UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ Preliminary Proxy Statement
¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
¨ Definitive Additional Materials
¨ Soliciting Material Pursuant to §240.14a-12
| CELANESE CORPORATION | ||
| (Name of Registrant as Specified In Its Charter) | ||
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||
Payment of Filing Fee (Check the appropriate box):
þ | No fee required | ||||
¨ | Fee paid previously with preliminary materials. | ||||
¨ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||||
 | Table of Contents | |||||||||||||||||||
| Table of Contents | |||||
| LETTER TO SHAREHOLDERS FROM OUR CHAIR/CEO AND OUR LEAD INDEPENDENT DIRECTOR | |||||
| NOTICE OF ANNUAL MEETING OF SHAREHOLDERS | |||||
| VOTING INFORMATION | |||||
| PROXY STATEMENT SUMMARY | |||||
| Director Nominees | |||||
| Director Nominee Highlights | |||||
| Environmental, Social and Governance Update | |||||
| Performance Highlights | |||||
| Additional Information | |||||
| PROXY STATEMENT | |||||
| Information About Solicitation and Voting | |||||
| GOVERNANCE | |||||
ITEM 1: ELECTION OF DIRECTORS | |||||
| Director Nominees | |||||
| Board and Committee Governance | |||||
| Board Oversight | |||||
| Shareholder Engagement | |||||
| Additional Governance Matters | |||||
| Director Compensation | |||||
| Director Independence and Related Person Transactions | |||||
| STOCK OWNERSHIP INFORMATION | |||||
Principal Shareholders and Beneficial Owners | |||||
| Securities Authorized for Issuance Under Equity Compensation Plans | |||||
| AUDIT MATTERS | |||||
Audit Committee Report | |||||
ITEM 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |||||
| EXECUTIVE COMPENSATION* | |||||
ITEM 3: ADVISORY APPROVAL OF EXECUTIVE COMPENSATION | |||||
ITEM 4: ADVISORY APPROVAL OF SAY ON PAY VOTE FREQUENCY | |||||
Compensation Discussion and Analysis | |||||
Compensation Risk Assessment | |||||
Compensation and Management Development Committee Report | |||||
Compensation Tables | |||||
CEO Pay Ratio | |||||
| Pay Versus Performance | |||||
| MANAGEMENT PROPOSAL | |||||
ITEM 5: APPROVAL OF THE AMENDED AND RESTATED 2018 GLOBAL INCENTIVE PLAN | |||||
| QUESTIONS AND ANSWERS | |||||
Annual Meeting Information | |||||
Proxy Materials and Voting Information | |||||
Company Documents, Communications and Shareholder Proposals | |||||
| EXHIBIT A | |||||
| Non-U.S. GAAP Financial Measures | |||||
| EXHIBIT B | |||||
Amended and Restated 2018 Global Incentive Plan | |||||
Cautionary Note Regarding Forward-Looking Statements; Available Information This Proxy Statement includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this Proxy Statement. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. We describe risks and uncertainties that could cause actual results and events to differ materially in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our Forms 10-K and 10-Q. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise. References to our website in this Proxy Statement are provided as a convenience, and the information on our website is not, and shall not be deemed to be a part of this Proxy Statement or incorporated into any other filings we make with the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers, including Celanese Corporation, that electronically file with the SEC at http://www.sec.gov. | ||||||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / i | ||||||||
| A letter from Lori J. Ryerkerk, our Chair and CEO and William M. Brown, our Lead Independent Director | |||||||||||||||||||
March 9, 2023
Dear Fellow Shareholders:
As the Chair and the Lead Independent Director of the Celanese Board, we are pleased to write to you in advance of our upcoming Annual Meeting of Shareholders. The Board is pleased with Celanese’s performance and accomplishments in 2022 and early 2023 in the face of a number of macroeconomic and geopolitical challenges.
Growing and Transforming Our Business
Author John Maxwell said, “Change is inevitable. Growth is optional.” Since we wrote to you at this time last year, Celanese has seen no shortage of change and growth.
Much of the change we navigated in 2022 was unfavorable to us and many of our Fortune 500 peers: geopolitical uncertainty, supply chain disruptions, logistics challenges, new or reinstated pandemic lockdowns in China, waning consumer demand coupled with inflation and recessionary trends – all impacting our business lines and geographies.
Through it all, our team handled the adverse changes and remained focused on our growth. Our numerous accomplishments growing and transforming our business include:
•achieving our second highest adjusted earnings per share in our history, along with robust free cash flow;
•announcing the acquisition of the majority of DuPont’s Mobility and Materials business and closing the $11 billion deal in less than nine months;
•achieving full integration of our Santoprene acquisition from 2021 and completing the restructuring of our KEPCO joint venture; and
•expanding capacity and achieving production records at many facilities.
We are proud of the results the Celanese team has achieved.
Advancing our Sustainability Strategy
Celanese is also proud of our continued progress in furthering our sustainability strategy, described elsewhere in this Proxy Statement.
•We advanced our product strategy through the launch of several new bio-based and recycled-content products.
•Following the setting of environmental goals in early 2022, we took the additional step of obtaining limited assurance of our environmental target baselines and 2022 CDP Climate and Water Security responses, to enhance the rigor of our reporting;
•We highlighted our progress and more in our updated and redesigned 2021-2022 Sustainability Report and Index to enable efficient access to our policies, practices, and metrics; and
•We were recognized by Newsweek as one of America’s 500 Most Responsible Companies; Celanese ranked 138th overall, 18th in the Materials and Chemicals industry, and 5th in the Social category.
Some of Celanese’s other key ESG and sustainability accomplishments during 2022 and early 2023 are also described beginning on page 7.
Your Board remains deeply committed to overseeing Celanese’s continued ESG progress, and continues to review and refine its approach to overseeing ESG priorities through its Committees and the full Board. You can read more about this approach in “Governance — Board Oversight of Environmental, Social and Governance Matters”.
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 1 | ||||||||
| A letter from Lori J. Ryerkerk, our Chair and CEO and William M. Brown, our Lead Independent Director | |||||||||||||||||||
Listening to our Shareholders and Enhancing our Board Composition
We are committed to active engagement with our shareholders to hear your views on how your Board can continue to serve you. The Board receives reports on your perspectives, and you can read about key topics our investors have expressed interest in, and the steps we have taken aligned with shareholder feedback, in the “Shareholder Engagement” sections within “Governance” and “Compensation Discussion and Analysis.”
These efforts are overseen by a Board representing a variety of viewpoints, experience and professional qualifications as described in "”Item 1: Election of Directors — Director Nominees.” The Board has added five new directors in the last five years, including two sitting executives as independent Board members. Three of these directors elected in the last five years are women and two are racially diverse. The Board highly values this mix of fresh perspectives as an effective complement to the experience and knowledge of our longer-serving directors, is proud of its members’ diversity, and is committed to thoughtful and intentional Board refreshment.
Looking Ahead
Looking ahead, we firmly believe that our ambitious vision of improving the world and everyday life through our people, chemistry and innovation will continue to guide us in choosing the right priorities that drive growth, even in the face of ongoing macroeconomic risks and uncertainties.
Please join our Board of Directors and executive officers on April 20, 2023, at 1:00 p.m. Eastern time, when we hold our Annual Meeting of Shareholders in live virtual format. Your vote is very important, and whether or not you are able to attend the event in real time, we encourage you submit your voting instructions by proxy as described in this document. We look forward to your participation.
Thank you for your continued support of Celanese.
Sincerely,
Lori J. Ryerkerk William M. Brown
Chair, Chief Executive Officer and President Lead Independent Director
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 2 | ||||||||
| Notice of Annual Meeting of Shareholders | |||||||||||||||||||
CELANESE CORPORATION
222 W. Las Colinas Blvd., Suite 900N
Irving, Texas 75039
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS | ||
Date and Time: | April 20, 2023, 1:00 p.m. (Eastern Daylight Saving Time) | |||||||
Virtual Meeting Website: | Online at www.virtualshareholdermeeting.com/CE2023 | |||||||
Items of Business: | ● To elect Jean S. Blackwell, William M. Brown, Edward G. Galante, Kathryn M. Hill, David F. Hoffmeister, Dr. Jay V. Ihlenfeld, Deborah J. Kissire, Michael Koenig, Kim K.W. Rucker and Lori J. Ryerkerk to serve until the 2024 Annual Meeting of Shareholders, or until their successors are elected and qualified or their earlier resignation; | |||||||
● To ratify the selection of KPMG LLP as our independent registered public accounting firm for 2023; | ||||||||
● To hold an advisory vote to approve executive compensation; | ||||||||
● To hold an advisory vote on the frequency of future advisory votes approving executive compensation; | ||||||||
● To approve the Amended and Restated 2018 Global Incentive Plan; and | ||||||||
● To transact such other business as may properly come before the meeting and any adjournments and postponements thereof in accordance with the provisions of the Company’s Seventh Amended and Restated By-laws (the “by-laws”). | ||||||||
Record Date: | You are entitled to attend the 2023 Annual Meeting virtually and to vote if you were a shareholder at the close of business on February 22, 2023. | |||||||
This year’s Annual Meeting will be held as a “virtual meeting” via the Internet at www.virtualshareholdermeeting.com/CE2023. You will be able to vote and submit questions online through the virtual meeting platform during the Annual Meeting.
To ensure that your shares are represented at the meeting, we urge you to submit your voting instructions by proxy as promptly as possible. You may submit your proxy via the Internet or telephone, or, if you received paper copies of the proxy materials by mail, you can also submit a proxy via mail by following the instructions on the proxy card or voting instruction card. We encourage you to submit a proxy via the Internet. It is convenient and saves us significant postage and processing costs. You can revoke a proxy at any time prior to its exercise at the Annual Meeting by following the instructions in the Proxy Statement.
By Order of the Board of Directors of
Celanese Corporation
A. Lynne Puckett
Senior Vice President, General Counsel
and Corporate Secretary
Irving, Texas
March 9, 2023
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 20, 2023 | ||||||||||||||
The Celanese Corporation 2023 Notice of Annual Meeting and Proxy Statement, 2022 Annual Report and other proxy materials are available at www.proxyvote.com. | ||||||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 3 | ||||||||
| Voting Information | |||||||||||||||||||
VOTING INFORMATION
You are invited to attend the Annual Meeting to be held at 1:00 p.m. (Eastern Daylight Saving Time) on Thursday, April 20, 2023. This year’s Annual Meeting will be held as a “virtual meeting” via the Internet at www.virtualshareholdermeeting.com/CE2023.
It is very important that you vote in order to play a part in the future of the Company. Please carefully review the proxy materials for the Annual Meeting and follow the instructions below to cast your vote on all of the voting matters.
Who is Eligible to Vote
You are entitled to vote at the Annual Meeting if you were a shareholder at the close of business on February 22, 2023, the record date for the meeting. On the record date, there were 110,824,914 shares of the Company’s Common Stock issued, outstanding and entitled to vote at the Annual Meeting. Each share of Common Stock is entitled to one vote on each proposal to be voted on at the meeting.
How to Vote
Even if you plan to attend the Annual Meeting, please submit your voting instructions by proxy as soon as possible using one of the following methods for submitting a proxy (see page 107 for additional details). Make sure to have your proxy card, voting instruction form or Notice of Internet Availability in hand and follow the instructions provided. Unless those documents provide different instructions, most of our shareholders will be able to vote in advance of the meeting by one of the following means:
| VOTE IN ADVANCE OF THE MEETING* | VOTE AT THE VIRTUAL MEETING | ||||||||||||||||||||||||||||
| via the internet | by phone | by mail | by QR code | ||||||||||||||||||||||||||
| : | ) | * |  | m | |||||||||||||||||||||||||
| Visit proxyvote.com to submit a proxy via computer or your mobile device | Call 1-800-690-6903 or the telephone number on your proxy card or voting instruction form | Sign, date and return your proxy card or voting instruction form | Scan this QR code to vote with your mobile device (may require downloading of free app) | ||||||||||||||||||||||||||
* You will need the 16-digit control number included on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.
If you are a shareholder who holds shares through a brokerage firm, bank, trust or other similar organization (that is, in “street name”), please refer to the instructions from the broker or organization holding your shares.
If you have questions or require assistance with voting your shares, or if you need additional copies of the proxy materials, please contact Alliance Advisors, LLC, 200 Broadacres Drive, 3rd Floor, Bloomfield, New Jersey 07003. Shareholders may call toll free: (800) 574-5971.
Important Note About Meeting Admission Requirements: If you plan to attend the virtual meeting, see the answer to question 2 on page 105 for important details on requirements to log-in to the meeting.
Electronic Shareholder Document Delivery | ||||||||||||||
Instead of receiving future copies of annual meeting proxy materials by mail, shareholders of record and most beneficial owners can elect to receive an e-mail that will provide electronic links to these documents. Opting to receive your proxy materials online will save us the cost of producing and mailing documents and will also give you an electronic link to the proxy voting site. | ||||||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 4 | ||||||||
| Proxy Summary | |||||||||||||||||||
PROXY STATEMENT SUMMARY | We provide below highlights of certain information in this Proxy Statement. As this is only a summary, please refer to the complete Proxy Statement and 2022 Annual Report before you vote. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proxy Item No. 1 Election of 10 Director Nominees | ü The Board recommends a vote FOR all Director Nominees Our Board and the Nominating and Corporate Governance Committee believe that the ten director nominees possess the necessary qualifications to provide effective oversight of the business and quality advice and counsel to the Company’s management. à See “Item 1: Election of Directors” and “Director Nominees” beginning on page 12 of this Proxy Statement for additional information. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Director Nominees | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table provides summary information about each director nominee. Each nominee is to be elected by a majority of the votes cast. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name and Qualifications | Age | Director Since | Primary Occupation / Other Public Company Boards | Independent | Committee Memberships | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jean S. Blackwell | 68 | 2014 | Former EVP / CFO – Cummins Inc. | ü | AC; NCG | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
&Q5ÐGq@6L | Ingevity Corp.; Johnson Controls Int’l plc | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| William M. Brown | 60 | 2015 | Former Executive Chair and CEO – L3Harris Technologies, Inc. | ü | CMD; NCGt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
&Q:5Gq@6L | Becton, Dickinson and Company | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edward G. Galante | 72 | 2013 | Former SVP – Exxon Mobil Corporation | ü | CMD£; EHS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
&Q.:ÐGq@6L | Linde plc; Clean Harbors Inc.; Marathon Petroleum Corp. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kathryn M. Hill | 66 | 2015 | Former SVP Dev. Strategy – Cisco Systems Inc. | ü | CMD; EHS£ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
&Q:5@6 | Moody’s Corporation; NetApp Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| David F. Hoffmeister | 68 | 2006 | Former SVP / CFO – Life Technologies Corp. | ü | AC; NCG | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
&Q.:Gq6L | Glaukos Corporation; ICU Medical Inc.; StepStone Group Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dr. Jay V. Ihlenfeld | 71 | 2012 | Former SVP, Asia Pacific – 3M Company | ü | CMD; EHS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Q.:5ÐG@6 | Ashland, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deborah J. Kissire | 65 | 2020 | Former Vice Chair - Ernst & Young LLP | ü | AC£; EHS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
&Q:5Gq6L | Omnicom Group; Axalta Coatings System Ltd.; Cable One, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Michael Koenig | 59 | 2022 | Chief Executive Officer – Nobian Industrial Chemicals B.V. | ü | CMD; EHS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
&Q.:5ÐG@6L | Symrise AG | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kim K.W. Rucker | 56 | 2018 | Former EVP and GC – Andeavor | ü | AC; NCG£ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
&Q:5ÐGq6L | Lennox International Inc.; Marathon Petroleum Corp.; HP Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lori J. Ryerkerk | 60 | 2019 | Chair, Chief Executive Officer and President – Celanese Corporation | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
&Q.:ÐGq@6L | Eaton Corporation plc | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Qualifications: | Board Committees: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| & | Leadership | G | Govt/regulatory | AC | Audit Committee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q | Global experience | q | Financial & transactions | CMD | Compensation and Management Development Committee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| . | Chemical industry | @ | Operational | EHS | Environmental, Health, Safety, Quality and Public Policy Committee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| : | Innovation-focused | 6 | Strategic | NCG | Nominating and Corporate Governance Committee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5 | Customer-focused | L | Risk oversight | £ | Committee Chair | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ð | Environmental / sustainability | t | Lead Independent Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 5 | ||||||||
| Proxy Summary | |||||||||||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 6 | ||||||||
| Proxy Summary | |||||||||||||||||||
| Environmental, Social and Governance Update | ||||||||||||||
| Accelerating safe and sustainable solutions through chemistry. | ||||||||||||||
We believe we have a responsibility to meaningfully improve the world through the power of chemistry. | ||||||||||||||
This responsibility to do more is instilled within us at Celanese, and we believe that when chemistry connects with sustainability, the possibilities are endless. | ||||||||||||||
Sustainability Strategy Framework Under Each Segment
Celanese is committed to protecting natural resources and helping our partners and their customers to do the same. Our three-part sustainability strategy of building solutions to support customers’ sustainability objectives, reducing GHG emissions in our own operations, and improving the sustainability of existing products enables us to act on this commitment in both our Acetyl Chain and Engineered Materials segments.
| Acetyl Chain | Engineered Materials | ||||
•Progress on several capital projects in Clear Lake, Texas to ◦increase renewable energy use and ◦turn industrial CO2 emissions into methanol via our Fairway Joint Venture with a projected start-up in late 2023 •Continue to leverage energy efficiency initiatives, such as our power and heat project at our Lanaken, Belgium site, focused on reducing steam usage, and considering limited carbon offsets through high-quality compensation measures as a carbon-footprint reduction tool •Announced availability of more sustainable versions of several Acetyl Chain products and expanded the ECO-B designation to these offerings | •Producing recycled content (designated as ECO-R) and mass balance biocontent (designated as ECO-B) to help customers incorporate renewable and recycled content into their products •Opened a new GUR ultra-high molecular weight polyethylene production line at our Bishop, Texas, manufacturing facility to support the increased demand for electric vehicles and lithium-ion battery separator supply •Acquired a majority of DuPont’s Mobility & Materials business, which offers complementary products in high-value, sustainability-related applications, such as materials for electric vehicles | ||||
Setting Meaningful Environmental Goals
As part of our efforts to reduce our environmental impact, we have set the below production intensity targets, which are measured against a 2021 baseline of Celanese owned and operated assets. In 2022, we engaged ERM Certification and Verification Services, Inc. to provide a limited assurance of our environmental baseline metrics associated with our 2030 environmental targets — including our target, announced in March 2022, for a 30% reduction in Scope 1 and 2 GHG Intensity (measured by product volume) by 2030 — and our 2022 CDP Climate and Water Security responses.
[1] Based on production from a 2021 baseline.
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 7 | ||||||||
| Proxy Summary | |||||||||||||||||||
Setting intensity-based targets allows us to better reflect the effects of future organic and acquisition opportunities in alignment with our low-carbon transition plan. In the short term, we are looking to enhance efficiency through capital investment projects and increase renewable energy consumption. We intend to explore the application of power-to-steam technology, renewable fuels, and breakthrough technologies like carbon capture and hydrogen. We are also working to better understand our Scope 3 emissions sources to develop a roadmap to identify, quantify and reduce them.
Reporting and Transparency
Our second Sustainability Report, published in 2022 and available at https://sustainability.celanese.com/, highlights our recent progress and advancements against our strategy. The accompanying Index, also available at https://sustainability.celanese.com/, includes a Sustainability Accounting Standards Board Index for the Chemical Industry, Task Force on Climate-Related Financial Disclosures Index, Human Capital and Safety Metrics, and ERM CVS limited external assurance statements, along with policies and other program disclosures. The information is organized by each of our four sustainability pillars: Customer Solutions, Preserving the Environment, People and Communities, and Operating Ethically. While we are not including Mobility and Materials environmental data in our reporting at this time, we hope to include this data in the future.
Significant Achievements and Growing Momentum
Through our dedication to improve the world, we have built on our past accomplishments and demonstrated our deep sense of responsibility to keep people safe and help to protect our planet:
■Received the U.S. Environmental Protection Agency ENERGY STAR® Award 2022 Partner of the Year designation for the seventh consecutive year and the Sustained Excellence designation, the highest honor of the ENERGY STAR Awards, for the fifth consecutive year.
■Named to Newsweek’s 2023 list of America’s Most Responsible Companies
■Received a grant from the Bill and Melinda Gates Foundation to produce a prototype for a refillable contraceptive implant using our VitalDose drug delivery platform, which could expand global access to women's health solutions in low-middle income communities
■Improved the Company’s CDP Climate Score Report to “B”
■Winner of D CEO’s 2023 Innovation in Manufacturing and Consumer Goods award
■Three M&M products (Zytel® PA612, Crastin® PBT and Vamac® AEM) won awards at the 51st Annual Society of Plastics Engineers Automotive Innovation Awards Competition and Gala in November 2022
■Multiple Celanese employees won awards at the American Chemistry Council's 2022 Annual Responsible Care® & Sustainability Conference in areas of environmental, health and safety excellence
■Named a Top Noteworthy Company on DiversityInc’s Top 50 list for second year
■Ranked among best employers in Germany through a joint survey conducted by Stern magazine and independent opinion research institute Statista
■Engaged ERM Certification and Verification Services, Inc. to provide a limited assurance of our environmental baseline metrics associated with our 2030 environmental targets and our 2022 CDP Climate and Water Security responses (available at https://sustainability.celanese.com/reporting)
See “Human Capital Management” beginning on page 56 of this Proxy Statement for additional information about our human capital efforts.
Go to https://www.celanese.com/sustainability/ to learn more about Sustainability at Celanese.
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 8 | ||||||||
| Proxy Summary | |||||||||||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 9 | ||||||||
| Proxy Summary | |||||||||||||||||||
Performance Highlights | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Performance in 2022 (see page 53 for more information on our controllable actions to drive performance) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ü | We reported 2022 net sales of $9.7 billion, 13% higher than our previous record in 2021. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ü | We generated record operating cash flow of $1,819 million and free cash flow(1) of $1,263 million, supporting our deleveraging strategy. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ü | Record net sales overall, record adjusted EBIT from Engineered Materials (even excluding the Santoprene and M&M acquisitions) and strong performance from the Acetyl Chain supported: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| t | GAAP diluted earnings per share of $17.41, and second-highest Adjusted EPS(1) of $15.88; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| t | Net earnings of $1,894 million and Adjusted EBIT(1) of $2,171 million. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Strengthening our Foundation for Earnings Per Share Growth and Long-Term Shareholder Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ü | In November 2022, we closed the acquisition of the majority of the Mobility & Materials business of DuPont (the M&M Acquisition). We signed and closed the $11.0 billion transaction in less than nine months, to establish Celanese as the pre-eminent global specialty materials company, with a broad and expanded portfolio of engineered thermoplastics and elastomers, industry-renowned brands and intellectual property, global production assets, and a world-class organization. | Net Sales ($Bn) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ü | We also enhanced our Engineered Materials business by completing the integration of the Santoprene acquisition (closed December 2021) less than a year after closing and completing the restructuring of our KEPCO joint venture to have more commercial control over our earnings. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ü | We initiated and completed a strategic overhaul of the acetate flake and tow products as part of the Acetyl Chain (AC) to deliver future earnings growth. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ü | We navigated continued sourcing and logistics constraints and maintained margin through deliberate commercial and pricing actions. | Earnings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| GAAP EPS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EPS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proxy Item No. 3 Advisory Approval of Executive Compensation | ü The Board recommends a vote FOR this proposal Our Board recommends that shareholders vote “FOR” the advisory approval of the compensation of our named executive officers (“NEOs” or “named executive officers”) for the 2022 performance year. à See “Item 3: Advisory Approval of Executive Compensation” and “Compensation Discussion and Analysis” beginning on page 53 of this Proxy Statement. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Information | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Please see “Questions and Answers” beginning on page 105 for important information about the proxy materials, voting, the Annual Meeting, Company documents, communications and the deadlines to submit shareholder proposals for the 2023 Annual Meeting. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Adjusted earnings per share, adjusted EBIT and free cash flow are non-U.S. GAAP financial measures. See “Exhibit A” for information concerning these measures including a definition and a reconciliation to the most comparable U.S. GAAP financial measure. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Proxy Statement | |||||||||||||||||||
PROXY STATEMENT
For the Annual Meeting of Shareholders To Be Held Virtually on April 20, 2023
The Board of Directors (the “Board of Directors” or the “Board”) of Celanese Corporation, a Delaware corporation (the “Company,” “we,” “us” or “our”), solicits the enclosed proxy for use at our 2023 Annual Meeting of Shareholders (the “Annual Meeting”) to be held virtually at 1:00 p.m. (Eastern Daylight Saving Time) on Thursday, April 20, 2023, at our virtual meeting website www.virtualshareholdermeeting.com/CE2023. This Proxy Statement (this “Proxy Statement”) contains information about the matters to be voted on at the meeting and the voting process, as well as information about our directors. We will bear the expense of soliciting the proxies for the Annual Meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 20, 2023 | ||||||||||||||
The Celanese Corporation 2023 Notice of Annual Meeting and Proxy Statement, 2022 Annual Report and other proxy materials are available at www.proxyvote.com. | ||||||||||||||
INFORMATION ABOUT SOLICITATION AND VOTING
Pursuant to U.S. Securities and Exchange Commission (“SEC”) rules, we have elected to furnish proxy materials to our shareholders via the Internet instead of mailing printed copies of those materials to each shareholder. If you received a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) by mail, you will not receive a printed copy of the proxy materials unless you request one. Instead, the Notice of Internet Availability will instruct you as to how you may access and review the proxy materials and cast your vote on the Internet. If you received a Notice of Internet Availability by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability. Shareholders who requested paper copies of proxy materials or previously elected to receive proxy materials electronically will not receive the Notice of Internet Availability and, instead, will receive the proxy materials in the format requested. This Proxy Statement, our 2022 Annual Report and other information about the Annual Meeting also are available in the “News & Events” section of our website, https://investors.celanese.com.
The Notice of Internet Availability and, for shareholders who previously requested electronic or paper delivery, the proxy materials will be mailed on March 9, 2023, to shareholders of record and beneficial owners who owned shares of the Company’s Common Stock at the close of business on February 22, 2023.
Our principal executive offices are located at 222 W. Las Colinas Blvd., Suite 900N, Irving, Texas 75039.
For additional information about the proxy materials and the Annual Meeting, see “Questions and Answers”.
GOVERNANCE
The Company is committed to effective corporate governance, which promotes the long-term interests of shareholders, strengthens Board and management accountability and helps build public trust in the Company. See “Corporate Governance Highlights” for more information.
The Company’s certificate of incorporation, by-laws, corporate governance guidelines, Board committee charters and other materials can be accessed on our website, https://investors.celanese.com, by clicking “Corporate Governance.” Instructions on how to obtain copies of these materials are also included in the response to question 20 in the Questions and Answers section on page 110.
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| Governance | |||||||||||||||||||
ITEM 1: Election of Directors
Background
Based on the recommendation of our independent Nominating and Corporate Governance Committee (the “NCG Committee”), our Board of Directors has nominated ten directors — Jean S. Blackwell, William M. Brown, Edward G. Galante, Kathryn M. Hill, David F. Hoffmeister, Dr. Jay V. Ihlenfeld, Deborah J. Kissire, Michael Koenig, Kim K.W. Rucker and Lori J. Ryerkerk — to serve a one-year term expiring at the 2024 Annual Meeting of Shareholders. Independent director Rahul Ghai, who joined the Celanese Board in February 2022 and joined GE Aerospace as Chief Financial Officer in August 2022, has decided in consultation with the rest of the NCG Committee and the Board that he will not stand for re-election at the upcoming Annual Meeting. Mr. Ghai has advised the Board that his responsibilities preparing GE Aerospace to become a standalone independent public company would make it difficult for him to continue to have sufficient time available for Celanese Board and committee meetings and consultation on Celanese matters as GE Aerospace gets closer its early 2024 separation date. There is no disagreement between Mr. Ghai and Celanese on any matter related to Celanese’s operations, policies, or practices. The Board expresses its thanks to Mr. Ghai for his contributions during his service, wishes him well at GE Aerospace, and will set the number of directors at ten effective as of the Annual Meeting.
At the Annual Meeting, shareholders will have the opportunity to elect these nominees. Unless otherwise instructed, the proxy holders will vote the proxies received by them “for’ these ten nominees. If any of our nominees is unable or declines to serve as a director as of the time of the Annual Meeting, the Board may designate a substitute nominee or reduce the size of the Board. Proxies will be voted for any nominee who shall be designated by the Board of Directors to fill the vacancy. These director nominees have consented to be elected to serve as directors for the next year and we have no reason to believe that any of the nominees will be unwilling or unable to serve if elected as a director.
The name of each of our nominees for election and certain information about them, as of the date of this Proxy Statement (except ages, which are as of the date of the Annual Meeting), is set forth below under “Director Nominees,” including the particular qualifications, attributes, skills and experience that led the Board to conclude that each should serve as a director of the Company.
Board Composition and Refreshment | BOARD REFRESHMENT | ||||||||||||||||||||||
| Over the last five years, we have: | |||||||||||||||||||||||
The Board and the NCG Committee believe the Board should represent a collection of talented, highly-experienced, high-integrity, strategic leaders from a variety of backgrounds with diverse viewpoints, possessing skill sets and experience that bring value to Celanese’s long-term strategy. To that end, the Board and NCG Committee continuously strive to maintain, through thoughtful Board refreshment, an appropriate balance of skills, tenure, and diversity. The Board believes that new perspectives and new ideas are critical to a forward-looking and strategic board, as is the ability to benefit from the valuable experience and familiarity with the complexities of our business that longer-serving directors bring. The Board and the NCG Committee regularly evaluate the skills represented on the Board, to support a thoughtful, long-term approach towards optimizing Board composition. | |||||||||||||||||||||||
● | Elected five new directors, three of whom are women and two of whom are racially or ethnically diverse | ||||||||||||||||||||||
● | Completed a Board leadership transition, and elected a new Lead Independent Director | ||||||||||||||||||||||
● | Rotated all Board committee chairs | ||||||||||||||||||||||
● | Added increased industry and M&A experience while increasing the diversity of the Board | ||||||||||||||||||||||
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Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 12 | ||||||||
| Governance | |||||||||||||||||||
•Our Chair and CEO Ms. Ryerkerk – joined as CEO effective May 2019, and named Board Chair in April 2020;
•Our NCG Committee Chair Ms. Rucker – elected to the Board in October 2018;
•Our Audit Committee Chair Ms. Kissire – elected to the Board in October 2020;
•Mr. Ghai – elected to the Board in February 2022 (and who is not seeking re-election for the reasons described above); and
•Mr. Koenig – elected to the Board in February 2022.
Each of these directors, as were all of our Board members, were identified in large part due to the fit of their deep experience with different aspects of our long-term strategy. See “Director Nominees” for more information on the specific qualifications and experience each of our nominees brings to our Board.
Qualifications, Qualities, Skills and Experience to be Represented on the Board
The Board and the NCG Committee require that each director be a recognized person of high integrity with a proven record of success in his or her field and have the ability to devote the time and effort necessary to fulfill his or her responsibilities to the Company. Each director must demonstrate innovative thinking, familiarity with and respect for corporate governance requirements and practices, a willingness to assume fiduciary responsibilities, an appreciation of diversity and a commitment to sustainability and to dealing responsibly with social issues. The NCG Committee uses a variety of methods for identifying and evaluating director nominees and considers candidates who are recommended by Board members, by shareholders, as well as those identified by third-party search firms retained from time to time (including during part of 2022). The NCG Committee and other Board members conduct interviews of potential director candidates to assess integral qualities, including the individual’s ability to ask difficult questions and, simultaneously, to work collegially.
The Board considers diversity of race, ethnicity, gender, age, cultural background and professional experience in evaluating candidates for Board membership and assesses the effectiveness of this policy through the NCG Committee’s annual review of director nominees. The Board believes that diversity results in a variety of points of view and, consequently, a more effective decision-making process. Of the five new directors added in the last five years, three are women and two are racially/ethnically diverse.
The Board has identified particular qualifications, attributes, skills and experience that are important to be represented on the Board as a whole, in light of the Company’s current and expected future business needs. These are summarized in the following table.
| Qualifications, Attributes, Skills and Experience | Characteristics | No. of Directors | ||||||||||||||||||
& | Relevant senior leadership/C-Suite experience | Senior leadership experience allows directors to better understand day-to-day and strategic aspects of a business | 9 | |||||||||||||||||
Q | Global business experience | Our business is global and multicultural, with products manufactured in the Americas, Europe and Asia and operations in 18 countries around the world | 10 | |||||||||||||||||
. | Extensive knowledge of the Company’s business and/or chemical industry | A deep understanding of the Company’s business and/or the chemical industry allows a director to better guide the Company | 5 | |||||||||||||||||
: | Experience in innovation-focused businesses | Focus on innovation to drive performance | 9 | |||||||||||||||||
| 5 | Experience in customer-driven businesses | High level of customer interaction | 7 | |||||||||||||||||
Ð | Environmental/sustainability experience | Experience with complex environmental regulation and sustainability-focused strategy | 6 | |||||||||||||||||
G | Government/regulatory/geopolitical exposure | Experience with regulatory obligations and political challenges in various jurisdictions | 9 | |||||||||||||||||
q | Financial & transactions experience | High level of familiarity with financial matters and complex financial transactions, including in foreign countries / currencies | 7 | |||||||||||||||||
@ | Operational experience | Experience managing manufacturing of many types and kinds of products consistent with high level specifications and in large quantities | 7 | |||||||||||||||||
| 6 | Strategy development experience | Experience with strategy development, allowing the Board to better evaluate management’s plan and guide the Company | 10 | |||||||||||||||||
L | Risk oversight/management experience | Assessment of risk and the policies/procedures to manage risk | 8 | |||||||||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 13 | ||||||||
| Governance | |||||||||||||||||||
Director Nominees
| Lori J. Ryerkerk | |||||||||||
 | Experience •Chief Executive Officer and President, Celanese (2019 – present); Chair (2020 – present) •Executive Vice President of Global Manufacturing of Shell Downstream Inc., the largest business of Royal Dutch Shell plc (now Shell plc), a global group of energy and petrochemical companies, where she led a team of 30,000 employees and contractors at refineries and chemical sites worldwide (2013 – 2018), Regional Vice President of Manufacturing in Europe and Africa responsible for the operation of five Shell Manufacturing facilities and five joint ventures (2010 – 2013) •Senior Vice President, Refining, Supply and Terminals at Hess Corporation, where she was responsible for refineries, terminals and a distribution network, and supply and trading (2008 – 2010) •Multiple operational and senior leadership roles in Refining and Chemicals Manufacturing, Power Generation, and various other groups including Supply, Economics and Planning, HSSE, and Public Affairs/Government Relations at ExxonMobil (1984 – 2008) •Former Independent Director at Axalta Coating Systems, a leading provider of liquid and powder coatings (2015 – 2019) Other Current Public Company Directorships •Independent Director at Eaton Corporation plc, a diversified power management company (2020 – present) Notable Affiliations •Board member, American Chemistry Council (2019 – present) •Board member, National Association of Manufacturers (2019 – present) Qualifications Provided to Our Board •Proven experience in P&L improvement, operational excellence and value creation in large, complex manufacturing organizations internationally and in the U.S., leading thousands of employees and multibillion dollar budgets at Shell, Hess and ExxonMobil •Leadership of multiple nine- and ten-figure acquisitions and divestitures to optimize manufacturing and operational portfolios •Significant experience in environmental and sustainability matters in the manufacturing and energy industries, including publication of Exxon’s first corporate-wide environmental, health and safety report, key involvement in the American Petroleum Institute’s establishment of guidelines for the calculation of greenhouse gas emissions, bringing keen insight to Celanese as we design, set and operationalize our sustainability targets and priorities •In multiple roles throughout her career, led multi-year improvements and safety and environmental metrics from individual manufacturing sites to large global businesses •Long history of effectively and influentially representing her companies and industries through trade associations and governmental committees in both the U.S. and abroad, including experience as the head of government relations and public affairs for the world’s largest energy company and broad experience in trade association leadership •External recognition includes being named as one of America’s Most Powerful Women in Business by Fortune, CEO of the Year by D (Dallas) Magazine (2020) and a member of the Department of Chemical and Biological Engineering Hall of Fame at Iowa State University (2021) Education •B.S. in chemical engineering, Iowa State University | ||||||||||
Director since: 2019 Age: 60 Current Board Committees: None | |||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 14 | ||||||||
| Governance | |||||||||||||||||||
| Jean S. Blackwell | |||||||||||
 | Experience •Chief Executive Officer of Cummins Foundation and Executive Vice President, Corporate Responsibility, of Cummins Inc., a leading global designer, manufacturer, distributor and servicer of engines and engine-related products (2008 – 2013), after serving as Executive Vice President and Chief Financial Officer (2003 – 2008); Vice President, Cummins Business Services (2001 – 2003); Vice President, Human Resources (1998 – 2001); and Vice President and General Counsel (1997 – 1998) •Partner at the Indianapolis law firm of Bose McKinney & Evans LLP, where she practiced in the areas of financial and real estate transactions (1984 – 1991) •State of Indiana Budget Director (1993-1995) •Executive Director of the Indiana State Lottery Commission (1991-1992) •Former Independent Director, Essendant Inc. (formerly United Stationers Inc.), a leading national wholesale distributor of business products (2007 – 2018) •Former Independent Director, Phoenix Companies Inc., a life insurance company (2004 – 2009) Other Current Public Company Directorships •Independent Chair of Ingevity Corporation, a leading global manufacturer of specialty chemicals and high performance carbon materials (2016 – present) •Independent Director, Johnson Controls International plc, a leading diversified technology company (2018 – present) Notable Affiliations •Director, Building Tomorrow Qualifications Provided to Our Board •Chief financial officer and public company audit committee chair service at large and prominent public companies, which brings to the Board a valuable perspective on financial, accounting, capital structure and risk management matters •Deep insight into navigating an increasingly complex global regulatory environment from experience gained as a general counsel, law firm partner and state government leader •Leadership in incorporating ESG priorities into our business strategy, leveraging experience gained as EVP of Corporate Responsibility for Cummins, as head of HR at Cummins, as board chair of a leading publicly-traded specialty chemical and performance materials company and as chair of the governance and sustainability committee of a large-cap multinational diversified technology company Education •B.A. in economics, The College of William and Mary • University of Michigan | ||||||||||
Director since: 2014 Age: 68 Current Board Committees: Audit Nominating and Corporate Governance | |||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 15 | ||||||||
| Governance | |||||||||||||||||||
| William M. Brown | |||||||||||
 | Experience •Executive Chair of the Board (2021 – 2022) and Chair and Chief Executive Officer (2019 – 2021) of L3Harris Technologies, Inc., successor to Harris Corporation, a global aerospace and defense technology company; President and Chief Executive Officer (2011 – 2019) and Chair (2014 – 2019), Harris Corporation •Various roles at United Technologies Corporation (UTC) (1997 – 2011), including as Senior Vice President, Corporate Strategy and Development (2011), President of UTC’s Fire & Security Division (2006 – 2011), additional U.S. and international roles at various divisions including Carrier Corporation’s Asia Pacific Operations and the Carrier Transicold division •Senior Engagement Manager McKinsey & Company •Project Engineer, Air Products and Chemicals, Inc. Other Current Public Company Directorships •Independent Director at Becton, Dickinson and Company, a global medical technology company (2022 – present) Notable Affiliations •Director, Fire Department of NYC Foundation Qualifications Provided to Our Board •Proven experience in the commercial, financial and cultural aspects of large M&A execution and integration, demonstrated through leading the $40 billion merger creating L3Harris, as well as M&A experience as SVP of Corporate Strategy and Development at United Technologies Corporation •Demonstrated leadership of complex global organizations, including his most recent executive role as Executive Chair and CEO of L3Harris, a global company with approximately $18 billion in revenue, 47,000 employees and customers in over 100 countries, following eight years as CEO of Harris Corporation •Insight into current cybersecurity issues globally through expertise in the defense industry as well as past service on the National Security Telecommunications Advisory Committee Education •B.S.,M.S. in mechanical engineering, Villanova University •MBA, The Wharton School, University of Pennsylvania | ||||||||||
Director since: 2015 Age: 60 Current Board Committees: Compensation Nominating and Corporate Governance | |||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 16 | ||||||||
| Governance | |||||||||||||||||||
| Edward G. Galante | |||||||||||
 | Experience •Senior Vice President and Member of the management committee of Exxon Mobil Corporation, an international oil and gas company (2001 – 2006), Executive Vice President of ExxonMobil Chemical Company (1999 – 2001) and various management positions of increasing responsibility over more than 30 years with the company. •Former Independent Director at Foster Wheeler AG, global engineering conglomerate (2007 – 2018) Other Current Public Company Directorships •Independent Director at Linde plc, a leading industrial gas and engineering company (2018 – present), previously Independent Director with Praxair, Inc., an industrial gas company (2007 – 2018) prior to its combination with Linde •Independent Director at Clean Harbors, Inc., a leading provider of environmental and industrial services (2007 – present) •Independent Director at Marathon Petroleum Corporation, a leading, integrated, downstream energy company (2018 – present), previously Independent Director at Andeavor Corporation, a highly integrated marketing, logistics and refining company acquired by Marathon (2016 – 2018) Notable Affiliations •LSU Foundation •Board of United Way Foundation of Metropolitan Dallas •Board of Trustees of Northeastern University •Director, Artis-Naples Qualifications Provided to Our Board •Decades-long operational and commercial experience in the petroleum and chemical manufacturing industry, including as EVP of one of the largest chemical companies in the world (Exxon Mobil Chemical), giving the Board and executive leadership valuable long-term insight into industry and commercial prospects, and capital deployment optimization •Brings to the Board and the EHSQPP Committee significant experience in environmental, health and safety (EHS) issues, gained from leading Exxon Mobil's EHS activities, chairmanship of the EHS Committee of Clean Harbors, membership on Marathon Petroleum’s Sustainability Committee and membership on the Environmental, Health, Safety and Security committee at Andeavor •Chair leadership and member service on large-company compensation committees gives our CMDC a valuable cross-industry perspective into best practices in driving value-creating behavior of leadership teams in large organizations Education •B.S. in civil engineering, Northeastern University | ||||||||||
Director since: 2013 Age: 72 Current Board Committees: Compensation Environmental, Health, Safety, Quality & Public Policy | |||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 17 | ||||||||
| Governance | |||||||||||||||||||
| Kathryn M. Hill | |||||||||||
 | Experience •Numerous executive-level positions at Cisco Systems, Inc., a communications and information technology company, including Executive Advisor (2011 – 2013); Senior Vice President, Development Strategy and Operations (2009 – 2011); Senior Vice President, Access Networking and Services Group (2008 – 2009); Senior Vice President, Ethernet Systems and Wireless Technology Group (2005 – 2008); and other roles of increasing responsibility •Various engineering positions of increasing responsibility at Hughes Network Systems, a satellite internet provider (1982 – 1993) Other Current Public Company Directorships •Independent Director at Moody’s Corporation, a global integrated risk assessment company (2011 – present) •Independent Director at NetApp, Inc., a global cloud-led, data-centric software company (2013 – present) Qualifications Provided to Our Board •Valuable insight into long-term commercialization strategies, through experience developing and successfully commercializing large complex enterprise products and services in multiple Senior Vice President roles at Cisco Systems •Practical knowledge and experience in enhancing our manufacturing and commercial effectiveness through digital strategies, gained from leadership experience at large technology companies, including service on Cisco’s development council •Long tenure at large technology companies and board membership at high-profile and complex technology-driven companies enabling her to advise the Board and management very effectively on governance and information security matters while chairing the EHSQPP Committee Education •B.S. in Mathematics, Rochester Institute of Technology | ||||||||||
Director since: 2015 Age: 66 Current Board Committees: Compensation Environmental, Health, Safety, Quality & Public Policy | |||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 18 | ||||||||
| Governance | |||||||||||||||||||
| David F. Hoffmeister | |||||||||||
 | Experience •Senior Vice President and Chief Financial Officer of Life Technologies Corporation, a global life sciences company, prior to its acquisition by ThermoFisher Scientific Inc. (2008 – 2014) •Chief Financial Officer of Invitrogen Corporation, a biotechnology company which merged with Applied Biosystems to form Life Technologies Corporation (2004 – 2008) •Senior partner at McKinsey & Company serving clients in the healthcare, private equity and chemical industries on issues of strategy (1984 – 2004), including as leader of McKinsey’s North American chemical practice (1998 – 2004) Other Current Public Company Directorships •Independent Director at Glaukos Corporation, an ophthalmic medical technology and pharmaceutical company (2014 – present) •Independent Director at ICU Medical Inc., a global leader in infusion systems, infusion consumables, and high-value critical care products (2018 – present) •Independent Director at StepStone Group Inc., a private markets investment firm (2020 – present) Notable Affiliations •Director at Kaiser Permanente, a private non-profit integrated managed care consortium (2014 – present) Qualifications Provided to Our Board •Long-standing knowledge of chemical and materials manufacturing, including from his time as the head of McKinsey’s North American chemical practice and as CFO of multibillion dollar life sciences companies •Valuable experience to effectively guide our efforts to grow our Engineered Materials business gained from deep knowledge of the medical and pharmaceutical industries through prior roles •Strong insight into successful acquisition execution, integration and synergy capture from leading, as CFO, the multibillion dollar merger and integration of two life sciences companies into a combined company, Life Technologies, with approximately 10,000 employees, and then playing an integral role in that company’s later $14 billion acquisition by Thermo Fisher Education •B.A. in business administration and management, University of Minnesota •MBA, University of Chicago Booth School of Business | ||||||||||
Director since: 2006 Age: 68 Current Board Committees: Audit Nominating and Corporate Governance | |||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 19 | ||||||||
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| Dr. Jay V. Ihlenfeld | |||||||||||
 | Experience •Senior Vice President, Asia Pacific (2006 – 2012), for 3M Company, a leader in technology and innovation; Senior Vice President, Research and Development (2002 – 2006); Various other leadership and technology positions, including Vice President of the Performance Materials business and Executive Vice President of the Sumitomo/3M business in Japan, over 33 years Other Current Public Company Directorships •Independent Director at Ashland, Inc., a premier global specialty materials company (2017 – present) Notable Affiliations •Minnesota Orchestra •University of Wisconsin-Madison College of Engineering Industrial Advisory Board •Phi Delta Theta Foundation Trustee Emeritus Qualifications Provided to Our Board •Extensive experience related to research, development, innovation and commercialization of chemical and performance materials products in multiple regions around the globe, which engineering and business knowledge is invaluable to the Board’s oversight of our product innovation, development and commercialization initiatives •A strong global perspective, from experience including his time as 3M’s Senior Vice President, Asia Pacific and Executive Vice President of 3M’s Sumitomo partnership, is highly beneficial to the Board’s and management’s understanding of global business and geopolitical considerations, particularly as the M&M acquisition expands our end market presence in the Asia-Pacific region •Deep experience in environmental and manufacturing strategy in the chemical sector, which helps guide the Board’s oversight of our operational sustainability efforts Education •B.S. in chemical engineering, Purdue University •PhD in chemical engineering, University of Wisconsin-Madison | ||||||||||
Director since: 2012 Age: 71 Current Board Committees: Compensation Environmental, Health, Safety, Quality & Public Policy | |||||||||||
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| Deborah J. Kissire | |||||||||||
 | Experience •Vice Chair and Regional Managing Partner, member of the Americas Executive Board and member of the Global Practice Group and various other various leadership positions, including Vice Chair and Regional Managing Partner for the East Central and Mid-Atlantic Regions and U.S. Vice Chair of Sales and Business Development, over a more than 35 year career at Ernst & Young LLP, an independent registered public accounting firm (1979 – 2015) Other Current Public Company Directorships •Independent Director at Cable One, Inc., a leading American cable and internet service provider (2015 – present) •Independent Director at Omnicom Group Inc., a global marketing and corporate communications holding company (2016 – present) •Independent Director at Axalta Coating Systems Ltd., a leading provider of liquid and powder coatings (2016 – present) Notable Affiliations •Advisory Board for Texas State University’s McCoy College of Business •Goodwill Industries of Greater Washington •Junior Achievement USA Qualifications Provided to Our Board •Ms. Kissire’s more than 35-year career and leadership roles at Ernst & Young, together with her service on other large public company audit committees, bring to our Audit Committee a thorough, multi-industry perspective to the complexities of our strategic planning, balance sheet and cash management, risk oversight and financial reporting •Experience leveraging her leadership skills and vision for strategic firm initiatives and programs at Ernst & Young in global branding, governance, and gender inclusiveness, such as their Partner Advisory Council, Strategy Task Force, Gender Equity Task Force, Vision 2000 Sales Task Force, and global Vision 2020 – which brings to our Board valuable experience in these areas key to our strategy Education •BBA in accounting, Texas State University | ||||||||||
Director since: 2020 Age: 65 Current Board Committees: Audit Environmental, Health, Safety, Quality & Public Policy | |||||||||||
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Michael Koenig | |||||||||||
 | Experience •Chief Executive Officer and a member of the board of directors of Nobian Industrial Chemicals B.V., a privately-held European leader in the production of essential chemicals that spun out of Nouryon (2021 – present) •Chief Executive Officer of ELKEM ASA, a publicly-listed and Norwegian-headquartered global supplier of silicon-based advanced materials (2019 – 2021) •Chief Executive Officer of China National Bluestar Group, a specialty chemicals company (2016 – 2019) •Multiple senior executive positions in Germany and China at Bayer AG, a life sciences company (1990 – 2015) •Former Executive Board Member at Elkem ASA (2016 – 2021) •Former Independent Director at Conzzeta AG, a sheet-metal processing company now known as Bystronic AG (2016 – 2021) Other Current Public Company Directorships •Independent Chair of Symrise AG, a publicly-listed developer and producer of food and cosmetic flavor and fragrance ingredients headquartered in Germany (2020 – present) Qualifications Provided to Our Board •Current and recent service as CEO of multibillion dollar chemical manufacturers – with thousands of employees and operations in dozens of countries – bringing additional expertise to our complex global manufacturing, distribution and sales operations •Deep expertise in global markets where we have significant operations and customer bases including China, where he worked and served as a senior chemicals and materials executive for nearly fifteen years, and Europe, where he has been CEO and board member of multiple large chemical manufacturing companies, which brings geopolitical and cross-border expertise to the execution of our global strategy in markets around the world •Service as a CEO and board member of multiple companies headquartered in Europe brings a valuable perspective to our customer and sustainability efforts in that region Education •M.S. in chemical process engineering, TU Dortmund University | ||||||||||
Director since: 2022 Age: 59 Current Board Committees: Compensation Environmental, Health, Safety, Quality & Public Policy | |||||||||||
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| Kim K.W. Rucker | |||||||||||
 | Experience •Executive Vice President, General Counsel and Secretary of Andeavor, an integrated marketing, logistics and refining company, and of Andeavor Logistics LP, a midstream energy infrastructure and logistics company, from 2016 until Andeavor was acquired by Marathon Petroleum Corporation (2016 – 2018), including time as interim Chief Human Resources Officer •Executive Vice President Corporate & Legal Affairs, General Counsel and Corporate Secretary of Kraft Foods Group, Inc., a food and beverage company (2012 – 2015) •Senior Vice President, General Counsel and Chief Compliance Officer of Avon Products, Inc., a global manufacturer of beauty and related products and beginning in 2009 assumed additional duties as Corporate Secretary (2008 – 2012) •Senior Vice President, Secretary and Chief Governance Officer of Energy Future Holdings Corp., an energy company (2004 – 2008) •Corporate Counsel for Kimberly-Clark Corporation •Partner in the Corporate & Securities group at the law firm of Sidley Austin LLP Other Current Public Company Directorships •Independent Director at HP Inc., a leading technology company (2021 – present) •Independent Director at Lennox International Inc., a global provider of climate control solutions (2015 – present) •Independent Director at Marathon Petroleum Corporation a leading, integrated, downstream energy company (2018 – present) Notable Affiliations •Haven for Hope •Johns Hopkins Medicine Board of Trustees Qualifications Provided to Our Board •Business, legal and regulatory experience as an executive leader and general counsel and chief compliance officer in oil and gas, food and beverage and personal care industries, and board roles in multiple customer-facing companies, brings a multi-industry, multi-disciplinary perspective to our Board’s oversight of the Company’s operational, governance, regulatory affairs and risk controls management •Leadership in negotiating, executing and integrating multiple large and high-profile acquisitions recently – including the $45 billion buyout that created Energy Future Holdings (at the time the largest leveraged buyout in history), the $45 billion merger of Kraft Foods Group with Heinz to create the world’s fifth largest food and beverage company, Andeavor’s $6 billion acquisition of Western Refining Logistics and the acquisition of Andeavor by Marathon Petroleum for over $20 billion – brings highly-valuable expertise regarding business strategy, complex M&A, and integration •Broad knowledge of law, business transactions, corporate governance, compliance, communications, crisis management, government affairs, human capital and community involvement gained as an executive and director of multiple public companies, including numerous board leadership roles. Brings current and expert perspective and leadership experience on various matters, including strategy, risk management and board practices Education •BBA in economics, University of Iowa •M.A. in public policy, John F. Kennedy School of Government at Harvard University •J.D., Harvard Law School | ||||||||||
Director since: 2018 Age: 56 Current Board Committees: Audit Nominating and Corporate Governance | |||||||||||
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Vote Required
Each director must receive a majority of the votes cast in favor of his or her election.
Recommendation of the Board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
“FOR” EACH OF THE NOMINEES LISTED ABOVE
Board and Committee Governance
Director Elections
All Celanese directors are elected annually. As part of its efforts to maintain a board composed of high-quality directors able to effectively serve the Company’s strategic needs, the NCG Committee evaluates the qualifications and performance of each incumbent director before recommending the nomination of that director for an additional term. Our Board proactively adopted a by-law, which permits a shareholder, or a group of up to 20 shareholders, owning at least three percent of the Company’s outstanding Common Stock continuously for at least three years, to submit director nominees for up to the greater of two directors or 20 percent of the number of directors currently serving on the Board, subject to the terms and conditions specified in the by-laws. | Proxy Access | |||||||||||||||||||
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Majority Voting Standard
Our by-laws provide that, in an uncontested election, like this one, each director must receive the majority of the votes cast with respect to that director (meaning that the number of shares voted “for” a director must exceed the number of shares voted “against” that director). If an incumbent director does not receive a majority vote, he or she has agreed that a letter of resignation will be submitted to the Board. The NCG Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the resignation within 90 days of the certification of the vote and will also promptly publicly disclose its decision regarding the director’s resignation. The Board’s decision will take into account the recommendation of the NCG Committee, which will include consideration of the vote result, the director’s contributions to the Company during his or her tenure, the director’s qualifications, any relevant input from shareholders, along with any other factors the NCG Committee deems relevant. The director who has tendered a resignation will not participate in the deliberations.
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Composition of the Board of Directors
Our certificate of incorporation provides that the number of members of the Board of Directors shall be fixed by the Board, but shall be no less than seven and no more than fifteen. Our Board may fill vacancies and increase or, upon the occurrence of a vacancy, decrease the Board’s size between annual shareholder meetings. As of the date of this Proxy Statement, we have, and the Board has established the size of the Board to be, 11 directors (which will be reduced to 10 following the Annual Meeting as Mr. Ghai is not seeking re-election.) Our Board of Directors is and shall be comprised of a majority of independent directors. See “Director Independence and Related Person Transactions” for additional information.
The Company has a director retirement guideline set forth in our corporate governance guidelines. The guideline provides that a director should retire from the Board no later than the annual meeting of shareholders following such director’s 75th birthday; provided, however, the retirement guideline may be waived by a majority of disinterested directors upon the recommendation of the NCG Committee. Because directors gain valuable experience and knowledge of our complex business operations through multiple years of service, and because it has a balance of newer and longer-serving members, the Board has determined that members should not be subject to mandatory term limits. Such limits could result in the premature loss of a director who continues to significantly contribute to deliberations assessing our strategies, operations and risks. We believe that our Board’s decision not to establish mandatory term limits is consistent with the prevailing practice among companies in the S&P 500.
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Annual Board and Committee Self-Evaluation Process
Each year, the members of the Board and each committee conduct a self-assessment. The process for the self-assessment is approved by the Board each year based on a recommendation from the NCG Committee. The NCG and the Board regularly review and make refinements to the annual assessment process.
Under the process used in 2022, the NCG Committee developed a thorough list of topics to be considered by the directors. These topics were incorporated into a Board questionnaire completed by each director and committee-specific questionnaires for each committee. After completion of the questionnaires, our NCG Committee Chair held virtual conferences with each independent director, including the Lead Independent Director, as well as the Chair, to discuss the topics and to gather any other feedback a director has as they relate to the Board and each committee. The input from the questionnaires and conversations was summarized and presented to the full Board (and to the independent directors as to the CEO) and to the individual committees at the October Board and committee meetings. An overview of this process is illustrated below.
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Board and Committee Self-Evaluation Process Summary | ||||||||
| Process Design and Approval | v | Discussion among management and NCG Chair regarding key topics for assessment and creation of the Board and Committee questionnaire. | ||||||
| Topics generally include Board and committee structure, oversight, allocation of responsibilities among committees, approach to meetings, individual director assessments, culture and current strategic or business topics of particular importance. | ||||||||
| v | NCG Committee recommends process for Board approval in July. | |||||||
| Questionnaire | v | Board members complete and provide comments on detailed questionnaire. | ||||||
| Includes specific questions and topics for each committee. | ||||||||
| One-on-One Conversations | v | NCG Chair holds one-on-one conversations with each director to discuss feedback and comments on the questionnaire, and any other topics a director wishes to raise. | ||||||
| v | NCG Chair confers with the Chair/CEO and Lead Independent Director so that they understand any opportunities for improvement that may have been raised. | |||||||
| Report-Out to Committees and Board | v | Feedback is reported to the Board and individual committees at the October meeting. | ||||||
| v | The Board and each committee hold dedicated closed executive sessions in October to discuss assessment and provide any feedback to management. | |||||||
| Implementation of Feedback | v | Management and directors coordinate to update policies and practices to incorporate director feedback. | ||||||
| v | The Board reviews implementation progress in connection with the following year’s self-evaluation process. | |||||||
| Enhancements implemented from the most recent self-evaluation included director education, refined cadence of certain agenda topics, refinements to the Board’s approach in overseeing cyber and supply chain risks, and review and refreshment of certain company policies. | ||||||||
Also, the NCG Committee and full Board evaluate directors who are nominees for re-election to the Board as part of the nomination process.
Board Leadership Structure
The Company’s governance framework provides the Board with flexibility to select the appropriate leadership structure for the Company. In making leadership structure determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company’s shareholders. The Board welcomes and takes under consideration any input received from our shareholders regarding the Board’s leadership structure and informs shareholders of any change in the Board’s leadership structure through press releases or, as applicable, by posting amended corporate governance guidelines on the Company’s website.
In April 2020, the Board elected our Chief Executive Officer Lori Ryerkerk to serve as Chair of the Board. The Board made this election as part of the planned transition of leadership from our prior CEO Mark Rohr. Therefore, the current leadership structure is comprised of a combined Chair of the Board and Chief Executive Officer, a Lead Independent Director, and Board committees comprised exclusively of and chaired by independent directors, together with active engagement by all directors. The Board believes that the current leadership structure is effective and currently serves the business and shareholders well. The Board also believes that combined leadership of the Board and the Company by Ms. Ryerkerk is currently the optimal structure to guide the Company, provide consistent leadership and maintain the focus required to achieve our long-term business goals.
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| Board Leadership Structure | The Board believes this is currently the optimal structure to provide consistent leadership and to maintain the focus required to achieve the Company’s strategic plan and long-term business goals. The NCG Committee and the Board will continue to reevaluate the structure annually. | ||||||||||||||||||||||
● | Chair and Chief Executive Officer: Lori Ryerkerk | ||||||||||||||||||||||
● | Lead Independent Director: William Brown (since April 2021) | ||||||||||||||||||||||
● | All Board committees comprised entirely of independent directors | ||||||||||||||||||||||
● | Active engagement by all directors | ||||||||||||||||||||||
Duties and Responsibilities of Lead Independent Director
The duties and responsibilities of the Company’s Lead Independent Director are set forth in our Lead Independent Director Policy, which is part of our corporate governance guidelines. The Company’s Lead Independent Director, who is elected by the independent directors for a one-year term:
•presides over executive sessions of the independent members of the Board and at meetings of the Board in the absence of, or upon the request of, the Chair;
•approves the scheduling of Board meetings, as well as the agenda and materials for each Board meeting and executive session of the Board’s independent directors, as well as advising on the quality or quantity of information provided to the Board;
•has the authority to call meetings of the Board and such other meetings of the independent directors as he/she deems necessary;
•serves as a liaison and supplemental channel of communication between the independent directors and the Chair/CEO;
•meets regularly with and advises the Chair/CEO;
•communicates with shareholders and other external stakeholders as requested and deemed appropriate by the Board, and speaks on behalf of the Board in circumstances where the Chair is not available;
•interviews director candidates along with the NCG Committee;
•approves and coordinates the retention of advisors and consultants who report directly to the independent members of the Board, except as otherwise required by applicable law or the New York Stock Exchange (“NYSE”) Listing Standards;
•guides the Board’s governance processes concerning the annual Board self-evaluation and CEO succession planning; and
•when requested by the Chair or the Board, assists the Board in reviewing and promoting compliance with governance principles.
Leadership Structure Determination
Consistent with the Board’s commitment to corporate governance practices that are in the best interests of the Company and its shareholders, at least one executive session of the directors each year includes a review of the Board’s leadership structure and a consideration of whether the position of Chair of the Board should be held by the Chief Executive Officer or an independent director.
Under the Company’s by-laws, the Chair presides over meetings of the Board, presides over meetings of shareholders and performs such other duties as may be assigned by the Board. The Chief Executive Officer is generally in charge of the daily affairs of the Company, subject to the overall direction and supervision of the Board and its committees and subject to such powers as reserved by the Board. Lori Ryerkerk currently serves as Chair of the Board and Chief Executive Officer.
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The Board has had a Lead Independent Director role for more than a decade. In February 2021, the independent directors elected William M. Brown to serve as Lead Independent Director beginning after the 2021 Annual Meeting (held in April 2021), and the independent directors re-elected Mr. Brown as Lead Independent Director to successive annual terms in February 2022 and February 2023. The Lead Independent Director is elected annually, and is generally expected to serve for not more than three to five years. Having served as Chair and CEO of L3Harris Technologies and Harris Corporation, two multibillion dollar public companies with thousands of employees, Mr. Brown brings to the Lead Independent Director role high-level executive, operational, risk oversight and corporate governance experience. The Board believes he is well-positioned to guide our Board and advise our Chair/CEO on enterprise strategy and risk.
Importantly, all directors play an active role in overseeing the Company’s business both at the Board and committee levels. As set forth in the Company’s corporate governance guidelines, the core responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareholders. The Board, including all of the nine independent nominees, consists of skilled and experienced leaders in business. Many directors currently serve or have served as chief executives or members of senior management of Fortune 1000 companies and/or as senior leaders in top consulting, accounting and law firms. In these prior roles, the independent directors have been called upon to provide solutions to various complex issues and are expected to, and do, ask hard questions of management. As such, the independent directors are well-equipped to oversee the success of the business and to provide advice and counsel to our CEO and management.
As part of each regularly scheduled Board meeting, the independent directors meet in executive session without the Chair/CEO present. These meetings allow independent directors to discuss issues of importance to the Company, including the business and affairs of the Company, as well as matters concerning management, without any member of management present. All of our Board committees are chaired by and consist entirely of independent directors.
Director Membership on Other Boards
Each of our directors is expected to have sufficient time and capacity to serve as an effective Board member and to carry out his or her duties to the Company and our shareholders. To this end, our corporate governance guidelines limit the number of other boards on which our directors serve. No director may serve on more than four public company boards including ours without the prior approval of the NCG Committee (but in no event shall a director serve on more than six public company boards). The Board also recognizes the time commitment associated with service as a public company executive officer, and therefore applies a tighter limit to any non-employee director who serves as a CEO or executive of another public company: generally such directors may serve on our Board and the board of their employer. The NCG Committee may approve up to one additional board and the full Board may approve additional service for particular directors (up to the previously-stated limit), following consideration of such factors deemed appropriate such as individual’s role, experience, diversity, background and other leadership positions. To date, neither the NCG Committee nor the Board has exercised this authority to approve additional service. Directors are expected to advise the Board Chair and the NCG Committee Chair in advance of accepting an invitation to serve on another company’s board.
Recognizing that directors’ responsibilities are increasingly complex and that Board and committee memberships demand significant time commitments, our Board regularly evaluates the other commitments of director candidates during the nomination process, and of its existing directors as part of the annual nomination and Board self-assessment processes to confirm that they can devote the time and energy required to be effective representatives of shareholders’ interests.
Board Meetings in 2022
The Board of Directors held seven meetings during 2022 and committees of the Board held a total of 22 meetings. Overall attendance at such meetings was 96%. Therefore all incumbent directors attended at least 75% of the aggregate of (i) meetings of the Board and (ii) meetings of the Board committees on which they served during the
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fiscal year ended December 31, 2022. In addition, the Board expects directors to attend the annual meeting of shareholders absent special circumstances. All of our directors then serving attended our 2022 Annual Meeting.
Committees of the Board
The Board of Directors has four standing Board committees:
•Audit Committee;
•Compensation and Management Development Committee;
•Nominating and Corporate Governance Committee; and
•Environmental, Health, Safety, Quality and Public Policy Committee.
The following table sets forth our nominees’ membership on our committees:
Information about the current composition and respective roles of each Board committee is set forth on the following pages. For additional information on each committee’s and the full Board’s roles in overseeing our environmental, social and governance (ESG) priority topics, please refer to “Board Oversight — Board Oversight of Environmental, Social and Governance Matters” below.
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Audit Committee
The Company’s Audit Committee (the “Audit Committee”) is currently comprised of Ms. Kissire (chair), Ms. Blackwell, Mr. Ghai, Mr. Hoffmeister and Ms. Rucker, each of whom the Board has affirmatively determined is independent of the Company and its management under the rules of the NYSE and the SEC. The Board has also determined that Ms. Blackwell, Mr. Ghai, Mr. Hoffmeister and Ms. Kissire are “Audit Committee Financial Experts” as the term is defined in applicable SEC rules. Each member of the Audit Committee is also “financially literate” as that term is defined by the rules of the NYSE. The complete text of the Audit Committee charter, as last reviewed and approved by the Board of Directors on July 13, 2022, is available on our website, https://investors.celanese.com, by clicking “Corporate Governance.”
The Audit Committee is directly responsible for the appointment, compensation and oversight of the work of the Company’s independent registered public accounting firm. The independent registered public accounting firm reports directly to the Audit Committee. The principal purposes of the Audit Committee are to oversee:
•accounting and reporting practices of the Company and compliance with legal and regulatory requirements regarding such accounting and reporting practices;
•the quality and integrity of the financial statements of the Company;
•internal control and compliance programs;
•the independent registered public accounting firm’s qualifications and independence; and
•the performance of the independent registered public accounting firm and the Company’s internal audit function.
The Audit Committee Charter provides that the Audit Committee may, in its sole discretion and at the Company’s expense, retain legal, accounting or other consultants or experts it deems necessary in the performance of its duties and without having to seek the approval of the Board.
Mr. Hoffmeister serves on the audit committees of three other publicly-traded companies in addition to ours. Our Board has affirmatively determined that Mr. Hoffmeister’s simultaneous service on these other audit committees does not impair his ability to effectively serve on our Audit Committee.
Compensation and Management Development Committee
The Company’s Compensation and Management Development Committee (the “CMDC”) is currently comprised of Mr. Galante (chair), Mr. Brown, Ms. Hill, Dr. Ihlenfeld and Mr. Koenig. The Board has determined that all members of the CMDC are independent under Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and applicable NYSE listing standards, and qualify as “non-employee directors” for purposes of Section 162(m) of the Internal Revenue Code. The complete text of the CMDC charter, as last amended by the Board of Directors on July 13, 2022, is available on our website, https://investors.celanese.com, by clicking “Corporate Governance”. A description of the CMDC’s processes and procedures for determining executive compensation and the roles of management and the compensation consultant in determining or recommending the amount and form of compensation is more fully described in “Compensation Discussion and Analysis.”
The principal purposes of the CMDC are to:
•review and approve the compensation of the Company’s executive officers;
•review and approve the corporate goals and objectives relevant to the compensation of the CEO and the other executive officers, and to evaluate the CEO’s and the other executive officers’ performance and compensation in light of such established goals and objectives;
•oversee the development and implementation of succession plans for the CEO and the other key executives; and
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•oversee and review the Company’s strategies and policies in the areas of human capital management, including talent development, diversity, equity and inclusion.
The CMDC charter provides that the CMDC may, in its sole discretion and at the Company’s expense, retain legal, accounting or other consultants or experts, including but not limited to compensation consulting firms, that the CMDC deems necessary in the performance of its duties.
During 2022, Willis Towers Watson PLC (“WTW”), as independent outside compensation consultant, advised the CMDC on executive officer compensation matters. See “Role of the CMDC’s Independent Compensation Consultant” for additional information.
Nominating and Corporate Governance Committee
The Company’s NCG Committee is currently comprised of Ms. Rucker (chair), Ms. Blackwell, Mr. Brown, Mr. Ghai and Mr. Hoffmeister. The complete text of the NCG Committee charter, as last reviewed and approved by the Board of Directors on July 13, 2022, and our corporate governance guidelines, as last reviewed and approved by the Board of Directors on October 19, 2022, are available on our website, https://investors.celanese.com, by clicking “Corporate Governance.”
The principal purposes of the NCG Committee are to:
•identify, screen and review individuals qualified to serve as directors and recommend candidates for nomination for election at the annual meeting of shareholders or to fill Board vacancies;
•review and recommend independent director compensation to the Board;
•develop and recommend to the Board and oversee implementation of the Company’s corporate governance guidelines;
•oversee evaluations of the Board;
•recommend to the Board nominees for the committees of the Board; and
•review and assess our Board’s and the committees’ structure for overseeing ESG matters; review and oversee our strategy and processes for public reporting on ESG and sustainability matters; and oversee our and our political action committee’s political engagement initiatives.
The NCG Committee charter provides that the NCG Committee may, in its sole discretion and at the Company’s expense, retain legal, accounting and other consultants or experts, including but not limited to leadership search firms, the NCG Committee deems necessary in the performance of its duties, including in its process of identifying director candidates.
During 2022, WTW, as independent outside compensation consultant, advised the NCG Committee on non-employee director compensation matters.
Environmental, Health, Safety, Quality and Public Policy Committee
The Company’s Environmental, Health, Safety, Quality and Public Policy Committee (the “EHS Committee”) is currently comprised of Ms. Hill (chair), Mr. Galante, Dr. Ihlenfeld, Ms. Kissire and Mr. Koenig. The EHS Committee assists the Board in fulfilling its oversight duties regarding, while Company management retains responsibility for assuring compliance with, applicable environmental, health and safety laws and regulations. The complete text of the EHS Committee charter, as last amended by the Board of Directors on July 13, 2022, is available on our website, https://investors.celanese.com, by clicking “Corporate Governance.”
The principal purposes of the EHS Committee are to:
•oversee the Company’s policies and practices concerning environmental, health, safety, quality and public policy issues;
•review the impact of such policies and practices on the Company’s ESG and sustainability responsibilities;
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•oversee the development, implementation and monitoring of greenhouse gas (GHG) reduction and other sustainability-related investments into our manufacturing and production processes;
•oversee management’s review of supply chain risk and cybersecurity risk; and
•make recommendations to the Board regarding these matters.
Board Oversight
Shareholders elect the Board to oversee management and to serve shareholders’ long-term interests. Management is responsible for delivering on our strategy, creating our culture, creating and delivering innovative products and services, establishing accountability, and controlling risk. The Board and its committees work closely with management to balance and align strategy, risk, corporate social responsibility, and other areas while considering feedback from shareholders. Essential to the Board’s oversight role is a transparent and active dialogue between the Board and its committees, and management. To support that dialogue, the Board and its committees have access to, receive presentations from, and conduct regular meetings with the senior leadership team, other business and function leaders, subject matter experts, the Company’s enterprise risk management and internal audit functions, and external experts and advisors.
Board Oversight of Strategy
One of the Board’s primary responsibilities is overseeing management’s establishment and execution of the Company’s strategy. As Celanese continues to transform and expand its business, the Board works with management to respond to a dynamically changing environment. At least quarterly, the CEO, the senior leadership team, and leaders from across the Company provide detailed business and strategy updates to the Board. At least annually, the Board conducts an even more in-depth review of the Company’s overall strategy, including critical issues, risks and opportunities. At all of these reviews, the Board engages with the senior leadership team and other business leaders regarding business objectives, the competitive landscape, economic trends, environmental and sustainability goals and investments, public policy and regulatory developments and other critical issues. At meetings occurring throughout the year, the Board also assesses acquisitions, the Company’s operating and capital plan, and performance and alignment to our strategy. The Board looks to the focused expertise of its committees to inform strategic oversight in their areas of focus. Members of senior management are available to discuss the Company’s strategy, plans, results and issues with the Board committees and the Board, and regularly attend such meetings to provide periodic briefings and access to management. In addition, the Audit Committee regularly holds separate executive sessions with the lead client service partner of our independent registered public accounting firm, the chief financial officer, the internal auditor, the chief compliance officer and other members of management as appropriate.
Board Oversight of Environmental, Social and Governance Matters
We recognize that our success is defined by multiple groups of stakeholders – investors, customers, employees, and communities – and this recognition is reflected in our efforts to promote safety and protect our environmental resources as a responsible corporate citizen.
Our CEO Lori Ryerkerk affirmed the need to build the next generation of sustainability efforts for the Company and formed the Celanese ESG Council in 2019. Our ESG Council is a cross-functional team of senior leaders from each region who develop, make recommendations to management and implement an ESG strategy on topics significant to Celanese’s long-term success.
The ESG Council meets monthly to form recommendations to senior leadership on key ESG program strategy and implementation of ESG-related projects. For example, the ESG Council has made recommendations on standards reporting alignment and further development of key KPIs, and has led the publication of the Company’s comprehensive Sustainability Reports, the most recent of which is available at sustainability.celanese.com.
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The Board of Directors and its committees have conducted an in-depth review of their approach to overseeing ESG topics most significant to Celanese (our priority topics). In April 2021, our Board agreed on a strengthened and clarified framework for overseeing priority ESG matters by aligning a specific committee or the full Board to each. The diagram below illustrates primary Board or committee oversight responsibility by topic.
Our Board regularly reviews the areas of responsibility of its committees, including through an annual review of its Committee Charters and our Corporate Governance Guidelines, and includes as part of those reviews ESG topics that are most significant to Celanese. In 2022, the Board determined the EHS Committee is well-positioned to oversee our cybersecurity efforts, and allocated that priority topic to such Committee as described in “Board Oversight of Risk — Highlight on Oversight of Cybersecurity Risk and Data Privacy.” The Company and the Board also receive feedback from shareholders on ESG issues through our shareholder outreach program and through communication from shareholders. See “Shareholder Engagement” below.
For highlights of some of our most significant recent progress on key ESG initiatives, please see “Environmental, Social and Governance Update” in the forepart of this Proxy Statement.
Board Oversight of Risk
Effective risk management is critical to Celanese’s ability to achieve its strategy and ESG goals. The Board oversees management in exercising its responsibility for managing risk, considering our robust framework of policies, procedures, and processes to anticipate, identify, assess, prioritize, and mitigate risks across the Company. Risk management is considered a strategic activity within the Company and responsibility for managing risk rests with executive management while the committees of the Board and the Board as a whole participate in the oversight of the process. Specifically, the Board has responsibility for overseeing the strategic planning process, reviewing and monitoring management’s execution of the strategic and business plan, and selected risk areas, including
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cybersecurity. Each Board committee is responsible for oversight of specific risk areas relevant to their respective committee charter. The oversight responsibility of the Board and the Board committees is enabled by an enterprise risk management model and process implemented by management that is designed to identify, assess, manage and mitigate risks. In addition, the Directors identify risks through the Board and committee self-assessment process and hears from a range of outside advisors and experts regarding trends and emerging risks. The Board further recognizes that risk management and oversight comprise a dynamic and continuous process and reviews the enterprise risk model and process periodically. On a regular basis, the Board and its committees engage with management, including the chief compliance officer, who reports to the general counsel, on risk as part of broad strategic and operational discussions which encompass interrelated risks, as well as on a risk-by-risk basis.
The Board executes its oversight responsibility directly and through its committees. It delegates oversight of some risks to efficiently allocate them to appropriate committees with related subject matter focus while retaining oversight of risks that require broader Board attention. Because many risks are dynamic, interrelated, and applicable across subject matter and company goals, the Board may continue to oversee such risks in addition to delegating some oversight to a committee.
Committees discuss the Company’s risk exposures with management, the internal audit executive and the independent external auditor in an iterative risk assessment process. Results of risk audits are routinely reported to leadership and the Audit Committee, which regularly reports back to the Board. Some examples of risks overseen by committees and the Board are:
•The Audit Committee regularly reviews and assesses the Company’s processes to manage financial reporting risk and to manage internal audit, internal control over financial reporting and disclosure controls and procedures, tax, investment, and other financial risks, as well as the Company’s financial position and financial activities. The Audit Committee also oversees the Company’s compliance program.
•The CMDC oversees compensation programs, policies and practices and their effect on risk-taking by management. See “Compensation Risk Assessment” for additional information.
•The NCG Committee oversees the governance framework and structure as well as other corporate governance matters, including oversight of the annual Board and committee self-assessment process, and is charged with developing and recommending to the Board corporate governance principles and policies and Board committee structure, leadership and membership.
•The EHS Committee oversees certain operational risks related to environmental, process and product safety and quality matters, as well as reputational issues related to those matters.
•The full Board oversees the enterprise risk process that management implements and reviews risks associated with it.
•The full Board and the CMDC address issues and risks associated with diversity, equity and inclusion and human capital management.
•The full Board and the EHS Committee oversee cybersecurity risk.
Each of the Board committees is required to make regular reports of its actions and any recommendations to the Board with respect to risk management, including recommendations to assist the Board with its overall risk oversight function. In addition, an annual report of enterprise risks, which undergo a comprehensive review using strategic, operational, financial, compliance and IT risk themes, is delivered to the Board. This approach to risk oversight does not affect the Board’s leadership structure.
Each of our directors has substantial experience managing and overseeing risk for complex, international organizations that they leverage while serving on our Board. For example, Ms. Ryerkerk’s experience as our chief executive officer, Mr. Brown’s past experience leading L3 Harris Technologies, Inc. as its chief executive officer and Mr. Koenig’s experience leading Nobian Industrial Chemicals as its chief executive officer each necessitate risk management and oversight on a daily basis. The extensive chemical industry leadership experience shared by Mr. Galante, Dr. Ihlenfeld and Ms. Ryerkerk, as well as Ms. Hill’s leadership experience in technology, allow each of them
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to understand and address key risk-related issues unique to our industry and the Company. Risk management was an active component of Mr. Hoffmeister’s responsibilities as chief financial officer for Life Technologies and Ms. Kissire’s senior leadership positions with Ernst & Young LLP. Finally, the management, leadership, accounting and legal backgrounds of Ms. Blackwell, Ms. Kissire and Ms. Rucker allow them unique perspectives with recognizing and advising on a broad array of issues affecting corporate risk.
Highlight on Oversight of Human Capital Management
The Board, the CMDC, and the EHS Committee engage with the senior leadership team and human resources executives on a regular basis across a broad range of human capital management issues. Celanese is focused on creating a respectful, safe, rewarding, diverse, and inclusive work environment that allows our people to build meaningful careers. The success of these human capital management objectives is important to the fulfillment of our strategy, and the Board works with management to provide oversight on matters including culture, succession planning and development, compensation, benefits, employee recruiting and retention, diversity, equity and inclusion and respectful workplace. Additionally, each year, the CMDC evaluates management’s annual assessment of risk related to our compensation policies and practices. The Board and the CMDC work with the CEO and the Senior Vice President and Chief Human Resources Officer to review CEO and senior executive succession plans, including considering the qualifications and experience of potential leadership candidates. For more detail please see “Compensation Discussion and Analysis — CD&A Highlights — Human Capital Management.”
Highlight on Oversight of Cybersecurity Risk and Data Privacy
The Board and the EHS Committee are both involved in oversight of the Company’s management of cybersecurity risk, reflecting the Board’s view of the benefits of periodic reporting on a range of cybersecurity issues to a dedicated subset of directors. Cybersecurity protection is vital to maintaining our proprietary information and the trust of our customers and employees. We recognize the importance of securing our data and information systems from potential breaches. Management provides regular updates to the EHS Committee on the Company’s cybersecurity policies and performance at least annually and periodically throughout the year, including information about cybersecurity governance processes, the status of projects to strengthen internal cybersecurity, and the results of assessments and security breach simulations. The Board and the EHS Committee also discuss recent incidents throughout the industry and the emerging threat landscape.
In 2021, we launched a comprehensive cybersecurity awareness course in our learning management system covering key topics such as identifying workplace cyber hazards and attacks. In 2022, we added updated content monthly in multiple languages. Our CyberSAFE intranet is a one-stop for quick and consumable content to help employees identify and avoid cybersecurity risks.
To protect the Company, we maintain cyber/information security insurance with coverage for security incident response expenses, certain losses due to network security failures, investigation expenses, privacy liability and certain third-party liability.
Highlight on Oversight of Climate Risk
Climate risk has the potential to impact many aspects of the Company’s strategy, so the Board has determined to retain oversight of the Company’s climate policy and strategy as a whole and has delegated to its Committees specific aspects of managing climate risk as described below.
The Company has set meaningful environmental goals to reach by 2030, including a 30% reduction in Scope 1 and 2 greenhouse gas emissions intensity, 10% reduction in net energy intensity, 10% reduction in water consumption intensity, and 15% reduction in waste disposal intensity, as described in “Environmental, Social and Governance Update” in the forepart of this Proxy Statement. Each goal requires significant input from all areas of the Company to focus the Company on achieving it and reporting accurate data to monitor progress and opportunity. The NCG Committee oversees the process by which the Company reports on these and other metrics.
Climate risk can include related financial and compliance risk. Management updates the Audit Committee and EHS Committee on the regulatory landscape and continued compliance activities supporting the Company’s increased
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focus on environmental sustainability. The EHS Committee oversees management’s greenhouse gas reduction efforts and the sustainability-related investments in the Company’s manufacturing and production processes, such as carbon capture and use at our Clear Lake site. The Board guides and receives reports on our product strategies to support our customers’ sustainability goals, such as light-weighting products and producing from bio-based sources.
Highlight on Oversight of Strategic Acquisitions
The full Board is responsible for overseeing Celanese’s strategic acquisition and integration process, which supports alignment with our strategic objectives, provides accountability across acquisitions, and enables insight for future acquisitions. Our individual directors have extensive negotiation, acquisition, integration, and other business combination experience that allows them to constructively engage with management and effectively evaluate acquisitions for alignment with our strategy and culture. Celanese views strategic acquisitions as an important element in delivering long-term shareholder value. While management is charged with identifying potential acquisition targets, executing transactions, and managing integration, our Board’s oversight extends to each phase. Management and the Board regularly discuss potential acquisitions of all sizes and degrees of complexity of integration and their role in the Company’s overall business strategy. These discussions include acquisitions in process and potential future acquisitions, focusing on valuation, strategic risk, and potential synergies with our businesses and strategy. When management considers potentially significant acquisitions, the Board receives an increased level and frequency of updates and discusses with management a broad range of matters, including negotiations, due diligence findings, valuation, tax impacts, integration planning, talent retention, environmental and other risks, and regulatory impacts. Throughout the acquisition process, the Board has access to the senior leadership team, appropriate business leaders, subject matter experts, and external advisors. As part of the entire strategic acquisition lifecycle, the Board also receives regular updates and provides feedback on ongoing integration, operational success, and financial performance of our completed acquisitions (including the M&M Acquisition), which allows the Board to provide oversight and to identify trends and opportunities across transactions and over time.
Shareholder Engagement
The Board believes that accountability to shareholders is a mark of good governance and critical to the Company’s success. To that end, the Company maintains dedicated resources for regular active communication with shareholders. The Company regularly engages with shareholders on a variety of topics throughout the year to address their questions and concerns, to seek input and to provide perspectives on Company policies and practices. Topics include corporate strategy, ESG matters, sustainability, cash deployment, executive compensation plan design and practices, Board composition and refreshment and executive succession.
During 2022, we contacted shareholders representing approximately 57% of our shares to offer engagement meetings and met telephonically in 2022 and early 2023 with shareholders holding approximately 38% of our shares. At these meetings senior representatives of our executive, corporate governance, human resources and investor relations teams met virtually with shareholder representatives to discuss our strategy, our ESG and sustainability progress, governance, human capital and executive compensation.
Shareholder Feedback in 2022 and Early 2023 Related to Our Strategy, Board and ESG Progress
We have listened intently to the views of shareholders, and the substantial majority that we spoke to in 2022 and early 2023 were supportive of our leadership structure, Board composition, our sustainability disclosures including our most recent 2021-2022 sustainability report, Accelerating Solutions Through Chemistry, and our ESG progress. Below is a summary of key topics that we found to be of interest to our shareholders during this year’s engagement.
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| Topics of Interest to Shareholders | Our Perspective, Actions Taken and Actions Planned | ||||
| ● Sustainability-focused product opportunities | ● We see significant growth opportunities for products supporting future mobility, vehicle light-weighting and other end-product efficiencies as well as solutions manufactured from recycled or bio-based materials. ● We recently re-designed our website to give customers a clearer picture of how our growing range of products and solutions can support their own sustainability goals. | ||||
| Climate-related topics: ● Our progress towards tracking our Scope 3 emissions ● Opportunities to reduce GHG emissions through products and operations, and associated costs ● Our perspective on net-zero and/or Scope 3 emissions reduction targets | ● In 2022, we engaged ERM CVS to provide a limited assurance of our environmental baseline metrics associated with our 2030 environmental targets as described beginning on page 7, ● We are actively investing in projects to increase our energy efficiency and our use of renewable energy, including carbon capture and hydrogen technologies, and have incorporated sustainability reviews into our capital planning process and analysis of potential returns. ● We are actively working to integrate the M&M Business’s reporting processes into our own in 2023, and also exploring our Scope 3 emissions sources to develop a roadmap to identify, quantify, and reduce our emissions further. | ||||
| ● Recent director searches, Board composition and Board refreshment | ● We have a highly-qualified and diverse board that brings unique capabilities across functions, experiences, industries and backgrounds. The attributes sought by the Board and NCG Committee are described above beginning on page 12. ● In recent years, the Board and NCG Committee have sought sitting executives with deep industry, global, M&A and risk experience, including Mr. Koenig elected in February 2022. | ||||
See page 58 for information about discussions with shareholders in 2022 and early 2023 regarding human capital matters and our executive compensation programs.
In addition to this direct engagement, the Company has instituted a number of complementary mechanisms that allow shareholders to effectively communicate a point of view with the Board, including:
•commitment to thoughtfully consider shareholder proposals submitted to the Company (see page 111); and
•providing shareholders a means for direct communications to individual directors, a Board committee or the entire Board (see page 111).
How We Have Responded To Shareholder Feedback on Governance Matters in the Past
We routinely consider shareholder feedback in compensation and governance matters. In prior years, in response to shareholder feedback, we eliminated our classified board structure, adopted a proxy access by-law, extended the PRSU performance period from two to three years, added a return measure (ROCE) to our long-term incentive plan, adopted a more enhanced compensation clawback policy, amended our insider trading policy to further address anti-hedging and prevent pledging of our Common Stock by our executive officers and accelerated our publication of disclosures aligned to the framework of the Task-Force on Climate-Related Financial Disclosures (TCFD).
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Additional Governance Matters
As a global company, Celanese must not only meet a breadth of varying local, state and regional regulations, but also be mindful of possible social and political conflicts. We understand the role corporate governance plays in maintaining our goal to act in accordance with our values.
Celanese’s Board of Directors is composed of a diverse group of leaders with experience at major domestic and international companies. They have worked in key market sectors that reflect our customer base and have sound financial and governance expertise. Their experience provides an understanding of business strategies and impacts, as well as challenges and risks. We encourage our directors to participate in, and we offer reimbursement for, director education programs to stay abreast of evolving governance, regulatory, and other issues. Nine of our 10 nominees are independent, 50% gender diverse and 10% racially or ethnically diverse. Copies of our committee charters and other governance documents are available on our website, https://investors.celanese.com.
Governance and Compensation Best Practices
Celanese is committed to strong corporate governance and compensation practices that promote the long-term interests of shareholders, strengthen board and management accountability and help build public trust in the Company. Examples are listed on page 55.
Political Engagement Policy
Although Celanese does not engage in any direct political contributions, the Company strives to offer fair, thoughtful and transparent educational advocacy programs to acquaint elected officials about the work we do, the jobs we create and the people behind the innovative solutions we produce. Eligible company employees can participate in a voluntary, nonpartisan political action committee called the Celanese Political Action Committee (“CELPAC”). CELPAC supports candidates for federal, state and local office in the U.S., representing both major U.S. political parties, that advocate and pursue government policies that promote the Company’s interests. CELPAC is governed by a Board of Directors who regularly evaluates the merits of donations to candidates to align those donations with the Company’s goals. For our full political engagement policy and for a list of political contributions, please go to https://www.celanese.com/legal/political-engagement-policy/.
Code of Conduct
The Company has adopted a code of business conduct applicable to directors, executive officers and all other employees. Our employees, suppliers and customers can ask questions about our code of conduct and other ethics and compliance issues, or report potential violations, through Navex, a global Internet and telephone information and reporting services company. The code of conduct is available on our compliance website, http://compliance.celanese.com, by clicking “Business Conduct Policy”. In the event the Company amends or waives any of the provisions of the code of conduct applicable to our directors or executive officers, the Company intends to disclose these actions on the Company’s website to the extent required by SEC or NYSE rules.
No Hedging, No Pledging and Anti-Short Sale Policies
The Company's hedging policy prohibits directors, executive officers and all employees of the Company and its subsidiaries from engaging in any transaction, acquiring any financial instrument, or entering into any derivative contract, directly or indirectly (including through any designee), that hedges or offsets, or is designed to hedge or offset, any decrease in the market value of any securities of the Company, including Common Stock, held directly or indirectly by any such person. The policy applies to all securities of the Company held by such a person, including securities not acquired as compensation. The hedging policy indicates that prohibited hedging may include put options, call options, forward sale contracts, prepaid variable forward contracts, equity swaps, collars and exchange funds.
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The Company's pledging policy prohibits directors and executive officers from pledging Common Stock, including holding Common Stock in a margin account. Directors and executive officers are also prohibited from engaging in short sales related to Common Stock.
Director Compensation
Director Compensation Process
Our director compensation program is intended to enhance our ability to attract, retain and motivate non-employee directors of exceptional ability and to promote the common interest of directors and shareholders in enhancing the value of our Common Stock.
The Board reviews director compensation at least annually based on recommendations by the NCG Committee. The NCG Committee has the sole authority to engage a consulting firm to evaluate director compensation and since 2017 has engaged WTW to assist in setting director compensation. The NCG Committee reviews director compensation taking into account multiple factors, including pay practices and trends at publicly traded companies (including companies in our compensation peer group and surveys of S&P 500 compensation data), continued expansion of director, committee chair and lead director responsibilities, and the growing time commitment of Board and Committee service. The NCG Committee and the Board base their determinations on director compensation on recommendations from WTW and these factors. The Board determined not to make any changes to the level or mix of director compensation during 2022.
Director Compensation in 2022
The Company uses both cash and equity-based compensation to attract and retain qualified directors to serve on our Board of Directors, as follows:
| Director Compensation Component | Amount | ||||
| Annual Awards | |||||
Annual cash retainer (paid quarterly) | $115,000 | ||||
Annual time-based restricted stock units (“RSU”)(one-year vesting) | $160,000 | ||||
| Incremental Awards for Board Leadership | |||||
Annual cash fee for chair: (i) Nominating and Corporate Governance Committee, and (ii) Environmental, Health, Safety, Quality and Public Policy Committee | $15,000 | ||||
Annual cash fee for chair: (i) Audit Committee, and (ii) Compensation and Management Development Committee | $20,000 | ||||
Annual cash fee for Lead Independent Director | $30,000 | ||||
Newly-elected directors receive a pro-rata equity award for a partial year of service. In addition to the above, Directors are reimbursed for expenses incurred in attending board, committee and shareholder meetings. Directors are also reimbursed for reasonable expenses associated with other business activities that benefit the Company, including participation in director education programs. We generally do not provide perquisites to our directors, other than small gifts provided at Board meetings and upon retirement. Occasionally, a director may use Company-provided aircraft for travel to Board meetings.
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U.S. non-management directors are entitled to participate in the Company’s 2008 Deferred Compensation Plan (“2008 Deferred Plan”), which is an unfunded, nonqualified deferred compensation plan that allows directors the opportunity to defer all or a portion of their cash compensation and RSUs in exchange for a future payment amount equal to their deferments plus or minus certain amounts (including dividend equivalents) based on the market performance of specified measurement funds selected by the participant. Deferrals by directors under the 2008 Deferred Plan, including deferrals of RSUs, do not receive above-market earnings. Directors Blackwell, Brown, Galante, Hill, Ihlenfeld, Kissire and Rucker were the only directors that made contributions to, or had balances in, this plan during 2022.
2022 Director Compensation Table
The table below is a summary of compensation earned and RSUs granted by the Company to non-management directors for the fiscal year ended December 31, 2022.
Name(1) (a) | Fees Earned or Paid in Cash ($)(2) (b) | Stock Awards ($)(3) (c) | Option Awards($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) | All Other Compensation ($) (g) | Total ($) (h) | |||||||||||||||||||||||||||||||||||||
| Jean S. Blackwell | 115,000 | 159,957 | — | — | — | — | 274,957 | |||||||||||||||||||||||||||||||||||||
| William M. Brown | 145,000 | 159,957 | — | — | — | — | 304,957 | |||||||||||||||||||||||||||||||||||||
| Edward G. Galante | 135,000 | 159,957 | — | — | — | — | 294,957 | |||||||||||||||||||||||||||||||||||||
| Rahul Ghai | 86,250 | 199,873 | — | — | — | — | 286,123 | |||||||||||||||||||||||||||||||||||||
| Kathryn M. Hill | 130,000 | 159,957 | — | — | — | — | 289,957 | |||||||||||||||||||||||||||||||||||||
| David F. Hoffmeister | 115,000 | 159,957 | — | — | — | — | 274,957 | |||||||||||||||||||||||||||||||||||||
| Dr. Jay V. Ihlenfeld | 115,000 | 159,957 | — | — | — | — | 274,957 | |||||||||||||||||||||||||||||||||||||
| Deborah J. Kissire | 135,000 | 159,957 | — | — | — | — | 294,957 | |||||||||||||||||||||||||||||||||||||
| Michael Koenig | 86,250 | 199,873 | — | — | — | — | 286,123 | |||||||||||||||||||||||||||||||||||||
| Kim K.W. Rucker | 130,000 | 159,957 | — | — | — | — | 289,957 | |||||||||||||||||||||||||||||||||||||
(1)Ms. Ryerkerk is not included in this table because she was an employee of the Company during 2022 and received no compensation for her services as a director.
(2)Includes amounts earned for the annual retainer and committee chair and lead independent director fees for the respective independent directors, as applicable.
(3)Represents the grant date fair value of 1,098 RSUs granted to each non-management director (1,372 RSUs for each of Mr. Ghai and Mr. Koenig, which included a prorated amount of RSUs for time served from their February 2022 election through April 2022) in April 2022 under the 2018 Global Incentive Plan. The fair value of RSUs granted to our non-management directors under our 2022 LTIP as part of the annual award was calculated to be $145.68 per RSU, which reflects the average of the high and low market price of our Common Stock as reported by the NYSE on the applicable grant date discounted for lack of dividend participation. As of December 31, 2022, each non-management director listed in the table owned 1,098 RSUs, except Mr. Ghai and Mr. Koenig who each held 1,372 RSUs.
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Director Stock Ownership Guidelines
The Board of Directors considers Common Stock ownership by directors to be of utmost importance. The Board believes such ownership enhances the commitment of directors to our future and aligns their interests with those of our other shareholders. The Board has therefore established minimum stock ownership guidelines for non-employee directors that require each director to own Common Stock having a value of at least five times his or her base annual cash retainer of $115,000. Each newly elected director has five years from the year elected to reach this ownership level. During the five-year period, a director may not sell more than 50% of the shares received as compensation. As of the computation date, December 31, 2022, all of our then current non-employee directors had attained the minimum stock ownership levels based on their holdings except for Ms. Kissire, who joined the Board in 2020 and Messrs. Ghai and Koenig who joined the Board in February 2022. Ms. Kissire and Mr. Koenig are on-track for compliance by their respective 2025 and 2027 compliance dates.
Director Independence and Related Person Transactions
Director Independence
The listing standards of the NYSE require companies listed on the NYSE to have a majority of “independent” directors. As noted below, all of our directors, other than our Chief Executive Officer, are independent.
The Board of Directors has adopted standards of independence for directors that are set forth in Exhibit A to the Company’s corporate governance guidelines. The Board reviews and determines the independence of each of the directors in accordance with these standards. The full text of the corporate governance guidelines is available on our website, https://investors.celanese.com, by clicking “Corporate Governance”. These standards incorporate all of the requirements for director independence contained in the NYSE listing standards. The NYSE listing standards generally provide that a director is independent if the Board affirmatively determines that the director has no material relationship with the Company directly or as a partner, shareholder or officer of an organization that has a relationship with the Company. In addition, a director is not independent if certain other relationships exist.
The Board, based on the recommendation of the NCG Committee, affirmatively determined that ten of our current directors, Ms. Blackwell, Mr. Brown, Mr. Galante, Mr. Ghai, Ms. Hill, Mr. Hoffmeister, Mr. Ihlenfeld, Ms. Kissire, Mr. Koenig, and Ms. Rucker are independent of the Company and its management under the NYSE listing standards and the Company’s director independence standards. Ms. Ryerkerk, our CEO, is the only current director who is not independent.
In addition, in compliance with the NYSE listing standards, we have an Audit Committee, a Compensation and Management Development Committee and a Nominating and Corporate Governance Committee that are each entirely composed of independent directors. Each of these committees have written charters addressing the respective committee’s purpose and responsibilities and the annual evaluation of the performance of these committees.
The Company in the normal course of business has been a party to transactions with other entities (or their subsidiaries) where certain of our directors are themselves either directors or officers. When making the Board’s director independence determination, the Board was aware of, and considered, the relationships listed below. All of the business relationships noted below were entered into on standard pricing and terms and arose in the ordinary course of our business. The amounts involved in each relationship did not exceed, in any of the last three fiscal years: (1) the greater of $1,000,000 or two percent of either company’s consolidated gross revenues, in the case of entities where our directors serve on the board, or (2) 1% of the consolidated gross revenues of the Company or the director’s entity, in the case of entities where our directors serve as executive officers. As a result, each qualified under a categorical standard of independence that the Board previously approved and none of the relationships
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were otherwise deemed to be a material relationship that impaired the director’s independence.
| Director | Organization | Director’s Relationship to Organization | Type of Transaction, Relationship or Arrangement | Does the Amount Exceed the Greater of $1 million or 2% of either company’s Gross Revenues?(1) | ||||||||||
| Jean S. Blackwell | Ingevity Corporation and its subsidiaries and affiliates | Director | Business Relationship - Routine sales to Ingevity | No | ||||||||||
| Johnson Controls International plc and its subsidiaries and affiliates | Director | Business Relationship - Routine purchases from Johnson Controls | No | |||||||||||
| William M. Brown | Becton, Dickinson and Company and its subsidiaries and affiliates | Director | Business Relationship - Routine sales to Becton, Dickinson | No | ||||||||||
| Edward G. Galante | Linde plc and subsidiaries and affiliates | Director | Business Relationship - Routine purchases from Linde | No | ||||||||||
| Clean Harbors and its subsidiaries and affiliates | Director | Business Relationship - Routine purchases from Clean Harbors | No | |||||||||||
| Rahul Ghai | Otis Worldwide Corporation and its subsidiaries and affiliates | Chief Financial Officer | Business Relationship - Routine purchases from Otis | No | ||||||||||
| GE Aviation LLC and its subsidiaries and affiliates | Chief Financial Officer | Business Relationship - Routine sales to, and purchases from, GE | No | |||||||||||
| Kathryn M. Hill | Moody’s Corporation and its subsidiaries and affiliates | Director | Business Relationship - Routine purchases from Moody’s | No | ||||||||||
| David F. Hoffmeister | Glaukos Corporation and its subsidiaries and affiliates | Director | Business Relationship - Routine sales to Glaukos | No | ||||||||||
| Dr. Jay V. Ihlenfeld | Ashland, Inc. and its subsidiaries and affiliates | Director | Business Relationship - Routine sales to, and purchases from, Ashland | No | ||||||||||
| Deborah J. Kissire | Axalta Coating Systems Ltd. and its subsidiaries and affiliates | Director | Business Relationship - Routine sales to Axalta | No | ||||||||||
| Michael Koenig | Nobian Industrial Chemicals B.V. and its subsidiaries and affiliates | Chief Executive Officer | Business Relationship - Routine purchases from Nobian | No | ||||||||||
| Symrise AG and its subsidiaries and affiliates | Director | Business Relationship - Routine sales to Symrise | No | |||||||||||
| Kim K.W. Rucker | HP Inc. and its subsidiaries and affiliates | Director | Business Relationship - Routine purchases from HP | No | ||||||||||
| Lori J. Ryerkerk | Eaton Corporation Plc and its subsidiaries and affiliates | Director | Business Relationship - Routine sales to, and purchases from, Eaton | No | ||||||||||
(1) In cases where our Board member serves as an executive officer, such transactions did not exceed 1% of either company’s gross revenues.
There are no family relationships among our directors or executive officers.
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Certain Relationships and Related Person Transactions
The Board of Directors has adopted a written policy regarding related person transactions (the “Related Party Transaction Policy”). For purposes of SEC rules and such policy, an interested transaction is a transaction or relationship in which the aggregate amount involved exceeds or may reasonably be expected to exceed $120,000 since the beginning of the Company’s last fiscal year, the Company or any of its subsidiaries is a participant, and any related party will have a direct or indirect material interest in the transaction or relationship. A related party is any person who is or was during the last fiscal year an executive officer, director or nominee for election as a director; a greater than 5 percent beneficial owner of Common Stock; or an immediate family member of any of these persons. Compensation paid to our named executive officers is not treated as an interested transaction under the Related Party Transaction Policy to the extent that it is disclosed as compensation in this Proxy Statement. In addition, a related party would not be deemed to have a “material interest” in a transaction simply due to such person’s position as a director of the other party in the transaction or, in the case of simply being an employee of the other party to the transaction, in the latter case if the aggregate amount involved in the subject year does not exceed the greater of $1,000,000 or two percent of that party’s annual revenues.
The Audit Committee reviews the material facts of all interested transactions that meet the requirements discussed above and therefore require the Audit Committee’s approval and either approves or disapproves of the entry into the interested transaction. In determining whether to approve an interested transaction, the Audit Committee takes into account, among other factors it deems appropriate, whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. The Audit Committee may not approve any interested transaction if it determines the interested transaction to be inconsistent with the interests of the Company and the shareholders.
In addition, the Audit Committee has delegated to the chair of the Audit Committee the authority to approve any interested transaction with a related party (other than the chair or an immediate family member of the chair) in which the aggregate amount involved is expected to be less than $2,000,000. In connection with regularly scheduled meetings of the Audit Committee, the Company provides the Audit Committee for its review, a summary of each new interested transaction that was approved by the chair of the Audit Committee. No director may participate in any discussion or approval of an interested transaction for which he or she is a related party, except that the director is required to provide all material information concerning the interested transaction to the Audit Committee.
No interested transactions were approved or ratified or, to our knowledge, required to be approved or ratified, during 2022.
None of our directors are adverse to the Company in any pending litigation or proceeding.
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 43 | ||||||||
| Stock Ownership Information | |||||||||||||||||||
STOCK OWNERSHIP INFORMATION
Principal Shareholders and Beneficial Owners
The following table sets forth information with respect to the beneficial ownership of Common Stock as of February 22, 2023, by (i) each person known to the Company to beneficially own more than 5% of our Common Stock; (ii) each of the Company’s present directors, including those nominated for election at the Annual Meeting; (iii) the Company’s named executive officers ; and (iv) all present directors and executive officers of the Company as a group. The percentage of beneficial ownership set forth below is calculated in accordance with SEC Rules and is based on the number of shares of Common Stock outstanding and entitled to vote as of February 22, 2023, which was 110,824,914.
| Amount and Nature of Beneficial Ownership of Common Stock | ||||||||||||||||||||||||||
Common Stock Beneficially Owned(1) | Rights to Acquire Shares of Common Stock(2) | Total Common Stock Beneficially Owned | Percentage of Common Stock Beneficially Owned | |||||||||||||||||||||||
The Vanguard Group, Inc.(3) | 13,332,489 | — | 13,332,489 | 12.0 | ||||||||||||||||||||||
Berkshire Hathaway(4) | 9,710,183 | — | 9,710,183 | 8.8 | ||||||||||||||||||||||
BlackRock, Inc.(5) | 7,642,363 | — | 7,642,363 | 6.9 | ||||||||||||||||||||||
Dodge & Cox(6) | 7,109,524 | — | 7,109,524 | 6.4 | ||||||||||||||||||||||
Wellington Management Company, LLP(7) | 6,479,930 | — | 6,479,930 | 5.8 | ||||||||||||||||||||||
Directors(8)(9) | ||||||||||||||||||||||||||
| Jean S. Blackwell | 8,201 | — | 8,201 | * | ||||||||||||||||||||||
| William M. Brown | 103 | — | 103 | * | ||||||||||||||||||||||
| Edward G. Galante | 10,898 | — | 10,898 | * | ||||||||||||||||||||||
| Rahul Ghai | — | — | — | * | ||||||||||||||||||||||
| Kathryn M. Hill | 9,474 | — | 9,474 | * | ||||||||||||||||||||||
| David F. Hoffmeister | 47,395 | — | 47,395 | * | ||||||||||||||||||||||
| Dr. Jay V. Ihlenfeld | 8,485 | — | 8,485 | * | ||||||||||||||||||||||
| Deborah J. Kissire | 100 | 100 | * | |||||||||||||||||||||||
| Michael Koenig | — | — | — | * | ||||||||||||||||||||||
| Kim K.W. Rucker | 56 | — | 56 | * | ||||||||||||||||||||||
Named Executive Officers(8) | ||||||||||||||||||||||||||
| John G. Fotheringham | 27,107 | — | 27,107 | * | ||||||||||||||||||||||
| Thomas F. Kelly | 42,709 | — | 42,709 | * | ||||||||||||||||||||||
| A. Lynne Puckett | 35,725 | — | 35,725 | * | ||||||||||||||||||||||
| Scott A. Richardson | 63,112 | (9) | — | 63,112 | * | |||||||||||||||||||||
Lori J. Ryerkerk(10) | 105,425 | — | 105,425 | * | ||||||||||||||||||||||
All present directors, nominees and executive officers as a group (16 persons)(11) | 361,482 | — | 361,482 | * | ||||||||||||||||||||||
*Less than 1% of shares.
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 44 | ||||||||
| Stock Ownership Information | |||||||||||||||||||
(1)Includes shares for which the named person or entity has sole and/or shared voting and/or investment power. Does not include shares that may be acquired through the vesting of restricted stock units or other rights to acquire shares. To our knowledge, none of the Common Stock listed as beneficially owned by the current directors or executive officers are subject to hedges or have been pledged.
(2)Reflects rights to acquire shares of Common Stock within 60 days of February 22, 2023, and includes, as applicable, shares of Common Stock issuable upon the vesting of restricted stock units granted under the 2018 GIP within 60 days of February 22, 2023. Does not include units in a stock denominated deferred compensation plan with investments settled in shares of Common Stock as follows: Ms. Blackwell – 8,822 equivalent shares, Mr. Brown – 11,209 equivalent shares, Mr. Galante – 6,467 equivalent shares, Ms. Hill 988 equivalent shares, Dr. Ihlenfeld – 9,730 equivalent shares, Ms. Kissire – 1,765 equivalent shares, and Ms. Rucker – 5,181 equivalent shares.
(3)On February 9, 2023, The Vanguard Group, Inc. (“Vanguard Group”) filed Amendment No. 9 to Schedule 13G with the SEC reporting beneficial ownership of 13,332,489 shares of Common Stock as of December 30, 2022, with shared voting power over 144,720 shares, sole dispositive power over 12,918,891 shares and shared dispositive power over 413,598 shares. The address of Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
(4)On February 14, 2023, Berkshire Hathaway filed a Schedule 13G with the SEC reporting beneficial ownership as of December 31, 2022. According to the Schedule 13 filing, (i) Warren E. Buffett and Berkshire Hathaway Inc. have shared voting power over 9,710,183 shares and shared dispositive power over 9,710,183 shares and (ii) National Indemnity Company has shared voting power over 8,487,966 shares and shared dispositive power over 8,487,966 shares. Information about other entities deemed to share beneficial ownership of the shares, including their voting and dispositive power, is disclosed in the Schedule 13G. The address of Berkshire Hathaway is 3555 Farnam Street, Omaha, NE 68131.
(5)On January 31, 2023, BlackRock, Inc. (“BlackRock”) filed a Schedule 13G with the SEC reporting beneficial ownership of 7,642,363 shares of Common Stock as of December 31, 2022, with sole voting power over 6,826,709 shares and sole dispositive power over 7,642,363 shares. The address of BlackRock is 55 East 52nd Street, New York, NY 10055.
(6)On February 14, 2023, Dodge & Cox filed Amendment No. 13 to Schedule 13G with the SEC reporting beneficial ownership of 7,109,524 shares of Common Stock as of December 31, 2022, with sole voting power over 6,694,537 shares and sole dispositive power over 7,109,524 shares. The address of Dodge & Cox is 555 California Street, 40th Floor, San Francisco, CA 94104.
(7)On February 6, 2023, Wellington Group Holdings LLP (“Wellington”) filed Amendment No. 3 to Schedule 13G with the SEC reporting beneficial ownership of 6,961,945 shares of Common Stock as of December 30, 2022, with shared voting power over 6,501,658 shares and shared dispositive power over 6,961,945 shares. The address of Wellington is 280 Congress Street, Boston, MA 02210.
(8)Listed alphabetically. To our knowledge and subject to applicable community property rules, each person has sole investment and voting power with respect to the Common Stock beneficially owned by such person.
(9)Includes beneficial ownership of Common Stock by Mr. Richardson of 572 equivalent shares in the Celanese Stock Fund under the CARSP as of February 22, 2023. Mr. Richardson has the ability to direct the voting of the Common Stock underlying these equivalent shares and the ability to change their investment options at any time.
(10)Ms. Ryerkerk also serves as a director and her ownership information is set forth under “Named Executive Officers.”
(11)Does not include an estimated 123,425 PRSUs (at target) held as of February 22, 2023 by our named executive officers and other executive officers, which are subject to future performance and vesting conditions and therefore does not represent rights to acquire shares of Common Stock within 60 days of February 22, 2023.
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 45 | ||||||||
| Stock Ownership Information | |||||||||||||||||||
Securities Authorized for Issuance Under Equity Compensation Plans
The following information is provided as of December 31, 2022 with respect to equity compensation plans:
| Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | 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 security holders | 1,233,281 | (1) | $ | — | (2) | 16,292,213 | (3) | ||||||||||||||||
| Equity compensation plans not approved by security holders | — | $ | — | — | |||||||||||||||||||
| Total | 1,233,281 | $ | — | 16,292,213 | |||||||||||||||||||
(1)Includes 1,233,281 restricted stock units ("RSUs") granted under the Celanese Corporation 2018 Global Incentive Plan (the "2018 Plan"), including shares that may be issued pursuant to outstanding performance-based RSUs, assuming currently estimated maximum potential performance; actual shares issued may vary, depending on actual performance. If the performance-based RSUs included in this total vest at the target performance level (as opposed to the maximum potential performance), the aggregate RSUs outstanding would be 831,766. Also includes 41,365 share equivalents attributable to RSUs deferred by non-management directors under the Company's 2008 Deferred Compensation Plan (and dividends applied to previous deferrals) and distributable in the form of shares of Common Stock under the 2018 Plan. Upon vesting, a share of the Company's Common Stock is issued for each RSU. Column (b) does not take any of these RSU awards into account because they do not have an exercise price.
(2)There were no outstanding options under the 2018 Plan as of December 31, 2022.
(3)Includes shares available for future issuance under the 2018 Plan and the Celanese Corporation 2009 Employee Stock Purchase Plan approved by shareholders on April 23, 2009 (the "ESPP"). As of December 31, 2022, an aggregate of 2,786,536 shares were available for future issuance under the 2018 Plan and 13,505,677 shares of our Common Stock were available for future issuance under the ESPP. As of December 31, 2022, 494,323 shares have been offered for purchase under the ESPP.
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 46 | ||||||||
| Audit Matters | |||||||||||||||||||
AUDIT MATTERS
Audit Committee Report
The Audit Committee is composed of five independent directors, each of whom satisfies the independence requirement of Rule 10A-3 under the Securities Exchange Act of 1934, as amended. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to the external reporting process and the Company’s internal controls. The Audit Committee serves as the primary communication link among the Board, the independent public accounting firm, and our internal auditors.
Company management is responsible for the financial statements and the reporting process, including the system of disclosure controls and procedures and the internal control over financial reporting. The independent registered public accounting firm, KPMG LLP, is responsible for performing an independent audit of the Company’s consolidated financial statements and expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States and on the effectiveness of the Company’s internal control over financial reporting.
The Audit Committee reviewed and discussed with the Company’s management and KPMG LLP the audited financial statements for the Company for the year ended December 31, 2022. The Audit Committee also met with KPMG LLP and the internal auditors, with and without management present, to discuss the results of the auditors’ examinations, their evaluation of our internal control, and the overall quality of our financial reporting. The Audit Committee also discussed with KPMG LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC. In addition, the Audit Committee reviewed and discussed with KPMG LLP its independence from the Company and management, including the matters in the written disclosures received by the Audit Committee and required by PCAOB rules.
The Audit Committee discussed with KPMG LLP and the internal auditors the overall scope and plans for their respective audits. The Audit Committee reviewed and discussed the fees billed to the Company by KPMG LLP for audit, audit-related, tax and other services provided during fiscal 2022, which are set forth under “Item 2: Ratification of Independent Registered Public Accounting Firm”, and determined that the provision of non-audit services is compatible with KPMG LLP’s independence. Based on the Audit Committee’s reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the Company be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for filing with the SEC.
The Audit Committee evaluates the performance of the independent registered public accounting firm each year and determines whether to re-engage the current firm or consider other audit firms. In doing so, the Audit Committee considers the quality and efficiency of the services provided by the registered public accounting firm, along with their capabilities, technical expertise, and knowledge of our operations and industry. Based on these evaluations, the Audit Committee decided to engage KPMG LLP as our independent registered public accounting firm for fiscal 2023. Although the Audit Committee has the sole authority to appoint the independent registered public accounting firm, the Audit Committee has continued its long-standing practice of recommending that the Board ask our shareholders to ratify the appointment of the registered public accounting firm at our annual meeting of shareholders. This report was submitted by the current members of the Audit Committee,
| Dated: February 21, 2023 | Deborah J. Kissire, Chair | (The Audit Committee report does not constitute soliciting material, and shall not be deemed to be filed or incorporated by reference into any other filing under the Securities Act of 1933, or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the Audit Committee report by reference therein.) | |||||||||
| Jean S. Blackwell | |||||||||||
| Rahul Ghai | |||||||||||
| David F. Hoffmeister | |||||||||||
| Kim K.W. Rucker | |||||||||||
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 47 | ||||||||
| Audit Matters | |||||||||||||||||||
ITEM 2: Ratification of Appointment of Independent Registered Public Accounting Firm
The Audit Committee of the Board of Directors has selected KPMG LLP to audit the Company’s consolidated financial statements for the fiscal year ending December 31, 2023. Since 2004, KPMG LLP has served as our independent registered public accounting firm and also provided other audit-related and non-audit services that were approved by the Audit Committee.
Representatives of KPMG LLP will virtually attend the Annual Meeting, will have the opportunity to make a statement if they desire and will be available to respond to appropriate questions from shareholders.
We are asking our shareholders to ratify the selection of KPMG LLP as our independent registered public accounting firm. Although ratification is not required by our by-laws or otherwise, the Board is submitting the Audit Committee’s selection of KPMG LLP to our shareholders for ratification as a matter of good corporate practice. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders. If the appointment of KPMG LLP is not ratified, the Audit Committee will evaluate the basis for the shareholders’ vote when determining whether to continue the firm’s engagement.
Audit and Related Fees
Aggregate fees billed to the Company by KPMG LLP and its affiliates were as follows:
| Year Ended December 31, | ||||||||
| 2022 | 2021 | |||||||
Audit Fees(1) | $ | 9,862,406 | $ | 7,786,275 | ||||
Audit-related Fees(2) | $ | 9,000 | $ | 60,028 | ||||
Tax Fees(3) | $ | 1,378,409 | $ | 1,321,559 | ||||
All Other Fees(4) | $ | 15,000 | — | |||||
| Total Fees | $ | 11,264,815 | $ | 9,167,862 | ||||
(1)For professional services rendered for the audits of annual consolidated financial statements of the Company (including the audit of internal control over financial reporting), statutory audits in non-U.S. jurisdictions, the review of the Company’s quarterly consolidated financial statements and review of SEC filings.
(2)Primarily for professional services rendered in connection with consultation on financial accounting and reporting standards and employee benefit plan audits.
(3)Primarily for professional services related to technical assistance, the preparation of tax returns in non-U.S. jurisdictions and assistance with tax audits and appeals.
(4)For other permitted professional advisory services.
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 48 | ||||||||
| Audit Matters | |||||||||||||||||||
Audit Committee Pre-Approval Policy
The Audit Committee is responsible for appointing, retaining and pre-approving the fees of the Company’s independent registered public accounting firm. The Audit Committee has adopted a Policy for Pre-Approval of Independent Auditor Services (“Pre-Approval Policy”) pursuant to which proposed services may be pre-approved through the application of detailed policies and procedures (“general pre-approval”) or by specific review of each service (“specific pre-approval”). The Audit Committee has provided general pre-approval for certain specific types of non-prohibited audit, audit-related and tax services that do not exceed $200,000 per project and $1,000,000 per year in the aggregate and gives detailed guidance to management as to the specific services that are eligible for general pre-approval. The Audit Committee is to be informed on a timely basis of any services performed by the independent registered public accounting firm pursuant to general pre-approval. Unless a type of service is included in this general pre-approval, it will require specific pre-approval. The annual audit services engagement terms and fees must be specifically pre-approved by the Audit Committee. Requests to provide services that require specific pre-approval must be submitted to the Audit Committee by both the independent registered public accounting firm and the chief financial officer or corporate controller, and must include detailed back-up documentation and a joint statement as to whether the request or application is consistent with the SEC’s rule on auditor independence.
The Audit Committee may delegate its pre-approval authority to one or more of its members. The member or members to whom such authority is delegated must report any pre-approval decisions to the Audit Committee at its next scheduled meeting.
All services performed by our independent registered public accounting firm in 2022 were pre-approved by the Audit Committee or otherwise under the Pre-Approval Policy.
Vote Required
Although ratification is not required in our by-laws or otherwise, approval of this proposal requires the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote.
Recommendation of the Board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
“FOR” THE RATIFICATION OF KPMG LLP AS OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR 2023
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 49 | ||||||||
| Executive Compensation | |||||||||||||||||||
EXECUTIVE COMPENSATION
Table of Contents
ITEM 3: ADVISORY APPROVAL OF EXECUTIVE COMPENSATION | |||||
ITEM 4: ADVISORY APPROVAL OF SAY ON PAY VOTE FREQUENCY | |||||
| COMPENSATION DISCUSSION AND ANALYSIS | |||||
| CD&A Highlights | |||||
| Named Executive Officers | |||||
| We Follow Compensation Governance Best Practices | |||||
| Human Capital Management | |||||
2022 Say on Pay Vote and Shareholder Engagement | |||||
| Compensation Philosophy and Elements of Pay | |||||
| Compensation Philosophy | |||||
| Compensation Objectives | |||||
| Elements of Compensation | |||||
| Setting Total Compensation | |||||
| Our Use of Peer Groups | |||||
| Compensation Decisions | |||||
| Base Salary | |||||
| Annual Incentive Plan Awards | |||||
| Long-Term Incentive Compensation | |||||
| Compensation Governance | |||||
| Compensation and Management Development Committee Oversight | |||||
| Role of the CMDC’s Independent Compensation Consultant | |||||
| Role of Management and Management’s Consultant | |||||
| Additional Information Regarding Executive Compensation | |||||
| Other Compensation Elements | |||||
| Executive Stock Ownership Requirements | |||||
| Executive Compensation Clawback Policy | |||||
| Tax and Accounting Considerations | |||||
| COMPENSATION RISK ASSESSMENT | |||||
| COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE REPORT | |||||
| COMPENSATION TABLES | |||||
2022 Summary Compensation Table | |||||
2022 Grants of Plan-Based Awards Table | |||||
Outstanding Equity Awards at Fiscal 2022 Year-End Table | |||||
2022 Option Exercises and Stock Vested Table | |||||
2022 Pension Benefits Table | |||||
2022 Nonqualified Deferred Compensation Table | |||||
| Potential Payments Upon Termination or Change in Control | |||||
| CEO PAY RATIO | |||||
| PAY VERSUS PERFORMANCE | |||||
Non-GAAP Financial Measures
This Proxy Statement, including the Compensation Discussion and Analysis, contains financial measures presented on a non-GAAP basis. Celanese’s non-GAAP financial measures used in this document are as follows: [1] Adjusted earnings per share (or Adjusted EPS), which we define as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method; [2] Free cash flow, which we define as net cash provided by (used in) operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to our partner in our methanol joint venture; [3] Adjusted EBIT, which we define as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items; and [4] Return on invested capital (adjusted), which we define as Adjusted EBIT, tax effected using the adjusted tax rate, divided by the sum of the average of beginning and ending short- and long-term debt and Celanese Corporation shareholders’ equity. See “Exhibit A” to this Proxy Statement for additional information concerning these performance measures and a reconciliation of these measures to earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted, net cash provided by (used in) operations, net earnings (loss) attributable to Celanese Corporation, and net earnings (loss) attributable to Celanese Corporation divided by the sum of the average of beginning and end the of year short- and long-term debt and Celanese Corporation shareholders’ equity, the most comparable U.S. GAAP financial measures, respectively.
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 50 | ||||||||
| Executive Compensation | |||||||||||||||||||
ITEM 3: Advisory Approval of Executive Compensation
The Company’s compensation program for our named executive officers (“NEOs”) was designed by our compensation and management development committee (the “CMDC”) to meet our compensation philosophy and objectives, including maintaining a pay for performance culture. The principles of the program have contributed to our strong performance. See “CD&A Highlights” for a summary of our compensation structure, 2022 performance, pay decisions and approach to compensation oversight.
This “say-on-pay” proposal gives shareholders the opportunity annually to cast a vote on our executive compensation program based on the following resolution:
“Resolved, that the shareholders approve, on an advisory basis, the compensation of our NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative disclosure, contained in this Proxy Statement.”
The Board of Directors recommends that shareholders endorse the compensation program for our NEOs by voting FOR the above resolution. Our compensation program is the result of a carefully considered approach and takes into account input provided by shareholders and advice received from the CMDC’s independent compensation consultant. We believe that executive compensation for 2022 was supported by our performance. The Board of Directors currently has a policy of holding annual advisory votes to approve our executive compensation. Provided that the Board of Directors does not modify this policy, including after consideration of the results of Item 4, the Company’s next say-on-pay proposal after the 2023 Annual Meeting will be presented at the 2024 Annual Meeting of Shareholders.
Advisory Vote
This vote is mandated by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC regulations. As an advisory vote, this proposal is not binding upon the Company. In addition, the non-binding advisory vote described in this proposal will not be construed as overruling any decision by the Company, the Board of Directors, or the CMDC, relating to the compensation of the NEOs, or creating or changing any fiduciary duties or other duties on the part of the Board of Directors, or any committee of the Board of Directors, or the Company.
Vote Required
Approval of this proposal requires the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote.
Recommendation of the Board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE “FOR” THE APPROVAL OF OUR EXECUTIVE COMPENSATION PROGRAM
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 51 | ||||||||
| Executive Compensation | |||||||||||||||||||
ITEM 4: Advisory Approval of Say on Pay Vote Frequency
In addition to providing an advisory vote on our executive compensation program, we are requesting that shareholders indicate their preference for the frequency with which future advisory votes on executive compensation should take place – every one, two or three years. This vote is mandated at least every six years by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC regulations. At our 2017 Annual Meeting, during which the Company held its most recent say-on--frequency vote, shareholders indicated their preference for annual advisory voting on our executive compensation plan.
Shareholders may indicate their preference on this advisory vote by choosing every year, every other year, or every three years, or abstaining on this vote, when shareholders vote in response to the resolution set forth below. We will ask shareholders not less than every six years whether they desire a different vote frequency on the advisory vote on executive compensation.
“Resolved, that a non-binding advisory vote of the Company’s shareholders to approve, on an advisory basis, the compensation of our named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative disclosure, in the proxy statement of the Company for the annual meeting of shareholders of the Company at which such advisory vote is to occur, be held every year, every other year or every three years, or abstain.”
The Board of Directors has recommended that shareholders approve that we conduct an advisory vote on executive compensation annually. We believe that an annual review of our executive compensation practices will be better aligned with shareholders’ interests as it allows us to obtain information on shareholders’ views of the compensation of our named executive officers on a more consistent basis. It also allows us to engage in regular dialogue with our shareholders on corporate governance matters, including our executive compensation philosophy, policies and programs. For these reasons, we believe that shareholders should support an annual advisory vote on executive compensation.
Advisory Vote
The option that receives the highest number of votes cast by the shareholders will be the frequency for the advisory vote on NEO compensation that has been selected by shareholders. However, because this is an advisory vote, this proposal is not binding upon the Company in any way and the CMDC and the Board of Directors may decide that it is in the best interests of shareholders and the Company to hold an advisory vote to approve executive compensation more or less frequently than the option approved by the shareholders. The CMDC and the Board of Directors highly value the opinions expressed by shareholders in their vote on this proposal, and will consider the outcome of the vote when making a decision about the frequency of future advisory votes on executive compensation.
Vote Required
The option that receives the highest number of votes cast by shareholders will be the advisory vote frequency selected by shareholders. However, as noted above, the voting on this proposal is advisory. Not later than 2029, we will have another vote to determine the frequency of this advisory vote.
Recommendation of the Board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THE SELECTION OF “ONE YEAR” AS THE
SHAREHOLDERS’ PREFERENCE FOR THE FREQUENCY WITH WHICH SHAREHOLDERS ARE PROVIDED AN
ADVISORY VOTE ON OUR EXECUTIVE COMPENSATION PROGRAM
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 52 | ||||||||
| Executive Compensation | |||||||||||||||||||
Compensation Discussion and Analysis
Our Compensation Discussion and Analysis describes the objectives and elements of our executive compensation program, its alignment with performance and 2022 compensation decisions regarding our NEOs.
CD&A Highlights
Celanese 2023 / Notice of Annual Meeting and Proxy Statement / 53 | ||||||||
| Executive Compensation | |||||||||||||||||||
Key 2022 Compensation Decisions | Key Pay and Governance Practices | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The CMDC kept the structure of the Annual Incentive Plan largely consistent with prior years, increasing the portion of the company performance factor tied to working capital results in recognition of the importance of cash management in anticipation of the M&M Acquisition. | Practices designed to align pay with performance for shareholders and to mitigate risk include: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Independent compensation consultant reporting to the CMDC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The CMDC added a relative TSR modifier to the 2022-2024 PRSU grants to enhance alignment of payouts with shareholder outcomes. | ü | Challenging performance targets tied to metrics that are consistent with our strategy and long-term shareholder value creation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Certain NEOs received salary increases intended to maintain competitiveness with our compensation peer group. | ü | Use of absolute caps (annual incentive plan and PRSUs) and adjustments based on relative TSR performance (PRSUs), to align management pay with shareholder outcomes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Robust clawback policy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
95% | of shareholder votes cast supported our say-on-pay vote at our 2022 Annual Meeting. | ü | Market-aligned stock ownership guidelines for NEOs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Annual risk assessment of our compensation policies and practices | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Named Executive Officers
Our NEOs for 2022 are:
Named Executive Officer | Title | |||||||
Lori J. Ryerkerk | Chair, Chief Executive Officer and President | |||||||
Scott A. Richardson | Executive Vice President and Chief Financial Officer | |||||||
| Thomas F. Kelly | Senior Vice President, Engineered Materials | |||||||
John G. Fotheringham(1) | Former Senior Vice President, Acetyls | |||||||
| A. Lynne Puckett | Senior Vice President, General Counsel and Corporate Secretary | |||||||
(1) As previously announced, Mr. Fotheringham stepped down from his position on March 1, 2023, and his employment will be terminated following a period of up to six months of garden leave. He served in the role of | ||||||||