless otherwise stated. Certain non-GAAP financial measures are used to measure performance and settle executive compensation. See page 65 for more information. |
Target Annual Incentive Opportunity
The table below outlines the annual incentive targets for our NEOs as at December 31, 2018 and the weighting of the various performance components applicable to each. The actual performance multiplier can range from 0% to 200% of target.
2018 Annual Incentive Target |
Performance Weighting | |||||||||||||||||||||||||||||||||||||||
NEO | 2018 Salary (1) | % of Salary | U.S.$ (1) | SHE | Corporate |
Business
Unit |
Individual | |||||||||||||||||||||||||||||||||
Chuck Magro |
$ | 1,234,854 | 140 | % | $ | 1,728,795 | 10 | % | 65 | % | N/A | 25 | % | |||||||||||||||||||||||||||
Mike Frank |
$ | 900,000 | 90 | % | $ | 810,000 | 10 | % | 35 | % | 30% | 25 | % | |||||||||||||||||||||||||||
Steve Douglas |
$ | 578,838 | 80 | % | $ | 463,070 | 10 | % | 65 | % | N/A | 25 | % | |||||||||||||||||||||||||||
Fred Thun |
$ | 299,707 | (2) | 45 | % | $ | 134,868 | 10 | % | 65 | % | N/A | 25 | % |
Notes:
(1) |
Compensation paid in Canadian dollars has been converted into U.S. dollars at a 2018 average annual exchange rate of U.S.$1.00 = CAD$1.2957. |
(2) |
Mr. Thuns salary reflects eligible earnings incorporating an increase in salary on April 1, 2018. |
41
|
EXECUTIVE COMPENSATION
|
Jochen Tilk and Wayne Brownlee had target bonuses of 140% and 85%, respectively. Due to the importance of his role in the organization integration and transition, Mr. Tilks performance was measured exclusively on the achievement of synergies.
2018 Annual Incentive Plan Decisions
2018 Safety, Health and Environmental (SHE) Results
We operate in an industry where our people are exposed to workplace situations with the potential to cause injury. Keeping them safe, healthy and secure is a core value. Our safety culture starts with our organizational leaders and extends to everyone involved in our business. That is why a key focus on our SHE score is based on leading indicators to entrench a safety culture in our business.
|
Leader Commitment measures the number of leaders who have developed personal commitments to continually improve our safety culture and demonstrate safety is a core value. |
|
Leader Commitment Completion aggregates weekly self-assessments by Nutriens senior leaders to measure their perception of personal safety and the safety of their team members. |
|
Total Recordable Injury Frequency (TRIF) measures the total number of recorded injuries per 200,000 hours worked. |
|
Lost Time Injury Frequency (LTIF) measures the number of injuries resulting in lost time per 200,000 hours worked. |
|
Environmental Incident Frequency (EIF) measures the number of environmental incidents per 200,000 hours worked. |
Objective |
Threshold
(50%) |
Target
(100%) |
Maximum
(200%) |
Results |
2018
Score |
Weighting |
Weighted
Score |
||||||||||||||||||||||||||||
Leader Commitment |
1,200 | 1,400 | 1,600 | 2,044 | 200 | % | 35 | % | 70 | % | |||||||||||||||||||||||||
Leader Commitment Completion |
75% | 80% | 85% | 85% | 200 | % | 35 | % | 70 | % | |||||||||||||||||||||||||
Total Recordable Injury Frequency (TRIF) |
1.25 | 1.20 | 1.15 | 1.28 | 0 | % | 10 | % | 0 | % | |||||||||||||||||||||||||
Lost Time Injury Frequency (LTIF) |
0.36 | 0.34 | 0.32 | 0.34 | 100 | % | 10 | % | 10 | % | |||||||||||||||||||||||||
Environmental Incident Frequency (EIF) |
0.14 | 0.11 | 0.08 | 0.07 | 200 | % | 10 | % | 20 | % | |||||||||||||||||||||||||
Corporate SHE Score |
170 | % | |||||||||||||||||||||||||||||||||
Retail Business Unit SHE Score |
66 | % |
2018 Corporate Results
We keep our executives focused on value creation by employing financial metrics that matter to our shareholders and our business.
|
Adjusted net earnings per share (EPS) closely measures near-term shareholder value creation and serves to align executive interests with those of shareholders. |
|
Free cash flow (FCF) serves to focus our executives on core operations and efficient capital allocation. The metric is measured on a per share basis to reflect shareholder interests. |
|
Finally, run-rate synergies measure the success of the integration of our two legacy companies, Agrium and PotashCorp. The success of the integration is a priority for all of Nutriens stakeholders. |
Objective |
Threshold
(50%) |
Target
(100%) |
Maximum
(200%) |
Results |
2018
Score |
Weighting |
Weighted
Score |
||||||||||||||||||||||||||||
Adjusted Net Earnings per Share (EPS) |
$1.60 | $2.00 | $2.60 | $2.69 | 200 | % | 40 | % | 80 | % | |||||||||||||||||||||||||
Free Cash Flow (US$/share) |
$2.00 | $2.50 | $3.00 | $3.16 | 200 | % | 40 | % | 80 | % | |||||||||||||||||||||||||
Synergy Run Rate (US$ million) |
$175 | $225 | $275 | $521 | 200 | % | 20 | % | 40 | % | |||||||||||||||||||||||||
Corporate Score |
200 | % | |||||||||||||||||||||||||||||||||
Retail Business Unit Score |
95 | % |
42
|
EXECUTIVE COMPENSATION
|
2018 Individual Performance Achievements
Executive | 2018 Key Results |
Individual
Score |
||
Chuck Magro |
Under Chuck Magros leadership, the organization moved quickly to come together as one organization and deliver on strategic priorities. The focus was on achieving synergy targets, maximizing value from equity divestitures and prudent capital allocation. Delivered adjusted EBITDA of $3.9 billion, 32% above 2017 combined historical adjusted EBITDA. Successfully completed the sale of equity investments in SQM, ICL and APC, generating $5.3 billion in net proceeds. Established a disciplined capital allocation policy, returning $2.8 billion to shareholders through dividends paid and share repurchase. Continued to drive growth across the business, through record potash sales and successful delivery on Retail strategic initiatives. Demonstrated a high level of personal engagement and strong rapport with shareholders, investors and the financial community. Improved our safety culture and delivered strong safety performance in the year. Ensured management continuity by overseeing the appointments of key positions on Nutriens Executive and Senior Leadership Teams. |
200% | ||
Mike Frank |
Oversaw significant allocation of growth capital to Nutriens Retail business, with approximately $600 million invested in M&A and greenfield development projects, which resulted in Retail executing on a record number of tuck-in acquisitions in 2018. Oversaw the development and execution of a global digital strategy to become the Ag Retailer of the Future, including the launch of an award-winning integrated digital customer portal, as well as the acquisitions of Agrible and Waypoint Analytical to support the delivery of agricultural solutions for growers. Drove improvements in annual cash operating coverage ratio and supported record EBITDA in 2018 through numerous initiatives to grow and optimize the Retail business. Led a robust Retail senior management and talent review to ensure strong functional leadership and business continuity, while securing key talent for leadership roles across: Digital, Supply Chain, Marketing, Business Development and Supplier Strategy in order to successfully execute on Retails business strategy. |
160% | ||
Steve Douglas |
Exceeded the two-year run-rate synergy target of $500 million within 12 months and increased the run-rate synergy target by 20% to $600 million, creating significant value for shareholders. Led Nutriens integration office ensuring successful achievement of synergy targets and company-wide process integration and operational excellence through 2018. |
110% | ||
Fred Thun |
Returned $2.8 billion to shareholders through increased dividends and share repurchases while maintaining a strong balance sheet and investment-grade credit rating. Completed equity stake divestments well ahead of regulatory timeline requirements for after-tax proceeds in excess of expectations and repatriated all net proceeds. Delivered synergies in the Chief Financial Officer organization in alignment with original synergy targets. Integrated financial systems and processes following both the merger and ongoing Retail acquisitions. Downsized the Companys credit facility and reduced associated maintenance costs while ensuring sufficient liquidity to meet seasonal operating requirements and fund continued growth in the merged organization. Successfully reorganized the Companys debt post-merger and reduced restrictive covenants. |
150% |
43
|
EXECUTIVE COMPENSATION
|
The table below outlines actual annual incentive payouts for our NEOs as at December 31, 2018 and the weighting of the various performance components applicable to each. The actual performance multiplier can range from 0% to 200% of target.
Target
Annual Incentive (% of salary) |
SHE
Performance |
Corporate
Performance |
Business Unit
Performance |
Individual
Performance |
Overall
Score
|
2018
Annual
|
||||||||||||||||||||||||||||||||||||||||||
NEO |
2018
Salary (1) |
Weight | Score | Weight | Score | Weight | Score | Weight | Score | |||||||||||||||||||||||||||||||||||||||
Chuck Magro | $ | 1,234,854 | 140% | 10% | 170 | 65% | 200 | 25% | 200 | 197% | $3,405,727 | |||||||||||||||||||||||||||||||||||||
Mike Frank | $ | 900,000 | 90% | 10% | 66 | 35% | 200 | 30% | 95 | 25% | 160 | 145% | $1,175,310 | |||||||||||||||||||||||||||||||||||
Steve Douglas | $ | 578,838 | 80% | 10% | 170 | 65% | 200 | 25% | 110 | 175% | $ 808,057 | |||||||||||||||||||||||||||||||||||||
Fred Thun | $ | 299,707 | (2) | 45% | 10% | 170 | 65% | 200 | 25% | 150 | 185% | $ 248,832 |
Notes:
(1) |
Compensation paid in Canadian dollars has been converted into U.S. dollars at a 2018 average annual exchange rate of U.S.$1.00 = CAD$1.2957. |
(2) |
Mr. Thuns salary reflects eligible earnings incorporating an increase in salary on April 1, 2018. |
The annual incentive payouts were made to Jochen Tilk and Wayne Brownlee in accordance with their employment agreements and prorated for active service in the year. For Mr. Tilk, the annual incentive was based on actual performance to September 30, 2018. Based on Mr. Tilks significant contribution to the delivery of two-year synergy targets within 12 months, he received an overall score of 200%. For Mr. Brownlee, his employment agreement called for an annual incentive payout at target to October 31, 2018.
The long-term incentive program provides the NEOs with an opportunity to receive variable compensation contingent on Nutriens long-term performance.
Long-term incentives are the most important component in Nutriens reward strategy, as these programs align the interests of NEOs, executives and senior leaders with the interests of our shareholders, motivate leaders to deliver shareholder value over various time horizons, mitigate potential compensation risk by virtue of the longer time horizon and allow us to attract, motivate and retain key talent. Nutrien achieves these objectives by using a combination of vehicles as shown below:
Vesting | Settlement | |||||||
PSUs |
||||||||
Three-year performance period Based on TSR performance relative to the PSU Peer Group |
Cash settled Dividend equivalents accrue and are also cash settled at end of the performance period Helps manage dilution |
See Schedule B Nutrien Long-Term Incentive Plans for the terms and conditions attached to the Nutrien 2018 long-term incentive awards.
|
||||||
Stock Options |
||||||||
25% per annum over four years on anniversary of grant |
Option to buy treasury shares at exercise price |
|||||||
Expire after 10 years |
The HR&C Committee believes that this mix of long-term awards will continue to focus our executives on long-term value creation and thereby align their interests with those of our shareholders. The HR&C Committee further believes that the long-term incentive compensation program supports a balanced approach to risk management.
44
|
EXECUTIVE COMPENSATION
|
Target Long-Term Award Level and Mix
The table below summarizes the target long-term incentives for the NEOs expressed as a percentage of salary.
NEO |
Target Award Value
(% of salary) |
Long-term Incentive Mix | ||||||||||||||||||||||||||||
Performance Share Units | Stock Options | |||||||||||||||||||||||||||||
Chuck Magro |
600 | % | 50 | % | 50 | % | ||||||||||||||||||||||||
Mike Frank |
200 | % | 50 | % | 50 | % | ||||||||||||||||||||||||
Steve Douglas |
250 | % | 50 | % | 50 | % | ||||||||||||||||||||||||
Fred Thun |
115 | % | 50 | % | 50 | % | ||||||||||||||||||||||||
Jochen Tilk |
450 | % | 50 | % | 50 | % | ||||||||||||||||||||||||
Wayne Brownlee |
275 | % | 50 | % | 50 | % |
Performance Share Units (PSUs)
The PSUs cliff vest at the end of three years, contingent on achievement of predetermined performance conditions over the three year performance period. The performance criteria is currently based on Nutriens relative Total Shareholder Return ( TSR ).
At the end of the three-year performance period, Nutriens TSR performance will be compared to that of the PSU Peer Group (discussed below). Performance is assessed at the end of each year, with the resulting three years averaged over the full performance period to determine the performance factor multiplier. The multiplier and vesting conditions apply to both the original grant and dividend equivalents.
The graph below illustrates the performance range and factor that can range from 0% to 200% of target.
|
No PSUs will pay out for ranking below the 25 th percentile.
The maximum payout multiplier is 200% of target, which is earned when the performance is at or above the 75 th percentile.
If Nutriens TSR is negative over the performance measurement period, payout multiplier is capped at target. |
Given the diverse nature of the Corporations business, the HR&C Committee has found it challenging to set a PSU Peer Group derived solely of Nutriens direct competitors. Therefore, a group of companies with some competitive overlap has been identified and used, consisting of competitors in one or more segments of our business, competitors for shareholder investment or companies with similar business models. The criteria for inclusion in the PSU Peer Group consists of:
✓ companies in the fertilizer or agricultural industries;
✓ companies with comparable market capitalization; and
✓ companies that have a similar risk profile.
It is anticipated that the PSU Peer Group will evolve over time to reflect these criteria, with a view to ensuring the change in peers does not result in unintended consequences. |
The HR&C Committee considers it appropriate to establish separate peer groups for compensation and performance assessment purposes. The Compensation Peer Group consists of North American companies that represent our primary market for executive talent, whereas the PSU Peer Group is a more global array of companies that represent reasonable investment alternatives for shareholders. |
|||||
45
|
EXECUTIVE COMPENSATION
|
The PSU Peer Group utilized for the 2018 grant was comprised of the following companies:
AGCO Corporation
Archer-Daniels-Midland Company
Bunge Limited
CF Industries Holdings, Inc. |
Deere & Company
FMC Corporation
Incitec Pivot Limited
Ingredion Incorporated |
Israel Chemicals Ltd.
K+S Aktiengesellschaft
Mosaic Company
Yara International ASA |
Stock options align our executives with the expectations of shareholders as any value realized is dependent on an increase in Nutriens share price. They are long-term in nature, with a ten-year term and vesting period over four years which also encourages retention.
2018 PSU and Stock Option Grants
At the beginning of 2018, Nutrien granted the following long-term incentives to the NEOs:
Performance Share Units (1) | Stock Options (2) |
Total Value
2018 Grant ($) |
||||||||||||||||||||||
NEO |
Number
Granted |
Value ($) (3) |
Number
Granted |
Value ($) (3) | ||||||||||||||||||||
Chuck Magro |
86,177 | $ | 3,834,877 | 391,715 | $ | 3,834,890 | $ | 7,669,767 | ||||||||||||||||
Mike Frank |
20,261 | $ | 901,615 | 92,096 | $ | 901,620 | $ | 1,803,235 | ||||||||||||||||
Steve Douglas |
16,832 | $ | 749,024 | 76,507 | $ | 749,004 | $ | 1,498,028 | ||||||||||||||||
Fred Thun |
3,923 | $ | 174,574 | 17,831 | $ | 174,565 | $ | 349,139 | ||||||||||||||||
Jochen Tilk |
48,499 | $ | 2,158,206 | 220,450 | $ | 2,158,206 | $ | 4,316,412 | ||||||||||||||||
Wayne Brownlee |
19,656 | $ | 874,692 | 89,346 | $ | 874,697 | $ | 1,749,389 |
Notes:
(1) |
Number of PSUs granted was based on a grant price of $44.50, which reflected the volume weighted average price for the trading day prior to the date of grant. |
(2) |
Number of Stock Options granted was based on an exercise price of $44.50 and the option value ratio used for financial reporting purposes of 22%. |
(3) |
For executives paid in Canadian dollars, the target long-term incentive value is converted to U.S. dollars on the date of the grant. |
Management Equity Ownership Requirements
NEOs and certain other designated executive officers are expected to hold an amount of equity equal to a multiple of base salary within five years of their appointment. PSUs (which track the value of the common shares at the target level of achievement) count towards the equity ownership requirements, capped at one-third of the number of PSUs held by the NEO for each year that the PSUs are tracking at or above target. To determine compliance with the equity ownership requirements, the value of common shares is assessed at the higher of (i) the original common share purchase price, and (ii) the market value of the common shares. The value of PSUs is based on market value. Stock options do not count towards the equity ownership requirements. All of our NEOs are in compliance with their equity ownership requirements.
See page 38 for information about our Securities Trading Policy, which prohibits directors and officers from entering into certain transactions that could reduce the risk of equity ownership.
46
|
EXECUTIVE COMPENSATION
|
The following table sets out the equity ownership interests of our NEOs who continued in office as at December 31, 2018:
NEO | Equity Ownership Requirement (1) | Equity Ownership | NEOs Equity-at-Risk (2) | |||||||||||||||
Multiple of
Base Salary |
2018 Ownership
Requirement (U.S.$) (3) |
Common
Shares (#) |
Eligible
PSUs (#) (4) |
Common Shares (U.S.$) |
PSUs (U.S.$) (4) |
Multiple of
Base Salary |
||||||||||||
Chuck Magro (3) |
5x | $5,864,243 | 65,101 | 83,549 | $3,059,747 | $3,926,812 | 5.96 | |||||||||||
Mike Frank |
3x | $2,700,000 | Nil | 65,398 | Nil | $3,073,700 | 3.42 | |||||||||||
Steve Douglas (3) |
3x | $1,649,318 | Nil | 17,719 | Nil | $ 832,775 | 1.51 |
Notes:
(1) |
Executive officers have five years to comply with equity ownership requirements. Nutrien considers the requirement met if the target is achieved on a prorated basis. |
(2) |
Based on Nutriens closing share price on the NYSE on December 31, 2018 of U.S.$47.00. |
(3) |
Base salaries paid to NEOs in Canadian dollars have been converted into U.S. dollars at the Bank of Canada exchange rate on December 31, 2018 of U.S.$1.00 = CAD$1.3642. |
(4) |
Amounts reported include PSUs credited as dividend equivalents. |
Total Shareholder Return Share Performance Graph
The following graph illustrates Nutriens Total Shareholder Return in Canadian dollars, assuming an initial investment of $100 in our common shares on January 1, 2018 (assuming reinvestment of dividends) and compares it to the return of the S&P/TSX Composite Index during that same period. We are unable to compare the trend in our Total Shareholder Return with the trend in total compensation awarded to our NEOs since it has only been one year since our merger. However, long-term incentives represent a significant portion of our NEOs compensation, where the value realized is tied directly to share price performance.
47
|
EXECUTIVE COMPENSATION
|
The following table provides a summary of the compensation earned by our NEOs for services rendered in all capacities during 2018, 2017 and 2016. Specific aspects of this compensation are dealt with in further detail in the following notes and tables:
Name | Year |
Salary
(1)
(U.S.$) |
Share-based
Awards (2)(3)(4) (U.S.$) |
Option-based
Awards (5)(6)(7) (U.S.$) |
Non-Equity
(U.S.$) |
Pension
Value (9) (U.S.$) |
All other
Compensation (10) (U.S.$) |
Total
Compensation (11) (U.S.$) |
||||||||||||||||||||||||||||||||||
Chuck Magro | President & CEO (Nutrien) | 2018 | $ | 1,234,854 | $3,834,877 | $3,834,890 | $3,405,727 | $ | 540,930 | $ 38,577 | $12,889,855 | (12) | ||||||||||||||||||||||||||||||
President & CEO (Agrium) | 2017 | $ | 1,218,133 | $2,687,720 | $2,661,193 | $2,647,614 | $ | 462,110 | $ 36,817 | $ 9,713,587 | ||||||||||||||||||||||||||||||||
2016 | $ | 1,128,877 | $2,541,125 | $2,505,192 | $2,072,957 | $ | 410,228 | $ 34,614 | $ 8,692,993 | |||||||||||||||||||||||||||||||||
Mike Frank | EVP & CEO, Retail (Nutrien) | 2018 | $ | 900,000 | $ 901,615 | $ 901,620 | $1,175,310 | $ | 315,105 | $ 88,743 | $ 4,282,393 | |||||||||||||||||||||||||||||||
EVP &
President, Retail (Agrium) (13) |
2017 | $ | 225,000 | $6,400,004 | (14) | Nil | $ 306,788 | $ | 82,007 | $ 3,532,796 | (14) | $10,546,595 | ||||||||||||||||||||||||||||||
Steve Douglas | EVP & CIO (Nutrien) | 2018 | $ | 578,838 | $ 749,024 | $ 749,004 | $ 808,057 | $ | 266,922 | $ 148,412 | $ 3,300,257 | |||||||||||||||||||||||||||||||
Senior VP & CFO (Agrium) | 2017 | $ | 570,564 | $ 594,560 | $ 588,688 | $1,220,052 | $ | 229,678 | $ 164,332 | $ 3,367,874 | ||||||||||||||||||||||||||||||||
2016 | $ | 470,554 | $ 561,282 | $ 553,369 | $ 640,151 | $ | 204,861 | $ 135,882 | $ 2,566,099 | |||||||||||||||||||||||||||||||||
Fred Thun |
Interim CFO (Nutrien) Effective November 1, 2018 | 2018 | $ | 299,707 | $ 174,574 | $ 174,565 | $ 248,832 | $ | 125,521 | $ 51,346 | $ 1,074,545 | |||||||||||||||||||||||||||||||
Jochen Tilk |
Executive Chair (Nutrien) Stepped down September 30, 2018 |
2018 | $ | 688,250 | (15) | $2,158,206 | $2,158,206 | $1,945,867 | (16) | $ | 157,311 | $12,952,684 | (17) | $20,060,524 | ||||||||||||||||||||||||||||
President & CEO (PotashCorp) | 2017 | $ | 924,534 | $3,045,613 | $ 794,768 | $2,144,538 | $ | 158,679 | $ 55,243 | $ 7,123,375 | ||||||||||||||||||||||||||||||||
2016 | $ | 779,649 | $1,600,063 | $ 681,360 | $ 648,763 | $ | 110,307 | $ 77,220 | $ 3,897,362 | |||||||||||||||||||||||||||||||||
Wayne Brownlee |
EVP & CFO (Nutrien) Stepped down October 31, 2018 |
2018 | $ | 526,394 | (18) | $ 874,692 | $ 874,697 | $ 449,545 | (19) | $ | (29,960 | ) | $ 3,111,585 | (20) | $ 5,806,953 | |||||||||||||||||||||||||||
EVP, Treasurer & CFO (PotashCorp) | 2017 | $ | 635,000 | $1,288,145 | $ 336,151 | $ 726,000 | $ | (287,614 | ) | $ 24,775 | $ 2,722,457 | |||||||||||||||||||||||||||||||
2016 | $ | 625,674 | $ 743,256 | $ 316,626 | $ 359,000 | $ | (418,529 | ) | $ 39,333 | $ 1,665,360 |
Notes:
(1) |
Amounts reported represent the base salary amount paid to NEOs in the years indicated. |
(2) |
Amounts reported for 2018 represent the grant date fair value of PSUs awarded in 2018. Grant date fair value reflects the number of PSUs granted multiplied by the grant price of $44.50. The grant price was based on the volume weighted average price for the trading day prior to the grant date. Grant date fair value differs from the value used for financial reporting purposes (accounting fair value) which has been calculated using a Monte Carlo Simulation Model. The accounting fair value determined under this method was $42.69 per PSU. The values shown are derived at a point in time and will be different than the value upon vesting. See Section Four: Executive Compensation 2018 Executive Compensation Long-Term Incentive Plan Awards Outstanding Share-Based Awards and Option-Based Awards for the value of outstanding PSU awards at December 31, 2018. |
48
|
EXECUTIVE COMPENSATION
|
(3) |
Amounts reported for former Agrium NEOs in 2017 and 2016 represent the grant date fair value of PSUs awarded in 2017 and 2016. Grant date fair value was calculated using the expected life binomial lattice methodology. This model and the underlying assumptions were used to provide consistent long-term incentive valuation across competitive market data. The underlying assumptions and values are outlined in the table below. They differ from the values used for financial reporting purposes (accounting fair value) which have been calculated using a Monte Carlo Simulation Model. The values shown are derived at a point in time and will be different than the value upon vesting: |
Assumptions | 2017 Grant Value | 2016 Grant Value | ||||||
Share price on date of grant |
$104.25 | $85.58 | ||||||
Expected term in years |
3 | 3 | ||||||
Expected volatility |
22% | 21% | ||||||
Expected dividend yield |
4% | 3% | ||||||
Payout range |
0%-200% | 0%-200% | ||||||
PSU value ratio |
81% | 81% | ||||||
PSU value |
$84.44 | $69.32 | ||||||
Accounting fair value |
$111.12 | $90.12 |
(4) |
Amounts reported for former PotashCorp NEOs in 2017 and 2016 represent the grant date fair value of PSUs awarded in 2017 and 2016, respectively, calculated in accordance with FASB ASC Topic 718. The underlying assumptions and values are outlined in the table below. |
Assumptions | 2017 Grant Value | 2016 Grant Value | ||||||
Share price on date of grant |
$18.70 | $15.94 | ||||||
Expected term in years |
3 | 1-3 | ||||||
Expected volatility |
30.1% | 29.3% | ||||||
Payout range |
0%-200% | 0%-200% | ||||||
PSU value ratio |
95% | 58% | ||||||
PSU accounting fair value |
$17.76 | $9.25 |
(5) |
Amounts reported for 2018 represent the grant date fair value of stock options awarded in 2018 as calculated for financial reporting purposes (accounting fair value). Grant date fair value has been calculated using the Black-Scholes-Merton option pricing model. Underlying assumptions and values are outlined in the table below. The values shown are theoretical values derived at a point in time and will be different than the value upon exercise. See Section Four: Executive Compensation 2018 Executive Compensation Long-Term Incentive Plan Awards Outstanding Share-Based Awards and Option-Based Awards for the value of outstanding option-based awards at December 31, 2018. |
Assumptions | 2018 Grant Value | |||
Share price on date of grant |
$44.50 | |||
Expected life in years |
7.5 | |||
Expected volatility |
29% | |||
Expected dividend yield |
3.58% | |||
Option value ratio |
22% |
(6) |
For 2017 and 2016, amounts reported for former Agrium NEOs represent the grant date fair value of stock options awarded in 2017 and 2016, respectively. Grant date fair value has been calculated using the expected life binomial lattice methodology. This model and the underlying assumptions were used to ensure consistent long-term incentive valuation across competitive market data. Underlying assumptions and values are outlined in the table below. They differ from the values used for financial reporting purposes (accounting fair value which have been calculated using a Black Scholes Model) mainly due to differences in assumptions such as expected life and volatility. See Schedule C Summary of Agrium Legacy Incentive Compensation Plans for more details related to the Agrium Legacy Stock Option Plan. |
Assumptions | 2017 Grant Value | 2016 Grant Value | ||||||
Share price on date of grant |
$103.22 | $84.37 | ||||||
Expected life in years |
6.25 | 6.25 | ||||||
Expected volatility |
22% | 21% | ||||||
Expected dividend yield |
4% | 3% | ||||||
Option value ratio |
12% | 12% | ||||||
Option value |
$12.39 | $10.12 | ||||||
Accounting fair value |
$21.86 | $18.23 |
(7) |
Amounts reported for former PotashCorp NEOs represent the grant date fair value of stock options awarded in 2017 and 2016, respectively, calculated in accordance with FASB ASC Topic 718. The underlying assumptions and values are outlined in the table below. See Schedule D Summary of PotashCorp Legacy Incentive Compensation Plans for more details related to the PotashCorp Legacy 2016 LTIP. |
Assumptions | 2017 Grant Value | 2016 Grant Value | ||||||
Share price on date of grant |
CAD$24.50 | CAD$20.49 | ||||||
Expected life in years |
5.9 | 5.9 | ||||||
Expected volatility |
28.6% | 29.7% | ||||||
Expected dividend yield |
2.14% | 6.27% | ||||||
Performance range |
N/A | N/A | ||||||
Option value ratio |
22.3% | 12.2% | ||||||
Option accounting fair value |
CAD$5.47 | CAD$2.49 |
49
|
EXECUTIVE COMPENSATION
|
(8) |
The amounts reported in 2017 to three NEOs include one-time discretionary transaction awards to recognize their important roles and significant efforts in connection with the completion of the merger. The discretionary awards included in 2017 were: Mr. Tilk ($826,195), Mr. Brownlee ($250,000) and Mr. Douglas ($500,000). These awards were solely in connection with the completion of the merger and will not be included for purposes of calculating any severance payments. |
(9) |
Amounts reported include all compensatory items related to the defined benefit and defined contribution plans, including service costs, plan changes and above market earnings. |
(10) |
Amounts reported represent all perquisites and include items such as car allowance, financial planning and executive medicals. For Mr. Tilk and Brownlee it also includes savings plan contributions (amounts for 2018 were $20,648 and $15,792, respectively). In 2018, 2017 and 2016, Mr. Douglas received a travel allowance of $131,884, $146,696 and $119,293 respectively, paid in relation to his travel between his home in Mississauga, Ontario and his office in Calgary, Alberta. In 2018, Mr. Frank received moving expenses of $61,437. In 2018, Mr. Thun received $38,589 in recognition of his role as Interim CFO. Refer to notes 17 and 20 for further details regarding Other Compensation for Mr. Tilk and Brownlee, respectively. |
(11) |
For 2018, cash compensation data amounts for compensation paid in Canadian dollars has been converted into U.S. dollars at a 2018 average annual exchange rate of U.S.$1.00 = CAD$1.2957. Defined benefit pension obligations have been converted from Canadian dollars to U.S. dollars using the 2018, 2017 and 2016 Bank of Canada exchange rates on December 31 of U.S.$1.00 = CAD$1.3642, U.S.$1.00 = CAD$1.2545 and U.S.$1.00 = CAD$1.3427, respectively. Equity compensation is denominated in U.S. dollars and thus does not require the application of an exchange rate. For 2017 and 2016, cash compensation data amounts for Canadian-based former Agrium executives have been converted from Canadian dollars to U.S. dollars using the 2017 and 2016 average annual exchange rates of U.S.$1.00 = CAD$1.2986 and U.S.$1.00 = CAD$1.3248, respectively. For former PotashCorp executives, amounts that were paid in Canadian dollars have been converted to United States dollars using the average exchange rate for the month prior to the date of payment, with the exception of 2017 cash compensation, which has been converted using the 2017 average annual exchange rate of U.S.$1.00 = CAD$1.2986. |
(12) |
Consistent with prevailing market practice, the HR&C Committee approved the use of the accounting value for determining stock option awards to simplify the process and mitigate differences in values between what is delivered and what is reported. PSUs are valued at face value. As such, the 2018 stock option and PSU awards are reported on this new basis whereas 2017 and 2016 equity awards are reported under the prior valuation methodology. This equity valuation change accounts for all but 4% of the increase in Mr. Magros total compensation from 2017 to 2018. |
(13) |
Mr. Frank joined Agrium in September 2017 as Executive Vice President and President, Retail. |
(14) |
In September 2017, Mr. Frank left a senior position at Monsanto to join Agrium as Executive Vice President and President, Retail. In order to compensate him for the market value of his unvested equity awards from Monsanto that he forfeited in order to join Agrium, he received a one-time transitional grant of PSUs under Agriums Legacy PSU/RSU Plan valued at $6,400,004, which vests at the end of a three-year performance period based on actual achievement of the applicable performance metrics. In order to compensate him for the additional amount that would have become payable to him on settlement of his equity awards on closing of the merger between Monsanto and Bayer (which has since been completed), as well as severance that would have been triggered with the change in control, he also received a one-time cash bonus of $3,500,000. These awards are solely in connection with the hiring of Mr. Frank and will not be included for purposes of calculating any severance payments. |
(15) |
Base salary to September 30, 2018. |
(16) |
Bonus payout for exceeding total committed synergy targets to September 30, 2018. |
(17) |
Includes change in control severance payments resulting from a resignation for good reason within two years of a change in control, calculated with reference to the Corporations contractual obligations under Mr. Tilks 2014 executive employment agreement, as amended by his separation agreement and release, to take into account potential statutory and common law entitlements that could result by reason of Mr. Tilks agreement to depart on September 30, 2018 and not May 31, 2019 as previously agreed. This lump sum cash payment is equal to: |
|
severance equal to two years annual salary plus average bonus in the two years prior to termination ($5,768,990) |
|
other amounts related to compensation determined to be payable to Mr. Tilk for his contract ending May 31, 2019 as agreed, including salary and bonus to the end of the contract, and long-term incentives ($6,517,110); and |
|
amounts the Corporation would have made to Nutrien pension and SERI plans or other pension or benefit plans and certain perquisites ($639,864). |
Further details on our contractual obligations to Mr. Tilk are provided under NEO Contracts, Termination and Change in Control Benefits below.
(18) |
Base salary to October 31, 2018. |
(19) |
Annual bonus at target to October 31, 2018. |
(20) |
Includes change in control severance payments resulting from a resignation for good reason within two years of a change in control, calculated with reference to the Corporations contractual obligations under Mr. Brownlees 1994 executive employment agreement. This lump sum cash payment relates to severance equal to three years base salary plus average bonus in the three years prior to termination ($3,091,000). Further details on our contractual obligations to Mr. Brownlee are provided under NEO Contracts, Termination and Change in Control Benefits below. |
Nutrien maintains executive compensation in home currency (Canadian based NEOs are paid in Canadian dollars and U.S. based NEOs are paid in U.S. dollars), with the exception of Wayne Brownlee, who was based in Canada but paid in U.S. dollars.
Long-Term Incentive Plan Awards
50
|
EXECUTIVE COMPENSATION
|
Option Awards (1) | Share-based Awards (1) | |||||||||||||||||||||||||||||||||||||||||||||
Name |
Option
Grant Date |
Number of
Securities Underlying Unexercised Options |
Options
Exercise price (U.S.$) |
Options
Expiration date |
Aggregate
Value of Unexercised in-the- money Options (1) (U.S.$) |
PSU
Grant Date |
Number
of PSUs that have not vested (2) (#) |
Market Value
of PSUs that have not vested (performance to date) (2)(3) (U.S.$) |
Market Value
of PSUs that have not vested (target performance) (2)(3) (U.S.$) |
Payout Value
of PSUs that have vested and are not paid out (2)(4) (U.S.$) |
||||||||||||||||||||||||||||||||||||
Chuck Magro | 25-Feb-10 | 8,251 | $28.35 | 25-Feb-20 | $ | 153,881 | 1-Jan-16 | Nil | Nil | Nil | $ | 6,488,858 | ||||||||||||||||||||||||||||||||||
24-Feb-11 | 6,223 | $40.87 | 24-Feb-21 | $ | 38,147 | 1-Jan-17 | 75,790 | $ | 4,951,361 | $ | 3,562,130 | |||||||||||||||||||||||||||||||||||
20-Mar-12 | 21,825 | $39.59 | 20-Mar-22 | $ | 161,723 | 20-Feb-18 | 88,965 | $ | 4,181,355 | $ | 4,181,355 | |||||||||||||||||||||||||||||||||||
25-Feb-13 | 47,405 | $45.35 | 25-Feb-23 | $ | 78,218 | |||||||||||||||||||||||||||||||||||||||||
24-Feb-14 | 199,700 | $40.60 | 24-Feb-24 | $ | 1,278,080 | |||||||||||||||||||||||||||||||||||||||||
25-Feb-15 | 402,452 | $51.96 | 25-Feb-25 | Nil | ||||||||||||||||||||||||||||||||||||||||||
26-Feb-16 | 551,793 | $37.84 | 26-Feb-26 | $ | 5,054,424 | |||||||||||||||||||||||||||||||||||||||||
22-Feb-17 | 479,111 | $46.29 | 22-Feb-27 | $ | 340,169 | |||||||||||||||||||||||||||||||||||||||||
20-Feb-18 | 391,715 | $44.50 | 20-Feb-28 | $ | 979,288 | |||||||||||||||||||||||||||||||||||||||||
Total | 2,108,475 | $ | 8,083,930 | Total | 164,755 | $ | 9,132,716 | $ | 7,743,485 | $ | 6,488,858 | |||||||||||||||||||||||||||||||||||
Mike Frank | 20-Feb-18 | 92,096 | $44.50 | 20-Feb-28 | $ | 230,240 | 15-Sep-17 | 178,979 | $ | 11,692,698 | (6) | $ | 8,412,013 | |||||||||||||||||||||||||||||||||
20-Feb-18 | 20,916 | $ | 983,052 | $ | 983,052 | |||||||||||||||||||||||||||||||||||||||||
Total | 92,096 | $ | 230,240 | Total | 199,895 | $ | 12,675,750 | $ | 9,395,065 | |||||||||||||||||||||||||||||||||||||
Steve Douglas | 25-Feb-15 | 116,051 | $51.96 | 25-Feb-25 | Nil | 1-Jan-16 | Nil | Nil | Nil | $ | 1,433,256 | |||||||||||||||||||||||||||||||||||
26-Feb-16 | 121,885 | $37.84 | 26-Feb-26 | $ | 1,116,467 | 1-Jan-17 | 16,766 | $ | 1,095,323 | $ | 788,002 | |||||||||||||||||||||||||||||||||||
22-Feb-17 | 105,985 | $46.29 | 22-Feb-27 | $ | 75,249 | 20-Feb-18 | 17,377 | $ | 816,719 | $ | 816,719 | |||||||||||||||||||||||||||||||||||
20-Feb-18 | 76,507 | $44.50 | 20-Feb-28 | $ | 191,268 | |||||||||||||||||||||||||||||||||||||||||
Total | 420,428 | $ | 1,382,984 | Total | 34,143 | $ | 1,912,042 | $ | 1,604,721 | $ | 1,433,256 | |||||||||||||||||||||||||||||||||||
Fred Thun | 25-Feb-10 | 3,746 | $28.35 | 25-Feb-20 | $ | 69,863 | 1-Jan-16 | Nil | Nil | Nil | $ | 314,902 | ||||||||||||||||||||||||||||||||||
24-Feb-11 | 2,981 | $40.87 | 24-Feb-21 | $ | 18,274 | 1-Jan-16 | (5) | Nil | Nil | Nil | $ | 97,063 | ||||||||||||||||||||||||||||||||||
20-Mar-12 | 8,349 | $39.59 | 20-Mar-22 | $ | 61,866 | 1-Jan-17 | 3,577 | $ | 233,685 | $ | 168,119 | |||||||||||||||||||||||||||||||||||
25-Feb-13 | 14,405 | $45.35 | 25-Feb-23 | $ | 23,768 | 1-Jan-17 | (5) | 1,664 | $ | 78,208 | $ | 78,208 | ||||||||||||||||||||||||||||||||||
24-Feb-14 | 19,838 | $40.60 | 24-Feb-24 | $ | 126,963 | 20-Feb-18 | 4,050 | $ | 190,350 | $ | 190,350 | |||||||||||||||||||||||||||||||||||
25-Feb-15 | 33,421 | $51.96 | 25-Feb-25 | Nil | ||||||||||||||||||||||||||||||||||||||||||
26-Feb-16 | 13,386 | $37.84 | 26-Feb-26 | $ | 122,616 | |||||||||||||||||||||||||||||||||||||||||
22-Feb-17 | 11,306 | $46.29 | 22-Feb-27 | $ | 8,027 | |||||||||||||||||||||||||||||||||||||||||
20-Feb-18 | 17,831 | $44.50 | 20-Feb-28 | $ | 44,578 | |||||||||||||||||||||||||||||||||||||||||
Total | 125,263 | $ | 475,955 | Total | 9,291 | $ | 502,243 | $ | 436,677 | $ | 411,965 | |||||||||||||||||||||||||||||||||||
Wayne Brownlee | 7-May-09 | 37,200 | CAD$ 93.30 | 7-May-19 | Nil | |||||||||||||||||||||||||||||||||||||||||
6-May-10 | 24,120 | CAD$ 87.50 | 6-May-20 | Nil | ||||||||||||||||||||||||||||||||||||||||||
12-May-11 | 17,240 | CAD$125.50 | 12-May-21 | Nil | ||||||||||||||||||||||||||||||||||||||||||
17-May-12 | 26,600 | CAD$ 99.83 | 17-May-22 | Nil | ||||||||||||||||||||||||||||||||||||||||||
16-May-13 | 29,720 | CAD$111.68 | 16-May-23 | Nil | ||||||||||||||||||||||||||||||||||||||||||
15-May-14 | 37,633 | CAD$101.08 | 15-May-24 | Nil | ||||||||||||||||||||||||||||||||||||||||||
12-Dec-14 | 17,173 | CAD$101.05 | 12-Dec-24 | Nil | ||||||||||||||||||||||||||||||||||||||||||
12-May-15 | 27,518 | CAD$ 97.88 | 12-May-25 | Nil | ||||||||||||||||||||||||||||||||||||||||||
11-May-16 | 65,364 | CAD$ 52.18 | 11-May-26 | $ | 602,336 | |||||||||||||||||||||||||||||||||||||||||
20-Feb-17 | 32,199 | CAD$ 61.25 | 20-Feb-27 | $ | 71,321 | |||||||||||||||||||||||||||||||||||||||||
20-Feb-18 | 89,346 | $44.50 | 20-Feb-28 | $ | 223,365 | |||||||||||||||||||||||||||||||||||||||||
Total | 404,113 | $ | 897,022 |
Notes:
(1) |
Outstanding awards granted before 2018 have been converted to Nutrien common shares with corresponding adjustments to the exercise prices. December 31, 2018 values are based on Nutriens closing share price on the NYSE on December 31, 2018 of U.S.$47.00 and Nutriens closing share price on the TSX on December 31, 2018 of CAD$64.12 (based on the stock exchange on which the original award was granted). The value of grants made in Canadian dollars has been converted into U.S. dollars at a 2018 average annual exchange rate of U.S.$1.00 = CAD$1.2957. |
(2) |
Includes PSUs credited as dividend equivalents. |
(3) |
For the 2017 and 2018 PSU grants, reflects the market value of PSUs that have not yet vested based on Nutriens closing share price on the NYSE on December 31, 2018 of U.S.$47.00 and tracking performance to December 31, 2018 (as applicable). |
(4) |
PSUs granted in 2016 that matured in 2018 were paid out in March 2019 based on Nutriens average closing share price for the month of December 2018 of U.S.$47.42 per common share. See note 4 of the Long-Term Incentive Plan Awards Value Vested or Earned During the Year table. |
(5) |
Mr. Thun received grants of RSUs under the Agrium Legacy PSU/RSU Plan. Amounts reported include RSUs credited as dividend equivalents. |
(6) |
See note 14 of the summary compensation table starting on page 48. |
51
|
EXECUTIVE COMPENSATION
|
Incentive Plan Awards Value Vested or Earned During the Year
The following table provides details regarding the option-based, share-based and non-equity incentive-based awards that vested or were earned during the year ended December 31, 2018:
Option-Based Awards | Share-Based Awards | |||||||||||||||||||||||||||||||||||||||
Name | Grant Date |
Number
Vested (1) (#) |
Value Vested or Earned During the Year (2)(3) (U.S.$) |
Grant Date |
Value Vested or Earned During the Year (4) (U.S.$) |
Non-Equity
Incentive Plan Compensation Value Earned During the Year (5) (U.S.$) |
||||||||||||||||||||||||||||||||||
Chuck Magro |
24-Feb-14 | 49,925 | $ | 485,271 | 1-Jan-16 | $ | 6,488,858 | |||||||||||||||||||||||||||||||||
25-Feb-15 | 100,613 | Nil | ||||||||||||||||||||||||||||||||||||||
26-Feb-16 | 137,950 | $ | 1,695,406 | |||||||||||||||||||||||||||||||||||||
22-Feb-17 | 119,778 | $ | 154,514 | |||||||||||||||||||||||||||||||||||||
Total | $ | 2,335,191 | Total | $ | 6,488,858 | $ | 3,405,727 | |||||||||||||||||||||||||||||||||
Mike Frank |
Nil | |||||||||||||||||||||||||||||||||||||||
Total | Nil | $ | 1,175,310 | |||||||||||||||||||||||||||||||||||||
Steve Douglas |
25-Feb-15 | 29,012 | Nil | 1-Jan-16 | $ | 1,433,256 | ||||||||||||||||||||||||||||||||||
26-Feb-16 | 30,472 | $ | 374,501 | |||||||||||||||||||||||||||||||||||||
22-Feb-17 | 26,496 | $ | 34,180 | |||||||||||||||||||||||||||||||||||||
Total | $ | 408,681 | Total | $ | 1,433,256 | $ | 808,057 | |||||||||||||||||||||||||||||||||
Fred
|
24-Feb-14 | 4,959 | $ | 70,170 | 1-Jan-16 | $ | 411,965 | |||||||||||||||||||||||||||||||||
25-Feb-15 | 16,710 | $ | 46,621 | |||||||||||||||||||||||||||||||||||||
26-Feb-16 | 10,039 | $ | 169,759 | |||||||||||||||||||||||||||||||||||||
22-Feb-17 | 11,306 | $ | 95,649 | |||||||||||||||||||||||||||||||||||||
Total | $ | 382,199 | Total | $ | 411,965 | $ | 248,832 | |||||||||||||||||||||||||||||||||
Jochen Tilk (6) |
11-May-16 | 140,716 | $ | 2,432,692 | 11-May-16 | $ | 1,416,302 | |||||||||||||||||||||||||||||||||
20-Feb-17 | 76,129 | $ | 783,206 | 20-Feb-17 | $ | 4,562,437 | ||||||||||||||||||||||||||||||||||
20-Feb-18 | 220,450 | $ | 2,909,940 | 20-Feb-18 | $ | 5,620,390 | ||||||||||||||||||||||||||||||||||
Total | $ | 6,125,838 | Total | $ | 11,599,129 | $ | 1,945,867 | |||||||||||||||||||||||||||||||||
Wayne Brownlee (6) |
12-May-15 | 27,518 | Nil | 11-May-16 | $ | 675,349 | ||||||||||||||||||||||||||||||||||
11-May-16 | 65,364 | $ | 848,516 | 20-Feb-17 | $ | 2,465,947 | ||||||||||||||||||||||||||||||||||
20-Feb-17 | 32,199 | $ | 192,593 | 20-Feb-18 | $ | 1,927,106 | ||||||||||||||||||||||||||||||||||
20-Feb-18 | 89,346 | $ | 753,187 | |||||||||||||||||||||||||||||||||||||
Total | $ | 1,794,296 | Total | $ | 5,068,402 | $ | 449,545 |
Notes:
(1) |
Vesting of stock options is determined by the board at the time of grant. For Nutrien and Agrium, stock options generally vest in 25% annual increments over a four year period. For PotashCorp, POP stock options granted before 2018 vest after the three year performance period and the following audited financial results. |
(2) |
The value vested or earned during the year for option-based awards has been calculated based on the number of stock options vested at the time and the share prices at the time of vesting. |
(3) |
Shows the aggregated dollar value that would have been realized if all stock options vested in 2018 were exercised on the vesting date. The value for grants made in Canadian dollars have been converted into U.S. dollars at the average 2018 exchange rate of U.S.$1.00 = CAD$1.2957. |
(4) |
PSUs granted to Mr. Magro, Mr. Thun and Mr. Douglas in 2016 that matured in 2018 were paid out in March 2019 based on Nutriens average share price for the month of December 2018 on the NYSE of U.S.$47.42 and performance multiplier for the period based on Agrium performance for 2016 and 2017 and Nutrien performance for 2018. |
As Mr. Tilk and Mr. Brownlee stepped down effective September 30, 2018 and October 31, 2018, respectively, the vesting of their PSUs granted in 2016, 2017 and 2018 was accelerated and paid out based on actual achievement, measured as of their departure date, in accordance with their terms in circumstances resulting from a resignation for good reason within two years of a change in control and the share price on the date of payout. The values were converted at the average 2018 exchange rate of U.S.$1.00 = CAD$1.2957.
Amounts reported include PSUs credited as dividend equivalents.
(5) |
Represents the total payments to each NEO under Nutriens Annual Incentive Plan attributable to performance in 2018. |
(6) |
As Mr. Tilk and Mr. Brownlee stepped down effective September 30, 2018 and October 31, 2018, respectively, their 2018 annual bonus was prorated to the date of their departure. Further details on our contractual obligations to Mr. Tilk and Mr. Brownlee are provided under NEO Contracts, Termination and Change in Control Benefits below. |
52
|
EXECUTIVE COMPENSATION
|
Number of Securities Issuable and Issued as at December 31, 2018
The following table presents prescribed disclosure of the total potential maximum level of dilution under all of the Corporations share-based incentive compensation arrangements providing for the issuance of common shares from treasury as required under Form 51-102F5 Information Circular . All information in the table is given based on the 608,535,477 outstanding common shares of Nutrien as at December 31, 2018.
Plan Category |
Number of securities to be
issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise
(U.S.$) |
Number of securities remaining
available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
||||||||||||
(a) | (b) | (c) | |||||||||||||
Equity compensation plans approved by shareholders | |||||||||||||||
Nutrien Stock Option Plan |
1,613,453 | $44.50 | 21,018,333 | ||||||||||||
Agrium Legacy Stock Option Plan Approved
|
4,413,296 | $43.56 | Nil | ||||||||||||
PotashCorp Legacy Share-Based Plans Approved by Shareholders of PotashCorp (2) |
131,700 | (3) | N/A | Nil | |||||||||||
4,362,890 | (4)(5) | $73.05 | Nil | ||||||||||||
Total: |
10,521,339 | $56.09 | 21,018,333 |
Notes:
(1) |
At the closing of the merger of our two legacy companies, the Corporation assumed the shareholder-approved legacy Agrium Stock Option Plan (the Agrium Legacy Stock Option Plan ) and the outstanding stock options granted under the plan. The Agrium Legacy Stock Option Plan is the only legacy Agrium incentive compensation plan that is settled in treasury shares, as described in Schedule C Summary of Agrium Legacy Incentive Compensation Plans. Outstanding awards denominated in Agrium common shares have been converted to Nutrien common shares (with corresponding adjustments to the exercise prices) using an exchange ratio of 2.23 Nutrien common shares for every one Agrium common share. No further stock options may be granted under the Agrium Legacy Stock Option Plan. |
(2) |
At the closing of the merger of our two legacy companies, the Corporation assumed the shareholder-approved legacy PotashCorp Performance Stock Option Plans implemented in the years prior to 2016 and the PotashCorp 2016 Long-Term Incentive Plan (collectively, the PotashCorp Legacy Share-Based Plans ), and the outstanding awards (performance stock options, stock options and PSUs) granted under the plans. The PotashCorp Legacy Share-Based Plans are the only legacy PotashCorp incentive compensation plans that are settled in treasury shares, as described in Schedule D Summary of PotashCorp Legacy Incentive Compensation Plans. Outstanding awards denominated in PotashCorp common shares have been converted to Nutrien common shares (with corresponding adjustments to the exercise prices) using an exchange ratio of 0.4 Nutrien common shares for every one PotashCorp common share. No further awards may be granted under the PotashCorp Legacy Share-Based Plans. |
(3) |
Under the legacy PotashCorp 2016 Long-Term Incentive Plan, 65,850 PSUs are outstanding that are subject to performance vesting criteria and may be settled in cash or common shares. The amount reported assumes the maximum payout multiplier is 200% and that all PSUs are settled in common shares. |
(4) |
Under the PotashCorp 2016 Long-Term Incentive Plan, 1,379,384 stock options are outstanding that are not subject to performance vesting criteria. |
(5) |
Under the PotashCorp Performance Stock Option Plans implemented between 2009 and 2015, an aggregate of 2,983,506 performance stock options are outstanding. |
The annual burn rates over the last three financial years for common shares granted annually under the Stock Option Plan and each legacy share-based long-term incentive plan assumed by the Corporation are as set out in the table below. In accordance with the rules of the Toronto Stock Exchange, the burn rate is calculated by dividing the number of share-based awards granted under the share-based compensation arrangement during the applicable fiscal year by the weighted average number of securities outstanding for the applicable fiscal year, expressed as a percentage:
Share-Based Compensation Arrangements | 2018 Burn Rate | 2017 Burn Rate | 2016 Burn Rate | |||||||||
Nutrien Stock Option Plan | 0.30% | N/A | N/A | |||||||||
Agrium Legacy Stock Option Plan | 0.00% | 0.38% | 0.44% | |||||||||
PotashCorp Legacy Share-Based Plans (1) | 0.00% | 0.18% | 0.37% |
Note:
(1) |
PSUs issued pursuant to PotashCorps Legacy Share-Based Plans are subject to performance multipliers ranging from 0% to 200% of the number of awards granted on the grant date. For these awards, the amount reported assumes the payout multiplier is 100%. See Schedule D Summary of PotashCorp Legacy Incentive Compensation Plans. |
53
|
EXECUTIVE COMPENSATION
|
Legacy awards made under the Agrium Legacy Stock Option Plan and the PotashCorp Legacy Share-Based Plans will continue to vest and be exercised or settled until all stock options are exercised, expire or are terminated in accordance with their terms (the last expiry date is in 2027), and all PSUs are settled, expire or are terminated in accordance with their terms (the last PSU performance cycle ends December 31, 2019), following which the legacy plans will terminate.
NEOs participate in both registered (or qualified) plans and non-registered (or non-qualified) plans. The registered (or qualified) plans are of the defined contribution plan type ( DC Plans ) and the non-registered (or non-qualified) plans are both the defined contribution and defined benefit type either the defined contribution supplemental executive retirement plan or the defined benefit supplemental executive retirement plan ( DC SERP or DB SERP ). While tax contribution limits for the DC Plans differ between Canada and the U.S., Nutrien sets the 401(k) Savings Plan company limit equal to the Canadian DC Plan for the U.S. NEO (Mike Frank).
Summary of Retirement Arrangements
Magro, Frank, Douglas and Thun | ||
DC Plan |
Nutrien contributes 6% of eligible earnings to the maximum imposed by the Income Tax Act (Canada).
Nutrien matches voluntary contributions at a rate of 50% to a maximum of 3% of eligible earnings. |
|
DB SERP |
Provides a pension benefit of 2% of the average of the three years highest earnings multiplied by years of service as an executive.
Earnings are defined as salary in excess of DC Plan eligible earnings, plus actual incentive to a maximum of the target incentive.
Earnings for the purpose of the DB SERPs are capped at $2,500,000 for the CEO and $1,000,000 for other NEOs.
Nutrien does not grant additional service credit, except as needed to recognize the notice period in the event an NEO is terminated without cause.
Total pension payable is further limited to 70% of final salary.
Normal retirement is age 60. Early retirement is available at age 55, however pension benefits are reduced by 6% for each year retirement occurs before age 60. Similarly, pension benefits are increased by 6% for each year retirement occurs after age 60.
Benefits are paid for life with a spousal survivor pension of 60% of the NEOs pension or a 15-year guarantee for a NEO without a spouse at retirement.
The original participants on inception of the plan (June 25, 2006) are fully vested; participants that entered the plan between inception and December 31, 2012 vest at a rate of 25% per year; while new participants after January 1, 2013 vest at 16.7% per year.
The DB SERPs are unfunded; benefits are paid from Nutriens general revenues.
DB SERPs for Canadian NEOs are secured through a letter of credit held by a third party trustee. DB SERPs for U.S. NEOs are not eligible for Canadian DB SERP security. |
54
|
EXECUTIVE COMPENSATION
|
Tilk and Brownlee | ||
DC Plan |
Nutrien contributes a matching 5.5% of eligible earnings to the maximum imposed by the Income Tax Act (Canada) to the registered pension plan plus an additional 3% of eligible earnings to the savings plan.
Discretionary profit related contributions up to 3% of eligible pay are available. There was no profit sharing contribution paid in 2018. |
|
DC SERP (Tilk) |
Nutrien contributes 10% of eligible earnings, less registered DC pension plan contributions, for certain eligible Canadian executives hired after July 1, 2014, including Mr. Tilk.
Plan earnings are credited each month based on Government of Canada 10-Year bond rates.
Benefits vest after two years of service and are unfunded. |
|
DB SERP (Brownlee) |
Nutrien provides a DB pension benefit for certain pre-2014 PotashCorp Canadian executives, including Mr. Brownlee. |
|
The formula is 5% of the average of the three highest years earnings multiplied by years of service to a maximum of 10 years, plus 2% of the average of the three highest years earnings multiplied by service in excess of 25 years to a maximum of 10 additional years. Different formulas apply to eligible pay and service for years after July 2009. |
||
Benefits under the registered DC pension plan are offset from the otherwise calculated pension benefit. |
||
Normal Retirement is age 65. Unreduced benefits are available at age 62. Reduced early retirement benefits are available at age 55. |
||
Benefits are payable for the life of the participant, with optional joint and survivor or lump sum distributions options available. |
||
Mr. Brownlees SERP is unfunded but secured through a letter of credit. |
||
Accrued benefits generally vest at age 55 and were vested upon the Nutrien change in control. |
Retirement Arrangements Value Disclosure
The following table presents the benefits accumulated under the DC Plans and DC SERP Plans as of December 31, 2018:
Name |
Accumulated
(U.S.$) (1) |
Compensatory (U.S.$) (1) |
Accumulated
(U.S.$) (1) |
|||||||||
Chuck Magro |
$ 332,925 | $ 12,271 | $324,187 | |||||||||
Mike Frank |
$ 2,858 | $ 15,977 | $ 40,268 | |||||||||
Steve Douglas |
$ 76,111 | $ 12,271 | $ 84,717 | |||||||||
Fred Thun |
$ 343,546 | $ 12,271 | $328,212 | |||||||||
Jochen Tilk |
$ 570,673 | $157,311 | Nil | |||||||||
Wayne Brownlee | $1,820,092 | $ 10,226 | Nil |
Note:
(1) |
Canadian dollar accumulated value amounts have been converted from Canadian dollars to U.S. dollars using the Bank of Canada exchange rate on December 31, 2017 and 2018 of U.S.$1.00 = CAD$1.2545 and U.S.$1.00 = CAD$1.3642, respectively and the compensatory amounts at the 2018 annual average exchange rate of U.S.$1.00 = CAD$1.2957, with the exception of the amounts applicable to Mr. Frank, to which no conversion rate was applied to his U.S. dollar amounts. |
55
|
EXECUTIVE COMPENSATION
|
The following table presents, as at December 31, 2018, accrued pension obligations and projected annual retirement benefits associated with the DB SERP payable to NEOs assuming the NEOs were to retire as of the stated dates. Jochen Tilk is not represented in the following table as he did not participate in the DB SERP.
Name |
Number of years credited
service
(1)
|
Annual benefits payable (U.S.$) (2)(3) |
Opening
(U.S.$) |
Compensatory Change (5)(7) (U.S.$) |
Non- Compensatory Change (6)(7) (U.S.$) |
Closing Present
(U.S.$) |
||||||||||||||||||||||||||||||||||
At year end (7) | At age 60 (7) | At age 65 (7) | ||||||||||||||||||||||||||||||||||||||
Chuck Magro |
9.161 | $ | 335,751 | $ | 727,503 | $ | 1,183,978 | $ | 4,385,123 | $ | 528,659 | $ | (513,154 | ) | $ | 4,400,628 | ||||||||||||||||||||||||
Mike Frank |
1.285 | $ | 22,950 | $ | 124,154 | $ | 277,489 | $ | 83,785 | $ | 299,128 | $ | (44,297 | ) | $ | 338,616 | ||||||||||||||||||||||||
Steve Douglas |
4.159 | $ | 60,971 | $ | 185,156 | $ | 335,993 | $ | 817,632 | $ | 254,651 | $ | (108,310 | ) | $ | 963,973 | ||||||||||||||||||||||||
Fred Thun |
7.667 | $ | 40,578 | $ | 103,856 | $ | 169,414 | $ | 810,715 | $ | 113,250 | $ | (97,392 | ) | $ | 826,573 | ||||||||||||||||||||||||
Wayne Brownlee |
35 | Nil | Nil | Nil | $ | 12,489,308 | $ | (40,186) | $ | (12,449,122 | ) | Nil |
Notes:
(1) |
None of the NEOs have been credited with additional years of service above the years of service actually provided to the Corporation. Mr. Brownlees years of credited service includes 11.6 years of service, from May 1977 to December 1988, with the government of Saskatchewan prior to the privatization of PotashCorp in 1989 and 29.9 years of service, from December 1988 to October 2018, with PotashCorp and predecessors. Under the Prior Canadian Supplemental Plan, credited service is capped at 35 years. |
(2) |
The normal retirement age for former Agrium executives is 60. The normal retirement age for former PotashCorp executives is 65. Unreduced benefits are available at age 62. |
(3) |
The projected annual pension benefits are calculated assuming the highest average Excess Earnings remain unchanged from December 31, 2018. |
(4) |
The present value of defined benefit obligations is the actuarial value of projected benefits for service accrued to the date indicated. The calculation of the amounts shown in the table use actuarial assumptions and methods that are consistent with those used for calculating pension obligations disclosed in the respective consolidated financial statements. For key assumptions used, see the notes to the Corporations audited consolidated financial statements. |
(5) |
The amount related to service cost and compensation changes differs from the assumptions (as utilized for purposes of calculating pension obligations as disclosed in the Corporations audited consolidated financial statements). |
(6) |
The amount related to items such as interest on the obligation, the impact of changes in the discount rate assumption and changes in the U.S. exchange rate for Canadian-based executives. |
(7) |
For Canadian plan members, the annual benefits payable and the defined benefit obligations as at December 31, 2018 have been converted from Canadian dollars to U.S. dollars using the exchange rate on December 31, 2018 of U.S.$1.00 = CAD$1.3642. The defined benefit obligation as at December 31, 2017 was converted at the December 31, 2017 exchange rate of U.S.$1.00 = CAD$1.2545. The remaining components were converted at the 2018 average annual exchange rate of U.S.$1.00 = CAD$1.2957. |
Employment Agreements, Termination & Change in Control
Executive Employment Agreements
The HR&C Committee believes that executive employment agreements for the Corporations most senior executive officers are a necessary component of a competitive compensation program and an important risk management tool by creating certainty in severance and other benefits payable upon certain termination events. Accordingly, in 2018, the HR&C Committee approved a new form of executive employment agreement to replace legacy agreements with Chuck Magro and certain other senior executive officers who are his direct reports. The legacy agreements with those senior officers who are not Mr. Magros direct reports will continue until they are terminated or expire in accordance with their terms. Certain legacy agreements based on older corporate governance practices that could not be replaced without triggering litigation risk were also continued.
Nutriens new executive employment agreements and annual and long-term incentive plans have double trigger change-in-control provisions, which means that within two years of a change of control, the Corporation must terminate the executive without cause, or the executive must resign for good reason, for the payouts and benefits to be triggered.
The merger is a Change in Control for purposes of the executive employment agreements and our annual and long-term compensation plans.
56
|
EXECUTIVE COMPENSATION
|
57
|
EXECUTIVE COMPENSATION
|
The following table presents the incremental amounts payable to each NEO in three different circumstances, assuming the event occurred on December 31, 2018. There are no incremental amounts payable if the NEO retires, resigns voluntarily or is terminated for cause. PSUs and stock options are treated according to the terms and conditions of the long-term incentive plans, with the limited exception of those NEOs with legacy agreements which provide otherwise. See below for information about the NEO employments agreements.
NEO |
Termination without Cause/
No Change in Control
(U.S.$) (1) |
Termination without Cause/
Constructive Dismissal
Within Two Years of a
|
Change in Control Without Termination (U.S.$) (1) |
||||||||||||
Chuck Magro (1) |
|||||||||||||||
Salary/Annual Incentive |
$ | 5,629,673 | $ | 5,629,673 | |||||||||||
Benefits |
$ | 25,363 | $ | 25,363 | |||||||||||
Perquisites |
$ | 63,041 | $ | 63,041 | |||||||||||
Long-term Incentives |
|||||||||||||||
PSUs (2) |
Nil | $ | 7,743,500 | ||||||||||||
Stock Options (3) |
Nil | $ | 3,761,612 | ||||||||||||
Pension Benefits |
$ | 998,159 | $ | 998,159 | |||||||||||
Total Compensation |
$ | 6,716,236 | $ | 18,221,348 | Nil | ||||||||||
Mike Frank |
|||||||||||||||
Salary/Annual Incentive |
$ | 3,420,000 | $ | 3,420,000 | |||||||||||
Benefits |
$ | 40,000 | $ | 40,000 | |||||||||||
Perquisites |
$ | 38,800 | $ | 38,800 | |||||||||||
Long-term Incentives |
|||||||||||||||
PSUs (2) |
$ | 8,411,998 | $ | 9,395,072 | |||||||||||
Stock Options (3) |
Nil | $ | 230,240 | ||||||||||||
Pension Benefits |
$ | 414,631 | $ | 414,631 | |||||||||||
Total Compensation |
$ | 12,325,429 | $ | 13,538,743 | Nil | ||||||||||
Steve Douglas (1) |
|||||||||||||||
Salary/Annual Incentive |
$ | 247,398 | $ | 1,484,386 | |||||||||||
Benefits |
$ | 16,493 | $ | 109,955 | |||||||||||
Perquisites |
$ | 3,555 | $ | 21,331 | |||||||||||
Long-term Incentives |
|||||||||||||||
PSUs (2) |
Nil | $ | 1,604,692 | ||||||||||||
Stock Options (3) |
Nil | $ | 805,933 | ||||||||||||
Pension Benefits |
$ | 40,899 | $ | 445,775 | |||||||||||
Total Compensation |
$ | 308,345 | $ | 4,472,072 | Nil | ||||||||||
Fred Thun (1) |
|||||||||||||||
Salary/Annual Incentive |
$ | 832,033 | $ | 832,033 | |||||||||||
Benefits |
$ | 25,363 | $ | 25,363 | |||||||||||
Perquisites |
$ | 22,724 | $ | 22,724 | |||||||||||
Long-term Incentives |
|||||||||||||||
PSUs (2) |
$ | 358,443 | $ | 436,671 | |||||||||||
Stock Options (3)(4) |
Nil | $ | 44,578 | $ | 44,578 | ||||||||||
Pension Benefits |
$ | 207,195 | $ | 207,195 | |||||||||||
Total Compensation |
$ | 1,445,758 | $ | 1,568,654 | $ | 44,578 |
Notes:
(1) |
Compensation paid in Canadian dollars has been converted into U.S. dollars at the December 31, 2018 exchange rate of U.S.$1.00 = CAD$1.3642. |
(2) |
PSU payouts are in U.S. dollars. Values for the 2017 and 2018 PSU grants that have not yet vested are based on Nutriens closing share price on the NYSE on December 31, 2018 of U.S.$47.00 and assumes target performance. Actual payouts will vary depending upon Nutriens share price and the percentage of PSUs held by the NEO that vest based on actual performance. For Mr. Thun, also includes value of RSUs (as applicable) granted under the legacy Agrium long-term incentive plan for Vice Presidents. |
(3) |
Values for stock options are based on stock options that are in-the-money based on Nutriens closing share price on the NYSE on December 31, 2018 of U.S.$47.00 and assumes immediate full vesting of all stock options held by the NEO as at December 31, 2018. Actual payouts will vary depending upon Nutriens share price and the number of stock options held by the NEO that vest. |
(4) |
Mr. Thun, who has a legacy executive employment agreement, has immediate full vesting of stock options on a change in control (single trigger). |
58
|
EXECUTIVE COMPENSATION
|
Jochen Tilk stepped down as Executive Chair and as a director on September 30, 2018 and Wayne Brownlee stepped down as CFO on October 31, 2018. The summary compensation table on page 48 shows the actual amounts they were paid as a result of their departure. See below for a description of their respective executive employment agreements.
Chuck Magro President & Chief Executive Officer
Chuck Magro has a new form of executive employment agreement.
Key Provisions | ||
Severance Period |
24 months.
|
|
Termination without Cause or Resignation for Good Reason - No Change in Control, or Within Two Years of a Change in Control |
Chuck Magro is entitled to a lump sum cash payment equal to:
his base salary for the severance period;
his annual incentive at target, prorated for the portion of the year worked, plus his annual incentive at target for the severance period;
the cost to Nutrien of his benefits for the severance period;
the value of Nutriens contributions to the DC Plan for the severance period; and
the value of the DC Plan accrued over the severance period.
Mr. Magro is also entitled to:
DB SERP service credit for the severance period; and
vesting and settlement of his PSUs and stock options according to the terms and conditions of our long-term incentive plans.
|
|
Restrictive Covenants |
12-month non-competition provision. | |
24-month non-solicitation provision.
|
||
Recoupment |
Agreement that incentive awards may be subject to recoupment or clawback under the Corporations Recoupment Policy.
|
Mike Frank Executive Vice President and CEO, Retail
Mike Frank has a new form of executive employment agreement.
Key Provisions | ||
Severance Period
|
24 months.
|
|
Termination without Cause or Resignation for Good Reason - No Change in Control, or Within Two Years of a Change in Control |
Michael Frank is entitled to a lump sum cash payment equal to:
his base salary for the severance period;
his annual incentive at target, prorated for the portion of the year worked, plus his annual incentive at target for the severance period;
the cost to Nutrien of his benefits for the severance period;
the value of Nutriens contributions to the DC Plan for the severance period; and
the value of the DC Plan accrued over the severance period.
Mr. Frank is also entitled to:
DB SERP service credit for the severance period; and
vesting and settlement of his PSUs and stock options according to the terms and conditions of our long-term incentive plans, except that the one-time transitional grant of PSUs in 2017 valued at $6,400,004 is accelerated and paid out at target as of the termination date.
|
|
Restrictive Covenants |
12-month non-competition provision. | |
24-month non-solicitation provision.
|
||
Recoupment |
Agreement that incentive awards may be subject to recoupment or clawback under the Corporations Recoupment Policy.
|
59
|
EXECUTIVE COMPENSATION
|
Steve Douglas Executive Vice President & Chief Integration Officer
Mr. Douglas has a legacy agreement.
Key Provisions | ||
Severance Period |
18 months.
|
|
Termination without Cause or Resignation for Good Reason No Change in Control |
Steve Douglas is entitled to a lump sum cash payment equal to:
his base salary for up to 18 months;
his annual incentive at target for up to 18 months;
the value of Nutriens contributions to the DC Plan for up to 18 months;
1% of base salary in lieu of benefits for up to 18 months; and
Nutriens cost of perquisites for up to 18 months.
Mr. Douglas is also entitled to:
DB SERP service credit for up to 18 months; and
vesting and settlement of his PSUs and stock options according to the terms and conditions of our long-term incentive plans.
|
|
Termination without Cause, or Resignation for Good Reason Within Two Years of a Change in Control |
Steve Douglas is entitled to a lump sum cash payment equal to:
his base salary for the severance period;
his annual incentive at target, prorated for the portion of the year worked, plus his annual incentive at target for the severance period;
the value of Nutriens contributions to the DC Plan for the severance period;
20% of base salary in lieu of benefits for the severance period; and
Nutriens cost of perquisites for the severance period.
Mr. Douglas is also entitled to:
DB SERP service credit for the severance period; and
vesting and settlement of his PSUs and stock options according to the terms and conditions of our long-term incentive plans.
|
|
Restrictive Covenants |
12-month non-competition provision.
12-month non-solicitation provision.
|
60
|
EXECUTIVE COMPENSATION
|
Fred Thun Interim Chief Financial Officer
Fred Thun has a legacy agreement.
Key Provisions | ||
Severance Period
|
24 months.
|
|
Termination without Cause or Resignation for Good Reason No Change in Control |
Fred Thun is entitled to a lump sum cash payment equal to:
his base salary for the severance period;
his annual incentive at target, prorated for the portion of the year worked, plus his annual incentive at target for the severance period;
the cost to Nutrien of his benefits for the severance period;
the value of Nutriens contributions to the DC Plan for the severance period; and
the value of the DC Plan accrued over the severance period.
Mr. Thun is also entitled to:
DB SERP service credit for the severance period;
vesting and settlement of his PSUs at target; and
vesting and settlement of his RSU and stock options according to the terms and conditions of our long-term incentive plans.
|
|
Termination without Cause or Resignation for Good Reason Within Two Years of a Change in Control
|
As above, except that there shall be immediate full vesting of all of his stock options. |
|
Change in Control No Termination
|
Mr. Thun is entitled to immediate full vesting of all of his stock options as of the date of the change in control (single trigger).
|
61
|
EXECUTIVE COMPENSATION
|
Jochen Tilk Former Executive Chair
In September 2018 the Corporation (with the approval of the HR&C Committee) and Jochen Tilk entered into a separation agreement and release to provide greater certainty as to the terms of Mr. Tilks departure, which took into account potential statutory and common law entitlements that could result by reason of Mr. Tilks agreement to depart on September 30, 2018 and not May 31, 2019 as previously agreed. The HR&C Committee also considered Mr. Tilks considerable contribution in guiding the Corporation through a complex merger of equals as President and Chief Executive Officer of PotashCorp and his many contributions to achieving synergies and integrating the businesses and operations of the two legacy companies as Executive Chair of Nutrien. In turn, Mr. Tilk agreed to release the Corporation from certain claims and to confirm his commitment to a non-competition and non-solicitation covenant. The summary compensation table on page 48 shows the actual amounts he was paid as a result of his departure. His severance payment and other benefits under his legacy agreement was determined as follows.
Key Provisions | ||
Severance Period |
24 months. |
|
Termination without Cause or Resignation for Good Reason Within Two Years of a Change in Control |
Jochen Tilk was entitled to a lump sum cash payment equal to:
his base salary for the severance period;
his annual incentive at actual achievement, prorated for the portion of the year worked, plus his average annual incentive in the two years prior to termination for the severance period;
compensation that he would have received if he had remained in employment with the Corporation until his agreed departure date of May 31, 2019, in lieu of (i) his base salary and annual incentive to May 31, 2019; and (ii) his long-term incentive award; and
benefits for the severance period.
Mr. Tilk was also entitled to:
continuation under Nutrien pension and SERI plans or other pension plans for the severance period; and
vesting and settlement of his PSUs and stock options according to the terms and conditions of our long-term incentive plans.
|
|
Restrictive covenants |
24-month non-competition provision.
24-month non-solicitation provision.
|
Wayne Brownlee Former Executive Vice President & Chief Financial Officer
Wayne Brownlee agreed to step down effective October 31, 2018. Mr. Brownlee has a legacy agreement that was entered into in 1994. The summary compensation table on page 48 shows the actual amounts he was paid as a result of his departure. His severance payment and other benefits under his legacy agreement was determined as follows.
Key Provisions | ||
Severance Period |
36 months.
|
|
Termination without Cause or Resignation for Good Reason Within Two Years of a Change in Control |
Wayne Brownlee was entitled to a lump sum cash payment equal to:
his base salary for the severance period;
his annual incentive at target, prorated for the portion of the year worked, plus his average annual incentive in the last three years for the severance period; and
the value of Nutriens contributions to the DC Plan for the severance period.
Mr. Brownlee was also entitled to:
continuation of medical, disability and group term life insurance, which terminate upon obtaining similar coverage from a new employer or upon commencement of retirement pension benefits; and
immediately full vesting of his PSUs based on actual achievement measured as of his departure date; and
immediate full vesting of all of his stock options as of the departure date.
|
|
Change in Control No Termination |
Mr. Brownlee was entitled to immediate full vesting of all of his stock options as of the date of the change in control (single trigger).
|
62
|
EXECUTIVE COMPENSATION
|
For information about our long-term incentive plans, please see the following:
|
Schedule B Summary of Nutrien Long-Term Incentive Plans |
|
Schedule C Summary of Agrium Legacy Incentive Compensation Plans |
|
Schedule D Summary of PotashCorp Legacy Incentive Compensation Plans. |
Double Trigger Change in Control Provisions
We define change in control as follows:
|
the acquisition by a person or entity of 30% or more of Nutriens common shares; |
|
a sale or other disposition of 50% or more of the book value of the fixed assets of the Corporation, or the fixed assets of substantially all of a business unit of the Corporation (but only with respect to the executives responsible for such business unit); |
|
a business combination with another person or entity, unless the total voting power of Nutriens common shares before the business combination is at least 50% of the total voting power of the surviving person or entity, and the total such voting power among the holders of Nutriens common shares after the business combination is in substantially the same proportion as the total voting power among such holders before the business combination; |
|
a change of more than 50% in the directors on the board as a result of a contested election of directors; or |
|
a board resolution indicates that a change in control of the Corporation has occurred or is imminent. |
We define good reason as follows:
|
a substantial diminishment of the executives authorities, duties, responsibilities or status; |
|
a reduction in or failure to increase annual base salary, other than in line with other similarly-situated employees; |
|
a substantial reduction in target compensation that is not replaced by alternative compensation, other than in line with other similarly-situated employees; |
|
a failure to continue participation in the annual or long-term incentive program in line with other similarly-situated employees, that is not replaced by alternative compensation; |
|
a failure to continue participation in the benefit plans, retirement program or post-retirement benefits program in line with other similarly-situated employees, other than the discontinuance of a defined benefit pension plan that is replaced by a defined contribution pension plan effective no earlier than the next compensation cycle; |
|
the assignment of any significant, ongoing duties inconsistent with the executives skills, duties, position, responsibilities or status; |
|
a relocation at the request of the Corporation to more than 80 km from the executives current job location or office; or |
|
a material breach by the Corporation of the executives employment agreement. |
63
|
GENERAL INFORMATION
|
Section Five: General Information
Indebtedness of Directors, Officers and Employees
None of the current or former executive officers, directors or employees of the Corporation or any of our subsidiaries is indebted to the Corporation or any of our subsidiaries, including by way of a guarantee, support agreement, letter of credit or similar arrangement or understanding between the Corporation or any of our subsidiaries and another entity.
Interest of Informed Persons in Material Transactions
We are not aware of any material interest, direct or indirect, of any informed person of the Corporation (as such term is defined under applicable Canadian securities laws), any proposed director of the Corporation, or any associate or affiliate of any informed person or proposed director, in any transaction since the start of our most recently completed financial year or in any proposed transaction which has or would materially affect us or any of our subsidiaries.
Shareholder proposals to be considered for inclusion in the 2020 management proxy circular must be received by us on or before December 29, 2019 by email to corporatesecretary@nutrien.com , or by mail or courier to Nutrien Ltd., Suite 500, 122- 1st Avenue South Saskatoon, SK Canada S7K 7G3, Attention : Corporate Secretary.
The Corporation has adopted a by-law relating to advance notice of nominations of the directors of the Corporation (the Advance Notice By-Law ) which establishes a framework for advance notice of nominations of persons for election to the board. The Advance Notice By-Law sets deadlines of a prescribed number of days before a shareholders meeting for a shareholder to notify us of its intention to nominate one or more directors, and explains the information that must be included with the notice for it to be valid. The Advance Notice By-Law applies at an annual meeting of shareholders or a special meeting of shareholders that was called to elect directors (whether or not also called for other purposes), and may be waived by the board. It does not affect the ability of shareholders to requisition a meeting or make a proposal under the Canada Business Corporations Act .
In the case of an annual meeting of shareholders, notice to the Corporation pursuant to the Advance Notice By-Law must be given not less than 30 days prior to the date of the annual meeting. In the event that the annual meeting is to be held on a date that is less than 50 days after the date that is the earlier of: (i) the date that a notice of meeting is filed; and (ii) the date that the first public announcement of the date of the annual meeting was made (the Notice Date ), notice may be given not later than the close of business on the 10th day following the Notice Date. In the case of a special meeting of shareholders (which is not also an annual meeting), notice to the Corporation pursuant to the Advance Notice By-Law must be given not later than the close of business on the 15th day following the Notice Date. As of the date of this circular, Nutrien had not received any additional director nominations for the meeting.
Shareholder Engagement and Contacting the Board
Nutrien is committed to providing a variety of avenues for shareholder engagement with the Corporation. Each year, we facilitate various channels of communication through the Corporations various public disclosures, such as the annual report, management proxy circular, annual information form, financial statements, news releases and regular updates to our webpage. In connection with our public disclosure, we hold quarterly earnings calls accessible to all and provide public notice of our annual meetings.
Nutrien encourages shareholders to participate in the Corporations governance by facilitating votes on shareholder proposals submitted in compliance with applicable laws and holding annual say-on-pay votes for executive compensation. The results of such votes are given the appropriate consideration in developing Nutriens governance policies and compensation philosophy.
64
|
GENERAL INFORMATION
|
Nutrien provides direct lines of confidential contact accessible at any time to Nutriens independent directors and the Chair of the Audit Committee, as below.
You can confidentially contact Nutriens board chair or the independent directors as a group, by writing to them at Nutriens corporate office. These envelopes will be delivered unopened. Please send the sealed envelope to our registered head office, marked as follows:
Private and Strictly Confidential
Nutrien Ltd.
Suite 500, 122- 1st Avenue South
Saskatoon, SK Canada S7K 7G3
Attention : Board Chair
If you want to confidentially contact Nutriens Chair of the Audit Committee, please send your sealed envelope to the same address, marked as follows:
Private and Strictly Confidential
Attention : Chair of the Audit Committee
You can also contact Nutriens board through our Corporate Secretary by sending an email to corporatesecretary@nutrien.com .
As of March 22, 2019, we know of no amendment, variation or other matter to come before the meeting other than the matters referred to above.
IFRS Advisory
Unless otherwise stated in this circular or Nutriens 2018 Managements Discussion and Analysis ( MD&A ) or Annual Information Form, historical financial information relating to Nutrien for 2018 and Agrium and PotashCorp for 2017 and 2016 presented and discussed in this circular is prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board.
Non-IFRS Financial Measures Advisory
Certain financial measures used in this circular, including free cash flow, adjusted net earnings per share and adjusted EBITDA in the case of Nutrien, and average annual cash flow return on investment (CFROI) in the case of PotashCorp, are not prescribed by, and do not have standardized meaning under, IFRS. Our method of calculation of the non-IFRS financial measures may not be directly comparable to that of other companies. We consider these non-IFRS financial measures to provide useful information to both management and investors in measuring our financial performance and financial condition. In addition, certain of these non-IFRS financial measures are used for measuring performance and setting executive compensation. These non-IFRS financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS. For a discussion of how these non-IFRS financial measures are calculated and their usefulness to users, including management, as well as for a reconciliation of these non-IFRS financial measures to the most directly comparable measures calculated in accordance with IFRS, please refer to Nutriens 2018 MD&A and Annual Information Form and PotashCorps 2017 MD&A.
The directors have approved the contents and mailing of this circular.
BY ORDER OF THE BOARD OF DIRECTORS | ||
Robert A. Kirkpatrick, Q.C.
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March 22, 2019 |
65
SCHEDULE A HUMAN RESOURCES & COMPENSATION COMMITTEE WORK PLAN
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Schedule A Human Resources & Compensation Committee Work Plan
Agenda Items | Feb | May | Jul | Dec |
As Needed |
Board Action |
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CEO Performance and Compensation |
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Evaluate CEO performance in prior fiscal year against goals, and recommend CEO annual incentive target, base salary and long-term equity incentive allocations for current fiscal year |
✓ | A | ||||||||||
Review CEO pay-for-performance analyses |
✓ | I | ||||||||||
Review pay position relative to Compensation Peer Group |
✓ | I | ||||||||||
Review update on CEO goal achievement year to date |
✓ | ✓ | I | |||||||||
Review and approve proposed CEO performance goals and objectives for current fiscal year |
✓ | I | ||||||||||
Senior Executive Performance and Compensation (other than CEO) |
||||||||||||
Review and approve annual incentive pools for prior years performance including payouts to senior executives |
✓ | I | ||||||||||
In consultation with the CEO, review and approve key performance indicators for senior executives for current fiscal year |
✓ | I | ||||||||||
Review pay position relative to Compensation Peer Group |
✓ | I | ||||||||||
Recommend the senior executives annual incentive targets, base salaries and long-term equity incentive allocations for current fiscal year |
✓ | A | ||||||||||
Review update on achievement of key performance indicators and corporate performance goals |
✓ | ✓ | ✓ | I | ||||||||
Comprehensive review of trends in termination and change in control practices, senior executive contract provisions, and incremental and aggregate payments pursuant to officer contracts and corporate policies and programs |
✓ | I | ||||||||||
Recommend appointment of new executive officers |
✓ | A | ||||||||||
Review and monitor compliance with senior executive equity ownership guidelines |
✓ | ✓ | I | |||||||||
Compensation and Benefit Programs and Design |
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Review and recommend executive compensation philosophy, Compensation and PSU Peer Groups |
✓ | A | ||||||||||
Review status of pension plan investment performance and administration |
✓ | I | ||||||||||
Recommend significant changes to compensation plans or benefit programs |
✓ | A | ||||||||||
Review U.S. retirement savings plans audits (in conjunction with Audit Committee) |
✓ | I | ||||||||||
Schedule review of program and/or plan design changes for pending fiscal year |
✓ | I | ||||||||||
Review and approve budgets related to salary increases, payouts related to annual incentive programs and maturing PSU payouts |
✓ | I | ||||||||||
Review and approve budgets related to current year PSU and RSU grants as well as stock option grants to all participants |
✓ | I | ||||||||||
Monitor performance metrics, estimated payouts and dilution related to annual incentive and long-term incentive plans |
✓ | ✓ | ✓ | ✓ | I | |||||||
Annual in camera session with Executive Vice President, Human Resources |
✓ | I | ||||||||||
Review of the North American Pension and Retirement Committee Charter |
✓ | |||||||||||
Succession Planning |
||||||||||||
Review CEO and senior executive succession planning, management structure and development |
✓ | ✓ | I | |||||||||
Review staff succession planning and leadership development |
✓ | ✓ | I | |||||||||
Review organizational changes |
✓ | I | ||||||||||
Review Workforce Strategy including Employee Diversity and Inclusion Strategy |
✓ | ✓ | I | |||||||||
Governance |
||||||||||||
Review trends and current developments related to executive compensation |
✓ | ✓ | I | |||||||||
Assess whether executive compensation plans, policies, programs and specific arrangements for senior executives align with the Corporations executive compensation philosophy, strategy and principles, taking into account Nutriens risk profile. Recommend material changes as applicable. |
✓ | A | ||||||||||
Recommend other risk categories assigned to the Human Resources & Compensation Committee |
✓ | A | ||||||||||
Review labour relations environment |
✓ | I | ||||||||||
Review of compensation consultant independence and performance |
✓ | I | ||||||||||
Review and approve CD&A and compensation disclosure for inclusion in management proxy circular |
✓ | I | ||||||||||
Review of HR&C Committee Charter |
✓ | I |
A - Approve, I Information Only
A1
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SCHEDULE B SUMMARY OF NUTRIEN LONG-TERM INCENTIVE PLANS
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Schedule B Summary of Nutrien Long-Term Incentive Plans
Nutrien Stock Option Plans
This section presents prescribed disclosure concerning the Stock Option Plan as required under Form 51-102F5 - Information Circular and TSX Company Manual Section 613 - Security-Based Compensation Arrangements .
The Stock Option Plan was implemented by the board on January 1, 2018 and approved by shareholders at the 2018 annual meeting. The Stock Option Plan is a share-based compensation arrangement providing for the issuance of common shares from treasury of the Corporation for the purposes of the rules of the Toronto Stock Exchange.
Description of Stock Option Plan
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Eligibility |
Granted at the discretion of the HR&C Committee, subject to the specific provisions of the Stock Option Plan, the Corporate Governance Framework and the Corporations HR&C Committee Charter.
An eligible participant is any current officer or employee of the Corporation or its affiliates who is eligible to receive stock options under the Stock Option Plan. Non-executive directors of the Corporation are not eligible to participate.
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Number of Securities Issuable and Issued as at December 31, 2018: |
As at December 31, 2018, there were 608,535,477 outstanding common shares of Nutrien. As at December 31, 2018:
· Plan Fixed Maximum the plan fixed maximum under the Stock Option Plan is 19,750,000 common shares, representing 3.25% of the common shares outstanding.
· Total Stock Options Exercised Since Stock Option Plan Inception 261,709 common shares have been issued under the Stock Option Plan since its inception.
· Number of Common Shares Underlying Outstanding Awards under the Stock Option Plan 1,613,453 common shares are issuable on exercise of stock options that have been granted and remain outstanding under the Stock Option Plan, representing 0.27% of the common shares outstanding.
· Number of Common Shares Underlying Outstanding Awards under the Stock Option Plan Available for Future Grants the total number of common shares that are reserved for issuance upon the exercise of stock options and that remain available for future stock option grants under the Stock Option Plan is 18,136,547 common shares, representing 2.98% of the common shares outstanding.
Common shares underlying stock options that are not exercised are available for future stock option grants. Common shares underlying stock options that are exercised are not available for future stock option grants and the plan reserve declines by the number of common shares underlying the stock options.
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Burn Rates
|
For information about historical burn rates see page 53.
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Insider Participation Limits |
No stock options shall be granted to any participant if such grant, together with any other previously-established share-based compensation arrangement of the Corporation, could result in:
· the number of common shares issuable to insiders at any time pursuant to stock options and any other share-based compensation arrangements exceeding 10% of the issued and outstanding common shares; and
· the issuance to insiders, within a one-year period, of a number of common shares exceeding 10% of the issued and outstanding common shares.
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Exercise Price and Fair Market Value |
The exercise price of any stock option shall in no circumstances be lower than the fair market value of the common shares on the date on which the stock option is granted.
Fair market value is based on the volume-weighted average trading price of the common shares on the New York Stock Exchange on the business day immediately preceding such date. |
B1
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SCHEDULE B SUMMARY OF NUTRIEN LONG-TERM INCENTIVE PLANS
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B2
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SCHEDULE B SUMMARY OF NUTRIEN LONG-TERM INCENTIVE PLANS
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Other Elements of Stock Option Plan
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Adjustments
|
The Stock Option Plan includes adjustment provisions.
|
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Trading Blackout |
Where a stock option expires during, or within 10 business days after a trading blackout period imposed by the Corporation, then the stock option shall expire 10 days after the blackout period is lifted.
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Amending Provisions |
Subject to the restrictions below, the HR&C Committee may amend, suspend, or discontinue the Stock Option Plan, and amend or discontinue any stock options granted under the Stock Option Plan, at any time, provided that no such amendment may materially and adversely affect any previously granted stock option without the consent of the participant, except to the extent required by applicable law.
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Without limiting the foregoing, the HR&C Committee can amend the Stock Option Plan, and the terms of any stock option granted under the Stock Option Plan, without obtaining shareholder approval, to:
amend the vesting provisions in circumstances involving the death, disability, retirement or termination of participants;
amend the provisions relating to a change in control;
amend the termination provisions (other than with respect to matters requiring shareholder approval as described below);
amend the eligibility requirements of eligible participants which would have the potential of broadening insider participation (other than to include non-executive directors as eligible participants that would require shareholder approval, as described below);
add any form of financial assistance;
amend a financial assistance provision which is more favorable to eligible participants; or
make other amendments of a housekeeping nature.
Shareholder approval is required to amend the Stock Option Plan to:
reduce the exercise price or cancel and reissue stock options or other entitlements so as to, in effect, reduce the exercise price;
change the manner of determining the exercise price so that the exercise price is less than the fair market value on the grant date;
extend the term of a stock option beyond its original expiry date (except as may be imposed by a trading blackout);
increase the fixed maximum number of common shares reserved for issuance (including to change from a fixed maximum number of shares to a fixed maximum percentage of shares);
revise the insider participation limits;
permit stock options to be transferred or assigned other than in accordance with the existing provisions;
include non-executive directors as eligible participants; or
amend the amending provisions.
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Nutrien PSU/RSU Plans
The PSU/RSU Plan was implemented by the Board effective January 1, 2018 to provide for awards of PSUs and RSUs of Nutrien. The following provisions apply in the event that the participant ceases to be entitled to participate in the PSU/RSU Plan.
B3
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SCHEDULE B SUMMARY OF NUTRIEN LONG-TERM INCENTIVE PLANS
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B4
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SCHEDULE C SUMMARY OF AGRIUM LEGACY INCENTIVE COMPENSATION PLANS
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Schedule C Summary of Agrium Legacy Incentive Compensation Plans
Effective as of the closing of the merger, the Corporation assumed the legacy Incentive Compensation Plans of Agrium and the outstanding awards issued under the Legacy Incentive Compensation Plans. The following information relates to the Agrium Legacy Incentive Compensation Plans.
Agrium Legacy Stock Option / TSAR Plan
This section presents prescribed disclosure concerning Agriums Amended and Restated Stock Option / Tandem Stock Appreciation Rights (TSAR) Plan (the Agrium Legacy Stock Option Plan ) as required under Form 51-102F5 Information Circular and TSX Company Manual Section 613 Security-Based Compensation Arrangements . The Agrium Legacy Stock Option Plan is Agriums only share-based compensation arrangement for purposes of the rules of the Toronto Stock Exchange.
No further awards may be issued under the Agrium Legacy Stock Option Plan. Legacy awards will continue to vest and be exercised or settled until all stock options are exercised, expire or are terminated in accordance with their terms (the last expiry date is in 2027), following which the Agrium Legacy Stock Option Plan will be terminated.
The following information is given as of December 31, 2018. Outstanding awards denominated in Agrium common shares have been converted to Nutrien common shares (with corresponding adjustments to the exercise prices) using an exchange ratio of 2.23 Nutrien common shares for every one Agrium common share.
C1
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SCHEDULE C SUMMARY OF AGRIUM LEGACY INCENTIVE COMPENSATION PLANS
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C2
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SCHEDULE C SUMMARY OF AGRIUM LEGACY INCENTIVE COMPENSATION PLANS
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C3
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SCHEDULE C SUMMARY OF AGRIUM LEGACY INCENTIVE COMPENSATION PLANS
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C4
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SCHEDULE C SUMMARY OF AGRIUM LEGACY INCENTIVE COMPENSATION PLANS
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Other Elements of Agrium Legacy Stock Option Plan
|
||||
Adjustments |
The number of stock options granted may be adjusted in the event of a corporate reorganization or change in control.
With respect to stock options granted on or before December 31, 2012, the optionee may vote or otherwise participate in change in control transactions on the same basis as if their vested and unvested Options had been exercised.
The board has the authority, in connection with a change in control transaction, to accelerate vesting in order to permit optionees to exercise all of their stock options subject to and conditional upon the completion of such transaction.
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|||
Trading Blackout |
Where the stock option expires during, or within five trading days after a trading blackout period, then the stock option shall expire 10 days after the blackout period is lifted.
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Agrium Legacy Stock Appreciation Rights (SAR) Plan
This section describes certain provisions of Agriums Amended and Restated Stock Appreciation Rights (SAR) Plan (the Agrium Legacy SAR Plan ), pursuant to which senior executives and senior leaders outside of Canada received stand-alone SARs (instead of stock options) which gave the holder the right to receive, on exercise of the SAR, a cash amount (less withholdings) equal to the appreciation in value of the underlying common shares between the day of grant and the day of exercise.
No further awards may be issued under the Agrium Legacy SAR Plan. Legacy awards will continue to vest and be exercised or settled until all SARs are exercised, expire or are terminated in accordance with their terms (the last expiry date is in 2027), following which the Agrium Legacy SAR Plan will be terminated.
Description of Agrium Legacy SAR Plan
|
||||
Eligibility |
Granted at the discretion of the board.
Eligible participants are officers and employees.
|
|||
Exercise Price |
The board can determine the exercise price. Where not determined, the exercise price will be the closing price on the NYSE in U.S. dollars on the last day preceding the date of grant.
In no circumstance may the exercise price be lower than the market price of the common shares on the date of the grant of the SAR.
|
|||
Vesting |
Unless otherwise determined by the board at the time of grant, SARs vest 25% on the first, second, third and fourth anniversaries of the date of grant.
|
|||
Term |
Unless otherwise determined by the board at the time of grant, SARs expire 10 years from the date the SARs are granted.
|
|||
Circumstances Involving Cessation of Entitlement to Participate
|
Vesting and expiry provisions in the Agrium Legacy SAR Plan applicable for SAR holders who leave the corporation are materially the same as those that apply under the Agrium Legacy Stock Option Plan described above. |
Agrium Legacy PSU/RSU Plan
This section describes the provisions that apply in the event that the participant ceases to be entitled to participate in Agriums Amended and Restated Performance Share Unit and Restricted Share Unit Plan (the Agrium Legacy PSU/RSU Plan ). No further awards may be issued under the Agrium Legacy PSU/RSU Plan. Legacy awards will continue to vest and be settled until all awards are settled, expire or are terminated in accordance with their terms (the last performance cycle ends December 31, 2019), following which the Agrium Legacy PSU/RSU Plan will be terminated.
C5
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SCHEDULE C SUMMARY OF AGRIUM LEGACY INCENTIVE COMPENSATION PLANS
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C6
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SCHEDULE C SUMMARY OF AGRIUM LEGACY INCENTIVE COMPENSATION PLANS
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Circumstances Involving Cessation of Entitlement to Participate - RSUs
|
||||
Change in Control |
RSUs do not vest on change in control unless:
the successor company fails to continue or substitute the RSUs, in which case the RSU holder is entitled to a lump sum payment equal to the market value of vested RSUs held by the RSU holder in their account as of the date of the change in control, with immediate full vesting of 100% of their RSUs as of such date (unless otherwise determined by the board); or
the RSUs are continued or substituted and the RSU holder is terminated without cause or resigns for good reason within two years following the change in control, in which
case the RSU holder is entitled to a lump sum payment equal to the market value of vested RSUs held by the RSU holder in their account as of the termination date, with immediate full vesting of 100% of their RSUs as of such date (unless otherwise determined by the board).
The board has the authority, in connection with a change in control transaction, to accelerate vesting in order to permit RSU holders to redeem all of their RSUs for a lump sum payment equal to the market value of vested RSUs held by the RSU holder in their account as of the date of the change in control, with immediate full vesting of 100% of their RSUs as of such date (unless otherwise determined by the board).
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C7
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SCHEDULE D SUMMARY OF POTASHCORP LEGACY INCENTIVE COMPENSATION PLANS
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Schedule D Summary of PotashCorp Legacy Incentive Compensation Plans
Effective as of the closing of the merger, the Corporation assumed the legacy Incentive Compensation Plans of PotashCorp and the outstanding awards issued under the Legacy Incentive Compensation Plans. The following information relates to the legacy Incentive Compensation Plans of PotashCorp.
PotashCorp Legacy 2016 Long-Term Incentive Plan
This section presents prescribed disclosure concerning PotashCorps 2016 Long-Term Incentive Plan (the PotashCorp Legacy 2016 LTIP ) as required under Form 51-102F5 - Information Circular and TSX Company Manual Section 613 - Security-Based Compensation Arrangements . The PotashCorp Legacy 2016 LTIP is a share-based compensation arrangement for purposes of the rules of the Toronto Stock Exchange.
No further awards may be issued under the PotashCorp Legacy 2016 LTIP. Legacy awards will continue to vest and be exercised or settled until all stock options are exercised, expire or are terminated in accordance with their terms (the last expiry date is in 2027), and all PSUs are settled, expire or are terminated in accordance with their terms (the last performance cycle ends December 31, 2019), following which the PotashCorp Legacy 2016 LTIP will be terminated.
The following information is given as of December 31, 2018. Outstanding awards denominated in PotashCorp common shares have been converted to Nutrien common shares (with corresponding adjustments to the exercise prices) using an exchange ratio of 0.4 Nutrien common shares for every one PotashCorp common share.
Description of PotashCorp Legacy 2016 LTIP
|
||||
Eligibility |
Officers and employees of the Corporation and its subsidiaries are eligible to participate in the PotashCorp Legacy 2016 LTIP if selected by the PotashCorp HR&C Committee.
Non-executive directors, non-employee contractors and third party vendors are not eligible to participate in the PotashCorp Legacy 2016 LTIP.
|
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Types of Awards |
The 2016 LTIP provides for awards of stock options and PSUs. |
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Stock Options:
Form of Payment : Stock options to purchase treasury common shares at the exercise price (which shall not be less than the Fair Market Value) determined at the date of grant.
Exercise Period / Performance Period : Stock options generally vest in full on the third anniversary of the grant date.
PSUs:
Form of Payment : PSUs are settled in treasury common shares, cash or a combination of both.
Exercise Period / Performance Period : Determined by the PotashCorp HR&C Committee.
|
||||
Number of Securities Issuable and Issued as at December 31, 2018 |
As at December 31, 2018, there were 608,535,477 outstanding common shares of Nutrien. As at December 31, 2018:
Plan Fixed Maximum the total fixed maximum number of common shares issuable under the PotashCorp Legacy 2016 LTIP, including common shares that have been issued upon the exercise of stock options and settlement of PSUs since inception of the PotashCorp Legacy 2016 LTIP, is 8,400,000 common shares, representing 1.38% of the common shares outstanding; |
D1
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SCHEDULE D SUMMARY OF POTASHCORP LEGACY INCENTIVE COMPENSATION PLANS
|
Description of PotashCorp Legacy 2016 LTIP
|
||||
Total Stock Options Exercised and PSUs Settled Since Plan Inception 374,195 stock options have been exercised and 21,870 PSUs have been settled (of which none were settled in cash and 21,870 were settled in common shares) under the PotashCorp Legacy 2016 LTIP since its inception in 2016, representing 0.07% of the common shares outstanding;
Number of Common Shares Underlying Outstanding Stock Options and PSUs the total number of common shares issuable on the exercise of actual stock options and PSUs that have been granted and remain outstanding under the PotashCorp Legacy 2016 LTIP is 1,511,084 common shares, representing 0.25% of the common shares outstanding; and
Number of Common Shares Available for Future Grants the total number of common shares that remain available for future stock option and PSU grants is Nil.
Common shares underlying stock options that are not exercised are not available for future stock option grants.
In 2018, no stock options were granted. |
||||
Burn Rates |
For information about the three-year historical burn rates under the PotashCorp Legacy Share-Settled Plans see page 53. |
|||
Insider Participation Limits |
No awards will be granted to insiders if such awards, together with any other security based compensation arrangements of the Corporation, could result in:
the number of common shares issuable to insiders at any time under the security based compensation arrangements of the Corporation exceeding 10% of the issued and outstanding common shares; or
the issuance to insiders under the security based compensation arrangements of the Corporation, within any one year period, of a number of common shares exceeding 10% of the issued and outstanding common shares.
Subject to an adjustment provision, no participant will be granted stock options, in the aggregate, for more than 300,000 common shares during any calendar year. |
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Fair Market Value |
Fair market value is generally the closing price of a common share on the TSX or the NYSE (for participants resident in the U.S. or others designated by the PotashCorp HR&C Committee) on the trading day immediately prior to the date on which fair market value is determined. |
Description of Stock Options under PotashCorp Legacy 2016 LTIP
|
||||
Exercise Price |
The PotashCorp HR&C Committee can determine the exercise price of the stock options.
In no circumstance may the exercise price be lower than the fair market value of the common shares on the date of the grant of the stock options. |
|||
Vesting |
Stock options generally vest in full on the third anniversary of the grant date. |
|||
Exercise Period, Term and Manner of Exercise |
Stock options are generally exercisable once they are vested until the end of their scheduled expiry date. Stock options will generally have a scheduled expiry date of 10 years from the date of grant of the stock option. In no event will a stock option have a scheduled expiry date of later than 10 years from the date of the grant.
Stock options may be exercised:
by cash settlement;
if permitted by the Corporation, by a broker-assisted cashless exercise arrangement; or
if permitted by the Corporation, by a net exercise arrangement. |
D2
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SCHEDULE D SUMMARY OF POTASHCORP LEGACY INCENTIVE COMPENSATION PLANS
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Circumstances Involving Cessation of Entitlement to Participate Stock Options
|
||||
Retirement |
Unvested stock options as of the date of retirement continue to vest to the end of the 36th month following the calendar month of the date of retirement.
Vested stock options, including those that vest post-retirement, must be exercised by the earlier of their scheduled expiry date and the end of the 36th calendar month following the calendar month of the date of retirement. |
|||
Termination without Cause - Not Involving a Change in Control |
Vested stock options as of the date of termination must be exercised by the earlier of the expiry date and the end of the 3rd calendar month following the calendar month of the date of termination. |
|||
Change in Control |
Stock options do not vest on change in control unless:
the successor company fails to continue or substitute the stock options; or
the stock options are continued or substituted and the optionee is terminated without cause or resigns for good reason within two years following the change in control.
Vested stock options must be exercised by their expiry date. |
|||
Termination with Cause |
Vested stock options as of the date of termination are exercisable until the earlier of their scheduled expiry date and the end of the calendar month following the calendar month of the date of termination. |
Description of PSUs under PotashCorp Legacy 2016 LTIP
|
||||
Performance Metrics and Performance Period |
The PotashCorp HR&C Committee determines the performance metrics and the performance period that apply to each grant of PSUs, and the formula for determining the number of PSUs that will be earned if performance is at or above the minimum or threshold level of performance or is at or above the target levels of performance, but falls short of maximum achievement. |
|||
Vesting |
PSUs generally vest at the completion of the performance period. Following each performance period, the performance criteria will be measured and the formula will be applied to calculate the number of PSUs that vest (if any). |
|||
Settlement |
At the end of the performance period, each vested PSU shall be paid in cash, in common shares, or a combination of both. |
Circumstances Involving Cessation of Entitlement to Participate PSUs
|
||||
Retirement |
PSUs held by the participant continue to vest pro-rata and are settled and paid at the end of the applicable performance periods(s), based on actual achievement of the applicable performance metric for each performance period. |
|||
Termination without Cause - Not Involving a Change in Control |
PSUs held by the participant continue to vest pro-rata and are settled and paid at the end of the applicable performance periods(s), based on actual achievement of the applicable performance metric for each performance period. |
|||
Change in Control |
PSUs do not vest on a change in control unless:
the surviving or successor company fails to continue or assume the PSUs, or replace the PSUs with an equivalent award; or
the PSUs are continued, assumed or replaced and the PSU holder is terminated without cause or resigns for good reason within two years of the change in control.
The date of the change in control or the date of termination (as applicable) is the early measurement date for purposes of calculating performance.
In each case vested PSUs are settled and paid in cash at the greater of target and actual achievement. |
D3
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SCHEDULE D SUMMARY OF POTASHCORP LEGACY INCENTIVE COMPENSATION PLANS
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Other Elements of PotashCorp Legacy 2016 LTIP
|
||||
Assignability |
PSUs are not assignable except as may be provided in a participants award agreement or, at the election of the PotashCorp HR&C Committee, awards may be assigned to a permitted assignee. |
|||
Amending Procedure |
Subject to the restrictions below and compliance with the rules of the TSX and NYSE, the board may amend, suspend, or terminate the PotashCorp Legacy 2016 LTIP or the terms of any previously granted award without obtaining approval of the shareholders of the Corporation. Without limiting the foregoing, the board can amend the PotashCorp Legacy 2016 LTIP without obtaining shareholder approval to make:
housekeeping amendments; amendments to the vesting provisions; and amendments necessary to comply with law, stock exchange rules or any other regulatory body.
Shareholder approval is required to amend the PotashCorp Legacy 2016 LTIP or an award agreement to:
increase the maximum number of common shares that may be issued;
reduce the exercise price of an outstanding stock option (including by cancelling stock options in exchange for cash, PSUs, or stock options with a lower exercise price);
extend the term of any stock option beyond 10 years (except in the event of a black-out period) or the date a stock option would otherwise expire;
amend the PotashCorp Legacy 2016 LTIP to allow a stock option to have a term of greater than 10 years (except in the event of a blackout period);
increase or delete the percentage limits on common shares issued or issuable to insiders;
increase or delete the limits on common shares that may be issuable in any one calendar year to a participant;
expand the assignment provisions;
permit non-executive directors to participate in the PotashCorp Legacy 2016 LTIP or otherwise add to the categories of participants who may participate in the PotashCorp Legacy 2016 LTIP; and
amend the provisions with respect to permissible amendments.
No amendment or termination of the PotashCorp Legacy 2016 LTIP or any award agreement will be made if it would adversely affect the existing rights of a participant under the PotashCorp Legacy 2016 LTIP or any award agreement without the participants written consent, unless the Corporation chooses to acquire such rights at fair market value as described in the PotashCorp Legacy 2016 LTIP. |
|||
Financial Assistance |
The Corporation does not provide financial assistance to participants in relation to stock options or PSUs. |
|||
Recoupment |
Participants and awards under the PotashCorp Legacy 2016 LTIP are subject to the terms of the Corporations Policy on Recoupment of Unearned Compensation. |
|||
Adjustments |
The PotashCorp Legacy 2016 LTIP includes adjustment provisions. |
|||
Trading Blackout |
Where a stock option expires during, or within 10 trading days after a trading blackout period, the expiration date of the stock option will be automatically extended to the 10th trading day after the end of the blackout period. |
D4
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SCHEDULE D SUMMARY OF POTASHCORP LEGACY INCENTIVE COMPENSATION PLANS
|
PotashCorp Legacy Performance Options Plans
This section presents prescribed disclosure concerning PotashCorps 2009 Performance Stock Option Plan, the 2010 Performance Stock Option Plan, the 2011 Performance Stock Option Plan, the 2012 Performance Stock Option Plan, the 2013 Performance Stock Option Plan, the 2014 Performance Stock Option Plan, and the 2015 Performance Stock Option Plan (collectively, the PotashCorp Legacy Performance Option Plans ) as required under Form 51-102F5 - Information Circular and TSX Company Manual Section 613 - Security-Based Compensation Arrangements . The PotashCorp Legacy Performance Option Plans are share-based compensation arrangements for purposes of the rules of the Toronto Stock Exchange.
No further awards may be issued under the PotashCorp Legacy Performance Option Plans. Legacy awards will continue to vest and be exercised and settled until all stock options are exercised, expire or are terminated in accordance with their terms (the last expiry date is in 2025), following which the PotashCorp Legacy Performance Option Plans will be terminated.
The following information is given as of December 31, 2018. The provisions of each PotashCorp Legacy Performance Option Plan are substantially the same for purposes of this disclosure and accordingly the PotashCorp Legacy Performance Option Plans are treated below as one plan. Outstanding awards denominated in PotashCorp common shares have been converted to Nutrien common shares (with corresponding adjustments to the exercise prices) using an exchange ratio of 0.4 Nutrien common shares for every one PotashCorp common share.
Description of PotashCorp Legacy Performance Option Plans
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Eligibility |
The eligibility requirements in the PotashCorp Legacy Performance Option Plans are substantially the same as those that apply under the PotashCorp Legacy 2016 LTIP described above.
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Number of Securities Issuable and Issued as at December 31, 2018 |
As at December 31, 2018, there were 608,535,477 issued and outstanding common shares of Nutrien. As at December 31, 2018:
Plan Fixed Maximum the total fixed maximum number of common shares issuable under PotashCorp Legacy Performance Option Plans, including common shares that have been issued upon the exercise of stock options under the PotashCorp Legacy Performance Option Plans, is 6,365,900 common shares, representing 1.05% of the common shares outstanding;
Total Stock Options Exercised Since Plan Inception a total of 205,050 (stock options have been exercised under the PotashCorp Legacy Performance Option Plans, representing 0.03% of the common shares outstanding;
Number of Common Shares Underlying Outstanding Stock Options the total number of common shares issuable on the exercise of actual stock options that have been granted and remain outstanding under the PotashCorp Legacy Performance Option Plan is 2,983,506 common shares, representing in the aggregate 0.49% of the common shares outstanding; and
Number of Common Shares Available for Future Grants the total number of common shares that remain available for future stock option is nil.
Common shares underlying stock options that are not exercised or that are terminated are not available for future stock option grants.
In 2018, no stock options were granted under any of the PotashCorp Legacy Performance Option Plans.
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Burn Rates |
For information about the three-year historical burn rates under the PotashCorp Legacy Share-Settled Plans see page 53.
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Insider Participation Limits |
The plan limits in the PotashCorp Legacy Performance Option Plans are substantially the same as those that apply under the PotashCorp Legacy 2016 LTIP described above.
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Fair Market Value |
The calculation of fair market value under in the PotashCorp Legacy Performance Option Plans is substantially the same as the calculation of fair market value under the PotashCorp Legacy 2016 LTIP described above.
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D5
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SCHEDULE D SUMMARY OF POTASHCORP LEGACY INCENTIVE COMPENSATION PLANS
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Description of PotashCorp Legacy Performance Option Plans
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Exercise Price |
Each stock option grant specifies the exercise price.
In no circumstance may the exercise price be lower than the fair market value of the common shares on the date of the grant of the stock options.
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Performance Metrics and Performance Period |
The PotashCorp HR&C Committee determines the performance metrics that apply to each grant of stock options over a 3-year performance period. The formula for determining the number of stock options that will be earned if performance is at or above the minimum or threshold level of performance or is at or above the target levels of performance, but falls short of maximum achievement, is based on cash flow return on investment and weighted average cost of net debt and equity capital.
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Vesting |
Stock options generally vest over the 3-year performance period. Following each performance period, the performance criteria will be measured and the formula will be applied to calculate the number of stock options that vest (if any).
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Exercise Period and Term |
Stock options are generally exercisable once they are vested until the end of their scheduled expiry date. Stock options will generally have a scheduled expiry date of 10 years from the date of grant of the stock option.
In no event will a stock option have a scheduled expiry date of later than 10 years from the date of the grant.
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Circumstances Involving Cessation of Entitlement to Participate
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Retirement |
Unvested stock options as of the date of retirement continue to vest to the end of the 36th month following the calendar month of the date of retirement.
Vested stock options, including those that vest post-retirement, must be exercised by the earlier of their scheduled expiry date and the end of the 36th calendar month following the calendar month of the date of retirement.
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Termination without Cause - Not Involving a Change in Control |
Vested stock options as of the date of termination must be exercised by the earlier of the expiry date and the end of the 3rd calendar month following the calendar month of the date of termination.
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Change in Control |
Stock options do not vest on change in control unless:
the successor company fails to continue or substitute the stock options; or
the stock options are continued or substituted and the optionee is terminated without cause or resigns for good reason within two years following the change in control.
Vested stock options must be exercised by their expiry date.
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Termination with Cause |
Vested stock options as of the date of termination are exercisable until the earlier of their scheduled expiry date and the end of the calendar month following the calendar month of the date of termination.
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Other Elements of PotashCorp Legacy Performance Option Plans
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Assignability |
The assignability provisions in the PotashCorp Legacy Performance Option Plans are materially the same as those that apply under the PotashCorp Legacy 2016 LTIP described above.
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Amending Procedure
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The amending provisions in the PotashCorp Legacy Performance Option Plans are materially the same as those that apply under the PotashCorp Legacy 2016 LTIP described above.
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Financial Assistance
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The Corporation does not provide financial assistance to participants in relation to stock options.
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Recoupment
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Stock options are subject to recoupment or clawback by the Corporation.
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Adjustments
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The PotashCorp Legacy Performance Option Plans include adjustment provisions.
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Trading Blackout
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The provisions relating to trading blackouts in the PotashCorp Legacy Performance Option Plans are materially the same as those that apply under the PotashCorp Legacy 2016 LTIP described above.
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D6
Any questions and requests for assistance may be directed to the
Strategic Shareholder Advisor and Proxy Solicitation Agent:
The Exchange Tower
130 King Street West, Suite 2950, P.O. Box 361
Toronto, Ontario
M5X 1E2
www.kingsdaleadvisors.com
North American Toll Free Phone:
1-866-581-0507
Email: contactus@kingsdaleadvisors.com
Facsimile: 416-867-2271
Toll Free Facsimile: 1-866-545-5580
Outside North America, Banks and Brokers Call Collect: 416-867-2272
Exhibit 99.3
NUTRIEN LTD.
INSTRUMENT OF PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON THURSDAY, MAY 9, 2019 |
THIS PROXY IS SOLICITED ON BEHALF OF THE MANAGEMENT OF NUTRIEN LTD. (THE CORPORATION), AND WILL BE USED AT THE ANNUAL MEETING (THE MEETING) OF SHAREHOLDERS (THE SHAREHOLDERS) OF THE CORPORATION TO BE HELD ON MAY 9, 2019 AT 4:00 P.M. (SASKATOON TIME) AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
Notes to Proxy
1. |
A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON, WHO NEED NOT BE A SHAREHOLDER, TO ATTEND AND ACT ON HIS OR HER BEHALF AT THE MEETING OTHER THAN THE PERSONS DESIGNATED IN THIS FORM OF PROXY. THIS RIGHT MAY BE EXERCISED BY INSERTING SUCH OTHER PERSONS NAME IN THE BLANK SPACE PROVIDED FOR THAT PURPOSE AND STRIKING OUT THE OTHER NAMES OR BY COMPLETING ANOTHER PROPER FORM OF PROXY AND, IN EITHER CASE, BY DELIVERING THE COMPLETED FORM OF PROXY TO THE CORPORATION AS INDICATED BELOW. |
2. |
This form of proxy must be dated and executed by the Shareholder (using exactly the same name in which the common shares are registered) or by his or her attorney authorized in writing or, if the Shareholder is a body corporate, by a duly authorized officer or attorney thereof. A copy of any such authorization should accompany this form of proxy. Persons signing as executors, administrators, trustees, etc. should so indicate. If this form of proxy is not dated, it will be deemed to bear the date on which it was mailed to the Shareholder by the Corporation. |
3. |
In order for this form of proxy to be effective, it must be signed and deposited with AST Trust Company (Canada), Attention Proxy Department, P.O. Box 721, Agincourt, Ontario, M1S 0A1, so that it arrives not less than 48 hours (excluding Saturdays, Sundays and holidays) before the Meeting or any adjournment or postponement thereof. Late proxies may be accepted or rejected by the Chair of the Meeting at his or her discretion and the Chair of the Meeting is under no obligation to accept or reject any particular late proxy. The Chair of the Meeting may waive or extend the proxy cut-off without notice. |
VOTE USING THE TELEPHONE, INTERNET OR FAX 24 HOURS A DAY 7 DAYS A WEEK |
TO VOTE BY TELEPHONE
1-888-489-5760 |
TO VOTE USING THE INTERNET
WWW.ASTVOTEMYPROXY.COM |
TO VOTE BY FAX*
1-866-781-3111
(IN NORTH AMERICA)
*BOTH SIDES |
To vote by telephone or using the internet, you will need to provide your CONTROL NUMBER listed in this proxy. If you vote by telephone or using the internet, DO NOT mail or fax back this form of proxy.
If you are unable to attend the Meeting in person, kindly complete and execute this form of proxy and return it in the envelope provided f or that purpose. Proxies must be received by 4:00 p.m. (Saskatoon time) on May 7, 2019, or if the Meeting is adjourned or postponed, by not less than 48 hours (excluding Saturdays, Sundays, and holidays) before the time and date at which the Meeting is reconvened. |
If you have any questions or need help voting, please contact our strategic shareholder advisor and proxy solicitation agent, Kingsdale Advisors by toll-free telephone in North America at 1-866-581-0507 or collect call at 1-416-867-2272 outside North America, or by email at contactus@kingsdaleadvisors.com. |
Appointment of Proxyholder
The undersigned hereby appoints Charles V. Magro, or failing him, Derek G. Pannell, | Print the name of the person you are appointing: | |||||
OR
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as proxyholder of the undersigned, with full power of substitution, to attend, vote and act for and on behalf of the undersigned at the Meeting of the Shareholders of the Corporation to be held on May 9, 2019 at 4:00 p.m. (Saskatoon time), and at any adjournment or postponement of the Meeting, and on every ballot that may take place in consequence thereof to the same extent and with the same powers as if the undersigned were personally present at the Meeting, with authority to vote at the proxyholders discretion except as otherwise specified below.
Information on the following can be found in the Management Information Circular for the Meeting. Without limiting the general powers hereby conferred, the undersigned hereby directs the proxyholder to vote the common shares represented by this proxy in the following manner:
1. Election of Directors |
FOR | WITHHOLD | FOR | WITHHOLD | |||||||||||||||
01 | Christopher M. Burley | ☐ | ☐ | 07 | Alice D. Laberge | ☐ | ☐ | |||||||||||
02 | Maura J. Clark | ☐ | ☐ | 08 | Consuelo E. Madere | ☐ | ☐ | |||||||||||
03 | John W. Estey | ☐ | ☐ | 09 | Charles V. Magro | ☐ | ☐ | |||||||||||
04 | David C. Everitt | ☐ | ☐ | 10 | Keith G. Martell | ☐ | ☐ | |||||||||||
05 | Russell K. Girling | ☐ | ☐ | 11 | Aaron W. Regent | ☐ | ☐ | |||||||||||
06 | Miranda C. Hubbs | ☐ | ☐ | 12 | Mayo M. Schmidt | ☐ | ☐ |
2. Re-Appointment of KPMG LLP as Auditor |
FOR ☐ or WITHHOLD ☐ on the re-appointment of KPMG LLP, Chartered Accountants, as auditor of the Corporation.
3. Non-Binding Advisory Say on Pay |
FOR ☐ or AGAINST ☐ a non-binding advisory resolution to accept the Corporations approach to executive compensation.
THE COMMON SHARES REPRESENTED BY THIS PROXY WILL BE VOTED, WHERE THE SHAREHOLDER HAS GIVEN A CHOICE ABOVE, AS DIRECTED OR, IF NO DIRECTION IS GIVEN, FOR EACH OF THE ABOVE MATTERS OF BUSINESS. THE PERSON OR PERSONS APPOINTED UNDER THIS PROXY ARE CONFERRED WITH DISCRETIONARY AUTHORITY WITH RESPECT TO AMENDMENTS OR VARIATIONS OF THOSE MATTERS SPECIFIED IN THIS PROXY AND THE NOTICE OF MEETING, AND WITH RESPECT TO ANY OTHER MATTERS WHICH MAY BE PROPERLY BROUGHT BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF, IN EACH INSTANCE, TO THE EXTENT PERMITTED BY LAW, WHETHER OR NOT THE AMENDMENT, VARIATION OR OTHER MATTER THAT COMES BEFORE THE MEETING IS ROUTINE AND WHETHER OR NOT THE AMENDMENT, VARIATION OR OTHER MATTER THAT COMES BEFORE THE MEETING IS CONTESTED. THIS FORM OF PROXY SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTICE OF MEETING AND MANAGEMENT PROXY CIRCULAR.
The undersigned hereby revokes any prior proxies.
DATED this day of , 2019. |
CONTROL NUMBER
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Signature of Shareholder |
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Name of Shareholder (Please Print) |
Exhibit 99.4
NUTRIEN LTD.
OFFICERS CERTIFICATE
Pursuant to Section 2.20 of National Instrument 54-101
Communication with Beneficial Owners of Securities of a Reporting Issuer (the Instrument )
NOTICE OF ABRIDGEMENT
I, Robert A. Kirkpatrick, Vice President & Corporate Secretary of Nutrien Ltd. (the Corporation ) hereby certify for and on behalf of the Corporation in my capacity as an officer of the Corporation and not in my personal capacity, that:
1. |
The Corporation has arranged to have its proxy-related materials for the annual meeting of shareholders of the Corporation to be held on May 9, 2019 (the Meeting ) sent in compliance with the applicable timing requirements in sections 2.9 and 2.12 of the Instrument. |
2. |
The Corporation has arranged to have carried out all of the requirements of the Instrument, in addition to those described in paragraph 1 above. |
3. |
The Corporation is relying upon section 2.20 of the Instrument to abridge certain time periods specified in the Instrument applicable to the Meeting. |
The term proxy-related materials used in this Certificate shall have the meaning ascribed thereto in the Instrument.
DATED this 29 th day of March, 2019 | ||
Per: | (Signed) Robert A. Kirkpatrick | |
Robert A. Kirkpatrick | ||
Vice President & Corporate Secretary |