Proposal 1:

Election of Directors

Carpenter Technology has a strong Board, bringing diverse experience and perspectives in areas vital to our business of manufacturing, fabricating and distributing specialty metals, including products for critical industries in aerospace, defense, energy, medical, and industrial and consumer end-use markets.

Our Board has ten directors that serve in three classes, with each class serving for three-year terms. The term of office of one class of directors expires each year at the Annual Meeting. Steven E. Karol, Gregory A. Pratt and Tony R. Thene have been re-nominated for election at the 2020 Annual Meeting of Stockholders to serve for an additional term. If elected, their terms will expire at the 2023 Annual Meeting.

Unless otherwise directed by the stockholders, the shares represented by proxies will be voted for the three nominees. Each nominee has consented to being nominated as a director and is expected to serve as a director if elected.

Majority voting standard: Generally, directors will be elected by a majority of the votes cast. In the event of a contested election, where the number of candidates exceeds the number of directors to be elected, directors will be elected by a plurality of the votes cast.

Resignation policy: If an incumbent director fails to obtain the required majority vote in an uncontested election, that director must promptly tender a resignation to the Board. The Corporate Governance Committee will recommend to the Board whether to accept or reject the resignation. The Board will then decide whether to accept or reject the resignation and publicly disclose its decision within 90 days following certification of the election results.

Mandatory retirement policy: All non-management directors must retire at the Annual Meeting of Stockholders that occurs after the director attains age 72 unless the Board determines there are extraordinary circumstances that warrant a longer tenure. A management director (officer of Carpenter Technology) must retire from the Board at the earlier of attaining age 65 or retiring as an officer of Carpenter Technology.

Robert R. McMaster has attained the mandatory retirement age and will retire from the Board at this year’s Annual Meeting of Stockholders.

Nomination Process and Criteria for Selection

The Board’s Corporate Governance Committee is responsible for identifying and recommending qualified individuals to become members of the Board of Directors. Candidates are considered for nomination based upon various criteria, including their general training and experience in business, science, engineering, finance or administration, and their personal integrity and judgment. The Corporate Governance Committee will review and consider any candidates for director recommended by a stockholder of record who is entitled to vote at an annual meeting and who satisfies the notice, information and consent provisions set forth in Carpenter Technology’s By-laws. The Corporate Governance Committee will use the same evaluation criteria and process for director nominees recommended by stockholders as it uses for other director nominees. The Corporate Governance Committee functions pursuant to a written charter that was adopted and is reviewed annually by the Board. A copy of the charter is posted on Carpenter Technology’s website at www.carpentertechnology.com.

In evaluating candidates to recommend to the Board of Directors, the Corporate Governance Committee considers whether a candidate enhances the diversity of the Board. The Corporate Governance Committee considers a number of characteristics, including each candidate’s professional background and capabilities, knowledge of specific industries, and experience working outside the United States. We believe the foremost responsibility of a Carpenter Technology director is to represent the interests of stockholders, which requires directors to have time available to devote to Board activities. Accordingly, Carpenter Technology seeks to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to Carpenter Technology. Carpenter Technology believes there should be mostly independent directors on the Board, and it is our policy to avoid nominating outside professionals, such as lawyers, investment bankers, or accountants, whose firms provide services to Carpenter Technology.

 

10		CARPENTER TECHNOLOGY 2020 PROXY STATEMENT

Proposal 1: Election of Directors

 

Director Skills Summary

Our Board of Directors brings diverse experience and perspectives to areas critical to our business. Their collective knowledge ensures appropriate management and risk oversight and supports our strategy of long-term sustainable stockholder value creation.

 

Director Name

CEO Experience

Key Industry Experience

Operational Manufacturing Experience

Financial Expertise

Strategy Experience

International Experience

R&D or Innovation Experience

Dr. Viola L. Acoff

⬛

⬛

Dr. A. John Hart

⬛

⬛

I. Martin Inglis

⬛

⬛

⬛

⬛

⬛

⬛

Steven E. Karol

⬛

⬛

⬛

⬛

⬛

⬛

Kathleen Ligocki

⬛

⬛

⬛

⬛

⬛

Robert R. McMaster

⬛

⬛

⬛

⬛

Gregory A. Pratt

⬛

⬛

⬛

⬛

⬛

⬛

Tony R. Thene

⬛

⬛

⬛

⬛

⬛

⬛

Dr. Jeffrey Wadsworth

⬛

⬛

⬛

⬛

Stephen M. Ward, Jr.

⬛

⬛

⬛

⬛

⬛

 

				FOR		The Board of Directors recommends that you vote FOR the election of Steven E. Karol, Gregory A. Pratt and Tony R. Thene.

 

CARPENTER TECHNOLOGY 2020 PROXY STATEMENT		11

Proposal 1: Election of Directors

 

Nominees

 

Terms to Expire 2023

 

Steven E. Karol   Mr. Karol is Managing Partner and founder of Watermill Group, a private investment firm specializing in strategic and operational management. He serves on the Boards of private companies owned by the Watermill Group, including Tenere, Inc., Quality Metalcraft, Inc., Experi-Metal, Inc., Cooper and Turner, LTD., Beck Industries, and ENBI Global, Inc. Additionally, Mr. Karol is Chairman of the Board and CEO of HMK Enterprises, Inc., a privately-held investment company. From 2006 through February 2012, Mr. Karol served as a Director of Latrobe Specialty Metals, Inc. (“Latrobe”), a manufacturer and distributor of high-performance materials, which was partially owned by the Watermill Group during this time period and was acquired by Carpenter Technology in February 2012.   Mr. Karol is currently a member of the Board of Advisors of The Walter Group. He has also served as Chairman of the Board at Mooney Aircraft Company, Director and Chairman of the Audit Committee at StockerYale, and as a Director for Jeepers! Inc., Intelligent Energy Limited, Inter-Tel Corp., Superior Tubes, and Fine Tubes.   Mr. Karol is currently a member of the Young President’s Organization-Gold and has served as a member of the leadership team for this organization. During this time, Mr. Karol served on the International Board of Directors (1991—2001), Chairman of Strategic Planning (1993—1996), and as International President (1998—1999). He is currently a trustee of Tufts University and is Chairman of the Council of Advisors. He received the 2009 Tufts Distinguished Service Award. He is also past Chairman of the Board of Trustees of Vermont Academy, and a Director Emeritus at the National Brain Tumor Society. In addition, he is a co-founder and President of the Herbert M. Karol Cancer Foundation. He formerly served as a member of the Board of Overseers of the Boston Symphony Orchestra, and he is a Trustee Emeritus of the Boston Ballet.								Managing Partner, Watermill Group; Chairman and Chief Executive Officer, HMK Enterprises, Inc.   AGE                          DIRECTOR SINCE   66                   2012   COMMITTEES ▶  Strategy (Chair) ▶  Corporate Governance ▶  Compensation   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 0
Qualifications
▶  Chief Executive Officer   ▶  Deep Industry Knowledge   ▶  Strategic Experience   ▶  Financial Knowledge		Mr. Karol’s qualifications include, among other things, his extensive business experience and experience as a Chief Executive Officer and Chairman of the Board, which enable him to contribute to the Board’s operational and growth initiatives. In addition, Mr. Karol’s experience as a Director of Latrobe (a wholly owned subsidiary of Carpenter Technology) enhances his contributions to the Board, particularly with respect to his industry knowledge and expertise.

 

 

12		CARPENTER TECHNOLOGY 2020 PROXY STATEMENT

Proposal 1: Election of Directors

 

Gregory A. Pratt   Mr. Pratt is the Chairman of the Board of Directors and served as interim President and Chief Executive Officer of Carpenter Technology in fiscal years 2010 and 2015. Mr. Pratt is former Vice Chairman and director of OAO Technology Solutions, Inc. (“OAOT”), an information technology and professional services company. He joined OAOT in 1998 as President and Chief Executive Officer after OAOT acquired Enterprise Technology Group, Inc., a software engineering firm founded by Mr. Pratt. Mr. Pratt served as President and Chief Operations Officer of Intelligent Electronics, Inc. from 1991 through 1996, and was co-founder, and served variously as Chief Financial Officer and President, of Atari (US) Corporation from 1984 through 1991.   Mr. Pratt serves as Chairman of the Nominating and Governance Committee and a member of the Audit Committee at Tredegar Corporation, a public company listed on the NYSE, and as an independent director on the Board of Anterix, Inc., a public company listed on NASDAQ. He served as a Director and Audit Committee Chairman of AmeriGas Propane, Inc., a public company listed on the NYSE, for seven years.   Mr. Pratt is a National Association of Corporate Directors (“NACD”) Board Leadership Fellow. He has demonstrated his commitment to boardroom excellence by completing NACD’s comprehensive program of study for experienced corporate directors, which is a rigorous suite of courses spanning leading practices for boards and committees. He also was appointed to serve a three-year term on the Standing Advisory Group of the Public Company Accounting Oversight Board ending November 2016. He supplements his skill sets through ongoing engagement with the director community and access to leading practices.								Chairman, Carpenter Technology Corporation; Prior Vice Chair, OAO Technology Solutions, Inc.   AGE                          DIRECTOR SINCE   71                     2002   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 2 ▶  Tredegar Corporation (since 2014) ▶  Anterix Inc. (since June 2020)   FORMER DIRECTORSHIPS ▶  AmeriGas Propane, Inc. ▶  OAO Technology Solutions ▶  Intelligent Electronics ▶  Atari Corporation
Qualifications
▶  Finance   ▶  Information Technology   ▶  Operations   ▶  International		Mr. Pratt’s qualifications include, among other things, his extensive financial expertise, his leadership skills, and significant operational and international management experience as president of a large public company, all of which contribute to the valuable perspective Mr. Pratt brings to our Board of Directors.

 

Tony R. Thene   Mr. Thene was appointed to serve as Carpenter Technology’s President and Chief Executive Officer in July 2015, when he was also appointed to the Board of Directors. He previously served as Carpenter Technology’s Senior Vice President and Chief Financial Officer from January 2013 until June 2015. Prior to joining Carpenter Technology, Mr. Thene served as the Chief Financial Officer of the Engineered Products and Solutions Business Group at Alcoa, Inc. from 2010 until 2013. Previously, he served as Vice President, Controller and Chief Accounting Officer of Alcoa. He also previously held various other positions during his 23-year career at Alcoa, including Director, Investor Relations; Chief Financial Officer for the Flat Rolled Products Group; Chief Financial Officer for Alcoa World Alumina and Chemicals; and manufacturing manager for the Alumina Chemicals business.   Mr. Thene earned his undergraduate degree in Accounting from Indiana State University and his MBA from Case Western Reserve University, Cleveland, Ohio. He is also a Certified Public Accountant.   Mr. Thene serves on the Board of Directors of Neenah, Inc., a leading global specialty materials company focused on premium niche markets that value performance and image. He also serves on Furman University’s Board of Trustees.								President and Chief Executive Officer, Carpenter Technology Corporation   AGE                           DIRECTOR SINCE   59                     2015   COMMITTEES ▶  Strategy   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 1 ▶  Neenah, Inc. (since 2018)
Qualifications
▶  Finance   ▶  Key Industry Experience   ▶  Operations		Mr. Thene’s qualifications include his extensive accounting and financial knowledge, operational and manufacturing experience, and his leadership skills.

 

CARPENTER TECHNOLOGY 2020 PROXY STATEMENT		13

Proposal 1: Election of Directors

 

Terms to Expire 2021

 

Dr. A. John Hart   Dr. Hart is a Professor of Mechanical Engineering at the Massachusetts Institute of Technology (“MIT”). He is also the Director of the MIT Laboratory for Manufacturing and Productivity, and the MIT Center for Additive and Digital Advanced Production Technologies (APT). Dr. Hart joined the MIT faculty in 2013. He has worked extensively with industry via his research and as a consultant, and is a co-founder of Desktop Metal, Inc. and VulcanForms, Inc.   Dr. Hart earned his master’s and Ph.D. degrees from MIT, and his undergraduate degree from the University of Michigan. He has received numerous awards for his research and teaching accomplishments.								Professor of Mechanical Engineering at the Massachusetts Institute of Technology   AGE                          DIRECTOR SINCE   41                     2019   COMMITTEES ▶  Audit/Finance ▶  Strategy   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 0
Qualifications
▶  Research and Development   ▶  Key Industry Experience   ▶  Innovation		Dr. Hart’s qualifications include, among other things, his extensive work in the areas of additive manufacturing, advanced materials, machine design, and automation. His industry expertise and his background as a professor in these areas add valuable support to both the Board and Carpenter Technology.

 

Kathleen Ligocki   Kathleen Ligocki is a former CEO and current board member. From 2015 to 2019, she served as the CEO of Agility Fuel Solutions, a leader in sustainable clean energy storage and propulsion solutions for commercial vehicles around the world. From 2014 to 2015, Ms. Ligocki served as the Chief Executive Officer of Harvest Power, one of the leading organics management companies in North America with a mission to create a more sustainable future by transforming organic wastes into bioenergy and soil amendment products. From 2012 to 2014, she worked as an Operating Partner at Kleiner Perkins Caufield & Byers, one of Silicon Valley’s top venture capital providers. From 2010 to 2012, Ms. Ligocki served as Chief Executive Officer of Next Autoworks, an auto company with a unique low-cost business model. From 2008 to 2009, Ms. Ligocki served as Chief Executive Officer of GS Motors, a Mexico City based auto retailer owned by Grupo Salinas, a large Mexican conglomerate. From 2003 to 2007, she served as Chief Executive Officer of Tower Automotive, a Fortune 1000 global auto supplier. Ms. Ligocki also founded her own firm, Pine Lake Partner, a consultancy firm focused on start-ups and turnarounds. She has held executive positions at Ford and United Technologies where she led operations in the Americas, Europe, Africa, the Middle East and Russia. She started her career at General Motors in manufacturing leadership, sales and strategy/program management.   Ms. Ligocki earned a bachelor’s degree with highest distinction from Indiana University Kokomo and holds an MBA from the Wharton School at the University of Pennsylvania. She also has been awarded honorary doctorate degrees from Indiana University Kokomo and Central Michigan University. Currently she serves on the boards of Lear Corporation, a publicly traded Fortune 200 automotive supplier, PPG Industries, a Fortune 200 global coatings company, and Farmers Business Network, a venture capital-backed technology company in the agriculture sector. She is also a board member at the Indiana University Foundation.								Former CEO of Agility Fuel Solutions   AGE                           DIRECTOR SINCE   63                     2017   COMMITTEES ▶  Compensation (Chair) ▶  Corporate Governance ▶  Strategy   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 2 ▶  Lear Corporation (since 2012) ▶  PPG Industries (since 2020)
Qualifications
▶  Chief Executive Officer   ▶  International   ▶  Key Industry Experience   ▶  Operational Manufacturing Experience		Ms. Ligocki’s qualifications include, among other things, her Chief Executive Officer experience and leadership skills. Her international knowledge and operational manufacturing experience bring valuable insight to the Board.

 

14		CARPENTER TECHNOLOGY 2020 PROXY STATEMENT

Proposal 1: Election of Directors

 

Dr. Jeffrey Wadsworth   Dr. Wadsworth, now retired, was President and Chief Executive Officer of Battelle, a research and development enterprise headquartered in Columbus, Ohio from January 2009 to September 2017. He formerly was Executive Vice President, Global Laboratory Operations at Battelle, Director of Oak Ridge National Laboratory, Chief Executive Officer and President of UT-Battelle LLC, and Senior Vice President for U.S. Department of Energy Science Programs at Battelle. Previously, he was Director of Homeland Security Programs at Battelle and part of the White House Transition Planning Office during the formation of the U.S. Department of Homeland Security. From 1992 to 2002, Dr. Wadsworth was at the Lawrence Livermore National Laboratory in Livermore, California, where from 1995 he was Deputy Director for Science and Technology. Prior to that, he was with Lockheed Missiles and Space Company, Research and Development Division.   Dr. Wadsworth was elected to the U.S. National Academy of Engineering in 2005, has been elected Fellow of three technical societies, and holds numerous awards and honors. Dr. Wadsworth holds a bachelor’s degree in metallurgy, a Ph.D., and D.Met, and D.Eng. degrees from Sheffield University, England.								Retired President and Chief Executive Officer, Battelle   AGE                           DIRECTOR SINCE   70                     2006   COMMITTEES ▶  Science and Technology (Chair) ▶  Audit/Finance   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 1 ▶  3D Systems (since 2017)
Qualifications
▶  Chief Executive Officer   ▶  Research and Development   ▶  Key Industry Experience		Dr. Wadsworth’s qualifications include, among other things, his strong background in Carpenter Technology’s primary area of focus—metallurgy. Additionally, Dr. Wadsworth’s significant leadership experience in the research and development arena enriches his contributions to the Board, particularly with respect to innovation and strategy matters.

 

Terms to Expire 2022

 

Dr. Viola L. Acoff   Dr. Acoff is currently the Associate Dean for Undergraduate and Graduate Programs at The University of Alabama College of Engineering, a position she has held since 2014. Dr. Acoff joined the faculty at The University of Alabama in 1994. Since 2004, she has been a full professor in the University’s Department of Metallurgical and Materials Engineering, where she served as Department Head from 2009 to 2014. Dr. Acoff also led the Department of Chemical and Biological Engineering. She is a Doctor of Philosophy in Materials Engineering and holds graduate and undergraduate degrees in the same field. All degrees were earned at the University of Alabama at Birmingham.   Dr. Acoff also serves on the Executive Board of Boy Scouts of America (Black Warrior Council), the Board of Trustees for TMS Foundation, and the Four Little Girls Memorial Fund. She holds multiple awards, honors, and publications.								Associate Dean for Undergraduate and Graduate Programs at the University of Alabama College of Engineering   AGE                          DIRECTOR SINCE   53                   2019   COMMITTEES ▶  Corporate Governance ▶  Compensation ▶  Science and Technology   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 0
Qualifications
▶  Innovation   ▶  R&D   ▶  Intellectual Property		Dr. Acoff’s qualifications include, among other things, her expertise in additive manufacturing, advanced materials, welding metallurgy, physical metallurgy and materials characterization. Additionally, Dr. Acoff’s strong background as a professor in the metallurgical and materials area enables her to contribute valuable knowledge to our Board.

 

CARPENTER TECHNOLOGY 2020 PROXY STATEMENT		15

Proposal 1: Election of Directors

 

I. Martin Inglis   Mr. Inglis joined Battelle, a research and development enterprise headquartered in Columbus, Ohio, in 2004, and served as Executive Vice President and Chief Operating Officer, retiring in July 2014. Through July 2013, he also served as Chief Financial Officer. Previously, he had retired as Group Vice President, Business Strategy for Ford Motor Company. He joined Ford of Europe in London in 1971 and held various finance and operations positions in international and domestic markets. He was named head, Global Products and Business Strategy, and elected a corporate Vice President in 1996; President, Ford South America, in 1999; head, Ford North America, in 2000; and Chief Financial Officer in 2001. Mr. Inglis also served on the Advisory Board of three venture funds (Reservoir Ventures, Battelle Ventures, and Fletcher Spaght), stepping down in mid-2015 from the first two.   Mr. Inglis is active in local charities and serves on the Board of Breckenridge Creative Arts where he is the Treasurer. He served as the Chairman of the Columbus Symphony Orchestra for six years through 2014. He holds a bachelor’s degree in business economics from Strathclyde University, Glasgow, Scotland.								Retired Chief Operating Officer, Battelle; Previous Chief Financial Officer, Ford Motor Company   AGE                          DIRECTOR SINCE   69                     2003   COMMITTEES ▶  Audit/Finance (Chair) ▶  Strategy   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 0
Qualifications
▶  Finance   ▶  Strategic Experience   ▶  Labor Relations		Mr. Inglis’ qualifications include, among other things, his extensive financial expertise and background as a Chief Financial Officer in both the public and private sectors. Additionally, Mr. Inglis’ substantial operational and labor relations experience and broad international knowledge enable him to provide valuable perspective to support Carpenter Technology’s growth strategies.

 

Stephen M. Ward, Jr.   Mr. Ward is the retired President and Chief Executive Officer of Lenovo Corporation, the international computer company formed by the acquisition of IBM’s PC business by Lenovo. Mr. Ward is a member of the founding team of C3.ai, the leading developer of Artificial Intelligence enterprise platforms and serves as a board member and Compensation Committee Chairperson at C3.ai. Mr. Ward is co-founder of E2open, a leading provider of supply chain software applications. Mr. Ward also serves on the Board of KLX Energy Services Holdings, Inc. where he is Chair of the Governance Committee.   Prior to joining Lenovo, Mr. Ward was senior vice president and general manager of IBM’s Personal Systems Group, responsible for the Personal Computing Division, the Retail Store Solutions Division, and the Printing Systems Division. In his 26-year career with IBM, he also served as IBM’s Chief Information Officer, and IBM Vice President of Business Transformation, directing business process and information technology investments. Mr. Ward was also general manager of IBM’s Global Industrial Sector, responsible for the marketing, sales, and service of IBM products and services to all manufacturing and industrial companies worldwide and General Manager of the IBM ThinkPad product lines. Mr. Ward began his career at IBM as an engineer in the Storage Products Division. He held various management positions in manufacturing, production control, and project development for disk drive, tape, and optical storage projects and software development, and was also an assistant to the IBM chairman.   Previously, he held positions on the boards of Lenovo, E-Ink, E2open, ODVision, and KLX Aerospace. Mr. Ward earned a BS degree in mechanical engineering from California Polytechnic State University at San Luis Obispo.								Retired President and Chief Executive Officer, Lenovo Corporation   AGE                           DIRECTOR SINCE   65                     2001   COMMITTEES ▶  Corporate Governance (Chair) ▶  Compensation ▶  Science and Technology   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 1 ▶  KLX Energy Services Holdings, Inc. (since 2018)
Qualifications
▶  Chief Executive Officer   ▶  Chief Information Officer   ▶  Information Technology and Digital Transformation   ▶  Innovation   ▶  International Markets Experience		Mr. Ward’s qualifications include, among other things, his broad executive experience and focus on General Management, Digital Transformation, Cyber, Product and Services innovation, which enable him to share with the Board valuable perspectives on a variety of issues relating to management, strategic planning, tactical capital investments, and international growth.

 

16		CARPENTER TECHNOLOGY 2020 PROXY STATEMENT

Proposal 1: Election of Directors

 

 

Robert R. McMaster   Mr. McMaster held various positions at KPMG, LLP, an international audit, advisory and tax services firm, from May 1970 to June 1997, including Ohio Valley Area Managing Partner. He served from 1992 to 1997 as a member of KPMG’s Management Committee. From June 1997 to February 2005, Mr. McMaster was Chairman and Chief Executive Officer of Westward Communications and President and Chief Executive Officer of its successor company, ASP Westward Holdings, publishers of community newspapers in Texas, Arkansas, and Colorado.   Mr. McMaster serves as Chairman of the Board and Audit Committee Chairman of Sally Beauty Holdings Inc., a public company listed on the NYSE. Additionally, from September 2008 through May 2013, Mr. McMaster served as Senior Financial Advisor to the Chairman of Worthington Industries, a diversified metal processing company. He also is a former Board member of American Eagle Outfitters, Inc. and Dominion Homes Inc.   He has been active in a wide variety of community affairs organizations in the Columbus, Ohio region. He received his B.S., magna cum laude, in accounting from Miami University, Oxford, Ohio in 1970, and is the recipient of the Haskins & Sells Foundation Award for excellence in accounting.								Retired Chairman and Chief Executive Officer, Westward Communications; Prior Area Managing Partner, KPMG, LLP   AGE                           DIRECTOR SINCE   72                     2007   COMMITTEES ▶  Audit/Finance ▶  Science and Technology   CURRENT NON-CARPENTER TECHNOLOGY PUBLIC DIRECTORSHIPS 1 ▶  Sally Beauty Holdings Inc. (since 2006)   FORMER DIRECTORSHIPS ▶  American Eagle Outfitters, Inc. ▶  Dominion Homes Inc.
Qualifications
▶  Chief Executive Officer   ▶  Accounting and Finance		Mr. McMaster’s qualifications include, among other things, his extensive accounting and financial expertise and background as managing partner at a large international firm providing audit, tax and advisory services.

 

CARPENTER TECHNOLOGY 2020 PROXY STATEMENT		17

Corporate Governance

Carpenter Technology’s business, property and affairs are managed under the direction of its Board of Directors in accordance with the General Corporation Law of the State of Delaware and Carpenter Technology’s Certificate of Incorporation and By-Laws. While Carpenter Technology’s non-employee directors are not involved in day-to-day operating details, they are kept informed of Carpenter Technology’s business through written reports and documents provided to them regularly, as well as by operating, financial and other reports presented by Carpenter Technology’s officers during meetings of the Board of Directors and its committees.

Board Information

Majority Voting Standard for Election of Directors

The By-Laws provide that directors will be elected by a majority of the votes cast except in the event of a contested election, where the number of candidates for election exceeds the number of directors to be elected. In a contested election, directors will be elected by a plurality of the votes cast.

Board Independence

In determining independence, each year the Board evaluates whether directors have a “material relationship” with Carpenter Technology. To assess the “materiality” of a director’s relationship with Carpenter Technology, the Board considers all relevant facts and circumstances, including the individuals or organizations with which the director has an affiliation. When a director is affiliated with one of Carpenter Technology’s service providers or customers, the Board considers how often or regularly services are provided, whether the services are being carried out at arm’s length in the ordinary course of business, and whether the services are being provided substantially on the same terms as those prevailing at the time for unrelated parties in comparable transactions.

Mr. Thene was appointed Carpenter Technology’s President and CEO and a member of Carpenter Technology’s Board of Directors effective July 1, 2015. With the exception of Mr. Thene, all other members of the Board of Directors qualify as independent directors under the applicable requirements of the Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange (the “NYSE”). Board committees also satisfy applicable requirements for certain of their members to qualify as independent directors.

Board Leadership Structure

At Carpenter Technology, the roles of Chairman and Chief Executive Officer are split into two separate positions. The Board believes this split is the most appropriate leadership structure for Carpenter Technology to clearly distinguish the functions of the Board and management. The separation of the Chairman and Chief Executive Officer positions allows our Chief Executive Officer to concentrate on operational and strategic issues while the Chairman focuses on governance and Board leadership.

Meetings of the Board, Committees, and Independent Directors

Carpenter Technology expects attendance and active participation by directors at Board and committee meetings. Each director attended at least 75% of the total number of meetings of the Board and the committees on which the director served during fiscal year 2020.

 

18		CARPENTER TECHNOLOGY 2020 PROXY STATEMENT

Corporate Governance • Board Information

 

As required by Carpenter Technology’s Corporate Governance Guidelines, the independent directors of the Board meet in an executive session at least twice per year to review the performance of the Chief Executive Officer and to address any other matters of concern. Gregory A. Pratt, Chairman of the Board, presided over all executive sessions in fiscal year 2020.

 

Board/Committee		# Meetings Held
Full Board			Total: 6
Audit/Finance			12
Corporate Governance			5
Compensation			7
Science and Technology			5
Strategy			5
Total Meetings			Total: 40
Executive Sessions (Independent directors meet without management present)			5
Annual Meeting of Stockholders			1
Average Director Attendance			99%
All directors attended last year’s Annual Meeting and are expected to attend in 2020

Board Committees

The Board of Directors has three standing committees: Audit/Finance, Corporate Governance, and Compensation. The Board currently also has two additional committees: Science and Technology, and Strategy. The Board periodically establishes ad hoc committees, on an interim basis, to assist the Board with specific matters when prudent and advisable. Summary information about each committee is shown in the following table.

 

CARPENTER TECHNOLOGY 2020 PROXY STATEMENT		19

Corporate Governance • Board Information

 

Significant Functions of the Committee

 

Audit/Finance Committee   ▶   Assists the Board in its oversight of the integrity of Carpenter Technology’s financial statements:   •   qualifications, independence and performance of Carpenter Technology’s independent registered public accounting firm;   •   performance of Carpenter Technology’s internal audit personnel; and   •   overall compliance with accounting, legal, regulatory, ethical and business conduct requirements.   ▶   Selects the independent registered public accounting firm and provides a recommendation to the Board with respect to including the Company’s audited financial statements in the Annual Report on Form 10-K.   ▶   Reviews and provides recommendations to the Board relating to major financial matters affecting the Company.		COMMITTEE AND MEMBERS   I. Martin Inglis, Chair   A. John Hart   Robert R. McMaster   Jeffrey Wadsworth   ▶  All members are independent   ▶  All members are financially literate under NYSE standards
Corporate Governance Committee   ▶   Functions as a nominating committee with respect to directors:   •   assists the Board in identifying qualified individuals to become directors; and   •   recommends the overall composition of the Board and its committees.   ▶   Assists the Board in developing, implementing and monitoring a set of corporate governance principles for the Company, and overseeing processes to assess the performance and effectiveness of the Board, its committees and Carpenter Technology’s management.   ▶   Ensures orderly succession at the Board and management levels.		COMMITTEE AND MEMBERS   Stephen M. Ward, Jr., Chair   Viola L. Acoff   Steven E. Karol   Kathleen Ligocki   ▶  All members are independent
Compensation Committee   ▶   Establishes the philosophy for executive compensation.   ▶   Designs and oversees administration of Carpenter Technology’s equity and incentive compensation plans.   ▶   Reviews and approves compensation of Carpenter Technology’s executive officers, except for the CEO.   ▶   Reviews and approves annually the corporate goals and objectives relevant to compensation of the CEO and evaluates the CEO’s performance in light of those goals and objectives.   ▶   Reviews succession plans for Carpenter Technology’s CEO and executive officers.   ▶   Assists the Board with other human resource matters, including overseeing management’s work to promote organizational effectiveness, leadership development, and the design and administration of employee benefits programs.		COMMITTEE AND MEMBERS   Kathleen Ligocki, Chair   Viola L. Acoff   Steven E. Karol   Stephen M. Ward, Jr.   ▶  All members are independent

 

20		CARPENTER TECHNOLOGY 2020 PROXY STATEMENT

Corporate Governance • Board of Directors’ Role in Risk Oversight

 

Significant Functions of the Committee

 

Science and Technology Committee   ▶   Reviews and monitors major scientific or technological developments that could affect Carpenter Technology’s current business or operations or implicate significant strategic planning or considerations for the future.   ▶   Makes periodic recommendations to the Board concerning major developments or potential business opportunities for Carpenter Technology with respect to scientific or technological matters.		COMMITTEE AND MEMBERS   Jeffrey Wadsworth, Chair   Viola L. Acoff   Robert R. McMaster   Stephen M. Ward, Jr.   ▶  All members are independent
Strategy Committee   ▶   Ensures that Carpenter Technology has developed a relevant operative strategy for the Company’s industry and markets.   ▶   Reviews and monitors implementation and maintenance of the corporate strategy.   ▶   Reviews implementation of the corporate strategy through capital investments and corporate developments, including acquisitions, divestitures, joint ventures, strategic alliances and facility utilization.		COMMITTEE AND MEMBERS   Steven E. Karol, Chair   A. John Hart   I. Martin Inglis   Kathleen Ligocki   Tony R. Thene   ▶  All members are independent except Mr. Thene, Carpenter Technology’s President and CEO

Board of Directors’ Role in Risk Oversight

As a part of its oversight function, the Board monitors management’s processes for operating Carpenter Technology’s business, including risk management. The Board’s oversight of risk includes monitoring management’s work to identify risks and manage risk parameters, including those relating to enterprise, financial, operational, cybersecurity, business and reputation risks.

In addition to the formal compliance program, the Board encourages management to promote a corporate culture that understands and is committed to risk management and also incorporates business integrity into Carpenter Technology’s overall corporate strategy and day-to-day business operations.

Oversight of Carpenter Technology’s risk management processes is an important part of Board and committee work throughout the year.

 

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Corporate Governance • Stockholder Engagement and Communication with the Board

 

Risk Oversight Role and Responsibilities

 

Full Board   The full Board oversees management’s processes for managing significant strategic and business risks, such as those relating to our products, markets, capital investments, and cybersecurity.

Audit/Finance Committee

Corporate Governance Committee

Compensation Committee

Science and Technology Committee

Strategy Committee

Oversees management’s processes for managing business and operational risks that could have a financial impact, such as those relating to internal controls, liquidity or raw materials

Oversees management’s processes for managing the risks associated with governance issues, such as the independence of the Board and key executive succession

Sets incentive metrics and the mix of incentive pay for executive compensation plans and policies; strives to drive high performance while avoiding an inadvertent incentive to take risks beyond the established risk parameters

Oversees management’s processes for managing the risks associated with major scientific or technological developments that could affect business, operations or strategic planning

Oversees management’s processes for the continual development, implementation and maintenance of Carpenter Technology’s corporate strategy, and ensures that the annual business plan is aligned with and supports the corporate strategy

Management   Carpenter Technology’s risk management processes include continuous work to assess and analyze the most likely areas of future risk and to address them in our long-term planning process and in our daily risk management activities.

Stockholder Engagement and Communication with the Board

Carpenter Technology has long supported a robust investor relations program to communicate regularly with investors about economic, financial, operational and strategic matters. As a result of institutional investors’ changing practices, the Board worked with management to establish further engagement with investors’ governance personnel to discuss leadership, compensation, social responsibility and other governance matters. James D. Dee, Carpenter Technology’s General Counsel and Chief Governance Officer, and Timothy Lain, Carpenter Technology’s Chief Financial Officer and head of Investor Relations, assist the Board in understanding stockholders’ priorities and views on an ongoing basis. Messrs. Dee’s and Lain’s roles are to communicate with stockholders throughout the year about investor relations, governance, compensation and social responsibility developments; to solicit feedback from stockholders and disseminate that information to the Board and management; to keep the Board and others in management apprised of stockholder views and priorities; and to arrange appropriate direct interactions for stockholders with the CEO, management, and directors.

The Board also requested that the Corporate Governance Committee regularly interact with the Chief Governance Officer, and that the Audit/Finance Committee regularly interact with the Chief Financial Officer (“CFO”) to help the Board stay well informed of stockholder views.

 

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Corporate Governance • Environmental and Social Issues

 

Any stockholder who wishes to interact with the Board directly should send a request to our Chief Governance Officer, who will work with the Corporate Governance Committee to arrange appropriate interactions. Stockholders can contact Mr. Dee at jdee@cartech.com or 610-208-3423. Also, stockholders can contact Mr. Lain at tlain@cartech.com or 610-208-2210 regarding Investor Relations matters.

How to Communicate with our Board of Directors

Stockholders can communicate with the Board of Directors by sending a letter addressed to Carpenter Technology’s Board of Directors, c/o Corporate Secretary, 1735 Market Street, 15th Floor, Philadelphia, PA 19103. Carpenter Technology’s Corporate Secretary will review the correspondence and forward it to the Chairman of the Board or to the Chair of the appropriate Board committee or to any individual director or directors to whom the communication may be specifically directed. If the communication is unduly hostile, threatening or illegal, does not reasonably relate to Carpenter Technology or its business, or is similarly inappropriate, the Corporate Secretary will not forward the communication, and will notify the sender if and as appropriate. Stockholders and other interested parties may also communicate with the non-employee directors, non-executive Chairman, or the Audit/Finance Committee by sending an email to boardauditcommittee@cartech.com.

Environmental and Social Issues

Carpenter Technology is committed to being a good corporate citizen that benefits the communities in which we live, work and play. We strive to maintain the highest ethical, environmental and safety standards and we encourage and celebrate our employees’ active participation in achieving these goals. Our business is managed for long-term success in a manner that we believe is economically, environmentally and socially responsible. Highlights of Carpenter Technology’s Environmental, Social and Governance (“ESG”) efforts are provided below. More ESG details are available at https://ir.carpentertechnology.com.

Carpenter Technology Safety Vision

Above all else, the safety of our employees is Carpenter Technology’s top priority. We believe that it is the shared responsibility of every employee to actively participate in all aspects of the safety program and to strive for our ultimate goal of a zero injury workplace. The hallmarks of our safety program are:

 

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dedicated leadership, accountability and employee empowerment;

 

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continual improvement plans (Plan-Do-Check-Act);

 

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tools, resources, and education to improve total workplace safety and health; and

 

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a skilled, technology-driven workforce that proactively assesses risks, strives to eliminate hazards, and integrates learning from incidents and near-misses to prevent further occurrences.

Safety and COVID-19

Carpenter Technology’s commitment to safety has not waivered during the COVID-19 pandemic. We acted swiftly and decisively, enacting policies and procedures designed to keep our employees safe while our facilities remained operational. We immediately formed a Rapid Response Team comprised of employees in various functions including operations, Environmental, Health and Safety (EH&S), human resources, communications, finance, commercial, legal and the Company’s medical vendor to enact a companywide, coordinated response to COVID-19. Carpenter Technology quickly implemented a strategy based on layers of protection that included modularization of our operations, enhanced cleaning protocols, allowing for airgaps between shifts, requiring social distancing at all times, enhanced personal protective equipment (PPE), and health and temperature screenings for all employees, visitors or contractors entering our site. Our response has been dynamic; we have altered our approach as we learned more about COVID-19 and have cascaded any changes or alterations to our protocols companywide. We provide regular communications to our employees to ensure the safety procedures and protocols that have been put in place are understood and adhered to. We have created a dedicated website that hosts all our current policies, procedures and safety protocols so employees, vendors and suppliers are aware of our efforts and abide by our safety procedures while on-site.

Community Relations

We believe that part of being a responsible corporate citizen is improving the communities where our employees live and work. This commitment spans a wide variety of engagement and activities, both in terms of our employees’ volunteerism and monetary donations on behalf of Carpenter Technology and by our employees, with the aim of

 

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Corporate Governance • Governance Policies and Practices

 

strengthening our communities. Our Carpenter Cares program provides employees a variety of ways to support the causes that are important to them. This year, we used an online platform that lets employees donate funds through payroll deductions to the charitable organizations they wish to support. Employees are also able to request grants through the online platform to support recognized 501(c)(3) organizations. To ensure our charitable giving and the causes we support align, an employee review committee regularly reviews all financial donation applications. The committee makes recommendations for or against awarding all corporate donations, and executive leadership takes these recommendations into strong consideration when making final decisions. We encourage employee volunteerism at all our locations through organized activities and by contributing to local charitable organizations and educational efforts from working at the food pantry, to taking children fishing, to creating Thanksgiving baskets for veterans. Our employees are passionate about our communities and enjoy working together for the greater good.

Examples of how Carpenter Technology supports our local communities include:

 

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Promoting science and math curriculum design in public schools and providing scholarship funding to educational efforts, such as summer materials camps, science and engineering fairs and STEM programs;

 

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Supporting the United Way and locally based non-profit organizations through monetary gifts and employee volunteerism; and

 

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Supporting programs for children, seniors and veterans in need.

Environmental

Carpenter Technology is committed to responsible environmental performance throughout our operations. We recently formed an Environmental, Social and Governance Working Committee to oversee our sustainability efforts including the implementation of a companywide Environmental Management System. We have enhanced our environmental policies and procedures to help ensure we are operating in a manner that meets or exceeds all applicable environmental, health, safety, and security regulations and laws. We believe in reducing waste across our operations by reusing, reducing or recycling materials and energy whenever possible, and we strive to manage our operations waste in a more sustainable manner, including more opportunities to recycle waste in lieu of disposing of it. Some of the highlights of our environmental practices include:

 

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Minimizing waste by evaluating operations and ensuring efficiency, recycling and re-use, while promoting a zero-waste policy. The goal of the zero-waste policy in the steelmaking process is to significantly minimize the amount of waste sent to landfills, reduce emissions, and preserve raw materials;

 

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Working with governmental agencies in support of effective environmental standards and regulations;

 

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Working towards ISO14001 certification for primary US and global operational sites and continuing to seek suppliers and vendors that are also ISO14001 attested;

 

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Collecting data on companywide greenhouse gas emissions and water usage in order to assess the risks and opportunities available to Carpenter Technology in order to reduce our carbon footprint;

 

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Seeking vendors and suppliers that adhere to a similar set of environmental standards;

 

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Participating in pollution prevention, waste management, and recycling and energy conservation;

 

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Continuous efforts to increase the use of recycled materials in our business;

 

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Investments to increase our manufacturing efficiencies to reduce our environmental impact and that of our customers; and

 

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Advancements in emerging technologies such as additive manufacturing and soft magnetic solutions facilitating light weighting, increased fuel efficiency and reduced carbon emissions in end-use applications.

Governance Policies and Practices

Corporate Governance Guidelines and Charters

Carpenter Technology’s Corporate Governance Guidelines, as well as the charters for all the Board committees and our Code of Business Conduct and Ethics, are available on Carpenter Technology’s website at www.carpentertechnology.com. Copies will be mailed to stockholders upon written request to the Corporate Secretary, Carpenter Technology Corporation, 1735 Market Street, 15th Floor, Philadelphia, PA 19103.

 

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Corporate Governance • Transactions with Related Parties

 

Code of Ethics

The Board of Directors has adopted a Code of Ethics for Carpenter Technology’s CEO and senior financial officers. There were no waivers of the Code of Ethics for fiscal year 2020 or through the date of this Proxy Statement.

 

Ethics Hotline: Carpenter Technology has established an independent web-based ethics hotline for employees to voice any concerns they may have in a confidential manner. A Board appointed corporate staff member reviews any reports and, if necessary, involves the legal, finance, asset protection, human resources or other department, as applicable.

Annual Board Performance Self-Evaluation

The Board conducts an annual self-evaluation to determine whether the Board and its committees are functioning effectively. The Corporate Governance Committee oversees the self-evaluation process. Results of the self-evaluation process are discussed with the Board as soon as practicable. The Corporate Governance Committee also evaluates individual directors as each is considered for re-election to the Board.

Director Training and Education

We have an orientation process for new directors that involves meeting with senior management and visiting our manufacturing facilities. All directors are encouraged to attend outside educational seminars presented by accredited third-party organizations as well as internal programs organized by Carpenter Technology for the directors’ ongoing education.

Succession Planning

The Corporate Governance Committee is responsible for determining the process for evaluating our CEO succession planning. Carpenter Technology’s CEO presents an annual report to the Board on succession planning for the CEO position. The CEO also recommends, on a continuing basis, a suitable successor should the CEO be unexpectedly disabled or otherwise unavailable to perform the duties of that office.

The Compensation Committee is responsible for monitoring succession planning and management development for positions other than that of the CEO.

Transactions with Related Parties

 

A “related party transaction” is a transaction with Carpenter Technology in an amount exceeding $120,000 in which a related person has a direct or indirect material interest. A related person includes an executive officer, director, or five percent stockholder of Carpenter Technology and any immediate family member of such a person. If Carpenter Technology management identifies a related party transaction, the transaction is brought to the attention of the Audit/Finance Committee for its approval, ratification, revision, or rejection after considering all the relevant facts and circumstances.

Any proposed transactions with executive officers, directors, substantial stockholders, or the family members or affiliates of any of those parties, require approval by the Audit/Finance Committee and will be disclosed as required by the SEC. Carpenter Technology’s Code of Business Conduct and Ethics requires that Carpenter Technology’s officers and directors avoid conflicts of interest, as well as the appearance of conflicts of interest, and disclose to Carpenter Technology’s General Counsel any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest between private interests and the interests of the Company. Carpenter Technology checks for any potential related party transactions primarily by circulating a Directors and Officers Questionnaire to each member of the Board of Directors and each NEO annually.

Fiscal Year 2020 Related Party Transactions

During fiscal year 2020, there were no related party transactions.

 

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