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page
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INVITATION TO SHAREHOLDERS
|
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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
|
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INFORMATION CIRCULAR
|
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PART I VOTING
|
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PART II BUSINESS OF THE MEETING
|
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RECEIVE THE FINANCIAL STATEMENTS
|
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ELECTION OF DIRECTORS
|
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REAPPOINTMENT AND REMUNERATION OF AUDITORS
|
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ADVISORY “SAY ON PAY” VOTE ON APPROACH TO EXECUTIVE COMPENSATION
|
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PART III CORPORATE GOVERNANCE
|
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PART IV COMPENSATION
|
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COMPENSATION OF DIRECTORS
|
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EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
|
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STATEMENT OF EXECUTIVE COMPENSATION
|
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INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
|
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DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE
|
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PART V OTHER INFORMATION
|
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NORMAL COURSE ISSUER BID
|
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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
|
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SHAREHOLDER PROPOSALS
|
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ADDITIONAL INFORMATION
|
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APPROVAL BY DIRECTORS
|
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SCHEDULE A
|
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METHANEX CORPORATE GOVERNANCE PRINCIPLES
|
|
|
|
|
|
DATE:
|
|
Thursday, April 30, 2020
|
|
|
|
TIME:
|
|
10:00 a.m. (Pacific Time)
|
|
|
|
PLACE:
|
|
East Meeting Room 19
Vancouver Convention Centre - East Building
999 Canada Place
Vancouver, British Columbia
|
1.
|
to receive the Consolidated Financial Statements of the Company for the financial year ended December 31, 2019 and the Auditors’ Report on such statements;
|
2.
|
to elect directors;
|
3.
|
to reappoint the auditors and authorize the Board of Directors to fix the remuneration of the auditors;
|
4.
|
to consider and approve, on an advisory basis, a resolution to accept the Company’s approach to executive compensation disclosed in the accompanying Information Circular; and
|
5.
|
to transact such other business as may properly come before the Meeting.
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
Kevin Price
|
General Counsel & Corporate Secretary
|
Email:
|
|
inquiries@astfinancial.com
|
Toll-free:
|
|
1 800 387 0825
|
Telephone:
|
|
1 416 682 3860
|
Mail:
|
|
AST Trust Company (Canada)
PO Box 700
Station B
Montreal, Quebec H3B 3K3
|
|
DOUGLAS ARNELL
Age: 53
West Vancouver, British Columbia, Canada
Director since: October 2016
Independent
|
Mr. Arnell is the President and Chief Executive Officer of Helm Energy Advisors Inc. ("Helm Energy"), a private company he founded in March 2015 that provides advisory services to the global energy sector. Prior to founding Helm Energy, from September 2010 to March 2015, Mr. Arnell was employed with Golar LNG Ltd., including as Chief Executive Officer from February 2011 to March 2015. Prior to joining Golar LNG, Mr. Arnell held various senior positions within the BG Group of companies from 2003 to 2010 and with other energy companies prior to that time.
Mr. Arnell holds a Bachelor of Science from the University of Calgary.
|
||||||||
Position/2019 Committee Memberships(1)(2)
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Chair of the Board(1)
Member of the Board
Corporate Governance Committee
Human Resources Committee
Public Policy Committee(3)
|
3 of 3
6 of 7
3 of 3
2 of 2
1 of 1
|
15 of 16
|
94%
|
None
|
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total DSUs and
RSUs(5)(6)
(#)
|
Total of Common
Shares, DSUs and
RSUs
(#)
|
Total Market Value of
Common Shares,
DSUs and RSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
4,055
|
18,663
|
22,718
|
1,044,574
|
1,290,000
|
No(10)
|
|
JAMES BERTRAM
Age: 63
Calgary, Alberta, Canada
Director since: October 2018
Independent
Committee memberships as at the date of the Information Circular:
- Human Resources Committee
- Responsible Care Committee
|
Mr. Bertram is a corporate director. He was Chief Executive Officer of Keyera Corporation ("Keyera") from its inception in 1998 until his retirement at the end of 2014. Mr. Bertram has been Chair of the Board of Keyera since 2016. Keyera is a publicly-traded, midstream oil and gas operator.
Mr. Bertram holds a Bachelor of Commerce from the University of Calgary and has been granted the ICD.D designation by the Institute of Corporate Directors.
|
||||||||
Position / 2019 Committee Memberships(2)
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Member of the Board
Human Resources Committee
Public Policy Committee(3)
Responsible Care Committee
|
10 of 10
3 of 3
1 of 1
3 of 3
|
17 of 17
|
100%
|
Emera Inc. (since 2018)
Keyera Corporation (since 2003)
|
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total DSUs and
RSUs(5)(6)
(#)
|
Total of Common
Shares, DSUs and
RSUs
(#)
|
Total Market Value of
Common Shares,
DSUs and RSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
12,650
|
7,403
|
20,053
|
922,037
|
720,000
|
Yes
|
|
PHILLIP COOK
Age: 73
Austin, Texas, USA Director since: May 2006
Independent
Committee memberships as at the date of the Information Circular:
- Corporate Governance Committee (Chair) - Human Resources Committee |
Mr. Cook is a corporate director. He held the position of Senior Advisor of The Dow Chemical Company (“Dow Chemical”) from June 2006 until his retirement in January 2007. Dow Chemical provides chemical, plastic and agricultural products and services. Prior to his Senior Advisor position, Mr. Cook was Corporate Vice President, Strategic Development & New Ventures of Dow Chemical from 2005. Mr. Cook previously held senior positions with Dow Chemical including Senior Vice President, Performance Chemicals & Thermosets from 2003, and from 2000 he held the position of Business Vice President, Epoxy Products & Intermediates.
Mr. Cook holds a Bachelor of Mechanical Engineering from the University of Texas at Austin and in 2018 he became a National Association of Corporate Directors Board Leadership Fellow. He also has a CERT Certificate in Cybersecurity Oversight. |
||||||||
Position / 2019 Committee Memberships
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Member of the Board
Corporate Governance Committee (Chair)
Human Resources Committee
|
10 of 10
6 of 6
5 of 5
|
21 of 21 |
100%
|
Cockrell School of Engineering Advisory Board (since 2004) and the Environmental Sciences Institute Advisory Board (since 2010) of the University of Texas at Austin (educational institution)
|
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total DSUs and
RSUs(5)(6)
(#)
|
Total of Common
Shares, DSUs and
RSUs
(#)
|
Total Market Value of
Common Shares,
DSUs and RSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
25,000
|
7,262
|
32,262
|
1,483,407
|
720,000
|
Yes
|
|
PAUL DOBSON
Age: 53
The Woodlands, Texas, USA
Director since: April 2019
Independent
Committee memberships as at the date of the Information Circular:
- Audit, Finance and Risk Committee
- Responsible Care Committee
|
Mr. Dobson is a corporate director. He was Acting President and Chief Executive Officer of Hydro One Limited ("Hydro One") from July 2018 to May 2019 and prior to that was Chief Financial Officer from March 2018. Hydro One is a major transmission and distribution provider in Ontario, Canada. Prior to joining Hydro One, Mr. Dobson served as Chief Financial Officer for Direct Energy Ltd. ("Direct Energy") in Houston, Texas from January 2016 to February 2018 and he was Chief Operating Officer of Direct Energy from May 2014 to December 2015. Prior to this from 2003, he held senior leadership positions in finance, operations, information technology and customer service across the Centrica Group, the parent company of Direct Energy. Prior to Direct Energy, Mr. Dobson worked at CIBC for 10 years in finance, strategy and business development roles in both Canada and the United States.
Mr. Dobson holds a Bachelor of Arts in Management Accounting (Honours) from the University of Waterloo as well as an MBA from the University of Western Ontario. He is a Chartered Professional Accountant and a Certified Management Accountant.
|
||||||||
Position / 2019 Committee Memberships
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Member of the Board
Audit, Finance and Risk Committee Responsible Care Committee |
3 of 3
6 of 6 2 of 2 |
11 of 11
|
100%
|
None
|
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total DSUs and
RSUs(5)(6)
(#)
|
Total of Common
Shares, DSUs and
RSUs
(#)
|
Total Market Value of
Common Shares,
DSUs and RSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
3,000
|
3,400
|
6,400
|
294,272
|
720,000
|
No(10)
|
|
JOHN FLOREN
Age: 61
Eastham, Massachusetts, USA Director since: January 2013
Not Independent
|
Mr. Floren has been President & CEO of the Company since January 2013. Prior to this appointment, Mr. Floren was Senior Vice President, Global Marketing & Logistics of the Company from June 2005 and prior to that, Director, Marketing & Logistics, North America from May 2002. He has been an employee of the Company for approximately 20 years and has worked in the chemical industry for over 30 years.
Mr. Floren holds a Bachelor of Arts in Economics from the University of Manitoba. He also attended the Harvard Business School’s Program for Management Development and has attended the International Executive Program at INSEAD. He has also completed the Directors Education Program at the Institute of Corporate Directors. |
||||||||
Position / 2019 Committee Memberships
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Member of the Board(11)
|
10 of 10
|
10 of 10
|
100%
|
West Fraser Timber Co. Ltd. (since 2016)
|
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total PSUs and
DSUs(5)(7)
(#)
|
Total of Common
Shares, PSUs (50% of balance) and
DSUs
(#)
|
Total Market Value of
Common Shares, PSUs (50% of balance) and
DSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
124,632
|
127,747
|
188,506
|
8,667,506
|
6,247,500
|
Yes
|
|
MAUREEN HOWE
Age: 62
Vancouver, British Columbia, Canada Director since: June 2018
Independent
Committee memberships as at the date of the Information Circular:
- Audit, Finance and Risk Committee - Corporate Governance Committee |
Ms. Howe is a corporate director. She was Managing Director at RBC Capital Markets, a global investment bank, in equity research from 1996 to 2008. Ms. Howe specialized in the area of energy infrastructure, which included power generation, transmission and distribution, oil and gas transmission and distribution, gas processing and alternative energy.
Ms. Howe holds a Bachelor of Commerce (Honours) from the University of Manitoba and a Ph.D. in Finance from the University of British Columbia.
|
||||||||
Position/2019 Committee Memberships(2)
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Member of the Board
Audit, Finance and Risk Committee Corporate Governance Committee |
10 of 10
9 of 9 6 of 6 |
25 of 25
|
100%
|
Pembina Pipeline Corporation (since 2017)
Mosaic Forest Management Corporation (previously TimberWest Forest Corp) (private) (since 2008)
|
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total DSUs and
RSUs(5)(6)
(#)
|
Total of Common
Shares, DSUs and
RSUs
(#)
|
Total Market Value of
Common Shares,
DSUs and RSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
10,000
|
6,474
|
16,474
|
757,475
|
720,000
|
Yes
|
|
ROBERT KOSTELNIK
Age: 68 Fulshear, Texas, USA Director since: September 2008
Independent
Committee memberships as at the date of the Information Circular:
- Human Resources Committee - Responsible Care Committee (Chair) |
Mr. Kostelnik has been a principal in GlenRock Recovery Partners, LLC since February 2012. GlenRock Recovery Partners facilitates the sale of non-fungible hydrocarbons in the United States. Prior to this, he was President & Chief Executive Officer of Cinatra Clean Technologies, Inc. from 2008 to May 2011. Mr. Kostelnik held the position of Vice President of Refining for CITGO Petroleum Corporation ("CITGO") from July 2006 until his retirement in 2007. He held a number of senior positions during his 16 years with CITGO.
Mr. Kostelnik holds a Bachelor of Science (Mechanical Engineering) from the University of Missouri and is a Registered Professional Engineer. |
||||||||
Position / 2019 Committee Memberships
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Member of the Board
Corporate Governance Committee Human Resources Committee
Responsible Care Committee (Chair)
|
9 of 10
3 of 3
3 of 3
3 of 3 |
18 of 19 |
95%
|
Association of Chemical Industry of Texas (industry association) (since 2004)
HollyFrontier Corporation (since 2011) |
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total DSUs and
RSUs(5)(6)
(#)
|
Total of Common
Shares, DSUs and
RSUs
(#)
|
Total Market Value of
Common Shares,
DSUs and RSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
27,000
|
7,262
|
34,262
|
1,575,367
|
720,000
|
Yes
|
|
LESLIE O'DONOGHUE
Age: 57
Calgary, Alberta, Canada
Independent
|
Ms. O'Donoghue is a corporate director. She was Executive Vice President and Advisor to the Chief Executive Officer of Nutrien Ltd. ("Nutrien") from June 2019 until her retirement in December 2019. Prior to this she was the Executive Vice President, Chief Strategy and Business Development Officer of Nutrien from January 2018 to June 2019, and prior to this she was Executive Vice President, Corporate Development and Strategy and Chief Risk Officer of Agrium Inc. (Nutrien's predecessor company) from 2012 to 2017. Nutrien is a Canadian fertilizer company, and is the world’s largest provider of crop inputs, services and solutions.
Ms. O'Donogue holds a Bachelor of Arts (Economics) degree from the University of Calgary and a LL.B., from Queen's University.
|
||||||||
Position / 2019 Committee Memberships
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Director Nominee
|
N/A
|
N/A
|
N/A
|
Pembina Pipeline Corporation (since 2008)
|
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total DSUs and
RSUs(5)(6)
(#)
|
Total of Common
Shares, DSUs and
RSUs
(#)
|
Total Market Value of
Common Shares,
DSUs and RSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|
KEVIN RODGERS
Age: 57
London, United Kingdom
Director since: July 2019
Independent
Committee memberships as at the date of the Information Circular:
- Corporate Governance Committee
- Human Resources Committee
|
Mr. Rodgers is a corporate director. He was Managing Director and Global Head of Foreign Exchange at Deutsche Bank in London (UK) from 2012 to June 2014. After joining Deutsche Bank in 1999 he also held many other senior leadership roles within foreign exchange and commodities including Global Head of Foreign Exchange Trading and Global Head of Energy Trading. Deutsche Bank is a global multinational investment bank and financial services company. Following his retirement from Deutsche Bank he was a Partner and Senior Advisor at Cumulus Asset Management from January 2018 until May 2019.
Mr. Rodgers holds a Master's degree in Chemical Engineering from Imperial College in London (UK), an MBA from the London Business School and a Master's Degree in Economic History from the London School of Economics (all with distinction).
|
||||||||
Position / 2019 Committee Memberships
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Member of the Board
Corporate Governance Committee
Human Resources Committee
|
2 of 2
1 of 1
2 of 2
|
5 of 5
|
100%
|
Arion Investment Management Limited (private) (since 2018)
|
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total DSUs and
RSUs(5)(6)
(#)
|
Total of Common
Shares, DSUs and
RSUs
(#)
|
Total Market Value of
Common Shares,
DSUs and RSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
6,000
|
3,400
|
9,400
|
432,212
|
720,000
|
No(10)
|
|
BENITA WARMBOLD
Age: 61
Toronto, Ontario, Canada Director since: February 2016
Independent
Committee memberships as at the date of the Information Circular:
- Audit, Finance & Risk Committee (Chair)
- Corporate Governance Committee
|
Ms. Warmbold is a corporate director. She was Senior Managing Director & Chief Financial Officer of the Canada Pension Plan Investment Board (“CPPIB”) from 2013 until her retirement in 2017. Prior to this and from 2008, Ms. Warmbold was the Senior Vice President & Chief Operations Officer of CPPIB. CPPIB is a professional investment management organization responsible for investing funds on behalf of the Canada Pension Plan. From 1997 to 2008, Ms. Warmbold was the Managing Director & CFO for Northwater Capital Management Inc.
Ms. Warmbold holds an Bachelor of Commerce (Honours) degree from Queen’s University, is a Chartered Professional Accountant, is a Fellow of the Institute of Chartered Professional Accountants of Ontario and has been granted the ICD.D designation by the Institute of Corporate Directors.
|
||||||||
Position/2019 Committee Memberships(2)
|
2019
Attendance
|
Total 2019 Attendance
at Board and Committee Meetings
|
Other Current Board
Memberships
|
|||||||
Member of the Board
Audit, Finance and Risk Committee (Chair)
Corporate Governance Committee
Responsible Care Committee
|
10 of 10
9 of 9
3 of 3
1 of 1
|
23 of 23
|
100%
|
Bank of Nova Scotia (since 2018)
Canadian Public Accountability Board (professional association) (since 2011)
Crestone Peak Resources (private) (since 2017)
Queen’s University Board of Trustees (educational institution) (since 2015)
SNC-Lavalin Group Inc. (since 2017)
|
||||||
Share and Share Equivalents Held as of March 5, 2020:
|
||||||||||
Common
Shares(4)
(#)
|
Total DSUs and
RSUs(5)(6)
(#)
|
Total of Common
Shares, DSUs and
RSUs
(#)
|
Total Market Value of
Common Shares,
DSUs and RSUs(8)
($)
|
Minimum
Shareholding
Requirements
($)
|
Meets Share
Ownership
Requirements?(9)
|
|||||
6,000
|
11,057
|
17,057
|
784,281
|
720,000
|
Yes
|
(1)
|
Mr. Arnell was appointed Chair of the Board on April 25, 2019. Upon this appointment he was no longer a member of any Committee, but in his capacity as Chair of the Board, was considered an ex-officio and attended all Committee meetings on a non-voting basis.
|
(2)
|
During 2019, a Special Committee was established for a limited time in order to address matters associated with the competing proxy at the 2019 Annual General Meeting. The Special Committee was comprised of Mr. Arnell (Chair), Mr. Bertram, Ms. Howe and Ms. Warmbold, each of whom attended three of three Special Committee meetings. Mr. Thomas Hamilton, who retired as a director in April 2019, was also a member of the Special Committee.
|
(3)
|
The Public Policy Committee was dissolved effective April 25, 2019.
|
(4)
|
The number of Common Shares held includes Common Shares directly or indirectly beneficially owned or under the control or direction of such nominee.
|
(5)
|
For information on Deferred Share Units, see “Share-Based Awards - Deferred Share Unit Plan (Director DSUs)”.
|
(6)
|
For information on Restricted Share Units, see “Share-Based Awards - Restricted Share Unit Plan for Directors”.
|
(7)
|
For information on Performance Share Units, see “Performance Share Unit Plan”. Non-management directors are not eligible to participate in this plan.
|
(8)
|
This value is calculated using $45.98, being the weighted average closing price of the Common Shares on the Toronto Stock Exchange for the 90-day period ending March 5, 2020.
|
(9)
|
See page 35 for more information on director share ownership requirements. See page 54 for more information on Mr. Floren’s share ownership requirements as President & CEO of the Company.
|
(10)
|
Directors have five years from the date of their appointment as a director or as Chair, to meet their director share ownership requirements.
|
(11)
|
Mr. Floren is not a member of any Committee, but attends all Committee meetings on a non-voting basis by invitation in his capacity as President & CEO of the Company.
|
(12)
|
Ms. Rennie was appointed Chair of the Human Resources Committee effective April 25, 2019.
|
Director
|
For
|
%
|
Withheld
|
%
|
|
Bruce Aitken(1)
|
58,685,269
|
99.83
|
100,834
|
|
0.17
|
Douglas Arnell
|
57,909,344
|
98.51
|
874,514
|
|
1.49
|
James Bertram
|
58,743,890
|
99.94
|
35,866
|
|
0.06
|
Phillip Cook
|
57,881,998
|
98.52
|
868,732
|
|
1.48
|
Paul Dobson
|
49,121,708
|
95.40
|
2,371,193
|
|
4.6
|
John Floren
|
58,709,794
|
99.87
|
76,252
|
|
0.13
|
Maureen Howe
|
58,748,048
|
99.94
|
35,292
|
|
0.06
|
Robert Kostelnik
|
58,529,648
|
99.58
|
248,994
|
|
0.42
|
Janice Rennie
|
57,613,434
|
98.68
|
773,620
|
|
1.32
|
Kevin Rodgers(2)
|
|
|
|
|
|
Margaret Walker
|
58,115,933
|
98.87
|
664,671
|
|
1.13
|
Benita Warmbold
|
57,804,193
|
98.68
|
771,583
|
|
1.32
|
Board of Directors
|
10
|
Audit, Finance and Risk Committee
|
9
|
Corporate Governance Committee
|
6
|
Human Resources Committee
|
5
|
Public Policy Committee(1)
|
1
|
Responsible Care Committee
|
3
|
Special Committee(2)
|
3
|
(2)
|
A Special Committee was established for a limited time in order to address matters associated with the competing proxy at the 2019 Annual General Meeting.
|
Director
|
Board
Meetings
Attended
(#)
|
Board
Meetings
Attended
(%)
|
Committee
Meetings Attended
|
Committee
Meetings
Attended
(%)
|
Total Board and
Committee
Meetings Attended
|
||
(#)
|
Committee
|
(#)
|
(%)
|
||||
Bruce Aitken(1)
|
9 of 10
|
90
|
3 of 3
|
Corporate Governance
|
100
|
16 of 17
|
94
|
|
|
|
3 of 3
|
Responsible Care
|
100
|
|
|
|
|
|
1 of 1
|
Public Policy (2)
|
100
|
|
|
Douglas Arnell(3)
|
9 of 10
|
90
|
3 of 3
|
Corporate Governance
|
100
|
18 of 19
|
95
|
|
|
|
2 of 2
|
Human Resources
|
100
|
|
|
|
|
|
1 of 1
|
Public Policy(2)
|
100
|
|
|
|
|
|
3 of 3 (Chair)
|
Special Committee(4)
|
100
|
|
|
James Bertram
|
10 of 10
|
100
|
1 of 1
|
Public Policy(2)
|
100
|
20 of 20
|
100
|
|
|
|
3 of 3
|
Responsible Care
|
100
|
|
|
|
|
|
3 of 3
|
Human Resources
|
100
|
|
|
|
|
|
3 of 3
|
Special Committee(4)
|
100
|
|
|
Phillip Cook
|
10 of 10
|
100
|
6 of 6 (Chair)
|
Corporate Governance
|
100
|
21 of 21
|
100
|
|
|
|
5 of 5
|
Human Resources
|
100
|
|
|
Paul Dobson(5)
|
3 of 3
|
100
|
6 of 6
|
Audit, Finance and Risk
|
100
|
11 of 11
|
100
|
|
|
|
2 of 2
|
Responsible Care
|
100
|
|
|
John Floren(6)
|
10 of 10
|
100
|
—
|
—
|
—
|
10 of 10
|
100
|
Maureen Howe
|
10 of 10
|
100
|
9 of 9
|
Audit, Finance and Risk
|
100
|
28 of 28
|
100
|
|
|
|
6 of 6
|
Corporate Governance
|
100
|
|
|
|
|
|
3 of 3
|
Special Committee(4)
|
100
|
|
|
Robert Kostelnik(7)
|
9 of 10
|
90
|
3 of 3
|
Corporate Governance
|
100
|
18 of 19
|
95
|
|
|
|
3 of 3
|
Human Resources
|
100
|
|
|
|
|
|
3 of 3 (Chair)
|
Responsible Care
|
100
|
|
|
Janice Rennie(8)
|
10 of 10
|
100
|
9 of 9
|
Audit, Finance and Risk
|
100
|
24 of 24
|
100
|
|
|
|
5 of 5 (Chair)
|
Human Resources
|
100
|
|
|
Kevin Rodgers(9)
|
2 of 2
|
100
|
1 of 1
|
Corporate Governance
|
100
|
5 of 5
|
100
|
|
|
|
2 of 2
|
Human Resources
|
100
|
|
|
Margaret Walker
|
10 of 10
|
100
|
5 of 5
|
Human Resources
|
100
|
18 of 18
|
100
|
|
|
|
3 of 3
|
Responsible Care
|
100
|
|
|
Benita Warmbold(10)
|
10 of 10
|
100
|
9 of 9 (Chair)
|
Audit, Finance and Risk
|
100
|
26 of 26
|
100
|
|
|
|
3 of 3
|
Corporate Governance
|
100
|
|
|
|
|
|
1 of 1
|
Responsible Care
|
100
|
|
|
|
|
|
3 of 3
|
Special Committee(4)
|
100
|
|
|
Total
|
|
98
|
|
|
100
|
|
99
|
(1)
|
Mr. Aitken is not standing for re-election at the Meeting.
|
(2)
|
The Public Policy Committee was dissolved effective April 25, 2019 and at that time, Mr. Aitken became a member of the Corporate Governance Committee and Mr. Bertram became a member of the Human Resources Committee.
|
(3)
|
Mr. Arnell was appointed Chair of the Board on April 25, 2019. Upon this appointment he was no longer a member of any Committee, but in his capacity as Chair of the Board, was considered an ex-officio and attended all Committee meetings on a non-voting basis.
|
(4)
|
A Special Committee was established for a limited time in order to address matters associated with the competing proxy at the 2019 Annual General Meeting.
|
(5)
|
Mr. Dobson was elected as a director effective April 25, 2019 and attended all Board and Committee meetings after that date.
|
(6)
|
Mr. Floren is not a member of any Committee, but attends all Committee meetings on a non-voting basis by invitation in his capacity as President & CEO of the Company.
|
(7)
|
In April 2019, Mr. Kostelnik ceased being a member of the Corporate Governance Committee and became a member of the Human Resources Committee.
|
(8)
|
In April 2019, upon Mr. Arnell's appointment as Chair of the Board, Ms. Rennie became Chair of the Human Resources Committee.
|
(9)
|
Mr. Rodgers was appointed as a director effective July 26, 2019 and attended all Board and Committee meetings after that date.
|
(10)
|
In April 2019, Ms. Warmbold ceased being a member of the Responsible Care Committee and became a member of the Corporate Governance Committee.
|
•
|
KPMG LLP’s global capabilities;
|
•
|
The quality and candour of KPMG LLP’s communications with the Audit Committee and management;
|
•
|
KPMG LLP’s independence;
|
•
|
The quality and efficiency of the services provided by KPMG LLP, including input from management on KPMG LLP’s performance and how effectively KPMG LLP demonstrated its independent judgment, objectivity and professional skepticism;
|
•
|
External data on audit quality and performance, including recent CPAB and Public Company Accounting Oversight Board reports on KPMG LLP and its peer firms; and
|
•
|
The appropriateness of KPMG LLP’s fees, KPMG LLP’s tenure as our independent auditor, and the controls and processes in place that help ensure KPMG LLP’s continued independence.
|
US$000s
|
2019
|
2018
|
||||
Audit Fees
|
1,688
|
|
|
1,552
|
|
|
Audit-Related Fees
|
60
|
|
|
56
|
|
|
Tax Fees
|
145
|
|
|
139
|
|
|
All Other Fees
|
12
|
|
|
47
|
|
|
Total
|
1,905
|
|
|
1,794
|
|
|
•
|
Demonstrate Responsible Care leadership in all aspects of the Board’s governance
|
•
|
Closely monitor the impact of current low methanol prices on cashflow and the Company’s balance sheet in light of current capital project commitments
|
•
|
Review progress on the Geismar 3 Project while ensuring that key risks are managed and mitigation strategies are in place
|
•
|
Maintain focus on plant reliability and sustainability, including gas supply
|
•
|
Maintain focus on key Board governance issues including CEO succession
|
•
|
Provide oversight of management’s initiatives with respect to Environmental, Social and Governance (ESG) and sustainability matters
|
Standing Committee
|
Current Members
|
Meetings
in 2019
(#)
|
Overall
Attendance(1)
(%)
|
Summary of Key Responsibilities
|
Audit, Finance and Risk Committee(2)
|
Benita Warmbold (Chair)(3)
Paul Dobson
Maureen Howe
Janice Rennie
|
9
|
100
|
• assisting the Board in fulfilling its oversight responsibility relating to:
• the integrity of the Company’s financial statements
• the financial reporting process
• systems of internal accounting and financial controls
• professional qualifications and independence of the external auditors
• performance of the external auditors
• risk management processes
• financing plans and pension plans
• compliance by the Company with ethics policies and legal and regulatory requirements
• the internal audit process
|
Corporate Governance Committee
|
Phillip Cook (Chair)
Bruce Aitken
Maureen Howe
Kevin Rodgers
Benita Warmbold
|
6
|
100
|
• establishing the appropriate composition and governance of the Board, including compensation of all non-management directors
• recommending nominees for election or appointment as directors
• annually assessing and enhancing the performance of the Board, Board Committees and Board members
• shaping the corporate governance of the Company and developing corporate governance principles for the Company
• monitoring compliance by the Company with ethics policies and legal and regulatory requirements
• providing oversight of the director education program
|
Human Resources Committee
|
Janice Rennie (Chair)
James Bertram
Phillip Cook
Robert Kostelnik
Kevin Rodgers
Margaret Walker
|
5
|
100
|
• approving the goals and objectives of the CEO and evaluating his performance
• reviewing and recommending to the Board for approval the remuneration of the Company’s executive officers
• approving the remuneration of all other employees on an aggregate basis
• reviewing the Company’s compensation policies and practices from a risk perspective
• approving the executive compensation discussion and analysis
• reporting to the Board on the Company’s organizational structure, officer succession plans, total compensation practices, human resource policies and executive development programs
• recommending grants and administrative matters in connection with the long-term incentive plan
|
Responsible Care Committee
|
Robert Kostelnik (Chair)
Bruce Aitken
James Bertram
Paul Dobson
Margaret Walker
|
3
|
100
|
• reviewing matters relating to the environment and occupational health and safety issues that impact significantly on the Company
• overseeing the Company’s Responsible Care Policy and reviewing the policies and standards that are in place to ensure that the Company is carrying out all of its operations in accordance with the principles of Responsible Care
|
(1)
|
Overall Attendance is a measure of the attendance of all individuals who were committee members during 2019.
|
(2)
|
The mandate of the Audit, Finance and Risk Committee, together with the relevant education and experience of its members and other information regarding the Audit, Finance and Risk Committee, may be found in the “Audit Committee Information” section of the Company’s Annual Information Form for the year ended December 31, 2019.
|
(3)
|
Ms. Warmbold has been designated as the “audit committee financial expert”.
|
Name
|
Management
|
Independent
|
Not Independent
|
Douglas Arnell
|
|
x
|
|
James Bertram
|
|
x
|
|
Phillip Cook
|
|
x
|
|
Paul Dobson
|
|
x
|
|
John Floren
|
x
|
|
x
|
Maureen Howe
|
|
x
|
|
Robert Kostelnik
|
|
x
|
|
Leslie O'Donoghue
|
|
x
|
|
Janice Rennie
|
|
x
|
|
Kevin Rodgers
|
|
x
|
|
Margaret Walker
|
|
x
|
|
Benita Warmbold
|
|
x
|
|
•
|
duties of directors and directors’ liabilities
|
•
|
board and committee governance documents
|
•
|
the Company’s Code of Business Conduct
|
•
|
strategic plans, operational reports and budgets
|
•
|
important corporate policies
|
•
|
recent regulatory filings and analyst reports
|
•
|
our corporate and organizational structure
|
•
|
the Company's Shareholder Engagement Policy
|
•
|
Competition Law Policy – provides employees with an understanding of the Company’s policy of compliance with all competition laws and information concerning the activities that are permitted and prohibited when dealing with competitors, customers and other parties.
|
•
|
Confidential Information and Trading in Securities Policy – provides guidelines to employees with respect to the treatment of confidential information and advises Company insiders when it is permissible to trade securities of the Company. This policy also prohibits insiders from purchasing financial instruments designed to hedge or offset a decrease in the market value of the Company’s shares that they hold. Furthermore, insiders are prohibited from engaging in short selling of the Company’s securities, trading in put or call options on the Company’s securities or entering into equity monetization arrangements related to the Company’s securities.
|
•
|
Corporate Gifts and Entertainment Policy – provides guidelines to Company employees on the appropriateness of gifts, gratuities or entertainment that may be offered to or accepted from third parties with whom the Company has commercial relations.
|
•
|
Corrupt Payments Prevention Policy – prohibits the payment or receipt of bribes and kickbacks by the Company’s employees and agents. Facilitation payments are also prohibited.
|
•
|
Political Donation Policy – prohibits all political donations by the Company.
|
Non-Mgmt Director Nominees
|
Board Skills
|
|||||||||||
|
Leader-ship(1)
|
Industry Know-
ledge & Exper-
ience
|
Finance
|
Govern-
ment & Public Affairs
|
Board Exper-
ience
|
Health, Safety & Environ-
ment Issues(2)
|
Inter-
national Perspective
|
Energy
|
Under-
standing of North America Natural Gas Feed-
stock Issues
|
China
|
Ambitious Business Growth - Large Capital Projects Execution
|
Ambit-
ious Business Growth -
Strat-
egies & Risks
|
|
||||||||||||
Arnell
|
ü
|
ü
|
|
ü
|
ü
|
|
ü
|
ü
|
ü
|
|
ü
|
ü
|
Bertram
|
ü
|
|
|
|
ü
|
ü
|
|
ü
|
|
|
ü
|
|
Cook
|
ü
|
ü
|
|
ü
|
|
|
ü
|
|
|
ü
|
ü
|
ü
|
Dobson
|
ü
|
ü
|
ü
|
|
|
|
ü
|
ü
|
ü
|
|
ü
|
ü
|
Howe
|
|
ü
|
ü
|
|
ü
|
|
|
ü
|
ü
|
|
|
ü
|
Kostelnik
|
|
ü
|
|
|
ü
|
ü
|
|
ü
|
ü
|
|
ü
|
|
O'Donoghue
|
ü
|
ü
|
|
ü
|
ü
|
|
|
|
ü
|
|
ü
|
ü
|
Rennie
|
|
|
ü
|
|
ü
|
|
|
|
|
|
|
|
Rodgers
|
|
|
ü
|
|
|
|
ü
|
|
|
|
|
|
Walker
|
|
ü
|
|
|
|
ü
|
ü
|
|
|
|
ü
|
ü
|
Warmbold
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
|
ü
|
director nominees
(non-mgmt)
|
6
|
7
|
5
|
3
|
7
|
3
|
6
|
5
|
5
|
1
|
7
|
7
|
TARGET
|
4
|
6
|
2
|
2
|
7
|
1
|
5
|
2-3
|
3-4
|
1-2
|
1
|
2-3
|
•
|
annual evaluations of individual directors to monitor the effectiveness of each director’s contribution;
|
•
|
the Corporate Governance Committee and the Chair of the Board annually review the membership of the Board to enable the Board to manage its overall composition and maintain a balance of directors to ensure long-term continuity and effectiveness; and
|
•
|
the Chair of the Board and the Chair of the Governance Committee are responsible for developing a long-term board succession plan which incorporates input from one-on-one discussions between the Chair of the Board and each Board member, including discussions regarding estimated future retirement dates for each Board member. This plan is reviewed and updated on an annual basis after the Chair of the Board completes his one-on-one evaluation meeting with each Board member.
|
•
|
compensate directors for applying their knowledge, skills and experience in the performance of their duties;
|
•
|
align the actions and economic interests of the directors with the interests of long-term shareholders; and
|
•
|
encourage directors to stay on the Board for a significant period of time.
|
FMC Corporation
H.B. Fuller Company IAMGOLD Corporation* International Flavors & Fragrances Inc. Kinross Gold Corporation* Lundin Mining Corporation* Olin Corporation |
PolyOne Corporation
RPM International Inc. The Chemours Corporation Vermillion Energy Inc.* Westlake Chemical Corporation Yamana Gold Inc.* |
Annual retainer for a non-management director (excluding the Chair of the Board)
|
$96,000
|
annual
|
Annual retainer for the Chair of the Board
|
$172,000
|
annual
|
Annual retainer for the Chairs of the Corporate Governance and Responsible Care Committees
|
$10,000
|
annual
|
Annual retainer for the Chair of the Audit, Finance and Risk Committee
|
$20,000
|
annual
|
Annual retainer for members of the Audit, Finance and Risk Committee, including the Chair
|
$10,000
|
annual
|
Annual retainer for the Chair of the Human Resources Committee
|
$20,000
|
annual
|
One-time Special Committee Fee for members of the Special Committee(1)
|
$15,000
|
single
|
One-time Special Committee Fee for the Chair of the Special Committee(1)
|
$30,000
|
single
|
One-time fee for Chair of the Corporate Governance Committee regarding the competing proxy(2)
|
$5,000
|
single
|
Chair Succession Fee (paid only for the duration of the Chair succession process)(3)
|
$30,000
|
annual
|
Cross-country or intercontinental travel fee to attend Board or Committee meetings
|
$2,500
|
per trip
|
Travel fee for site visits undertaken separate and apart from attendance at Board or Committee meetings (and not for orientation purposes upon joining the Board)
|
$2,500
|
per day
|
(1)
|
A Special Committee was established for a limited time in order to address matters associated with the competing proxy at the 2019 Annual General Meeting.
|
(2)
|
This fee was paid for additional work undertaken by the Chair of the Corporate Governance Committee in order to address matters associated with the competing proxy at the 2019 Annual General Meeting.
|
(3)
|
Mr. Arnell ceased receiving the chair succession fee upon being appointed Chair of the Board in April 2019.
|
|
2020
|
2019
|
Chair of the Board
|
6,100 RSUs or DSUs
|
3,400 RSUs or DSUs
|
All other non-management directors
|
3,400 RSUs or DSUs
|
1,900 RSUs or DSUs
|
Director
|
Annual
Retainer
(1)
($)
|
Annual
Retainer for
Committee
Chairs
($)
|
Annual
Retainer for
Audit & HR
Committee
Chairs
($)
|
Annual
Retainer for
Audit
Committee
Members
($)
|
Travel Fees &
Ad hoc site
visit fees(2)
($)
|
Total
Fees Earned(3)
($)
|
Share-Based
Award(4)
($)
|
All Other
Comp-
ensation(5)
($)
|
Total
($)
|
|||||||||
Bruce Aitken(6)
|
96,000
|
|
—
|
|
—
|
|
—
|
|
10,000
|
|
106,000
|
|
144,000
|
|
—
|
|
250,000
|
|
Douglas Arnell(7)
|
156,667
|
|
—
|
|
6,667
|
|
—
|
|
—
|
|
163,334
|
|
147,117
|
|
18,716
|
|
329,167
|
|
Howard Balloch(8)
|
32,000
|
|
3,333
|
|
—
|
|
3,333
|
|
7,500
|
|
46,166
|
|
144,000
|
|
21,783
|
|
211,949
|
|
James Bertram
|
96,000
|
|
—
|
|
—
|
|
—
|
|
2,500
|
|
98,500
|
|
147,117
|
|
4,873
|
|
250,490
|
|
Phillip Cook
|
96,000
|
|
10,000
|
|
—
|
|
—
|
|
20,000
|
|
126,000
|
|
147,117
|
|
9,441
|
|
282,558
|
|
Paul Dobson(9)
|
64,000
|
|
|
|
6,667
|
|
17,500
|
|
88,167
|
|
—
|
|
—
|
|
88,167
|
|
||
John Floren(10)
|
|
|
|
|
|
|
|
|
|
|||||||||
Thomas Hamilton(8)
|
57,333
|
|
—
|
|
—
|
|
—
|
|
—
|
|
57,333
|
|
263,262
|
|
4,370
|
|
324,965
|
|
Maureen Howe
|
96,000
|
|
—
|
|
—
|
|
10,000
|
|
2,500
|
|
108,500
|
|
147,117
|
|
4,265
|
|
259,882
|
|
Robert Kostelnik
|
96,000
|
|
10,000
|
|
—
|
|
—
|
|
15,000
|
|
121,000
|
|
147,117
|
|
9,441
|
|
277,558
|
|
Janice Rennie
|
96,000
|
|
—
|
|
13,333
|
|
10,000
|
|
2,500
|
|
121,833
|
|
144,000
|
|
24,519
|
|
290,352
|
|
Kevin Rodgers(9)
|
40,000
|
|
|
|
|
5,000
|
|
45,000
|
|
—
|
|
—
|
|
45,000
|
|
|||
Margaret Walker
|
96,000
|
|
—
|
|
—
|
|
—
|
|
12,500
|
|
108,500
|
|
147,117
|
|
9,441
|
|
265,058
|
|
Benita Warmbold
|
96,000
|
|
—
|
|
20,000
|
|
10,000
|
|
27,500
|
|
153,500
|
|
147,117
|
|
13,905
|
|
314,522
|
|
Total
|
1,118,000
|
|
23,333
|
|
40,000
|
|
40,000
|
|
122,500
|
|
1,343,833
|
|
1,725,081
|
|
120,754
|
|
3,189,668
|
|
(1)
|
In addition, the following fees were paid to members of a Special Committee which was established for a limited time in order to address matters associated with the competing proxy at the 2019 Annual General Meeting. Mr. Cook also received a fee for additional work undertaken as Chair of the Corporate Governance Committee in order to address matters associated with the competing proxy at the 2019 Annual General Meeting:
|
(2)
|
Travel fees are paid per trip for cross-country or intercontinental travel to attend Board or Committee meetings or for site visits undertaken separate and apart from attendance at Board or Committee meetings (and not for orientation purposes upon joining the Board).
|
(3)
|
This column includes all retainers and travel fees earned during 2019 (with the exception of fees earned in relation to the competing proxy at the 2019 Annual General Meeting, as outlined in footnote (1)). This column also includes any paid in DSUs. Under the DSU Plan, non-management directors may elect to receive 100%, 50% or 0% of their annual cash retainer as DSUs. The DSU Plan is more fully described under “Share-Based Awards - Deferred Share Unit Plan (Director DSUs)”. In 2019, Messrs. Arnell and Bertram elected to receive 100% of their cash retainers as DSUs (Arnell: 3,448 DSUs; and Bertram: 2,013 DSUs) and Ms. Howe elected to receive 50% of her cash retainer as DSUs (1,096 DSUs). The number and value of the DSUs received by Messrs. Arnell and Bertram and Ms. Howe in lieu of fees are reflected in the "Share-Based Awards - Value Vested During the Year" table on page 34.
|
(4)
|
This column reflects the grant date fair value of the share-based compensation (RSUs and DSUs) received by directors in 2019. The value shown is calculated by multiplying the number of RSUs or DSUs awarded in 2019 by the closing price of the Common Shares on the TSX on March 7, 2019, the day before such share units were granted, being $77.43. The grant date fair value shown in this column is the same as the accounting fair value. Directors can elect to receive their share-based compensation award as RSUs or DSUs. Commencing in 2014, if share ownership requirements are met at the time they make their election, directors may elect to receive the value of their share-based award as cash. Please see "Share-Based Awards - Restricted Share Unit Plan for Directors" for more information. In 2019, Messrs. Aitken and Balloch and Ms. Rennie made such election.
|
(5)
|
This column is made up of the value of additional share units earned by directors in 2019 (RSUs and/or DSUs as applicable) corresponding to dividends being declared on Common Shares during 2019. See “Share-Based Awards – Restricted Share Unit Plan for Directors” and “Share-Based Awards - Deferred Share Unit Plan (Director DSUs)” for more information on dividend equivalents. With respect to dividend equivalent DSUs, the value of dividend equivalent additional DSUs is calculated by multiplying the number of such units by the Canadian dollar closing price of the Common Shares of the TSX on the day that such units were credited. With respect to dividend equivalent RSUs, the value of dividend equivalent additional RSUs is calculated by multiplying the number of such units by the weighted average Canadian dollar closing price of the Common Shares of the TSX for the 15 trading days prior to the day that such units were credited. No perquisites were paid in 2019.
|
(6)
|
Mr. Aitken is not standing for re-election at the Meeting.
|
(7)
|
Mr. Arnell's Annual Retainer in 2019 includes a Chair succession fee of $10,000 for the period commencing January 1, 2019 and ending on the date he was appointed Chair of the Board in April 2019.
|
(8)
|
Messrs. Balloch and Hamilton retired as directors in April 2019.
|
(9)
|
Mr. Dobson was elected and Mr. Rodgers was appointed as a director during 2019 and therefore were not eligible to receive share-based awards in 2019.
|
(10)
|
Mr. Floren is President & CEO of the Company and therefore did not receive any compensation as a director. See “Statement of Executive Compensation” for information on Mr. Floren’s compensation in 2019.
|
|
Outstanding Share-Based Awards as at December 31, 2019
|
||
Director
|
Shares or Units of Shares
that Have Not Vested(1)
(#)
|
Market or Payout Value
of Share-Based
Awards that Have Not
Vested(1)
($)
|
Market or Payout Value of
Vested Share-Based
Awards Not Paid Out or
Distributed(2)
($)
|
Bruce Aitken(3)
|
—
|
—
|
—
|
Douglas Arnell
|
—
|
—
|
285,905
|
Howard Balloch(4)
|
—
|
—
|
—
|
James Bertram
|
—
|
—
|
98,444
|
Phillip Cook
|
3,862
|
193,679
|
—
|
Paul Dobson(5)
|
—
|
—
|
—
|
John Floren(6)
|
|
|
|
Thomas Hamilton(4)
|
—
|
—
|
—
|
Maureen Howe
|
—
|
—
|
98,444
|
Robert Kostelnik
|
3,862
|
193,679
|
—
|
Janice Rennie
|
—
|
—
|
676,724
|
Kevin Rodgers(5)
|
—
|
—
|
—
|
Margaret Walker
|
3,862
|
193,679
|
—
|
Benita Warmbold
|
—
|
—
|
285,905
|
(1)
|
These columns reflect the number and value of outstanding unvested RSUs as at December 31, 2019 and include dividend equivalent RSUs credited since the date of the original RSU grants. The value of the RSUs outstanding is calculated by multiplying the number of RSUs outstanding by the closing price of the Common Shares on the TSX on December 31, 2019, being $50.15.
|
(2)
|
This column reflects the value of vested DSUs received as their annual share-based award (“Annual DSUs”) held by each director as at December 31, 2019, and includes dividend equivalent Annual DSUs credited since the date of the original Annual DSU grants. The value of the Annual DSUs is calculated by multiplying the number of Annual DSUs outstanding by the closing price of the Common Shares on the TSX on December 31, 2019, being $50.15.
|
(3)
|
Mr. Aitken is not standing for re-election at the Meeting.
|
(4)
|
Messrs. Balloch and Hamilton retired as directors in April 2019. Following their retirement, Mr. Balloch redeemed all of his outstanding DSUs (61,479 DSUs) and the 9,966 RSUs held by Mr. Hamilton, vested and were paid out under the terms of the RSU Plan. Mr. Balloch did not hold any RSUs on his retirement and Mr. Hamilton did not hold any DSUs on his retirement.
|
(5)
|
Mr. Dobson was elected and Mr. Rodgers was appointed as a director during 2019 and therefore were not eligible to receive share-based awards in 2019.
|
(6)
|
Mr. Floren was President & CEO during 2019 and therefore did not receive any compensation as a director. See “Statement of Executive Compensation” for information on Mr. Floren’s compensation in 2019.
|
Director
|
Number of Outstanding DSUs as at Dec 31, 2019
(#)
|
Value of Outstanding
DSUs as at Dec. 31, 2019
($)
|
Bruce Aitken(1)
|
—
|
—
|
Douglas Arnell
|
12,563
|
630,034
|
Howard Balloch(2)
|
—
|
—
|
James Bertram
|
4,003
|
200,750
|
Phillip Cook
|
—
|
—
|
Paul Dobson(3)
|
—
|
—
|
John Floren(4)
|
|
|
Thomas Hamilton(2)
|
—
|
—
|
Maureen Howe
|
3,074
|
154,161
|
Robert Kostelnik
|
—
|
—
|
Janice Rennie
|
13,494
|
676,724
|
Kevin Rodgers(3)
|
—
|
—
|
Margaret Walker
|
—
|
—
|
Benita Warmbold
|
7,657
|
383,999
|
(1)
|
Mr. Aitken is not standing for re-election at the Meeting.
|
(2)
|
Messrs. Balloch and Hamilton retired as directors in April 2019. Following his retirement, Mr. Balloch redeemed all of his outstanding DSUs (61,479 DSUs). Mr. Hamilton did not hold any DSUs on his retirement.
|
(3)
|
Mr. Dobson was elected and Mr. Rodgers was appointed as a director during 2019 and therefore were not eligible to receive share-based awards in 2019.
|
(4)
|
Mr. Floren was President & CEO during 2019 and therefore did not receive any compensation as a director. See "Statement of Executive Compensation" for information on Mr. Floren's compensation in 2019.
|
|
Share-Based Awards – Value Vested during the Year
|
|||||||||||||||||||
|
Number Vested during 2019
(#)
|
Value Vested during 2019
($)
|
||||||||||||||||||
|
RSUs(1)
|
DSUs(2)
|
Total
|
RSUs(3)
|
DSUs(2)
|
Total
|
||||||||||||||
Director
|
Share-Based
Award
|
Granted
in Lieu
of Fees(4)
|
Share-Based
Award(5)
|
Dividend
Equivalents(6)
|
Share-Based
Award
|
Granted
in Lieu of Fees(4) |
Share-Based
Award(5)
|
Dividend
Equivalents(6)
|
||||||||||||
Bruce Aitken(7)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Douglas Arnell
|
—
|
|
3,448
|
|
1,900
|
|
340
|
|
5,688
|
|
—
|
|
193,334
|
|
147,117
|
|
18,716
|
|
359,167
|
|
Howard Balloch(8)
|
—
|
|
—
|
|
—
|
|
287
|
|
287
|
|
—
|
|
—
|
|
—
|
|
21,783
|
|
21,783
|
|
James Bertram
|
—
|
|
2,013
|
|
1,900
|
|
90
|
|
4,003
|
|
—
|
|
113,500
|
|
147,117
|
|
4,873
|
|
265,490
|
|
Phillip Cook
|
1,820
|
|
—
|
|
—
|
|
—
|
|
1,820
|
|
93,710
|
|
—
|
|
—
|
|
—
|
|
93,710
|
|
Paul Dobson(9)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
John Floren(10)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Thomas Hamilton(11)
|
9,966
|
|
—
|
|
—
|
|
—
|
|
9,966
|
|
779,591
|
|
—
|
|
—
|
|
—
|
|
779,591
|
|
Maureen Howe
|
—
|
|
1,096
|
|
1,900
|
|
78
|
|
3,074
|
|
—
|
|
61,750
|
|
147,117
|
|
4,265
|
|
213,132
|
|
Robert Kostelnik
|
1,820
|
|
—
|
|
—
|
|
—
|
|
1,820
|
|
93,710
|
|
—
|
|
—
|
|
—
|
|
93,710
|
|
Janice Rennie
|
—
|
|
—
|
|
—
|
|
439
|
|
439
|
|
—
|
|
—
|
|
—
|
|
24,519
|
|
24,519
|
|
Kevin Rodgers(9)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Margaret Walker
|
1,820
|
|
—
|
|
—
|
|
—
|
|
1,820
|
|
93,710
|
|
—
|
|
—
|
|
—
|
|
93,710
|
|
Benita Warmbold
|
—
|
|
—
|
|
1,900
|
|
249
|
|
2,149
|
|
—
|
|
—
|
|
147,117
|
|
13,905
|
|
161,022
|
|
(1)
|
Except in the case of Mr. Hamilton (see footnote (11)), this column represents RSUs that were awarded in 2017 and vested on December 1, 2019, together with dividend equivalent RSUs credited in respect thereof. See “Share-Based Awards – Restricted Share Unit Plan for Directors” for more information.
|
(2)
|
DSUs vest immediately upon grant; however, they may not be redeemed by a director until retirement or upon death. Directors may elect to receive 100%, 50% or 0% of their annual cash retainer and other fees as DSUs. Directors may also elect to receive their share-based award in the form of DSUs. Additional DSUs are credited each quarter corresponding to dividends declared on Common Shares. See “Share-Based Awards - Deferred Share Unit Plan (Director DSUs)” for more information.
|
(3)
|
Except in the case of Mr. Hamilton (see footnote (11)), the value of the RSUs shown in this column reflects the amount actually paid to directors for RSUs that vested on December 1, 2019, calculated in accordance with the terms of the RSU Plan by multiplying the number of vested units (including fractional units) by the weighted average closing price of the Common Shares on the TSX during the 15 trading days prior to the vesting date, being $51.47.
|
(4)
|
These columns reflect the number and value of DSUs received in lieu of fees earned in 2019, as elected by non-management directors. DSUs are granted in lieu of fees on a quarterly basis and the number of DSUs granted at the end of each quarter is calculated by dividing one-quarter of the annual fees elected to be received as DSUs by the average closing price of the Common Shares on the TSX on the last five trading days of the preceding fiscal quarter. In 2019, Messrs. Arnell and Bertram elected to receive 100% of their cash retainers as DSUs and thus the value of DSUs granted to Messrs. Arnell and Bertram in lieu of fees is equal to their total fees earned (including Special Committee fees) as noted in the Directors' Total Compensation table on page 31. In 2019, Ms. Howe elected to receive 50% of her cash retainer as DSUs and thus the value of DSUs granted to Ms. Howe in lieu of fees is equal to half the value of her total fees earned (including Special Committee fees) as noted in the Directors' Total Compensation table on page 31.
|
(5)
|
These columns reflect the number and value of DSUs granted to directors in 2019 as share-based awards. The value shown is the grant date fair value (which is the same as accounting fair value) and is calculated by multiplying the number of DSUs awarded in 2019 by the closing price of the Common Shares on the TSX on March 7, 2019, the day before such share units were granted, being $77.43. Directors can elect to receive their share-based award as RSUs or DSUs, or the cash equivalent. See “Share-Based Awards—Restricted Share Unit Plan for Directors” for more information.
|
(6)
|
These columns reflect dividend equivalent additional DSUs credited on outstanding DSUs in 2019, and the value is calculated by multiplying the number of such additional DSUs by the closing price of the Common Shares on the TSX on the day that such DSUs were credited.
|
(7)
|
Mr. Aitken is not standing for re-election at the Meeting.
|
(8)
|
Mr. Balloch retired as a director in April 2019.
|
(9)
|
Mr. Dobson was elected and Mr. Rodgers was appointed as a director during 2019 and therefore were not eligible to receive share-based awards in 2019.
|
(10)
|
Mr. Floren was President & CEO during 2019 and therefore did not receive any compensation as a director. See “Statement of Executive Compensation” for information on Mr. Floren’s compensation in 2019.
|
(11)
|
Mr. Hamilton retired as a director in April 2019 and the number and value of RSUs in this table represents his outstanding RSUs which vested on his retirement date and were paid out in accordance with the terms of the RSU Plan. See "Share-Based Awards - Restricted Share Unit Plan for Directors" for more information.
|
Director
|
Director
Since
|
As At
|
Common
Shares
Held(1)
(#)
|
Share Units
Held
(#)
|
Total
Common
Shares
and Share
Units Held
(#)
|
Total At-Risk
Value of Common
Shares and Share Units(2)
($)
|
Value of Common
Shares and Share Units Required to Meet Requirement(3)
($)
|
Percentage
of
Requirement
Achieved
(%)
|
Amount
at Risk as
a Multiple
of Annual
Retainer
|
Meets
Requirement
|
|||||||
RSUs
|
DSUs
|
||||||||||||||||
Bruce Aitken(4)
|
Jul-04
|
Mar 5, 2020
|
100,189
|
—
|
|
—
|
|
100,189
|
4,606,690
|
|
720,000
|
|
640
|
48.0
|
Yes
|
||
|
|
Mar 8, 2019
|
100,189
|
—
|
|
—
|
|
100,189
|
7,284,742
|
|
|
|
|
|
|||
|
|
Change
|
—
|
|
—
|
|
—
|
|
—
|
|
-2,678,052
|
|
|
|
|
|
|
Douglas Arnell(5)
|
Oct-16
|
Mar 5, 2020
|
4,055
|
—
|
|
18,663
|
22,718
|
1,044,574
|
|
1,290,000
|
|
81
|
6.1
|
No(6)
|
|||
|
|
Mar 8, 2019
|
2,120
|
|
—
|
|
8,775
|
|
10,895
|
792,175
|
|
|
|
|
|
||
|
|
Change
|
+1,935
|
|
—
|
|
+9,888
|
|
+11,823
|
|
+252,399
|
|
|
|
|
|
|
James Bertram
|
Oct-18
|
Mar 5, 2020
|
12,650
|
|
—
|
|
7,403
|
|
20,053
|
922,037
|
|
720,000
|
|
128
|
9.6
|
Yes
|
|
|
|
Mar 8, 2019
|
2,600
|
|
—
|
|
1,900
|
|
4,500
|
327,195
|
|
|
|
|
|
||
|
|
Change
|
+10,050
|
|
—
|
|
+5,503
|
|
+15,553
|
|
+594,842
|
|
|
|
|
|
|
Phillip Cook
|
May-06
|
Mar 5, 2020
|
25,000
|
7,262
|
—
|
|
32,262
|
1,483,407
|
|
720,000
|
|
206
|
15.5
|
Yes
|
|||
|
|
Mar 8, 2019
|
25,000
|
5,517
|
—
|
|
30,517
|
2,218,891
|
|
|
|
|
|
||||
|
|
Change
|
—
|
|
+1,745
|
|
—
|
|
+1,745
|
|
-735,484
|
|
|
|
|
|
|
Paul Dobson
|
Apr-19
|
Mar 5, 2020
|
3,000
|
|
3,400
|
|
—
|
|
6,400
|
|
294,272
|
|
720,000
|
|
41
|
3.1
|
No(6)
|
John Floren(7)
|
Jan-13
|
|
|
|
|
|
|
|
|
|
|
||||||
Maureen Howe
|
Jun-18
|
Mar 5, 2020
|
10,000
|
|
—
|
|
6,474
|
|
16,474
|
757,475
|
|
720,000
|
|
105
|
7.9
|
Yes
|
|
|
|
Mar 8, 2019
|
10,000
|
|
—
|
|
1,900
|
|
11,900
|
865,249
|
|
|
|
|
|
||
|
|
Change
|
—
|
|
—
|
|
+4,574
|
|
+4,574
|
|
-107,774
|
|
|
|
|
|
|
Robert Kostelnik
|
Sep-08
|
Mar 5, 2020
|
27,000
|
|
7,262
|
—
|
|
34,262
|
1,575,367
|
|
720,000
|
|
219
|
16.4
|
Yes
|
||
|
|
Mar 8, 2019
|
21,000
|
|
5,517
|
—
|
|
26,517
|
1,928,051
|
|
|
|
|
|
|||
|
|
Change
|
+6,000
|
+1,745
|
|
—
|
|
+7,745
|
|
-352,684
|
|
|
|
|
|
||
Janice Rennie
|
May-06
|
Mar 5, 2020
|
3,000
|
—
|
|
13,494
|
16,494
|
758,394
|
|
720,000
|
|
105
|
7.9
|
Yes
|
|||
|
|
Mar 8, 2019
|
3,000
|
—
|
|
13,055
|
16,055
|
1,167,359
|
|
|
|
|
|
||||
|
|
Change
|
—
|
|
—
|
|
+439
|
|
+439
|
|
-408,965
|
|
|
|
|
|
|
Kevin Rodgers
|
Jul-19
|
Mar 5, 2020
|
6,000
|
—
|
|
3,400
|
|
9,400
|
432,212
|
|
720,000
|
|
60
|
4.5
|
No(6)
|
||
Margaret Walker
|
Apr-15
|
Mar 5, 2020
|
9,500
|
7,262
|
—
|
|
16,762
|
770,717
|
|
720,000
|
|
107
|
8.0
|
Yes
|
|||
|
|
Mar 8, 2019
|
4,576
|
5,517
|
—
|
|
10,093
|
733,862
|
|
|
|
|
|
||||
|
|
Change
|
+4,924
|
|
+1,745
|
|
—
|
|
+6,669
|
|
+36,855
|
|
|
|
|
|
|
Benita Warmbold
|
Feb-16
|
Mar 5, 2020
|
6,000
|
|
—
|
|
11,057
|
|
17,057
|
|
784,281
|
|
720,000
|
|
109
|
8.2
|
Yes
|
|
|
Mar 8, 2019
|
6,000
|
|
—
|
|
7,408
|
|
13,408
|
|
974,896
|
|
|
|
|
|
|
|
|
Change
|
—
|
|
—
|
|
+3,649
|
|
+3,649
|
|
-190,615
|
|
|
|
|
|
(1)
|
This column includes all Common Shares directly or indirectly beneficially owned or over which control or direction is exercised by each director.
|
(2)
|
For 2020, this value is calculated using $45.98 per share, being the weighted average closing price of the Common Shares on the TSX for the 90-day period ending March 5, 2020. For 2019, this value is calculated using $72.71 per share, being the weighted average closing price of the Common Shares on the TSX for the 90-day period ending March 8, 2019.
|
(3)
|
Director share ownership requirements state that non-management directors are to hold Common Shares and/or share units equal to at least three times their total retainer, which includes both the cash and equity components of the retainer.
|
(4)
|
Mr. Aitken is not standing for re-election at the Meeting.
|
(5)
|
Mr. Arnell is Chair of the Board and his share ownership requirement is $1,290,000 being three times his total retainer of $430,000.
|
(6)
|
Directors have five years from the date of their appointment to meet director share ownership requirements. A new Chair of the Board has five years from the date of their appointment as Chair to meet their increased share ownership requirement.
|
(7)
|
Mr. Floren is President & CEO and therefore does not receive any compensation as a director. See “Share Ownership Requirements” for information regarding Mr. Floren’s holdings and ownership requirements.
|
Director
|
Common Shares Held(1)
(#)
|
DSUs Held(2)
(#)
|
Total Common Shares and DSUs Held
(#)
|
Accumulated Value(3)
($)
|
||||
Bruce Aitken(4)
|
100,189
|
|
—
|
|
100,189
|
|
3,921,397
|
|
Douglas Arnell
|
4,055
|
|
18,663
|
|
22,718
|
|
889,183
|
|
James Bertram
|
12,650
|
|
7,403
|
|
20,053
|
|
784,874
|
|
Phillip Cook
|
25,000
|
|
—
|
|
25,000
|
|
978,500
|
|
Paul Dobson
|
3,000
|
|
—
|
|
3,000
|
|
117,420
|
|
John Floren
|
124,632
|
|
—
|
|
124,632
|
|
4,878,096
|
|
Maureen Howe
|
10,000
|
|
6,474
|
|
16,474
|
|
644,792
|
|
Robert Kostelnik
|
27,000
|
|
—
|
|
27,000
|
|
1,056,780
|
|
Janice Rennie
|
3,000
|
|
13,494
|
|
16,494
|
|
645,575
|
|
Kevin Rodgers
|
6,000
|
|
3,400
|
|
9,400
|
|
367,916
|
|
Margaret Walker
|
9,500
|
|
—
|
|
9,500
|
|
371,830
|
|
Benita Warmbold
|
6,000
|
|
11,057
|
|
17,057
|
|
667,611
|
|
(1)
|
This column includes all Common Shares directly or indirectly beneficially owned or over which control or direction is exercised by each director.
|
(2)
|
DSUs vest immediately upon grant; however, they may not be redeemed by a director until retirement or upon death. Directors may elect to receive 100%, 50% or 0% of their annual cash retainer and other fees as DSUs. Directors may also elect to receive their share-based award in the form of DSUs. Additional DSUs are credited each quarter corresponding to dividends declared on Common Shares. See “Share-Based Awards - Deferred Share Unit Plan (Director DSUs)” for more information.
|
(3)
|
For the purpose of this table, this value is calculated using $39.14 per share, being the closing price on the TSX on March 4, 2020, being the date before the date of this Information Circular.
|
(4)
|
Mr. Aitken is not standing for re-election at the Meeting.
|
•
|
Base salary: The Board increased Mr. Floren’s base salary by 5% in 2019 to reflect his significant experience in the CEO role and strong performance and to align with projected salary increases within the Company's executive compensation comparator group. Mr. Floren's base salary increased by 16% in 2018 and 8% in 2017 to reflect his strong performance and maintain competitiveness with the market.
|
•
|
Short-term incentive award: In 2019, Mr. Floren's short-term incentive target was 120% of base salary and he was awarded a short-term incentive award of $1,035,000 at 69% of target, significantly lower than his 2018 award of $2,770,000 at 194% of target. Mr. Floren’s short-term incentive award primarily reflects the Company's lower financial results in 2019 while acknowledging his individual performance.
|
•
|
Long-term incentive award: Mr. Floren received a long-term incentive award grant with a target value of $4.3 million in 2019, made up of 50% performance share units and 50% tandem stock appreciation rights. The target value of Mr. Floren’s long-term incentive award remained approximately the same in 2019 compared to 2018. However, the ultimate value of the 2019 award is tied to Methanex's share price appreciation, total shareholder return and return on capital employed.
|
|
|
Douglas Arnell
Chair of the Board
|
Janice Rennie
Chair, Human Resources Committee
|
•
|
Alignment with shareholder interests. Our performance-based incentive plans align the interests of executives with shareholders and the total compensation earned by the NEOs (as defined below), including the realized and unrealized value of previously granted long-term incentive awards, aligns with cumulative total shareholder return over time.
|
•
|
Pay-for-performance. We believe in pay-for-performance. Accordingly, approximately 83% of the President & CEO’s target compensation and 70% of other NEO's target compensation is at risk and linked to a combination of individual and corporate performance goals, share price performance, relative compounded total shareholder return and return on capital employed.
|
•
|
Effective risk management. Compensation policies and practices are designed with features that mitigate risk without diminishing the incentive nature of the compensation. We believe our compensation policies and practices encourage and reward prudent business judgment and appropriate risk-taking over the long-term to increase shareholder value.
|
•
|
Pay competitively. Our executive compensation program is designed to be competitive with the 50th percentile of a comparator group of North American-based chemical, mining and oil and gas companies with global operations in order to attract, retain and engage high-quality executive talent.
|
Element
|
Description
|
Base Salary
|
Fixed compensation intended to compensate executives competitively for leadership, specific skills, knowledge and experience required to perform their duties.
|
Short-Term Incentive Plan
|
Variable compensation designed to recognize and reward the achievement of strategic performance goals with an annual cash reward. Amounts are based on an assessment of corporate financial performance (modified return on capital employed) and individual performance over the year.
|
Long-Term Incentive Plan
|
Variable compensation designed to retain talented executives, reward them for their contribution to the long-term success of the Company and align their interests with shareholders. Consists of PSUs that deliver value based on a combination of relative compounded total shareholder return and three-year average return on capital employed and stock options/SARs/TSARs that deliver value based on the Company's share price performance over varying periods of time.
|
Indirect Compensation
|
Fixed compensation intended to support the health, wellness and financial well-being of executives and their families. Executives are provided a single, fixed amount, taxable perquisite allowance. Executives participate in group benefit and registered defined contribution retirement programs on the same terms as other employees (except one, Mr. Henderson, who is a grandfathered participant in a closed defined benefit retirement plan). Executives also participate in a supplemental retirement plan due to Canadian tax limits.
|
Named Executive Officer
|
Office Held
|
Principal Occupations and Positions During Last Five Years
|
John Floren
|
President & CEO
|
President & CEO since January 1, 2013.
|
Ian Cameron
|
Senior Vice President, Finance & Chief Financial Officer
|
Senior Vice President, Finance & Chief Financial Officer since January 1, 2003.
|
Vanessa James
|
Senior Vice President,
Global Marketing & Logistics
|
Senior Vice President, Global Marketing & Logistics since January 1, 2013.
|
Mike Herz
|
Senior Vice President, Corporate Development
|
Senior Vice President, Corporate Development since January 1, 2013.
|
Kevin Henderson
|
Senior Vice President, Manufacturing
|
Senior Vice President, Manufacturing since May 2016. Prior thereto was Vice President, Manufacturing, North America since January 1, 2014.
|
•
|
Our short-term incentive and PSU awards have maximum limits, based on pre-defined plan provisions and the calculation formula;
|
•
|
There is a proportionately greater award opportunity derived from the long-term, equity-based incentive plan compared to the short-term incentive plan, creating a greater focus on sustained performance over time;
|
•
|
The application of a modified return on capital employed ("ROCE" - as defined below) metric that aligns employees with the balanced objectives of increasing revenues, reducing costs and managing net assets is a significant component of the short-term incentive award;
|
•
|
We use two distinct long-term incentive vehicles - PSUs and stock options/SARs/TSARs - that vest over a number of years, thereby providing strong incentives for sustained operational and financial performance; and
|
•
|
Our long-term incentive plan awards are made annually and have overlapping vesting and performance periods, such that at any one time, multiple potential awards are affected by current year performance, thereby encouraging and rewarding sustained high levels of performance and maintaining executives' exposure to the risks of their decisions in the long-term.
|
•
|
The Human Resources Committee and Board have discretion to adjust payouts under both the short-term incentive plan and the long-term incentive plan to reflect the core operating performance of the business and the level and type of risk taken to achieve results; and
|
•
|
The incorporation of an individual performance rating, ranging from 0% to 200%, as a factor in the short-term incentive calculation enables the Human Resources Committee to direct a zero payout to any executive in any year if the individual executive did not perform well or engaged in activities that pose a financial, operational or other undue risk to the Company.
|
•
|
Ms. Rennie became Chair of the Human Resources Committee as of April 25, 2019 after previously serving as Chair from April 2017 to December 2017. She was a member of the People and Compensation Committee at WestJet from 2011 until 2019 and has been a member of the Compensation Committee at West Fraser Timber since 2012. She was Senior Vice President, Human Resources & Organizational Effectiveness at EPCOR Utilities Inc. ("EPCOR") between 2004 and 2005, was a member and Chair of the Compensation Committee at Teck Resources from 2008 to 2015 and a member of the Corporate Governance, Compensation and Nominating Committee at Capital Power between 2009 and 2012. Ms. Rennie is currently the Chair of the Board of EPCOR.
|
•
|
Mr. Bertram was Chief Executive Officer of Keyera Corporation from 1998 until his retirement in 2014. Keyera is a publicly-traded, midstream oil and gas operator. In his role at Keyera, he had extensive experience in compensation and governance matters. Mr. Bertam is Chair of the Board of Keyera Corporation and also serves as a director of Emera Energy as a member of its Management Resources and Compensation Committee, which oversees executive compensation matters.
|
•
|
Mr. Cook held a number of executive management positions during his 37 years at Dow Chemical. From 2003 to 2006, he managed a portfolio that included about one-third of Dow's businesses with over 10,000 employees on six continents. He was involved at an executive level with various human resources issues for these businesses, including compensation, workforce planning, employee development and talent management.
|
•
|
Mr. Kostelnik has been a principal in GlenRock Recovery Partners, LLC since February 2012. GlenRock Recovery Partners facilitates the sale of non-fungible hydrocarbons in the United States. Prior to this, he was President & Chief Executive Officer of Cinatra Clean Technologies, Inc. from 2008 to May 2011. Mr. Kostelnik held a number of senior positions during his 16 years with Petroleum Corporation ("CITGO"), including VP, Health, Safety and Environmental, VP, Shared Services (Human Resources, Information Technology and Procurement) and VP, Refining, which he held from July 2006 until his retirement in 2007. In his role as VP, Shared Services, he was responsible for all human resources activities for the 4,300 employees of CITGO. As VP, Refining, he was responsible for the performance, development and well being of 2,700 direct employees.
|
•
|
Mr. Rodgers was Managing Director and Global Head of Foreign Exchange at Deutsche Bank in London (UK) from 2012 to June 2014. After joining the bank in 1999 (following nine years at Merrill Lynch and Bankers Trust), he also held many other senior leadership roles within foreign exchange and commodities at Deutsche Bank including Global Head of Foreign Exchange Trading and Global Head of Energy Trading, among others. As part of his duties, he was responsible for chairing the annual compensation committees for the businesses he managed. Towards the end of his career, he was a member of the compensation committee for the bank's entire Fixed Income business - a unit that employed thousands of investment banking professionals. Following his retirement from Deutsche Bank, he was a Partner and Senior Advisor at Cumulus Asset Management.
|
•
|
Ms. Walker was the Vice President, Engineering & Technology for Dow Chemical between 2004 and 2010. Prior to that role, Ms. Walker held other senior positions with Dow Chemical and served on various management committees related to human resources programs.
|
FMC Corporation
H.B. Fuller Company
IAMGOLD Corporation*
International Flavors & Fragrances Inc.
Kinross Gold Corporation*
Lundin Mining Corporation* Olin Corporation
|
PolyOne Corporation
RPM International Inc.
The Chemours Corporation Vermillion Energy Inc.* Westlake Chemical Corporation Yamana Gold Inc.*
|
1.
|
A biennial review, using the updated comparator group, of benchmark compensation data for the CEO and other executive officers, and recommendations with respect to compensation levels for the covered executives; and
|
2.
|
General executive compensation assistance.
|
|
|
At Risk Payouts
|
|||
|
Base Salary
|
Short-Term Incentive Award
|
Stock Options/SARs/TSARs
|
PSUs
|
Total Compensation "At Risk"
|
CEO
|
17%
|
20%
|
31.5%
|
31.5%
|
83%
|
All Other NEOs
|
30%
|
20%
|
25%
|
25%
|
70%
|
Total Direct Compensation
|
|
Indirect Compensation
|
|||
Base Salary
|
Short-Term
Incentive Award
|
Long-Term
Incentives
|
+
|
Benefits
|
Retirement Plans
|
Pay for role and capability
|
Pay for achievement of annual strategic performance goals
|
Pay for future performance and retention
|
|
Investment in employee health and well-being as well as perquisites
|
Investment in
financial security
after retirement
|
|
“At-Risk” Payouts
|
“At-Risk” Payouts
|
|
|
|
•
|
The Company uses an enduring standard for setting the Modified ROCE target based on achieving a long-term return above the Company’s weighted average cost of capital ("WACC", thus ensuring that a target payout is achieved only when returns exceed the WACC. We believe that this is aligned with long-term shareholder value creation and reflects our shareholders’ long-term performance expectations.
|
•
|
The enduring standard we set for Modified ROCE does not take into account anticipated annual changes in commodity prices or broader economic factors, which results in greater variability of payouts. We do not decrease our targets when Modified ROCE is expected to be lower in a given year because methanol prices are lower nor do we raise them when Modified ROCE is expected to be higher in a given year. We believe that our performance standards and payout levels should align with an appropriate level of return for shareholders, regardless of the shorter term economic conditions. This means that payouts will be low when our return is low, even if management has outperformed budget expectations. We believe this aligns the interests of management directly with the interests of our shareholders.
|
•
|
The Board reviews the threshold, target and maximum ROCE targets each year to ensure that they remain appropriate, primarily in light of our WACC, historical Modified ROCE results and the ROCE of our peer companies.
|
•
|
The Modified ROCE target is set independently of our annual budgeting process, which allows the budget to focus on expected results in the particular conditions, while incentives focus on long-term shareholder value creation.
|
•
|
The Board understands we are in a cyclical business and that our shareholders take a longer term view of their share ownership. The use of an enduring standard ensures that management similarly takes a long-term view; they understand that payouts will be low when commodity prices are low, but that if they remain with the Company over the long-term, their annual incentives will likely average out to approximately target.
|
(1)
|
Up to and including 2011, the corporate performance component accounted for 60% of the potential overall award (40% based on Modified ROCE performance and 20% based on other strategic financial or operational measures). Since 2012, Modified ROCE performance has been the singular corporate performance measure. Since 2014, the corporate performance component has accounted for 70% of the potential overall award for all NEOs.
|
Named
Executive
Officer
|
Corporate
Performance
Assessment
(a)
|
Corporate
Performance
Weighting
(b)
|
Individual
Performance
Assessment
(c)
|
Individual
Performance
Weighting
(d)
|
Overall
Performance
Result
(a×b) + (c×d)
|
Short-Term Incentive
Award Calculation(1)
($)
|
John Floren
|
34%
|
70%
|
150%
|
30%
|
69%
|
1,249,500 x 120% x 69% = $1,035,000
|
(1)
|
The short-term incentive award calculation is (base salary at December 31, 2019) × (short-term incentive target percentage) × (overall performance result), rounded to the nearest thousand dollars.
|
|
Stock Options/SARs/TSARs Granted in 2019(1) (#)
|
Number of Stock Options/SARs/TSARs Granted in 2019 as a Percentage of Outstanding Common Shares at Dec. 31, 2019(2)
(%) |
Stock Options/SARs/TSARs Granted in 2018
(#) |
Number of Stock Options/SARs/TSARs Granted in 2018 as a Percentage of Outstanding Common Shares at Dec. 31, 2018(3)
(%) |
CEO
|
110,200
|
0.145
|
108,000
|
0.140
|
NEOs (4 individuals, excluding CEO)
|
84,300
|
0.111
|
81,000
|
0.105
|
Other managers (approximately 27 individuals)
|
117,560
|
0.154
|
286,100
|
0.370
|
Total
|
312,060
|
0.410
|
475,100
|
0.615
|
(1)
|
In 2019, all NEOS received TSARs since they were Canadian employees.
|
(2)
|
The Company had 76,196,080 Common Shares outstanding as at December 31, 2019.
|
(3)
|
The Company had 77,263,273 Common Shares outstanding as at December 31, 2018.
|
1.
|
Broadening the PSU Payout Range to an expanded range of 0% to 200% (previously 25% to 150%);
|
2.
|
Replacing the absolute total shareholder return ("TSR") performance measure with relative TSR, which compares the Company's absolute TSR in relation to the S&P Composite 1500 Chemicals Index (with payout capped at target of 100% if the Company's absolute TSR is negative);
|
3.
|
Introducing three-year average Modified ROCE as a second PSU performance measure; and
|
Performance Target
|
50% Relative TSR vs. S&P Composite Chemicals 1500 Index(1)
|
50% ROCE
(3-Year Average)
|
Payout Range
|
Threshold
|
-2%
|
0%
|
0%
|
Target
|
0%
|
12%
|
100%
|
Maximum
|
4%
|
18%
|
200%
|
(1)
|
For Total Return calculations, the graph reflects the total cumulative total shareholder return for $100 invested on December 31, 2014 and dividends declared on Common Shares are assumed to be reinvested at the closing price on the dividend payment date.
|
|
2015
|
2016
|
2017
|
2018
|
2019
|
NEO Total Compensation (millions)
|
$12.5
|
$13.2
|
$15.4
|
$18.0
|
$15.7
|
CEO
|
2015
|
2016(1)
|
2017(2)
|
2018(3)
|
2019(4)
|
|||||
Realized Compensation
|
|
|
|
|
|
|||||
Base Salary
|
932,000
|
|
951,000
|
|
1,006,500
|
|
1,148,750
|
|
1,234,625
|
|
Annual Incentive
|
751,000
|
|
447,000
|
|
1,169,000
|
|
2,770,000
|
|
1,035,000
|
|
Stock Options/SARs/TSARs: Value Realized on Exercise
|
2,330,903
|
|
589,528
|
|
5,044,905
|
|
10,040,619
|
|
—
|
|
PSUs: Value Realized on Settlement
|
762,442
|
|
2,794,808
|
|
371,178
|
|
518,424
|
|
4,990,641
|
|
Total Realized Compensation
|
4,776,345
|
|
4,782,336
|
|
7,591,583
|
|
14,477,793
|
|
7,260,266
|
|
Unrealized Compensation
|
|
|
|
|
|
|||||
Change of Value of Outstanding In-the-Money Value of Stock Options/SARs/TSARs at December 31 of each year
|
(4,802,034)
|
|
4,273,053
|
|
5,160,179
|
|
(8,927,130
|
)
|
(865,533
|
)
|
Change of Value of Outstanding PSUs at December 31 of each year
|
130,991
|
|
1,222,687
|
|
2,452,738
|
|
(799,052
|
)
|
(2,486,584
|
)
|
Total Change in Unrealized Compensation
|
4,671,043
|
|
5,495,740
|
|
7,612,917
|
|
(9,726,182
|
)
|
(3,352,117
|
)
|
CEO: Total Realized Compensation + Total Change in Unrealized Compensation
|
105,302
|
|
10,278,076
|
|
15,204,500
|
|
4,751,611
|
|
3,908,149
|
|
All Other NEOs - Aggregate
|
2015
|
2016(1)
|
2017(2)
|
2018(3)
|
2019(4)
|
|||||
Realized Compensation
|
|
|
|
|
|
|||||
Base Salary
|
1,791,500
|
|
1,778,000
|
|
1,861,250
|
|
2,030,500
|
|
2,152,813
|
|
Annual Incentive
|
746,000
|
|
543,000
|
|
1,533,000
|
|
2,532,000
|
|
998,000
|
|
Stock Options/SARs/TSARs: Value Realized on Exercise
|
3,713,489
|
|
1,463,376
|
|
2,322,546
|
|
8,890,132
|
|
—
|
|
PSUs: Value Realized on Settlement
|
1,948,781
|
|
2,249,050
|
|
390,399
|
|
388,818
|
|
4,035,361
|
|
Total Realized Compensation
|
8,199,770
|
|
6,033,426
|
|
6,107,195
|
|
13,841,450
|
|
7,186,174
|
|
Unrealized Compensation
|
|
|
|
|
|
|||||
Change of Value of Outstanding In-the-Money Value of Stock Options/SARs/TSARs at December 31 of each year
|
(7,905,691)
|
|
4,427,348
|
|
8,192,816
|
|
(10,386,892
|
)
|
(1,787,194
|
)
|
Change of Value of Outstanding PSUs at December 31 of each year
|
(898,880)
|
|
1,425,035
|
|
2,231,400
|
|
99,053
|
|
(2,047,517
|
)
|
Total Change in Unrealized Compensation
|
(8,804,571)
|
|
5,852,383
|
|
10,424,216
|
|
(10,287,839
|
)
|
(3,834,711
|
)
|
All Other NEOs: Total Realized Compensation + Total Change in Unrealized Compensation
|
(604,801)
|
|
11,885,809
|
|
16,531,411
|
|
3,553,611
|
|
3,351,463
|
|
Aggregate NEOs: Total Realized Compensation + Total Change in Unrealized Compensation
|
(499,499)
|
|
22,163,885
|
|
31,735,911
|
|
8,305,222
|
|
7,259,612
|
|
(1)
|
The increase in total realized and unrealized compensation from 2015 to 2016 was mainly attributable to the increase in share price and an increase in the number of long-term incentive units.
|
(2)
|
The increase in total realized and unrealized compensation from 2016 to 2017 was mainly attributable to the increase in share price and short-term incentive payments.
|
(3)
|
The decrease in total unrealized compensation from 2017 to 2018 was due to the decrease in the value of outstanding PSUs and in-the-money stock options. The decrease is partially offset by the increase in total realized compensation from 2017 to 2018, which was attributable to the increase in the value received upon exercise of stock options during 2018.
|
(4)
|
The decrease in total unrealized compensation from 2018 to 2019 was mainly attributable to the decrease in share price and short-term incentive payments.
|
Named Executive Officer
|
Minimum Ownership Requirement (as Multiple of Base Salary)
|
Common Shares Beneficially Owned or over Which Control or Direction is Exercised (Units)
|
Value of Shares ($)
|
PSUs Held (50% of Balance) (1) (Units)
|
Value of 50% of PSUs ($)
|
DSUs Held (Units)
|
Value of DSUs ($)
|
Total Holdings (Units)
|
Value of Total Holdings (incl 50% of PSUs Held) ($)
|
Ownership Requirement Achieved (as Multiple of Base Salary (2))
|
|||
John
|
5 times
|
123,689
|
|
6,169,607
|
33,655
|
1,678,711
|
—
|
|
—
|
|
157,344
|
7,848,318
|
6.3 times
|
Floren
|
|||||||||||||
Ian
|
3 times
|
31,631
|
|
1,577,754
|
9,099
|
453,858
|
48,974
|
|
2,456,046
|
|
89,704
|
4,487,658
|
7.1 times
|
Cameron
|
|||||||||||||
Vanessa
|
3 times
|
35,725
|
|
1,781,963
|
6,422
|
320,329
|
—
|
|
—
|
|
42,147
|
2,102,292
|
4.0 times
|
James
|
|||||||||||||
Mike
|
3 times
|
45,062
|
|
2,247,693
|
6,422
|
320,329
|
—
|
|
—
|
|
51,484
|
2,568,022
|
4.9 times
|
Herz
|
|||||||||||||
Kevin
|
3 times
|
31,237
|
|
1,558,102
|
6,422
|
320,329
|
—
|
|
—
|
|
37,659
|
1,878,431
|
3.8 times
|
Henderson
|
(1)
|
For 2017 and 2018 PSUs, 50% of the number of units held are considered for share ownership purposes. For 2019 PSUs, due to the removal of the guaranteed minimum vesting floor, the value of PSUs are not considered when determining share ownership requirements.
|
(2)
|
Based on $49.88 per Common Share, being the weighted average closing price of the Common Shares on the TSX for the 90-day period ending December 31, 2019. The multiple shown demonstrates the extent to which the requirement has been achieved and is based on the respective 2019 base salary.
|
|
Year
|
Base Salary(1) ($)
|
Share-Based Awards(2),(3) ($)
|
Option-Based Awards(4) ($)
|
Non-Equity Incentive Plan Compensation
|
Pension Value(6) ($)
|
All Other Compensation(7) ($)
|
Total Compensation ($)
|
|
Name and Principal Position
|
Annual Incentive Plans(5) ($)
|
Long-Term Incentive Plans
|
|||||||
John Floren
|
2019
|
1,234,625
|
2,400,330
|
2,396,006
|
1,035,000
|
—
|
298,779
|
312,844
|
7,677,584
|
President & CEO
|
2018
|
1,148,750
|
2,177,130
|
2,159,404
|
2,770,000
|
—
|
277,997
|
319,122
|
8,852,403
|
|
2017
|
1,006,500
|
2,148,800
|
2,146,759
|
1,169,000
|
—
|
221,430
|
277,991
|
6,970,480
|
Ian Cameron
|
2019
|
622,500
|
565,239
|
563,127
|
304,000
|
—
|
116,408
|
197,348
|
2,368,622
|
Senior VP, Finance &
|
2018
|
585,000
|
491,610
|
499,862
|
815,000
|
—
|
109,395
|
194,276
|
2,695,143
|
CFO
|
2017
|
530,000
|
671,500
|
647,729
|
488,000
|
—
|
99,110
|
184,956
|
2,621,295
|
Vanessa James
|
2019
|
518,750
|
425,865
|
430,498
|
235,000
|
—
|
94,153
|
121,219
|
1,825,485
|
Senior VP, Global
|
2018
|
490,000
|
351,150
|
379,895
|
582,000
|
—
|
88,481
|
121,972
|
2,013,498
|
Marketing & Logistics
|
2017
|
457,250
|
470,050
|
481,170
|
341,000
|
—
|
46,346
|
183,993
|
1,979,809
|
Mike Herz
|
2019
|
518,750
|
425,865
|
430,498
|
235,000
|
—
|
94,153
|
113,437
|
1,817,703
|
Senior VP, Corporate
|
2018
|
490,000
|
351,150
|
379,895
|
582,000
|
—
|
88,935
|
114,622
|
2,006,602
|
Development
|
2017
|
451,500
|
470,050
|
481,170
|
386,000
|
—
|
81,947
|
109,411
|
1,980,078
|
Kevin Henderson
|
2019
|
492,813
|
410,379
|
408,756
|
224,000
|
—
|
329,820
|
114,928
|
1,980,696
|
Senior VP,
|
2018
|
465,500
|
351,150
|
359,901
|
553,000
|
—
|
621,271
|
106,036
|
2,456,858
|
Manufacturing
|
2017
|
430,350
|
470,050
|
444,157
|
281,000
|
—
|
230,372
|
95,331
|
1,951,260
|
(1)
|
Values in this column reflect base salary from January 1st to December 31st each year. Salary increases are effective from April 1st of each year.
|
(2)
|
This column reflects the grant date fair value of PSUs granted to NEOs as long-term incentive awards. For PSUs granted in 2017 and 2018, at the time of vesting, a minimum of 25% to a maximum of 150% of PSUs will vest depending on the Company’s performance against predetermined criteria. The grant date fair value shown in this column is calculated by multiplying the total number of PSUs awarded by the closing price of the Common Shares on the TSX on the day before the PSUs were granted (2018: $70.23; 2017: $67.15). This valuation methodology is different than the accounting fair value. The accounting fair value as calculated by the binomial pricing model on the grant date in previous years is: 2018: CEO US$423,538, CFO US$95,638 and each Senior VP US$68,313; 2017: CEO US$401,360, CFO US$125,425 and each Senior VP US$87,798.
|
(3)
|
This column reflects the grant date fair value of PSUs granted to NEOs as long-term incentive awards. For PSUs granted in 2019, at the time of vesting, a minimum of 0% to a maximum of 200% of PSUs will vest depending on the Company's performance against predetermined criteria. For PSUs granted in 2019, the performance criterion is based on an equal combination of a) total shareholder return compared against the total shareholder return of the S&P Composite1500 Chemicals Index over the period January 1, 2019 to December 31, 2021 and b) the three-year average Modified ROCE over the same period. The grant date fair value shown in this column is calculated by multiplying the total number of PSUs awarded by the closing price of the Common Shares on the TSX on the day before the PSUs were granted ($77.43). This valuation methodology is different than the accounting fair value. In calculating the accounting fair value, the Company uses the Monte Carlo pricing model to assign a probability weighted ROCE and relative total shareholder return factor to determine the number of PSUs that would be included in the valuation in accordance with the PSU Plan. The 2019 accounting fair value, as calculated on the grant date based on the Monte Carlo pricing model, is: CEO US$2,017,728, CFO US$475,142, Senior VP Marketing & Logistics and Senior VP, Corporate Development US$357,984, Senior VP, Manufacturing US$344,966.
|
(4)
|
This column reflects the grant date fair value of stock options/SARs/TSARs received by NEOs as long-term incentive awards. The value shown is calculated by multiplying the number of stock options/SARs/TSARs granted by the Canadian dollar exercise price at the time of the grant by the Black-Scholes valuation factor (2019: exercise price = $77.43 Black-Scholes valuation factor = 28.08%; 2018: exercise price = $70.23 Black-Scholes valuation factor = 28.47; 2017: exercise price = $67.15 Black-Scholes valuation factor = 27.56%). This value is the same as the accounting fair value of the full grant, but is not adjusted by the vesting schedule. The actual exercise price of stock options under the Stock Option/SARs/TSARs Plan is the US dollar closing price of the Common Shares on NASDAQ on the day before the stock options/SARs/TSARs were granted.
|
(5)
|
These annual incentive payments are reported in the year in which they were earned, not in the year in which they were actually paid. They are paid in cash and/or DSUs in the year following the year in which they are earned. All NEOs elected to be paid in cash in each of the past three years. No NEOs elected to convert their annual incentive payment to DSUs as permitted under the terms of the DSU Plan.
|
(6)
|
The amounts shown for Messrs. Floren, Cameron, Herz and Ms. James include the Company’s pension contributions both to the Company’s regular defined contribution pension plan in Canada and its supplemental defined contribution retirement plan in Canada. Due to US tax rules for US tax residents, Mr. Floren's supplemental retirement plan balances are held notionally and, at retirement, will be paid as a lump sum from general revenues. The amount shown for Mr. Henderson is the change in value under the Company's closed Canadian defined benefit and supplemental defined benefit plans.
|
(7)
|
The amounts shown represent:
|
•
|
For Mr. Floren: the Company’s contributions to the Company’s Employee Share Purchase Plan, the value of additional PSUs corresponding to dividends declared on Common Shares (2019: $180,494 (3,194 units); 2018: $195,048 (2,392 units); 2017: $161,030 (2,568 units)), perquisite allowance (2019: $66,000; 2018: 66,000; 2017: $66,000) and other miscellaneous items.
|
•
|
For Mr. Cameron: the Company’s contributions to the Company’s Employee Share Purchase Plan, the value of additional PSUs corresponding to dividends declared on Common Shares (2019: $46,769 (828 units); 2018: $54,277 (666 units); 2017: $45,236 (722 units)), the value of additional DSUs corresponding to dividends declared on Common Shares (2019: $88,960 (1,593 units); 2018: $81,238 (990 units); 2017: $68,834 (1,077 units)), perquisite allowance (2019: $57,000; 2018: $57,000; 2017: $57,000) and other miscellaneous items.
|
•
|
For Ms. James: the Company’s contributions to the Company’s Employee Share Purchase Plan, the value of additional PSUs corresponding to dividends declared on Common Shares (2019: $33,662 (596 units); 2018: $39,836 (489 units); 2017: $35,973 (574 units)), perquisite allowance (2019: $57,000; 2018: $57,000; 2017: $57,000) and other miscellaneous items.
|
•
|
For Mr. Herz: the Company’s contributions to the Company’s Employee Share Purchase Plan, the value of additional PSUs corresponding to dividends declared on Common Shares (2019: $33,662 (596 units); 2018: $39,836 (489 units); 2017: $35,973 (574 units)), perquisite allowance (2019: $57,000; 2018: $57,000; 2017: $57,000) and other miscellaneous items.
|
•
|
For Mr. Henderson: the Company’s contributions to the Company’s Employee Share Purchase Plan, the value of additional PSUs corresponding to dividends declared on Common Shares (2019: 33,287 (589 units); 2018: $25,761 (316 units); 2017: $16,813 (268 units)), perquisite allowance (2019: $57,000; 2018: $57,000; 2017: $37,123) and other miscellaneous items.
|
|
|
Option-Based Awards
|
Share-Based Awards
|
||||||||||
|
Year
|
Securities Underlying Unexercised Options / SARs/TSARs
|
Option / SAR / TSAR Exercise Price (1)
|
Option / SAR / TSAR Expiration
|
Vested Unexercised Options / SARs / TSARs at Year End
|
Value of Unexercised In-the-Money Options / SARs / TSARs (2)
|
Shares or Units That Have Not Vested
|
Market or Payout Value of Share-Based Awards That Have Not Been Vested (3)
|
Market or Payout Value of Vested Share-Based Award Not Paid Out or Distributed (4)
|
||||
Name
|
Granted
|
(#)
|
(US$)
|
Date
|
(#)
|
($)
|
(#)
|
($)
|
($)
|
||||
John
|
2019
|
110,200
|
57.60
|
Mar 7, 2026
|
—
|
—
|
32,030
|
|
—
|
|
|||
Floren
|
2018
|
108,000
|
54.65
|
Mar 1, 2025
|
36,000
|
—
|
32,718
|
|
410,201
|
|
|
||
|
2017
|
116,000
|
50.17
|
Mar 2, 2024
|
77,333
|
—
|
|
|
432,830
|
|
|||
|
2016
|
65,334
|
34.59
|
Mar 3, 2023
|
65,334
|
341,338
|
|
|
|
|
|||
|
2014
|
99,000
|
73.13
|
Mar 6, 2021
|
99,000
|
—
|
|
|
|
||||
Ian
|
2019
|
25,900
|
57.60
|
Mar 7, 2026
|
—
|
—
|
7,543
|
|
—
|
|
|||
Cameron
|
2018
|
25,000
|
54.65
|
Mar 1, 2025
|
8,333
|
—
|
7,388
|
|
92,626
|
|
|
||
|
2017
|
35,000
|
50.17
|
Mar 2, 2024
|
23,333
|
—
|
|
|
135,359
|
|
|||
|
2016
|
57,000
|
34.59
|
Mar 3, 2023
|
57,000
|
297,797
|
|
|
|
|
|||
|
2015
|
33,000
|
55.66
|
Mar 5, 2022
|
33,000
|
—
|
|
|
|
||||
|
2014
|
24,000
|
73.13
|
Mar 6, 2021
|
24,000
|
—
|
|
|
|
||||
Vanessa
|
2019
|
19,800
|
57.60
|
Mar 7, 2026
|
—
|
—
|
5,683
|
|
—
|
|
|
||
James
|
2018
|
19,000
|
54.65
|
Mar 1, 2025
|
6,333
|
—
|
5,277
|
|
66,161
|
|
|
||
|
2017
|
26,000
|
50.17
|
Mar 2, 2024
|
17,333
|
—
|
|
|
95,003
|
|
|||
|
2016
|
14,667
|
34.59
|
Mar 3, 2023
|
14,667
|
76,628
|
|
|
|
|
|||
|
2015
|
33,000
|
55.66
|
Mar 5, 2022
|
33,000
|
—
|
|
|
|
||||
|
2014
|
24,000
|
73.13
|
Mar 6, 2021
|
24,000
|
—
|
|
|
|
||||
Mike
|
2019
|
19,800
|
57.60
|
Mar 7, 2026
|
—
|
—
|
5,683
|
|
—
|
|
|
||
Herz
|
2018
|
19,000
|
54.65
|
Mar 1, 2025
|
6,333
|
—
|
5,277
|
|
66,161
|
|
|
||
|
2017
|
26,000
|
50.17
|
Mar 2, 2024
|
17,333
|
—
|
|
|
95,003
|
|
|||
|
2016
|
44,000
|
34.59
|
Mar 3, 2023
|
44,000
|
229,878
|
|
|
|
|
|||
|
2015
|
33,000
|
55.66
|
Mar 5, 2022
|
33,000
|
—
|
|
|
|
||||
|
2014
|
24,000
|
73.13
|
Mar 6, 2021
|
24,000
|
—
|
|
|
|
||||
Kevin
|
2019
|
18,800
|
57.60
|
Mar 7, 2026
|
—
|
—
|
5,476
|
|
—
|
|
|
||
Henderson
|
2018
|
18,000
|
54.65
|
Mar 1, 2025
|
6,000
|
—
|
5,277
|
|
66,161
|
|
|
||
|
2017
|
24,000
|
50.17
|
Mar 2, 2024
|
16,000
|
—
|
|
|
94,681
|
|
|||
|
2016
|
10,400
|
34.59
|
Mar 3, 2023
|
10,400
|
54,335
|
|
|
|
||||
|
2015
|
7,200
|
55.66
|
Mar 5, 2022
|
7,200
|
—
|
|
|
|
||||
|
2014
|
5,400
|
73.13
|
Mar 6, 2021
|
5,400
|
—
|
|
|
|
||||
|
2013
|
9,000
|
38.24
|
Mar 7, 2020
|
9,000
|
4,355
|
|
|
|
(1)
|
For the purposes of this column, the US dollar exercise price represents the closing price of the Common Shares on NASDAQ on the day prior to the date of the grant. One-third of the stock options/SARs/TSARs are exercisable beginning on the first anniversary of the date of the grant, one-third beginning on the second anniversary of the date of the grant and the final third beginning on the third anniversary of the date of the grant. If the stock options/SARs/TSARs are unexercised, they will expire, in the ordinary course, seven years after the date of their grant.
|
(2)
|
This column reflects the in-the-money value of outstanding vested and unvested stock options/SARs/TSARs. The closing price of the Common Shares on NASDAQ on December 31, 2019 was $57.60. For the purposes of this column, the US dollar exercise price of any stock option has been converted to Canadian dollars at the Bank of Canada closing rate of exchange on December 31, 2019.
|
(3)
|
This column reflects the value of outstanding unvested PSUs and includes dividend equivalent PSUs credited since the date of the original PSU grant. PSUs provide for different payouts depending on achievement of a target compounded annual growth rate of total shareholder return over a three-year period. For PSUs granted in 2018, the minimum payout is 25% of the vested PSU balance. For PSUs granted in 2019, there is no minimum payout. The value shown is based on a minimum payout for 2018 and is calculated using the closing price of the Common Shares on the TSX on December 31, 2019, being $50.15.
|
(4)
|
This column reflects the settlement value of PSUs granted in 2017, including dividend equivalent PSUs in respect thereof that vested on December 31, 2019. During 2019, Mr. Floren, Mr. Cameron and Mr. Henderson elected to settle such vested PSUs in cash only. The cash settlement value of such vested PSUs is based on the weighted average closing price of the Common Shares on the TSX during the 15 trading days prior to December 31, 2019 ($50.05). Ms. James' and Mr. Herz's vested 2017 PSUs will be settled according to the general provisions of the PSU Plan whereby they will each receive an amount of cash equal to one-half the value of their vested PSUs (less withholding tax) and a number of Common Shares equal to one-half the number of vested PSUs. These Common Shares were purchased on behalf of employees on the open market between January 13 and January 31, 2020. The cash settlement value ($50.05) is described above and the share settlement value ($50.39) is the weighted average purchase price of the Common Shares purchased between January 13 and January 31, 2020. The closing price of the Common Shares on the TSX on December 31, 2019, the vesting date of the 2017 PSUs, was $50.15. Based on the TSR CAGR achieved, the number of 2017 PSUs that vested was 25% of each individual’s 2017 PSU balance as at December 31, 2019. The number of PSUs for each NEO in respect of vested 2017 PSUs was as follows: Mr. Floren: 8,648 PSUs; Mr. Cameron: 2,702 PSUs; Ms. James: 1,892 PSUs; Mr. Herz: 1,892 PSUs; and Mr. Henderson: 1,892 PSUs. The 2017 PSUs will be settled on March 19, 2020.
|
NEO(1)
|
Outstanding DSUs as at Dec. 31, 2019
|
Value of Outstanding DSUs as at Dec. 31, 2019
|
|
Ian Cameron
|
48,974
|
|
$2,456,046
|
Name
|
Option-Based Awards - Value Vested During the Year (1) ($)
|
Option-Based Awards - Value Realized at Exercise (2) ($)
|
Share-Based Awards - Value Vested During the Year (3) ($)
|
Non-Equity Incentive Plan Compensation - Value Earned During the Year (4) ($)
|
|||
John Floren
|
3,261,581
|
|
—
|
432,830
|
|
1,035,000
|
|
Ian Cameron
|
935,289
|
|
—
|
224,220
|
|
304,000
|
|
Vanessa James
|
715,926
|
|
—
|
95,003
|
|
235,000
|
|
Mike Herz
|
715,926
|
|
—
|
95,003
|
|
235,000
|
|
Kevin Henderson
|
300,726
|
|
—
|
94,681
|
|
224,000
|
|
(1)
|
The value shown in this column is calculated by multiplying the number of stock options that vested in 2019 by the difference between the exercise price, converted to Canadian dollars from US dollars at the Bank of Canada closing rate of exchange on the vesting date, and the closing price of the Common Shares on the TSX on the vesting date.
|
(2)
|
This amount represents, in respect of all Common Shares acquired during 2019 on exercise of stock options/SARs/TSARs, the difference between the market value of such shares at the time of exercise and the exercise price. The exercise price is denominated in US dollars and has been converted to Canadian dollars using the foreign exchange rate at the time of the exercise and provided to the stock option administrator, Solium ULC, by Solium’s stockbroker.
|
(3)
|
The value shown in this column includes: (a) the settlement value of PSUs granted in 2017, including dividend equivalent PSUs in respect thereof, that vested on December 31, 2019; and (b) the value of dividend equivalent DSUs received during the year. The settlement value of such PSUs is fully described in footnote (4) of the “Outstanding Option-Based Awards and Share-Based Awards” table. Mr. Floren does not currently participate in the DSU Plan due to tax implications and/or residency requirements. The value of DSU dividend equivalents is based on the market price on the day they were granted, which is also the vesting date. DSUs vest immediately upon grant; however, they may not be redeemed by the NEO until the NEO ceases to be an employee.
|
(4)
|
The value shown in this column is the annual incentive payment included in the Summary Compensation Table.
|
Name
|
Accumulated Value at Start of Year(1) ($)
|
Compensatory(2) ($)
|
Non-Compensatory(3) ($)
|
Accumulated Value at Year-End ($)
|
||||
John Floren
|
2,457,936
|
|
298,779
|
|
323,264
|
|
3,079,979
|
|
Ian Cameron
|
2,432,859
|
|
116,408
|
|
418,641
|
|
2,967,908
|
|
Vanessa James
|
85,202
|
|
94,153
|
|
16,755
|
|
196,110
|
|
Mike Herz
|
1,252,357
|
|
94,153
|
|
216,003
|
|
1,562,513
|
|
(1)
|
Ms. James joined the Canadian DC plan on January 1, 2018 when she moved to Canada.
|
(2)
|
The amounts include the Company’s pension contributions to both the Company’s regular defined contribution pension plan and to the Company’s supplemental defined contribution retirement plan. The Company’s pension contributions are also reported in the “Pension Value” column of the Summary Compensation Table.
|
(3)
|
The amounts include regular investment earnings or losses on pension contributions. Employee contributions are not permitted in the Canadian pension plans.
|
Name
|
Number of Years Credited Service
|
Annual Benefits Payable ($)
|
Opening Present Value of Defined Benefit Obligation ($)
|
Compensatory Change(1)
($)
|
Non-Compensatory Change(2)
($)
|
Closing Present Value of Defined Benefit Obligation ($)
|
|
|
|
At Year End
|
At Age 65
|
|
|
|
|
Kevin Henderson
|
44.75
|
294,956
|
317,359
|
5,029,008
|
329,820
|
573,220
|
5,932,048
|
(1)
|
The compensatory change is the value of the projected pension earned during 2019 and is also reported in the “Pension Value” column of the Summary Compensation Table.
|
(2)
|
The non-compensatory change includes interest on obligations at the beginning of the year, change in actuarial assumptions and gains and losses due to differences in actual experience compared to actuarial assumptions.
|
•
|
more than 40% of voting shares of the Company are acquired by an outsider;
|
•
|
a majority change in the Board occurs;
|
•
|
all or substantially all of the assets of the Company are sold to an outsider; or
|
•
|
a majority of directors determines that a change in control has occurred.
|
(1)
|
Under the employment agreements, an executive officer is required to give three months’ written notice of his or her resignation and the Company is required to give three months’ written notice of termination.
|
(2)
|
Under the long-term incentive plans, retirement is defined as (a) the employee has been continuously employed by the Company for a minimum of five years; (b) the employee has notified the Company of his or her intended termination of employment at least 30 days in advance; and (c) the employee has attained 55 years of age. If the employee meets all of these criteria, his or her voluntary termination is considered a retirement. If the employee does not meet all of these criteria, his or her voluntary termination is considered a resignation.
|
(3)
|
The table reflects the Termination Amount for all currently employed NEOs other than Mr. Cameron, who has grandfathered provisions in his executive agreement that provide for the inclusion of the value of his long-term incentives in the calculation of the Termination Amount in the event of a Change of Control and termination within 24 months. His termination payment is equal to (a) 2.0 times his most recent compensation (highest annual salary during the last three years plus the average of the value of the last three years’ short-term incentive awards and long-term incentive awards) and (b) compensation for pension and other Company benefits he would have received over a 24-month period, plus all legal and professional fees and expenses. For all other NEOs – Mr. Floren, Ms. James, Mr. Herz, and Mr. Henderson – the value of long-term incentive awards is not included as part of the calculation of the Termination Amount. Employment agreements for any new executive officers in the future will not include the value of long-term incentives in the calculation of the Termination Amount.
|
Name
|
Change of Control with Termination
|
Termination without Cause ($)
|
||||||
Termination Payment
($) |
Value of Early Vested Options and Share-Based Awards (1)
($) |
Total ($)
|
||||||
John Floren
|
6,790,016
|
|
3,247,109
|
|
10,037,125
|
|
6,472,816
|
|
Ian Cameron
|
5,125,270
|
|
748,785
|
|
5,874,055
|
|
1,982,418
|
|
Vanessa James
|
2,276,550
|
|
549,646
|
|
2,826,196
|
|
1,640,288
|
|
Mike Herz
|
2,301,624
|
|
549,646
|
|
2,851,270
|
|
1,636,593
|
|
Kevin Henderson
|
2,189,844
|
|
539,265
|
|
2,729,109
|
|
1,631,076
|
|
(1)
|
This column reflects the value of early vested stock options/SARs/TSARs and unvested PSUs, including dividend equivalent PSUs received. Early vesting of stock options/SARs/TSARs requires that both (a) a Change of Control occurs and (b) either termination of the NEOs employment or the NEO suffers an adverse material change in employment status. All unvested PSUs vest at the time of a Change of Control. For greater clarity, the value of stock options/SARs/TSARs and PSUs that vested on or before December 31, 2019, in accordance with the terms of the plans, are not included in this column.
|
Plan Category
|
Securities to be Issued
upon Exercise of
Outstanding Options,
Warrants and Rights
(a)
|
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights(1)
(b)
|
Securities Remaining Available
for Future Issuance under
Equity Compensation Plans
(Excluding Securities Reflected
in Column (a))
(c)
|
(#)
|
($)
|
(#)
|
|
Equity compensation plans approved by securityholders
|
1,861,958
|
55.82
|
4,311,729
|
Equity compensation plans not approved by securityholders
|
—
|
—
|
—
|
Total
|
1,861,958
|
55.82
|
4,311,729
|
(1)
|
The exercise prices of all outstanding options are denominated in US dollars. However, for the purposes of this column, the exercise prices have been converted to Canadian dollars using the Bank of Canada daily exchange rate on December 31, 2019, being 1.2988.
|
(1)
|
This assumes all outstanding unexercised options will ultimately be exercised in full.
|
(2)
|
Approximate percentage of the Company’s 76,196,080 outstanding Common Shares on a non-diluted basis as at December 31, 2019.
|
a.
|
in the case of death of an optionee prior to the expiry date, the option (and related tandem SAR) will vest immediately and will be exercisable prior to the earlier of (i) the date that is one year from the date of death and (ii) the expiry date;
|
b.
|
in the case of disability of the optionee prior to the expiry date, the option (and related tandem SAR) shall vest immediately and will be exercisable until the expiry date;
|
c.
|
in the case of termination of the optionee’s employment by reason of (i) retirement where the optionee is not less than 55 years of age, the optionee has been employed by the Company for at least five years, and the optionee provides the Company with written notice of their retirement at least 30 days prior to the retirement date or (ii) circumstances that the Board, in its discretion, determines constitute a “major divestiture or disposition of assets, facility closure or major downsizing” (which determination shall be conclusive and binding on all parties concerned), the option (and related tandem SAR) will continue to vest in accordance with its terms and will be exercisable until the expiry date;
|
d.
|
if the optionee ceases, for any other reason, to be an officer or employee of the Company or of a subsidiary of the Company prior to the expiry date, the option (and related tandem SAR) will be exercisable prior to the earlier of (i) the date which is 90 days from the date the optionee ceases to be an officer or employee and (ii) the expiry date; and
|
e.
|
where an option expires or ceases to be exercisable during a blackout period during which trading in Company securities is restricted in accordance with the policies of the Company or its affiliates, or within the ten business days immediately after a blackout period, the expiry date for the option (and related tandem SAR) shall become a date that is ten days after the last day of the blackout period.
|
1.
|
an increase in the number of Common Shares that can be issued under the Stock Option Plan, including an increase to the fixed maximum number of securities issuable under the Stock Option Plan, either as a fixed number or a fixed percentage of the Company’s outstanding capital represented by such securities;
|
2.
|
a reduction in the exercise price or purchase price of outstanding options (including a cancellation of an outstanding option for the purpose of exchange for reissuance at a lower exercise price to the same person);
|
3.
|
an extension of the expiry date of an option or amending the Stock Option Plan to permit the grant of an option with an expiry date of more than seven years from the day the option is granted;
|
4.
|
an expansion of the class of eligible recipients of options under the Stock Option Plan that would permit the reintroduction of non-management directors;
|
5.
|
an expansion of the transferability or assignability of options (including any tandem SARs connected therewith), other than to a spouse or other family member; an entity controlled by the option holder or spouse or family member; an RRSP or RRIF of the option holder, spouse or family member; a trustee, custodian or administrator acting on behalf of, or for the benefit of, the option holder, spouse or family member; any person recognized as a permitted assign in such circumstances in securities or stock exchange regulatory provisions; or for estate planning or estate settlement purposes;
|
6.
|
any amendment of the Stock Option Plan to increase any maximum limit of the number of securities:
|
(a)
|
issued to insiders of the Company within any one-year period, or
|
(b)
|
issuable to insiders of the Company at any time;
|
7.
|
if the Stock Option Plan has a fixed maximum number of securities issuable, the addition of any provision that allows for the exercise of options without cash consideration, whether the option holder receives the intrinsic value in the form of securities from treasury or the intrinsic value in cash, which does not provide for a full deduction of the underlying Common Shares from the maximum number issuable under the Stock Option Plan or, if the Stock Option Plan does not have a fixed
|
8.
|
a change to the amendment provisions of the Stock Option Plan;
|
1.
|
clerical or administrative changes (including a change to correct or rectify an ambiguity, immaterial inconsistency, defective provision, mistake, error or omission or clarify the Stock Option Plan’s provisions or a change to the provisions relating to the administration of the Stock Option Plan);
|
2.
|
changing provisions relating to the manner of exercise of options (or related tandem SAR), including changing or adding any form of financial assistance provided by the Company to participants or, if the Stock Option Plan has a fixed maximum number of securities issuable, adding provisions relating to a cashless exercise that provides for a full deduction of the underlying Common Shares from the maximum number issuable under the Stock Option Plan;
|
3.
|
changing the eligibility for and limitations on participation in the Stock Option Plan (other than amendments of the Stock Option Plan to increase any maximum limit of the number of securities that may be issued or issuable to insiders that may be specified in the Stock Option Plan or the reintroduction of participation by non-management directors);
|
4.
|
changing the terms, conditions and mechanics of grant, vesting, exercise and early expiry of options (or related tandem SARs);
|
5.
|
changing the provisions for termination of options so long as the change does not permit the Company to grant an option (and related tandem SAR) with an expiry date of more than seven years or extend an outstanding option’s expiry date;
|
6.
|
additions, deletions or alterations designed to respond to or comply with any applicable law or any tax, accounting, auditing or regulatory or stock exchange rule, provision or requirement or to allow option holders to receive fair and equitable tax treatment under any applicable tax legislation; and
|
7.
|
certain changes to provisions on the transferability of options (and related tandem SARs) that do not require shareholder approval as described above.
|
|
|
|
|
|
1.
|
|
OBJECT OF THESE CORPORATE GOVERNANCE PRINCIPLES
|
|
|
|
|
|
||
2.
|
|
CODE OF ETHICS
|
|
|
|
|
|
||
3.
|
|
BOARD RESPONSIBILITIES
|
|
|
|
|
|
||
4.
|
|
DIRECTOR RESPONSIBILITIES
|
|
|
|
|
|
||
5.
|
|
BOARD LEADERSHIP
|
|
|
|
|
|
||
6.
|
|
BOARD MEMBERSHIP
|
|
|
|
|
|
||
7.
|
|
BOARD COMPENSATION
|
|
|
|
|
|
||
8.
|
|
SHARE OWNERSHIP
|
|
|
|
|
|
||
9.
|
|
ASSESSING THE BOARD’S PERFORMANCE
|
|
|
|
|
|
||
10.
|
|
BOARD’S INTERACTION WITH STAKEHOLDERS
|
|
|
|
|
|
||
11.
|
|
MEETING PROCEDURES
|
|
|
|
|
|
||
12.
|
|
COMMITTEE MATTERS
|
|
|
|
|
|
||
13.
|
|
BOARD RELATIONSHIP TO SENIOR MANAGEMENT
|
|
|
|
|
|
||
14.
|
|
ACCESS TO RESOURCES AND ENGAGEMENT OF ADVISORS
|
|
|
|
|
|
||
15.
|
|
EVALUATION AND SUCCESSION OF EXECUTIVE OFFICERS
|
|
|
|
|
|
||
16.
|
|
REVIEW OF CORPORATE GOVERNANCE PRINCIPLES
|
|
|
|
|
|||
Exhibit A to the Methanex Corporate Governance Principles
|
|
•
|
monitoring overall corporate performance;
|
•
|
overseeing compensation and succession planning for, and performance of, executive officers, including the appointment and performance of the CEO;
|
•
|
adopting a strategic planning process and approving, at least annually, a strategic plan that takes into account, among other things, the opportunities and risks of the business;
|
•
|
evaluating the integrity of, and overseeing the implementation of, the Company’s management information systems and internal controls and procedures;
|
•
|
identifying and overseeing the implementation of systems to manage the principal risks of the Company’s business;
|
•
|
overseeing the implementation of appropriate disclosure controls, including a communication policy for the Company;
|
•
|
developing the Company’s approach to corporate governance; and
|
•
|
to the extent feasible, satisfying itself as to the integrity of the CEO and other executive officers and that the CEO and executive officers create a culture of integrity throughout the organization.
|
|
a)
|
act honestly and in good faith with a view to the best interest of the Company; and,
|
|
b)
|
exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
|
1)
|
experiential (education, business and functional experience);
|
2)
|
demographic (age, gender, ethnicity, nationality, geography); and
|
3)
|
personal (personality, interests, values).
|
(A)
|
a director who is, or at any time during the past three years was, employed by the Company;
|
(B)
|
a director who accepted or who has a Family Member who accepted any compensation from the Company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than the following:
|
a.
|
compensation for board or board committee service;
|
b.
|
compensation paid to a Family Member who is an employee (other than an Executive Officer) of the Company; or
|
c.
|
benefits under a tax-qualified retirement plan, or non-discretionary compensation.
|
(C)
|
a director who is a Family Member of an individual who is, or at any time during the past three years was, employed by the Company as an Executive Officer;
|
(D)
|
a director who is, or has a Family Member who is, a partner in, or a controlling Shareholder or an Executive Officer of, any organization to which the Company made, or from which the Company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following:
|
a.
|
payments arising solely from investments in the Company’s securities; or
|
b.
|
payments under non-discretionary charitable contribution matching programs.
|
(E)
|
a director of the Company who is, or has a Family Member who is, employed as an Executive Officer of another entity where at any time during the past three years any of the Executive Officers of the Company serve on the compensation committee of such other entity; or
|
(F)
|
a director who is, or has a Family Member who is, a current partner of the Company’s outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years.
|
|
METHANEX CORPORATION
|
|||
Date: March 20, 2020
|
By:
|
/s/ KEVIN PRICE
|
||
|
|
Name:
|
|
Kevin Price
|
|
|
Title:
|
|
General Counsel & Corporate Secretary
|