Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

 

Orion S.A.

Société Anonyme

6, Route de Trèves

L-2633 Senningerberg (Municipality of Niederanven)

Grand Duchy of Luxembourg

The Annual General Meeting of Shareholders will be held through private deed and convene on

Thursday, June 20, 2024, at 2:00 p.m. CET, at the registered office of the Company at:

6, Route de Trèves

L-2633 Senningerberg (Municipality of Niederanven)

Grand Duchy of Luxembourg

The Annual General Meeting is also referred to as the “General Meeting”.

Dear Shareholders of Orion S.A.,

The Board of Directors (the “Board of Directors” or “Board”) of Orion S.A., a société anonyme having its registered office at 6, Route de Trèves, L-2633 Senningerberg (Municipality of Niederanven), Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies Register under registration number B 160558 (the “Company” or “Orion”), convened, in accordance with the provisions of article 10 of the articles of association of the Company, an Annual General Meeting of the Shareholders (the “Annual General Meeting”). You are cordially invited to attend our 2024 Annual General Meeting of Shareholders, which will be held at 2:00 p.m. Central European Time (“CET”) on June 20, 2024, at the Company’s headquarters at 6, Route de Trèves, L-2633 Senningerberg (Municipality of Niederanven), Grand Duchy of Luxembourg.

A Notice of Internet Availability of Proxy Materials for the 2024 Annual General Meeting of Shareholders will be mailed to shareholders on or around May 10, 2024.

The following is the agenda of the Annual General Meeting:

The Company urges each shareholder to cast its vote at the General Meeting by completing, signing, dating and returning the respective proxy made available by the Company for use at the General Meeting in accordance with the instructions below.

Only holders of record of the Company’s common shares (the “Common Shares”) outstanding on April 26, 2024, at 11:59 P.M. CET (the “Record Date”) are entitled to attend and vote at the General Meeting.

As of April 26, 2024, the Company had       Common Shares issued and outstanding. Each shareholder is entitled to one vote for each Common Share held of record by such shareholder as of the Record Date, on each matter submitted to a vote at the General Meeting. All Common Shares represented by proxy for the General Meeting duly executed and received by voting via telephone and internet until June 16, 2024, 11:59 P.M. EST (June 17, 2024 5:59 A.M. CET), and by voting via hard copy ballots until June 17, 2024, 12:00 P.M. (noon) EST (June 17, 2024 6:00 P.M. CET) (the “Voter Deadline”) will be voted at the General Meeting in accordance with the terms of the proxy. If any other item is properly added to the agenda for the General Meeting under the Company’s articles of association or Luxembourg law, proxies for such General Meeting will be voted in accordance with the best judgment of the proxyholders. Generally, only the items appearing in the convening notice and agenda for the General Meeting can be voted on at the General Meeting. Each shareholder can vote only once on each item on the agenda of the General Meeting. A shareholder may revoke a proxy for the General Meeting by (i) submitting a document revoking it prior to the Voter Deadline, (ii) submitting a duly executed proxy bearing a later date prior to the Voter Deadline, or (iii) attending the General Meeting and voting in person.

You may cast your vote at the General Meeting by marking, signing and dating the proxy card for the General Meeting and returning the proxy card in the enclosed envelope (postage within the United States paid; or in another envelope, postage to be paid), to: Equiniti Trust Company, 55 Challenger Rd, Suite 200B 2nd floor, Ridgefield Park, NJ 07660, U.S.A. Proxy cards that are mailed must be received by American Stock Transfer & Trust Company, LLC at the above address by the Voter Deadline. No postage is required for mailing of the enclosed envelope in the United States. The Company will bear the cost of soliciting proxies with respect to the matters to be voted on at the General Meeting.

Alternatively, you may also cast your vote over the Internet, at www.proxyvote.com (beneficial shareholders) or www.voteproxy.com (registered shareholders), or by telephone, by following the instructions on your proxy card or the instructions that you received by e-mail from the Company. If you plan to vote over the Internet or by telephone, your votes must be received no later than the Voter Deadline to allow sufficient time to tabulate the votes prior to the start of the General Meeting.

Shareholders may also vote in person at the General Meeting. To vote at the meeting, shareholders must present valid government- issued photo identification. If your shares are held by a bank or broker, you must also obtain and present a “legal proxy” from the holder of record to vote at the General Meeting. For specific instructions, please refer to the proxy card, notice or e-mail notification you received. Admittance of shareholders to the General Meeting and acceptance of written voting proxies will be governed by Luxembourg law.

Even if you plan to attend the General Meeting, we recommend that you vote your shares in advance of the General Meeting in one of the manners available to you so that your vote will be counted if you later are unable to attend the General Meeting.

If you hold your Common Shares through a bank, brokerage firm or other agent and do not give instructions to your bank, brokerage firm or other agent as to how your Common Shares should be voted at the General Meeting, the Common Shares that you hold through a bank, brokerage firm or other agent will not be voted at the General Meeting on Proposals 1 through 8.

The Company therefore urges all shareholders who hold their Common Shares through a bank, brokerage firm or other agent to promptly provide voting instructions in accordance with the procedures of their bank, brokerage firm or other agent. Your ability to vote over the Internet or by telephone depends on the voting procedures of your bank or broker or other agent.

Directors, executive officers and employees of the Company may solicit proxies in person or by mail, telephone or e-mail, but will not receive any additional compensation for these services. The Company may reimburse brokers and others for their reasonable expenses in forwarding proxy solicitation material to the beneficial owners of Common Shares. The Company may retain a proxy solicitation firm to assist in the solicitation of proxies for the General Meeting.

Each shareholder of record who holds one or more Common Shares on the Record Date will be admitted to participate and vote in the General Meeting. A holder of Common Shares held through an operator of a securities settlement system or recorded as book-entry interests in the accounts of a professional depositary who wishes to attend the General Meeting should receive from such operator or depositary a certificate certifying (i) the number of Common Shares recorded in the relevant account on the Record Date and (ii) that such Common Shares are blocked until the closing of the General Meeting. The certificate should be submitted to the Company no later than the Voter Deadline. If you plan to attend the General Meeting, you are kindly requested to notify the Company thereof in writing and provide your name, address and telephone number and any other necessary materials before the Voter Deadline by post to the registered office of the Company located at 6, Route de Trèves, L-2633 Senningerberg (Municipality of Niederanven), Grand Duchy of Luxembourg, or by e-mail to investor-relations@orioncarbons.com.

The General Meeting will also be held by teleconference, in addition to the physical location, at 2:00 p.m. CET on June 20, 2024. The dial-in information for participation in the General Meeting by teleconference will be published on our website at https://investor.orioncarbons.com/financial/Proxy-Statements/default.aspx one week prior to the date of the General Meeting. You may ask questions to the Board of Directors until 11:59 p.m. CET on June 17, 2024 by sending an e-mail to investor-relations@orioncarbons.com together with a proof of shareholding. The Board of Directors will respond at the General Meeting to questions duly submitted by shareholders. It will not be possible to raise questions and vote shares during the meeting if you participate via teleconference, and we encourage you therefore to vote your Common Shares prior to the General Meeting.

Shareholders are not entitled to appraisal or dissenters’ rights for any matter being voted on at the General Meeting.

One or more shareholders of record holding at least 10% of the outstanding Common Shares (excluding, for the avoidance of doubt, any Common Shares repurchased by the Company) may add items to the agenda of the General Meeting, provided that each such item is accompanied by a justification or a draft resolution to be adopted in the General Meeting. If you plan to add items to the agenda of the General Meeting, you must notify the Company thereof in writing and provide your name, address and telephone number by registered mail to the registered office the Company located at 6, Route de Trèves, L-2633 Senningerberg (Municipality of Niederanven), Grand Duchy of Luxembourg, or by e-mail to investor-relations@orioncarbons.com. Your request must be received by the Company no later than June 13, 2024, 11:59 p.m. CET.

The General Meeting will deliberate validly regardless of the number of Common Shares present or represented by proxy.

Resolutions will be adopted by a simple majority of the votes validly cast at the General Meeting.

Copies of the full and unabridged text of the documents to be submitted at the General Meeting together with draft resolutions proposed pursuant to the agenda of the General Meeting will be made available on the Company’s website or may be individually requested by you in writing by post to Orion S.A. 6, Route de Trèves, L-2633 Senningerberg (Municipality of Niederanven), Grand Duchy of Luxembourg, or by e-mail to investor-relations@orioncarbons.com.

BY ORDER OF THE BOARD OF DIRECTORS

Dr. Christian Eggert

Instructions for submitting your proxy are provided in the Notice of Internet Availability of Proxy Materials, the Proxy Statement and the proxy card. It is important that your Common Shares be represented and voted at the General Meeting. Please submit your proxy by completing the proxy card. You may revoke your proxy at any time prior to its exercise at the General Meeting. Please do not return the proxy card if you are voting through the Internet or by telephone or plan to vote in person at the General Meeting in Luxembourg.

Important Notice Regarding the Availability of Proxy Materials for the General Meeting to be held on June 20, 2024:

Information and materials concerning the General Meeting are available in the Investor Relations section of our website at https://investor.orioncarbons.com/financial/Proxy-Statements/default.aspx. The information and materials available online are comprised of:

The accompanying proxy is solicited on behalf of the Board of Directors (the “Board of Directors” or “Board”) of Orion S.A. (the “Company” or “we” or “Orion”) for use at the Company’s 2024 Annual General Meeting of Shareholders (the “Annual General Meeting” or “General Meeting”) to be held at the Company’s headquarters located at 6, Route de Trèves, L-2633 Senningerberg (Municipality of Niederanven), Grand Duchy of Luxembourg on June 20, 2024, at 2:00 p.m. (Central European Time (“CET”)), and any adjournment thereof.

On or about May 10, 2024, we will mail to our shareholders of record and beneficial owners a Notice of Internet Availability of Proxy Materials containing instructions on how to access this proxy statement (the “Proxy Statement”) and the annual accounts prepared in accordance with generally accepted accounting principles in Luxembourg (“Lux GAAP”) for the year ended December 31, 2023, and our consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for the year ended December 31, 2023 as well as our Annual Report on Form 10-K for the financial year ended December 31, 2023 (the “Annual Report on Form 10-K”).

The Notice of Internet Availability of Proxy Materials will also contain instructions on how you can receive a paper copy of the proxy materials. Our 2023 stand-alone accounts, consolidated accounts and Annual Report on Form 10-K, Notice of Internet Availability of Proxy Materials and the proxy card are first being made available online on or around May 10, 2024.

What proposals are scheduled to be voted on at the Annual General Meeting and what is the recommendation of the Board on each of the proposals scheduled to be voted on at the Annual General Meeting?

Shareholders will be asked to vote on the following proposals:

We are not aware of any other business to be brought before the Annual General Meeting. If any additional business is properly brought before the Annual General Meeting, proxies will be voted on those matters in accordance with the best judgment of the person or persons acting under the proxies.

As of April 16, 2024, the Company had 58,307,933 Common Shares issued and outstanding. Each Common Share is entitled to one vote on each matter brought before the Annual General Meeting.

Unless otherwise required by applicable law or by the articles of association of the Company, resolutions at the Annual General Meeting are adopted by a simple majority of the votes validly cast. Therefore, each proposal made herein can be approved by a simple majority of the votes validly cast, regardless of the proportion of the issued share capital of the Company present or represented at such meeting.

Abstentions, broker non-votes (see below) and nil votes will not be taken into account. A nil vote under Luxembourg law means a vote that does not show clearly the intention of the shareholder to cast a vote for, against or to abstain with regard to a specific resolution.

Shareholders as of the Record Date for the Annual General Meeting are entitled to vote at the Annual General Meeting. As of April 16, 2024, the Company had 58,307,933 Common Shares issued and outstanding.

If on the Record Date your Common Shares were registered directly in your name with our transfer agent, American Stock Transfer and Trust Company, then you are considered a shareholder of record with respect to those Common Shares.

As a shareholder of record, you may vote at the Annual General Meeting or vote by proxy. Whether or not you plan to attend the Annual General Meeting, we urge you to vote over the Internet, by telephone or by filling out and returning the proxy card.

If on the Record Date, you hold your Common Shares through a bank, brokerage firm or other agent and do not give instructions to your bank, brokerage firm or other agent as to how your Common Shares should be voted at the Annual General Meeting, the Common Shares that you hold through a bank, brokerage firm or other agent will not be voted on Proposals 1 through 8. The Company therefore urges all shareholders who hold their Common Shares through a bank, brokerage firm or other agent to promptly provide voting instructions in accordance with the procedures of their bank, brokerage firm or other agent.

If you are a shareholder of record, you may use one of the following means:

All Common Shares represented by proxy for the Annual General Meeting duly executed and received by the Voter Deadline will be voted at the Annual General Meeting in accordance with the terms of the proxy. This includes votes submitted via the Internet or by telephone. Submitting your proxy, whether via the Internet, telephone or by mail if you requested a paper proxy card, will not affect your right to vote in person at the Annual General Meeting if you were a shareholder of record as of 11:59 P.M. CET on April 26, 2024, and should you decide to attend the Annual General Meeting and vote your shares at the Annual General Meeting. If you decide to vote in person at the Annual General Meeting, your previous proxy will be revoked and become void.

If you are not a shareholder of record, please refer to the voting instructions provided by your nominee that will direct you on how to vote your Common Shares.

Your vote is important. Whether or not you plan to attend the Annual General Meeting, we urge you to vote by proxy to ensure that your vote is counted. You may still attend the Annual General Meeting if you have already voted by proxy.

A shareholder giving a proxy has the power to revoke it at any time before it is voted by providing written notice to the Secretary of the Company or by delivering a later-dated proxy or by voting in person at the Annual General Meeting.

There is no quorum requirement. The Annual General Meeting will proceed regardless of the number of Common Shares present or represented by proxy.

Broker non-votes occur when Common Shares held by a broker for a beneficial owner are not voted because (i) the broker did not receive voting instructions from the beneficial owner, and (ii) the broker lacked discretionary authority to vote the Common Shares on a particular resolution item.

Broker non-votes have no effect on the matters voted upon. Note that if you are a beneficial holder and do not provide specific voting instructions to your broker, the broker that holds your Common Shares will not be authorized to vote on Proposals 1 through 8 (broker non-votes). The appointment of the independent auditor (Proposal 9) and the ratification of the appointment of the independent registered public accounting firm (Proposal 10) are considered to be routine matters and, accordingly, even if you do not instruct your broker, bank or

other nominee on how to vote the Common Shares in your account for Proposal 9 or Proposal 10, brokers will be permitted to exercise their discretionary authority to vote for the appointment of the independent auditor and the ratification of the appointment of the independent registered public accounting firm. We encourage you to provide voting instructions to your broker, whether or not you plan to attend the Annual General Meeting.

All proxies will be voted in accordance with the instructions specified on the proxy card.

If you do not vote on specific resolution items and you hold your Common Shares through a broker, bank or other nominee and your broker, bank or other nominee does not have discretionary power to vote your shares, your Common Shares may constitute “broker non-votes” (as described above). Voting results will be tabulated and certified by the inspector of elections appointed for the Annual General Meeting.

Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), the Company uses the Internet as the primary means of furnishing proxy materials to shareholders. Accordingly, on or around May 10, 2024, the Company will mail a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) to the Company’s shareholders. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice of Internet Availability or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice of Internet Availability and at https://investor.orioncarbons.com/financial/Proxy-Statements/default.aspx. The Notice of Internet Availability also contains instructions on how to receive, free of charge, paper copies of the proxy materials. If you received the notice, then you will not receive a paper copy of the proxy materials unless you request one. The Company encourages shareholders to take advantage of the availability of the proxy materials on the Internet to help the environment and reduce costs to the Company associated with the physical printing and mailing of proxy materials.

The Notice of Internet Availability will provide you with instructions regarding how to use the Internet to:

The Company’s proxy materials are also available at https://investor.orioncarbons.com/financial/Proxy-Statements/default.aspx. This website address is included for reference only. The information contained on the Company’s website is not incorporated by reference into this proxy statement.

Choosing to receive future proxy materials by e-mail will save the Company the cost of printing and mailing documents to you. If you choose to receive future proxy materials by e-mail, you will receive an e-mail message next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

The Company is paying the costs of the solicitation of proxies. Proxies may be solicited on behalf of the Company by our directors, officers, employees or agents in person or by telephone or other electronic means. We will also reimburse brokerage firms and other custodians, nominees and fiduciaries, upon request, for their reasonable expenses incurred in sending proxies and proxy materials to beneficial owners of our Common Shares. We have not retained an outside proxy solicitation firm to assist us with the solicitation of proxies.

 

 

All nine director nominees are current directors of the Board. Each director nominee presented below, if elected, will serve as a director until the next Annual General Meeting of shareholders and until such director’s successor is duly elected and qualified or, if earlier, such director’s death, resignation or removal. All the director nominees listed below have given their consent to be named as nominees for election and have indicated their intention to serve if they are elected. Following the 2024 Annual General Meeting, the Board will remain fully independent except for our CEO, Mr. Painter. The Board does not anticipate that any of the nominees will be unable to serve as a director, but in the event that any nominee is unable to serve as a director or should otherwise become unavailable before the 2024 Annual General Meeting, the Board may either propose an alternate nominee, in which case the proxies will be voted for the alternative nominee unless directed to withhold from voting, or the Board may elect to reduce the size of the Board.

Our Board believes that it is necessary for each of our directors to possess qualities such as integrity and honesty as well as attributes and skills that contribute to a diversity of views and perspectives amongst the directors. These characteristics enhance the overall effectiveness of the Board. The ability and willingness to commit adequate time and attention to Board and Committee activities, and the complementing mix of individual’s skills and personality in line with those of other directors are additional key criteria for Board membership.

As described under section “Corporate Governance and Director Independence – Selection and Evaluation of Director Candidates” and as further prescribed in the committee’s charter, our Nominating, Sustainability and Governance Committee considers all factors it deems relevant after thorough review when evaluating prospective candidates or current board members for nomination to our Board. Candidates brought to the attention of the Nominating, Sustainability and Governance Committee by shareholders are evaluated with the same criteria as the Board’s own nominees. All our director nominees bring to the Board leadership experience derived from past and present service. There are no family relationships between these directors and executive officers of the Company, and no legal proceedings adverse to the Company are pending in which director nominees are involved as a party or otherwise.

The director nominees bring a diversity of views and perspectives derived from their individual experiences working in a range of industries and occupations, which provides our Board, as a whole, with the skills and expertise that reflect the needs of the Company.

Certain individual experiences, qualifications and skills of our directors that contribute to the Board’s effectiveness as a whole are described in the biographies set forth below.

We are asking our shareholders to approve the following resolution regarding appointment of each director nominee:

RESOLVED, that the shareholders of Orion S.A. (the “Company”) hereby resolve that each director nominee is appointed by the Annual General Meeting as Director of the Company for a term ending on the date of the Annual General Meeting of shareholders of the Company called to approve the Company’s annual accounts and consolidated financial statements for the financial year ending December 31, 2024.

Resolutions at the Annual General Meeting of Shareholders are adopted by a simple majority of the votes validly cast, regardless of the proportion of the issued share capital of the Company present or represented at such meeting. Abstentions, broker non-votes and nil votes will not be taken into account.

The Board has adopted the Company’s Corporate Governance Guidelines which describe the Board’s view on several governance topics. The Corporate Governance Guidelines along with the charters of the Board committees and the Company’s Code of Conduct as well as the Company’s Code of Ethics for Senior Financial Officers, provide the corporate governance framework of the Company. The recent corporate governance initiatives adopted by the Board are discussed below. Our Corporate Governance Guidelines and the Company’s Code of Ethics for Senior Financial Officers can be found under “Investors” and “Corporate Governance” on our website https://investor.orioncarbons.com/governance/governance-documents/default.aspx.

The information contained on, or that can be accessed through our website is not incorporated by reference and is not a part of this Proxy Statement.

The following table summarizes the most important corporate governance practices of our Board:

 

Our nominated directors bring a diverse set of perspectives to our Board. Our Board has directors with cultural backgrounds from five different countries of origin and hold citizenship in five different countries. They are domiciled in the United States, Europe and Asia. Three directors (33%) hold citizenship in a European country, one director (11%) originates from an Asian country, and two directors (22%) are female (one of whom is a committee chair). Two directors (22%) served in the U.S. Armed Forces. We believe that diversity of gender, nationality, veteran status and cultural background are an important dimension of diversity in the Company and our Board.

Eight out of nine (89%) of the director nominees are independent with Mr. Painter, the Company CEO, being the only non-independent director.

Our current Board consists of nine members. Our directors hold office until their successors have been elected and qualified or appointed, or until the earlier of their death, resignation or removal. Interim vacancies on the Board are filled solely by the affirmative vote of a majority of the remaining directors then in office, until a regular shareholder meeting appoints a new director. Each of our directors is elected by shareholder vote annually.

Our Nominating, Sustainability and Governance Committee oversees the annual assessment of the composition of our Board, including a review of the size of the Board, the skills and qualifications represented on the Board, and a self-assessment of the effectiveness of our Board and its committees. The committee thereby identifies any opportunities for improvement, as further described below. The findings of the annual review of the Board and its committees are reported to and discussed with the full Board.

We believe that appropriate director qualifications and characteristics include having directors with diverse backgrounds, education, experiences, expertise and perspectives. These qualifications and characteristics are:

The Board is free to select its Chairman and the Company’s CEO in the manner it considers in the best interest of the Company at any given point in time. These positions may be filled by one individual or by two different individuals. Currently, the two positions are separated.

At any time when the positions of Chairman and CEO are filled by one individual, the independent directors shall designate from among themselves a lead director, who shall have the following powers and duties:

The Nominating, Sustainability and Governance Committee is responsible for searching, selecting or recommending for the Board’s selection, the slate of qualified director nominees for election to the Company’s Board and, if deemed feasible by the Board, for filling vacancies occurring between Annual General Meetings of shareholders. The Nominating, Sustainability and Governance Committee may also consult with outside advisors or retain independent search firms to assist in the search for qualified candidates. The Nominating, Sustainability and Governance Committee endeavors to identify a diverse list of potential candidates, including diversity in experience, skills, culture and gender, among other factors. Once potential candidates are identified, the Nominating, Sustainability and Governance Committee reviews

the backgrounds of those candidates, evaluates candidates’ independence from the Company and potential conflicts of interest and determines if candidates meet the NYSE Rules. The committee assesses also whether candidates meet the qualifications desired by the Nominating, Sustainability and Governance Committee for election as director as well as future committee member, as applicable.

The Nominating, Sustainability and Governance Committee is responsible for reviewing with our Board, on an annual basis, the appropriate characteristics, skills and experience required for the Board as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members) and in recommending candidates for election, the Nominating, Sustainability and Governance Committee will consider the individual’s, cultural background, experience and characteristics. In addition, the Nominating, Sustainability and Governance Committee reviews the overall composition of the Board to ensure there is an appropriate mix of specific culture, experience, qualifications and skills to promote a diversity of points of view for the effective performance of the Board’s oversight functions and representation of shareholders’ interests. One or more shareholders of record holding at least 10% of the outstanding Common Shares (excluding, for the avoidance of doubt, any Common Shares repurchased by the Company) may add items to the agenda of the Annual General Meeting, including a resolution to appoint a director of the Company, provided that each such item is accompanied by a justification or a draft resolution to be adopted in the Annual General Meeting. The Board through its Nominating, Sustainability and Governance Committee will give appropriate consideration to candidates for Board membership proposed by shareholders and will evaluate such candidates in the same manner as other candidates identified by or submitted to the Board.

Under Luxembourg law, a given director can be appointed to the Board an unlimited number of times for a maximum period of six years for each such appointment. Because of the value the Board places on having directors who are knowledgeable about the Company and its operations, the Company follows the policy to nominate each director for the election by shareholders for a one-year period at a time only, with the ability to be re-elected to the Board on a yearly basis. In connection with each director nomination recommendation, the Nominating, Sustainability and Governance Committee considers continuing director tenure and retirement aspects.

To ensure that directors may appropriately discharge their responsibilities, the Board has adopted a policy that any director (including a management director) who has a significant change in business affiliation or position of principal employment which the Board may deem to be contrary to the best interests of the Company or adversely affecting her or his ability to perform the essential functions and responsibilities of a director, will be expected to tender her or his proposed resignation from the Board to the Nominating, Sustainability and Governance Committee (or, in the event of the chair of the Nominating, Sustainability and Governance Committee’s occupation or association changing, to the Chairman of the Board). The Nominating, Sustainability and Governance Committee shall review the director’s continuation on the Board, and recommend to the Board whether, in light of all the circumstances, the Board should accept such proposed resignation or request that the director continues to serve as one of the Company’s directors.

The Board seeks to bring together a diverse mix of directors that the Board and senior management can leverage to make well-considered strategic decisions in the best interests of the Company and its stockholders. To gather new ideas and perspectives, and to respond to the ever-changing needs of our clients and other stakeholders, the Board actively seeks candidates representing a range of tenures, areas of expertise, industry experience, and backgrounds. Consequently, the Board has refreshed its composition by adding four new directors in the last five years, including Ms. Mary Lindsey in 2020, who brings finance, accounting, tax and cybersecurity expertise, Mr. Yi Hyon Paik in 2020, who brings technology, strategy and research and development experience and Mr. Michel Wurth in 2020, who adds finance, strategy and sustainability expertise. Mr. Anthony L. Davis joined the Board in 2022, and brought knowledge and experience in the ESG field while adding an investor perspective to the Board. He served on the Board until his resignation on December 27, 2023, to focus on other commitments and not as a result of any disagreement with the Company.

In accordance with our articles of association, the election of directors requires the approval of a majority of the votes validly cast at the Annual General Meeting.

Our nominated Board is composed of a supermajority of independent directors in accordance with the NYSE listing requirements. In making a respective determination, the Board has affirmed that each of the independent directors meets the objective requirements for independence set forth by the NYSE listing requirements. The independent directors are Ms. Kerry A. Galvin, Mr. Paul Huck, Ms. Mary Lindsey, Mr. Didier Miraton, Mr. Yi Hyon Paik, Mr. Dan F. Smith, Mr. Hans-Dietrich Winkhaus, and Mr. Michel Wurth. Only one director, Mr. Corning Painter, is not independent because he is our CEO.

The independence standards included in the NYSE listing requirements specify the criteria by which the independence of our directors is determined, including strict guidelines for directors and their immediate family members with respect to past employment or affiliation with the Company, its management or its independent registered public accounting firm.

We operate under a written Code of Conduct that applies to all our employees and directors, including those officers responsible for financial reporting. Upon employment with us, all officers and employees are required to affirm in writing their receipt and review of the Code of Conduct and their compliance with its provisions. Our Code of Conduct is accompanied by our whistleblower policy and hotline. The Company’s General Counsel addresses all material whistleblower complaints with the Board’s Audit Committee on a quarterly basis. We maintain an Insider Trading Policy that safeguards compliance with insider trading laws and prohibits officer, employee and director hedging of Company securities, including our Common Shares.

A yearly training reflecting the principles laid out in our Code of Conduct and other material policies is mandatory for all employees, globally. In 2023, 100% of Company employees successfully completed our compliance training.

Also, as previously mentioned, the Board has, upon the recommendation of the Nominating, Sustainability and Governance Committee, adopted a set of Corporate Governance Guidelines to promote the functioning of the Board and its committees and to set forth a common set of expectations as to how the Board should perform its functions. Such guidelines address, in particular Board composition, Board leadership, the selection of directors, the organization of Board meetings, executive Board sessions, Board committee purpose and responsibilities, management succession, Board compensation, expectations on directors, Board evaluation processes and the reliance on management and outside advice.

Additionally, the Board has adopted a Code of Ethics for Senior Financial Officers, applicable to the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, in order to:

The Code of Ethics for Senior Financial Officers is accompanied by the Company’s Clawback Policy, which applies in the event of material misstatements in our financial reporting.

Our Code of Conduct, Corporate Governance Guidelines, Code of Ethics for Senior Financial Officers and the Company‘s Clawback Policy can be accessed under the Investors and Corporate Governance links on our website at https://investor.orioncarbons.com/governance/governance-documents/default.aspx and https://orioncarbons.com/legal/compliance-guidelines/#compliance_policies. We intend to satisfy any disclosure requirements pursuant to Item 5.05 of Form 8-K and NYSE rules regarding any amendment to, or waiver from, certain provisions of our Code of Conduct by posting such information on our website.

The chair of the Nominating, Sustainability and Governance Committee coordinates the annual self-evaluation process on behalf of the Board. The charter of each committee of the Board also requires an annual performance evaluation, which is performed for each committee as part of the annual Board evaluation.

The Board self-evaluation process involves completion of an electronic questionnaire by each Board and committee member, followed by a one-on-one interview of each director conducted by the chair of the Nominating, Sustainability and Governance Committee. On this basis, the chair of the Nominating, Sustainability and Governance Committee leads a discussion with each committee and the full Board to review the results of the self-evaluation and identify follow up items. The objective is to allow the directors to share their perspectives and consider adjustments or enhancements to the Board processes in response to the feedback.

Our executive management team actively engages in communications throughout the year with shareholders of all ownership levels. Generally, these communications involve presentations to investors and question and answer sessions, meetings with investors and shareholders one-on-one and in small groups, as well as responding to investor and shareholder e-mails and telephone calls. Management’s discussions with shareholders and the investment community address numerous aspects of our business and matters of importance or concern to our shareholders. Observations, questions or comments from our shareholders are routinely shared with the Board and its committees, so that the Board can then consider these matters as part of its oversight responsibilities. On occasion, an independent board member may participate in these discussions. Important shareholder engagement topics discussed in 2023 were:

 

Our Board oversees and regularly discusses corporate strategy of which two pillars are driven by sustainability: developing the market for conductive carbons and the development of a circular economy for used tires. The Board is updated periodically on the Life Cycle Analysis of our products and various manufacturing processes we operate or are developing.

Our Board of Directors’ Nominating, Sustainability and Governance Committee regularly reviews the Company’s strategy, activities and policies regarding sustainability and makes recommendations to the full Board, which has the oversight function with regard to the Company’s Environmental, Social and Governance (ESG) goals and activities. Our CEO is accountable to ensure accurate reporting on sustainability to the Board. In 2023, Orion refreshed its ESG materiality assessment, engaged with customers and EU authorities on environmental topics, with employees via an employee engagement survey, with its plant managers on community engagement and with investors on various financial and ESG achievements. The Company launched its newly introduced Supplier Code of Conduct with its suppliers and reported to the Nominating, Sustainability and Governance Committee on progress and status with regard to its specific ESG goals. The Board’s Audit Committee actively monitored the Company’s achievement of the sustainability-linked loan targets.

 

In accordance with SEC Rules, the Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal control, auditing or financial matters (collectively, “Accounting Matters”) and (ii) the confidential, anonymous submission by employees or outside third parties of concerns regarding questionable Accounting Matters. The Audit Committee oversees treatment of complaints and concerns in this area. The Audit Committee can involve an external counsel in any reviews and investigations. The General Counsel reports to the Audit Committee at each quarterly meeting on current compliance matters (if any). Additional information regarding our procedures for anonymous reporting can be found in our Policy on Whistleblower Protection and under the Legal link on our website at https://orioncarbons.com/legal/compliance-guidelines/#reporting_violations.

With respect to the roles of the Chairman of our Board and CEO, our Board exercises its discretion in combining or separating these positions as it deems appropriate in light of prevailing circumstances. The Board believes that the combination or separation of these positions should continue to be considered as part of our succession planning process. Currently, the roles are not combined, with Mr. Painter serving as our CEO and Mr. Smith serving as the non-executive Chairman of the Board. Mr. Painter and Mr. Smith’s extensive business knowledge, along with their demonstrated leadership capability, makes them highly qualified to continue to serve as our CEO and Chairman of the Board, respectively. Having both roles separated allows for an intensive dialogue between the CEO and the Chairman of the Board in addition to the regular discussions amongst the CEO, the Chairman of the Board and the other committee chairpersons and directors. Our Board of Directors regards this as meaningful, not only as this leads to different perspectives for Board meeting agenda proposals to the full Board, but for adding value through larger, diverse experience backing up these two most senior company positions. The independent Chairman of the Board also heads the Board’s regular independent director executive sessions with the CEO not being present and provides an independent perspective to the CEO on strategic topics. The Board of Directors plans to continue the separation of the two roles because the separation of executive management and Board leadership supports the effective oversight function of the Board. We regard this to be good corporate governance that also reflects supervisory board elements typically found in European two-tier corporate setups. The Board would consider combining the roles of Chairman of the Board and CEO in one person, if e.g. an emergency event would suggest such combination, or the above described advantages could be achieved more efficiently by other corporate governance structures, or would be outweighed by the need for a concentrated leadership in order to better serve the interests of shareholders. Combining the roles of Chairman of the Board and CEO would be addressed beforehand with shareholders at an annual general meeting of shareholders if allowable under the circumstances.

The Board of Directors provides guidance and exercises oversight on the Company’s global strategy and its translation into immediate, mid-term and long-term projects, measures, and initiatives. The Board reviews the Company’s strategies as part of the budget and capital expense plan process at least annually and provides guidance on business development projects. The Board approves the Company’s business plan, performance objectives, capital spending as well as the research and development and innovation budget for the following year. The Board focuses amongst other factors on the adequate return on capital spent and on improving project execution. In addition, various strategy elements are discussed with management at each Board meeting and form part of the Board’s regular committee work. The Nominating, Sustainability and Governance Committee provides oversight and guidance on environmental and sustainability matters, while the Audit Committee focuses on financial reporting and capital allocation. Both committees report to the full Board on these matters. Management provides regular updates on progress and execution on the business plan and overall strategy to the Board, and the Board involves third-party experts when it deems appropriate.

The Board is responsible for overseeing our risk management process (including cybersecurity risk and environmental, health, safety as well as social risks), but does not provide day-to-day risk management of the Company, which is the responsibility of our executive management team.

The Board oversees the implementation of risk mitigation strategies by management to ensure such strategies focus on both general risk management and management of the Company’s most significant risks. In evaluating the risks, the Board typically starts from a risk heat map compiled by senior management which ranks risks in particular based on probability, amounts at stake and reputational consequences considering a ten-year time span. The Board also considers the periodic reports from the Company’s risk committee which meets at least once per quarter and periodic intra-year updates to the development of the risk heat map. Outside perspectives are provided in specific areas such as by third party cybersecurity evaluation firms and by relayed comments from members of our insurance group. On this basis, the Board determines the adequacy of the mitigation measures and strategies taken, thereby applying short-, mid- and long-term effects and respective oversight requirements. The Board is aware that specific risks require individual mitigation strategies and oversight standards. The Board is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters and significant transactions. In addition, each of the Board committees is responsible for risk management or recommendations on risk-related matters concerning its area of responsibility, consistent with its charter, and such other responsibilities as may be delegated to it by the Board from time to time.

The risk management process established and overseen by the Company’s executive management team includes the centralized corporate review of the global market, financial, regulatory, legal, cybersecurity and other risks associated with transactions, and approval of funds disbursed. The Company’s General Counsel holds the responsibility of the group’s Chief Compliance Officer. He ensures the group’s functioning compliance management system, investigates compliance matters, ensures the respective mitigation of compliance risks, and reports in this function to the Company’s Audit Committee.

The Board’s approach to managing cybersecurity is designed to ensure oversight and strategic leadership. Leading the Company’s cybersecurity risk management is our Chief Information Security Officer (“CISO”) who has more than 10 years’ experience in the field of cybersecurity. In the case of cybersecurity incidents, our CISO leads our Cyber Emergency Response Team and coordinates the respective disclosure process, which is a collaborative process by which our CISO is advised of cyber incidents and communicates and collaborates with relevant departments across the organization to develop and execute an appropriate response.

While the Board of Directors has delegated the continuous cybersecurity monitoring responsibility to the Board’s Audit Committee, it remains apprised of relevant cybersecurity updates, risks and incidents. The regular updates on cybersecurity status, material cyber incidents, and cyber risk management from either the CIO or CISO are provided to both the Board and Audit Committee. In addition, the Company’s executive management, through its CIO, briefs the Audit Committee at each quarterly Audit Committee meeting on the Company’s IT and cybersecurity status, including its Operational Technology systems. The Audit Committee reviews also cover current IT cybersecurity scorecards, which reflect amongst others the status of awareness training programs, phishing incidents, penetration tests, endpoint security findings and an overall cybersecurity vulnerability assessment score. The Audit Committee regularly discusses identified security risks with senior management and reviews management proposed mitigation measures, as well as key cybersecurity initiatives and programs. The Board has discussed emerging technologies such as artificial intelligence (AI) and the associated upsides of using AI in its operations as well as the risk factors from cyber and data security perspectives. The Board also considers cybersecurity topics including risk mitigation on a regular basis.

In line with the guidance provided by the Board, the Company performs IT external network penetration testing and table-top exercises and regularly benchmarks its measures to top marketplace security standards such as the U.S. National Institute of Standards and Technology’s (“NIST”) cybersecurity standards.

The Board believes this expanded attention to cybersecurity is appropriate. In line therewith, the Company’s CEO as well as Ms. Galvin (Chair of the Nominating, Sustainability and Governance Committee as well as member of the Audit Committee) each have completed a two-day master class in cybersecurity organized by the National Association of Corporate Directors (NACD) in early 2023. Also, our Director, Ms. Lindsey, has earned a CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University. Ms. Lindsey is a member of the Company’s Audit Committee.

Our capital structure and liquidity position evolves due to the impact of fluctuations in the global economic environment on underlying carbon black demand and our results of operations. Changes in growth, continuity and safety capital investment levels over time also play a role. The Board oversees financing and liquidity risks by regularly monitoring our financial and liquidity position to ensure we maintain the financial resources needed to fund our operations, projected growth, and other financing and operating expenses. At each Board meeting, management reviews together with the Board, current information related to the Company’s financial results and position. We believe these procedures provide adequate risk oversight of financing and liquidity matters affecting the Company. In 2023, the Company renewed its senior secured revolving credit facility, which was intentionally reduced from EUR 350 million to EUR 300 million, as a result of the Company’s stronger cash flow. In line with the Board’s position, the Company added a new feature that includes the linkage of revolving facility funding costs to two sustainability goals. They include continuous greenhouse gas intensity reduction and improvement of its annual EcoVadis ESG rating. Under these terms, the interest rate could be reduced by five basis points – or by 0.05 percent - if the company achieves both of its targets.

The Audit Committee of the Board provides risk oversight with respect to financial reporting, internal control over financial reporting, general risk management, cybersecurity and related regulatory as well as general compliance matters. Each quarter, our Audit Committee meets and discusses with our independent registered public accounting firm its review of the current interim financial information. After our financial year-end, the Audit Committee discusses with the independent registered public accounting firm its audit of our annual consolidated financial statements, including our procedures on internal control over financial reporting. On this basis, the Audit Committee makes a recommendation for the Board’s approval of the inclusion of the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission. Also, during the financial year, our Audit Committee meets in private sessions (without the presence of management) with our independent registered public accounting firm to discuss any matters related to the audit of our annual consolidated financial statements and our internal control over financial reporting.

The Compensation Committee of the Board provides risk oversight with respect to compensation of the Company’s employees, including the NEOs. We believe we have established a short- and long-term compensation program that appropriately incentivizes desired performance and mitigates inappropriate risk-taking.

The Compensation Committee solicits input from our CEO with respect to the performance of our executive officers and their compensation levels not less frequently than annually. The members of our Compensation Committee have extensive and varied experience with various

public and private corporations - as investors and shareholders, as senior executives, and as directors charged with the oversight of management and the setting of executive compensation levels. Further, the Compensation Committee engaged Korn Ferry, an independent executive compensation advisory firm, to provide survey data and advice on market trends on director and executive compensation.

The Board has identified the Company’s strategies, activities and policies regarding sustainability and any other Environmental, Social and Governance (ESG) opportunities and challenges as a key focus of risk oversight.

Consequently, the Nominating, Sustainability and Governance Committee of the Board regularly reviews the Company’s strategies, activities and policies regarding sustainability and other ESG-related matters and makes recommendations to the Board. The committee also reviews the Company’s annual sustainability report as well as other material ESG disclosures (if any) prior to their publication. The Board and its committees thereby complement the Company’s internal risk management organization which comprises, amongst other things, an electronic company-wide risk reporting tool and register, regional as well as global risk owners and a standing risk committee headed by the Company’s Chief Risk Officer and assisted by the Company’s Environmental, Health and Safety, commercial and functional leaders.

The Board oversees the Company’s broader social responsibilities. It consequently approves the Company’s donations and social contributions strategy, contributions above certain thresholds and the annual budget for contributions.

The Board also focuses on community service and investment efforts that help strengthen the communities around the world in which we operate, as well as giving to organizations that advance education and respond to natural disasters. Some examples of our community engagement in recent years, include:

The Board also addresses its social responsibilities through focusing on the Company’s human capital and talent management. The Board receives periodic updates from management on topics such as culture, development, engagement, and diversity and inclusion. The Board has opportunities to engage with employees in informal situations like dinners and plant visits. The Board endorses the attracting, recruiting, motivating and developing of a diverse, talented global workforce as a primary goal. The Company is committed to providing its employees with equal opportunities for learning and personal growth in an environment where creativity and innovation are encouraged. To this end, the Board supports the Company’s aspiration to be the employer of choice in our industry. The Board has reviewed the results of the latest employee survey and has aligned with management on measures and initiatives to be undertaken to further improve employee satisfaction. With this in mind, management continues to augment and improve the existing programs to provide an effective platform for all our employees to be trained and developed and to provide them with an opportunity to grow and achieve their individual aspirations. In 2023, senior management in conjunction with the Board has renewed the Company’s purpose and value definitions and has summarized these in a new company slogan for Orion which reads “Orion - Delivering sustainable solutions”. Management believes this statement best describes Orion’s purpose and values in a short statement that nurtures a culture and environment in which all employees feel inspired to advance their personal growth and the planet.

Since 2023, Orion also sponsors a women’s professional group, which functions as an organized effort to support and advocate for the professional growth of women at Orion. The group creates a space that fosters professional development for women in all departments and provides more tools for success in the workplace.

Employee engagement and enablement makes Orion a better place to work and is integral to our continued success. To ensure our employees are both motivated to do their work and equipped with the tools and training to be successful, we start with listening. We continue to use employee surveys and communication meetings to help ensure the voices of all our employees are heard. To further demonstrate our commitment in advancing our employees, our long-term incentive plan measures include our annual employee engagement score. In 2023, we further aligned our actions and investments in several priority areas including the:

The 2023 employee engagement survey showed continued positive trends and marked improvement in a number of areas including: training, employee recognition, employee communications and performance feedback. We saw a 1,100 basis point improvement in employees falling into the “Most Effective” category indicating both high engagement and high enablement. We will continue to solicit regular feedback from our employees to bolster our action plans to further support our strategy to attract, retain, engage and develop our employees and to position Orion as an employer of choice. In 2023, Orion has been elected as one of the Top Workplaces in Houston. The voluntary attrition rate at Orion was at 3.25%. We believe that the low rate at Orion is the result of our focus on what’s important to our employees.

The Board is responsible for determining a succession plan for the CEO in the event of an emergency or otherwise. At least annually, the Board reviews a succession plan developed by the CEO and sets the policies and principles for selecting a successor to the CEO, both in an emergency situation and in the ordinary course of business. The succession plan includes an assessment of the experience, performance, skills, leadership capability and planned career paths for possible successors to the CEO. The Board’s Nominating, Sustainability and Governance Committee reviews and discusses with the CEO the succession plans to be presented to the Board in accordance with the above. In addition, the CEO updates the Board at least annually on the assessment of senior leadership positions to ensure we have leadership with the right skills in place to ensure business continuity and building a refined and resilient company to meet the needs of our evolving business.

The Board currently holds at least four, typically five, Board meetings a year, with further meetings or working sessions to occur (or action to be taken by unanimous consent) at the discretion of the Board. The Board typically visits one production site per year, however in 2023 this meeting was canceled due to labor unrest in the country’s transportation network. Specific locations are selected based on technology developments, the importance of the site, and with a goal to expose the Board to a diverse set of employee teams in terms of nationality. The meetings are usually accompanied by certain Board committee meetings or working sessions in addition to the Board meeting. Compared to the Board or committee meetings, Board or committee working sessions do not include resolutions taken by the Board or committee but rather focus on specific topics, like company strategy or earnings documentation review. The Board also conducts production site visits that allow for a direct interaction with Orion employees and a hands-on review of the Company’s local strategies and initiatives. Consequently, for two days in April 2024, the Board of Directors visited the Company’s Berre/France facility, which produces acetylene black, a product used in battery applications for electric vehicles.

The agenda for each Board meeting is prepared by the Chairman (or a designee of the Chairman) together with the Company’s CEO and General Counsel. Management provides to all directors the agenda and appropriate materials in advance of meetings. Agendas and topics for Board and committee meetings are developed through discussions among management and members of the Board and its committees.

During 2023, our Board met seven times, including video conference meetings and working sessions and acted ten times by unanimous written consent. In 2023, all directors attended 100% of the meetings of the Board and the committees on which they served. We do not currently have a policy on director attendance at our annual meetings, but all our directors attended our annual shareholder meeting in 2023.

To ensure free and open discussion and communication among the independent directors of the Board, the independent directors meet in executive sessions, which form a part of each regular Board meeting. Executive sessions also take place with the Senior Vice President, Global Operations and Safety. The Chairman of the Board or the General Counsel acting as company secretary presides at the executive sessions. If the Chairman of the Board were not present, the independent directors designate the director who will preside at the executive sessions. The Audit Committee has separate executive sessions with the Chief Financial Officer, Internal Audit Director and our independent auditors.

The Board has three standing committees: the Audit Committee, the Compensation Committee and the Nominating, Sustainability and Governance Committee. Each of these committees reports to the Board as it deems appropriate and as the Board may request. The Board has adopted written charters for each of the committees. From time to time, special committees may be established under the direction of our Board when necessary to address specific issues.

Accordingly, the Board has established an Executive Committee in 2019. This Committee consists of the Chairman of the Board, Mr. Smith, the Chairman of the Audit Committee, Mr. Huck, the Chairwoman of the Nominating, Sustainability and Governance Committee, Ms. Galvin and the Chief Executive Officer, Mr. Painter. This Committee does not meet on a regular basis but meets as needed to deal with urgent or quickly moving matters, when it is not feasible to get the entire Board together. It may also be used to conduct investigations or examine potential conflicts of interest, although it has not had to do so to date. The Executive Committee did not hold meetings in 2023. Deliberations or actions by this Committee are communicated to the full Board as soon as practicable and the Committee is not intended to be a substitute for the Board.

The table below sets forth the financial year 2023 membership of the Board and its standing committees and the number of meetings including working sessions held during 2023:

The 2024 membership of the Board and its standing committees are generally expected to remain the same as it was in 2023, except for the composition of the Nominating, Sustainability and Governance Committee, with Mr. Tony L. Davis no longer serving on it.

In order to achieve the financial alignment of the Company’s directors with the interest of the Company’s shareholders, the Board has established a stock ownership guideline for directors. Under this guideline, each director is required to own Common Shares that have a fair market value (determined as of each Annual General Meeting of the Company’s shareholders) equal to five times (5x) the annual cash retainer paid to the applicable independent director (and any new independent director shall have five (5) years from his or her initial appointment or election to the Board within which to satisfy the foregoing stock ownership guideline). All Directors are in compliance with the stock ownership guideline. Refer to the share ownership of each director under “Security Ownership of Certain Beneficial Owners” in this Proxy Statement.

None of our executive officers serves or served during the 2023 financial year as a member of the board of directors or the compensation committee of any other company that has or at the time had any executive officers serving as a member of our Board or Compensation Committee.

To ensure that all employees, executive officers and directors avoid any activity that is in conflict with or has the appearance of conflicting with the Company’s business interests, our Board has adopted a written policy regarding transactions with related parties (the “Related Party Transaction Approval Policy”). This policy which supplements the conflict of interest provisions in our Code of Conduct and Code of Ethics for Senior Financial Officers, requires that all related party transactions are subject to approval or ratification in accordance with the Company’s policy, and that an independent committee reviews and approves or takes such other action it may deem appropriate with respect to (a) related party transactions, (b) any material amendment, modification, extension or termination of a related party transaction, (c) any amendment, modification, extension or termination of a transaction that thereby will become a related party transaction, and (d) the handling and resolution of any disputes arising in connection with related party transactions. The Board has assigned this task to the Audit Committee as a committee of independent directors. The Related Party Transaction Approval policy defines a “related party transaction” as (i) a transaction in which the Company or one or more of its subsidiaries is a participant and which involves an amount exceeding $120,000, in which any director, officer, greater than 5% shareholder of the Company or any other “related person” (as defined in Item 404 of Regulation S-K and included below), has or will have a direct or indirect material interest, (ii) any material amendment, modification, extension or termination of the Registration Rights Agreement the Company is a party to, and (iii) any other transaction for which disclosure will be required pursuant to Item 404 of Regulation S-K.

In determining whether to approve or ratify any related party transaction, the independent committee or the disinterested members of the Board, as the case may be, shall consider all factors that are relevant to the related party transaction, including, without limitation, the following:

In the event that the Company becomes aware of a related party transaction that was not approved under the Policy, such related party transaction will be reviewed in accordance with the policy as promptly as reasonably practicable. The Audit Committee will consider all of the relevant facts and circumstances, evaluate all options available to the Company, including ratification, amendment or termination of such related party transaction and take such course of action as the Audit Committee deems appropriate under the circumstances. All directors and executive officers have an obligation to inform the Company when confronted with situations that may be perceived as a conflict of interest. Additionally, at least annually, directors and executive officers complete a questionnaire specifying any business relationship that may give rise to a conflict of interest or a related party affiliation.

As of December 31, 2023, related parties with which the Company entered into the below transactions were Deutsche Gaßrußwerke GmbH & Co. KG (DGW), a joint venture company of the Company that is accounted for using the equity method. The transactions concerned the following:

Any shareholder or any other interested party who wishes to communicate directly with our Board or the non-executive directors as a group may do so by corresponding with Investor Relations at the following address:

Investor Relations

Orion Engineered Carbons LLC

1700 City Plaza Drive, Suite 300

Spring, Texas 77389, or

via e-mail at investor-relations@orioncarbons.com. The Company will forward any such communication to the intended recipients, unless the communication is clearly of a marketing nature or is unduly hostile, threatening, illegal or similarly inappropriate.

Set forth below is information regarding the Company’s current executive officers:

Corning F. Painter. Mr. Painter became the CEO of the Company in September 2018. He is responsible for implementing strategy and policies, setting company culture, developing leadership talent and meeting customer and shareholder commitments.

Prior to joining the Company, he was the Executive Vice President for the Industrial Gases division at Air Products and Chemicals, a publicly listed global industrial gas company from 2014 until he left the company in 2018. Prior to that, he was Senior Vice President of the Merchant Gases division of Air Products and Chemicals from 2013 to 2014. Mr. Painter joined Air Products and Chemicals in 1984 as a participant in a career development program and held various positions including Vice President, Global Electronics, Senior Vice President, Corporate Strategy and Technology, and Senior Vice President Supply Chain (operations, engineering, procurement and safety). He was based overseas in Asia and Europe for ten years.

Mr. Painter has served on numerous non-profit boards. He is a Certified Professional Engineer and holds a Bachelor of Science degree in chemical engineering from Carnegie-Mellon University.

Jeffrey Glajch. Mr. Glajch joined the Company on April 18, 2022, as Chief Financial Officer.

Mr. Glajch has over 35 years of experience leading corporate finance and accounting and control functions for both public and private companies. Prior to joining the Company, he served as CFO and Corporate Secretary at Graham Corporation from 2009 to 2022, a NYSE listed company, which is a leading designer and manufacturer of vacuum and heat transfer equipment for energy markets, process industries and the U.S. Navy. Prior to joining the Graham Corporation, he held senior financial roles at a number of public and private companies. Mr. Glajch is on the advisory board of M42, a private AI company. He has previously served on numerous non-profit and university boards.

Mr. Glajch holds a Master of Science degree in Industrial Administration (MBA) from Purdue University, a Master of Administrative Science from Johns Hopkins University, a Master of Science degree in chemical engineering from Clarkson University and a Bachelor of Science degree in chemistry from Carnegie-Mellon University.

Dr. Sandra Niewiem. Dr. Niewiem was appointed Senior Vice President Global Specialty Carbon Black and EMEA Region in September 2019. She joined the Company in December 2013 and previously held the position of Vice President Global Product Management and Business Development Specialty Carbon Black. She has over 19 years of experience in process industries, engineering and industrial goods, and more than 13 years in management consulting at a global consulting firm. Dr. Niewiem holds an Economics Doctorate from European Business School, Oestrich-Winkel, Germany and a Master of Science degree in business administration from James Madison University, Virginia.

Pedro Riveros. Mr. Riveros joined the Company in his current role as Senior Vice President, Global Rubber Carbon Black and Americas Region in June 2019. Prior to joining the Company, he served in multiple business leadership roles at Air Products and Chemicals from 1994 to 2019, where his key areas of expertise included business strategy, margin enhancement, productivity and supply chain management. He has over 25 years of experience in varied general management and business management roles in the industrial gas and chemicals area both in North and South America. Mr. Riveros holds a Bachelor of Science degree in mechanical engineering from Rensselaer Polytechnic Institute, New York.

Carlos Quinones. Mr. Quinones joined the Company in his current role as Senior Vice President, Global Operations in June 2019. Prior to joining the Company, he held multiple operational leadership positions at Air Products and Chemicals from 2015 to 2019. Prior to Air Products, Mr. Quinones held various positions of increasing leadership responsibilities in the chemical industry with Praxair, Rohm and Haas/Dow Chemical, and Arco Chemical. Mr. Quinones holds a Bachelor of Science degree in Mechanical Engineering from Texas A&M University.

The following table sets forth certain information regarding the beneficial ownership of our Common Shares as of April 26, 2024, by (i) each of our directors and named executive officers (“NEOs”), individually, (ii) all of our directors and executive officers as a group, and (iii) each person known to our management to be the beneficial owner of more than 5% of the outstanding Common Shares.

Section 16(a) of the Exchange Act requires our officers, directors and persons who own more than 10% of our Common Shares to file reports of ownership and changes in ownership with the SEC. These officers, directors and 10% shareholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) reports they file.

One Form 4 for each of Messrs. Anthony L. Davis, Didier Miraton, Yi Hyon Paik, Dan Smith, Hans-Dietrich Winkhaus and Michel Wurth and Mses. Kerry Galvin and Mary Lindsey reporting the grant on June 8, 2023, to each of 5,250 restricted shares by the Company were filed late. To our knowledge, all other Section 16(a) reporting requirements applicable to our directors and executive officers were satisfied in a timely manner.

The Company is seeking a non-binding advisory vote from its shareholders to approve the compensation paid to our NEOs for the year 2023, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion. This vote is commonly referred to as the “Say-on-Pay” vote. In accordance with the requirements of the SEC, we are providing our shareholders with an opportunity to express their views on the compensation paid to our NEOs in a non-binding, advisory vote.

The Company’s core compensation philosophy is to align executive compensation with our shareholders’ interests and our annual and long-term performance. This includes linking executives’ pay to their performance and the Company’s overall annual and

long-term performance.

Our Board and the Compensation Committee are dedicated to ensuring that our executive compensation programs reflect best practices in numerous ways, including by making a portion of compensation performance-based to maximize both short- and long-term shareholder value. The Board believes the Company’s compensation programs are well-tailored to align executive officers’ interest with those of our shareholders, retain executive talent and appropriately reward performance. We encourage our shareholders to read the “Compensation Discussion and Analysis” section in this Proxy Statement, which describes (i) the processes our Compensation Committee used to determine the structure and amounts of the compensation of our NEOs for 2023 and (ii) how our executive compensation philosophy, policies and procedures operate and are designed to achieve our compensation objectives. The Compensation Committee and the Board believe that our executive compensation strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our NEOs to commit to creating long-term value for our shareholders.

In accordance with Section 14A of the Exchange Act and the related rules of the SEC, we are asking our shareholders to approve the following resolution regarding the compensation of our NEOs:

RESOLVED, that the shareholders of Orion S.A. (the “Company”) hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the proxy statement for the Company’s 2024 Annual General Meeting of Shareholders.

Although this advisory vote is non-binding, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our NEOs’ compensation and related executive compensation programs.

Resolutions at the Annual General Meeting of Shareholders are adopted by a simple majority of the votes validly cast, regardless of the proportion of the issued share capital of the Company present or represented at such meeting. Abstentions, broker non-votes and nil votes will not be taken into account.

We are asking our shareholders to approve the following resolution regarding the compensation of the Board of Directors of the Company:

RESOLVED, that the shareholders of Orion S.A. (the “Company”) hereby approve to remunerate the members of the Board during the financial year that ends on December 31, 2024 as follows: (i) each non-executive director shall receive a cash retainer of $105,000 and restricted Common Shares of the Company with a value of $137,500 at the time of issuance, with such awards generally subject to vesting only if the director serves the full approximate one-year term she/he was appointed for; (ii) the non-executive Chairman of the Board shall receive an additional cash retainer of $105,000; (iii) the Chairman of the Audit Committee of the Board shall receive an additional cash retainer of $25,000; (iv) the Chairman of the Compensation Committee of the Board shall receive an additional cash retainer of $25,000, and (v) the Chairman of the Nominating, Sustainability and Governance Committee shall receive an additional cash retainer of $20,000. Each non-chairing, non-executive member of the following Board committees shall receive an additional cash retainer as follows: for Audit Committee members an additional cash retainer of $10,000, for Compensation Committee members an additional cash retainer of $7,000, and for Nominating, Sustainability and Governance Committee members an additional cash retainer of $5,000.

We encourage our shareholders to read the “Compensation Discussion and Analysis” section in this Proxy Statement, specifically the section titled “Compensation of Our Named Executive Officers and Directors – Director Compensation” for further information on this proposal.

Resolutions at the Annual General Meeting of Shareholders are adopted by a simple majority of the votes validly cast, regardless of the proportion of the issued share capital of the Company present or represented at such meeting. Abstentions, broker non-votes and nil votes will not be taken into account.

In this Compensation Discussion and Analysis (“CD&A”), we provide an overview of our executive compensation program and describe the material components of our executive compensation program for our 2023 named executive officers (“NEOs”). Our NEOs for 2023 were:

We enjoy a long-standing reputation within the industry for carbon black product and process technology, applications knowledge and innovation. Our goal is to remain at the forefront of the industry in terms of product development by having dedicated applications technology teams, commercial teams and manufacturing facilities. Our long-term success depends on our ability to attract, engage, incentivize and retain highly talented individuals who are committed to our corporate and business strategies.

The Company takes a long-term view of performance, growth and value creation as an essential part of our culture, business strategy and compensation approach. Building a business that is resilient to fluctuations in the economy is critical to our success.

We believe that through the leadership of our experienced executive team, we performed well in a challenging economic environment, delivering a record annual Adjusted EBITDA of $332.3M (up 6.4% year-over-year) in 2023.

Our key 2023 business, safety, sustainability and strategic achievements included the following:

In 2023, we continued to demonstrate our operational resilience by successfully executing our strategy across the following six core pillars:

Our executive compensation program is designed to align with our pay-for-performance philosophy and, accordingly, directly links a substantial portion of annual executive compensation to Company performance. We also believe that the amount of compensation paid to each NEO should reflect the depth of their experience and the quality of their performance. We place a significant emphasis on long-term incentive compensation, designed to link the value created for shareholders with those responsible for the results. We offer a total compensation opportunity that is both competitive with similarly sized companies for our industry and that is internally equitable. Our compensation program is designed to attract, develop and retain business leaders to drive financial and strategic growth and build long-term shareholder value, and to deliver competitive compensation for superior Company performance. Likewise, when Company performance falls short of expectations, these variable incentive programs deliver lower levels of compensation. However, the Compensation Committee endeavors to balance pay-for-performance objectives with retention considerations so that, even during a temporary downturn in the economy and the chemicals industry, the program continues to ensure that qualified, successful, performance-driven employees stay committed to increasing our long-term value. Furthermore, to attract and retain highly skilled management, our executive compensation program must remain competitive with those of comparable employers who compete with us for talent.

 

We seek to maintain high standards with respect to the governance of executive compensation. Key features of our compensation policies and practices that aim to drive long-term performance and align with stockholder interests are highlighted below:

The Compensation Committee has built our executive compensation program upon a framework that includes the components and objectives listed below. The Compensation Committee routinely reviews each component of our executive compensation program to assess how it affects total target pay levels and considers pay ranges for similar executive positions among companies in our industry peer group.

Our executive compensation program directly links most of the executive compensation opportunity to our financial performance through annual and long-term incentives. The elements of the NEO compensation program have remained relatively consistent in the past years, with target compensation allocated between fixed and variable, cash and non-cash and short-term or long-term components. The Target Compensation Mix chart below describes each of the compensation elements for the Chief Executive Officer (“CEO”) and other current NEOs for 2023 as a percentage of total target direct compensation.

 

As illustrated in this chart, the target short-term incentive (“STI”) compensation, which is primarily dependent on the Company’s financial performance and the accomplishment of key strategic projects, as well as the target performance-based portion of our long-term incentive compensation in the form of PSUs, which is linked to ROCE, rTSR as compared to the average rTSR of the S&P Small-Cap 600 Index and the S&P 600 Chemicals Index, sustainability and employee engagement, together constitute approximately 82% and 61%, respectively, of the total target direct compensation of our CEO and other NEOs. Our Compensation Committee believes that such a large majority of our CEO’s and each NEO’s target compensation should be at risk based on the Company’s performance, and most of this at-risk compensation should be tied to the Company’s stock price. The amount of our CEO’s and NEOs’ actual earned at-risk compensation will strongly align with shareholders’ interests and investments.

The Compensation Committee, in consultation with management and with the advice and recommendation of the Compensation Committee’s independent compensation consultant, endeavors to establish levels of compensation that are competitive in the marketplace taking into account our pay-for-performance philosophy and core principles of driving growth of long-term shareholder value.

Since the Company’s initial public offering in July 2014, the Compensation Committee has engaged Korn Ferry as its independent compensation consultant. In developing our executive compensation program and policies and setting pay levels, Korn Ferry has assisted the Compensation Committee with reviewing elements of executive pay against a comparison industry peer group, as discussed below, and advising the Compensation Committee on evolving best practices. In addition, from time to time, the Company utilizes various salary benchmarking data sources to use as a guideline for establishing competitive market pay rates and salaries.

The Compensation Committee has evaluated the independence of Korn Ferry and concluded that they did not provide any other compensation services to the Company during 2023 and were qualified to serve as an independent consultant to the Compensation Committee.

The Compensation Committee, which is comprised entirely of independent directors, is responsible for overseeing our executive compensation program. The Compensation Committee determines and approves all compensation and payment levels for the CEO and certain other senior officers, including the other NEOs.

The Compensation Committee performs an annual review of the CEO’s goals and his performance in achieving such goals in each financial year and keeps the Board apprised of such evaluations. Our CEO reviews the performance of our other senior officers, including the NEOs (other than himself), and makes recommendations to the Compensation Committee regarding the compensation for those executive officers.

The Compensation Committee, with input from Korn Ferry, determines each element of compensation for the CEO. The Compensation Committee also determines each element of compensation for the other NEOs based on consideration of each individual’s leadership

qualities, operational performance, business responsibilities, tenure with the Company, current compensation arrangements and long-term potential to enhance shareholder value as well as input from Korn Ferry and the CEO. The Compensation Committee is under no obligation to follow these recommendations. Executive officers and others may participate in discussions with the Compensation Committee when invited to do so.

The Compensation Committee also reviews and approves all recommended salary increases, STI awards and LTI grants for our NEOs.

The Compensation Committee provides risk oversight with respect to the compensation of our Company’s employees, including the NEOs and other key officers. We believe we have established a short- and long-term compensation program that properly incentivizes desired performance and mitigates inappropriate risk-taking with a possible adverse effect on the Company.

The Compensation Committee oversees the Company’s executive compensation program and annually reviews the program against the Company’s strategic goals, industry practices and emerging trends to ensure alignment with shareholder interests. The Compensation Committee believes that our performance-based bonus and equity programs provide executives with incentives to create long-term shareholder value.

As part of this evaluation, the Compensation Committee considers whether the program components encourage or otherwise promote the taking of inappropriate or unacceptable risks that could threaten the Company’s value. Based on this review, the Compensation Committee believes that many features of the Company’s compensation program are designed to effectively promote the creation of long-term value, discourage behavior that leads to excessive risk, and mitigate the material risks associated with executive and other compensation programs.

These features for 2023 are as follows:

Based on its most recent review, management and the Compensation Committee do not believe that the compensation policies and practices of the Company create risks that are reasonably likely to have a material adverse effect on the Company.

The Compensation Committee utilized Korn Ferry to identify an industry peer group for the Company to perform an annual review of our executive compensation and to assess the competitiveness of our executive compensation program. The Company’s philosophy for senior executive pay, including our NEOs’ pay, is to provide a target total compensation package that is competitive with our peer group and general industry market data as provided by Korn Ferry. We do not benchmark our NEOs’ compensation to any specified level, and compensation levels of executives in our peer group is just one factor considered when determining total compensation levels. In addition to market data, other factors, such as the NEO’s experience, responsibilities, performance and long-term strategic value to the Company, are also considered by the Compensation Committee when making recommendations and decisions on compensation.

For 2023, Korn Ferry provided market data for a peer group of 14 companies with revenues between $800 million and $3.9 billion (median revenues of $2.0 billion). Peer group compensation data was limited to information that is publicly reported and such data was used to evaluate the major components of compensation for our NEOs, including base pay, target annual bonus opportunity and long-term incentive opportunity. In accordance with the foregoing process and analysis, the Compensation Committee approved the following peer group of 14 companies in the specialty chemicals industry to provide a reference for pay decisions for 2023. The Compensation Committee annually reviews peer group companies to reflect merger & acquisition activity in the industry. Our 2023 peer group companies were:

The Compensation Committee considers several factors when evaluating the pay levels of our NEOs. These include but are not limited to:

Each NEO’s approved target compensation provides the executive with an appropriate compensation opportunity. The Compensation Committee determined, based on the Company’s financial year 2023 performance, that each NEO’s total 2023 earned compensation was appropriate in light of the overall Company performance, the NEO’s personal performance, responsibility, and experience, relative to the total shareholder return for 2023. For NEOs who are promoted or hired externally into their role, and whose total direct compensation is not competitive at the time of their promotion or hire, our philosophy is to bring such NEO’s compensation to benchmark levels used by the Committee generally over a three-year period.

The total compensation opportunities for each NEO in 2023 are intended to reflect the depth of their experience, quality of their performance and level of service to the Company and its shareholders. The 2023 compensation of our NEOs illustrates how a meaningful portion of each executive’s pay is based on performance against our short-term and long-term strategic objectives.

We pay base salaries to attract and retain talented executives and to provide a fixed base of cash compensation. The table below shows the annual salary of each NEO for 2022 and 2023:

For financial year 2023 base salary determinations, the Compensation Committee reviewed each NEO’s job responsibilities, management experience, individual contributions, tenure and then-current salary, as well as the executive compensation benchmarking data prepared by the independent compensation consultant, Korn Ferry.

Our STI compensation program is designed to offer opportunities for cash compensation directly tied to our Company’s performance relative to established performance measures and ranges that the Compensation Committee believes create shareholder value. We provide opportunities for our executives to earn annual cash incentive awards that reward performance achievements for the year. Performance goals are objective and based on our annual business strategy and budget approved by the Compensation Committee. Our STI Plan is designed to:

At the beginning of 2023, the Compensation Committee reviewed the annual target STI award opportunities for Messrs. Painter, Glajch, Riveros and Quinones and Dr. Niewiem. After consulting with Korn Ferry, the Compensation Committee approved an increase in target STI to 60% (from 50%) for Messrs. Riveros and Quinones and Dr. Niewiem effective January 1, 2023. These changes were made in consultation with Korn Ferry to recognize performance and further align our compensation package with the peer benchmarks. The 2023 target annual STI award opportunities for our NEOs, inclusive of these changes, are as follows:

STI payouts for plan year 2023 range from 0% – 200% of the NEO’s target annual bonus. Sixty-five percent (65%) of the annual target bonus is determined by Adjusted EBITDA, 5% is based on Safety results and 5% is based on Sustainability results, with threshold, target, and maximum payout levels for each such performance metric. Performance at the threshold level results in a payout at 50% of target STI, performance at the target level results in a payout at 100% and performance at the maximum level results in a maximum payout at 200%. For these three key performance measures, we use linear interpolation to determine the actual STI payouts for achievement between the three performance levels.

 

The key performance metrics, payout calculation and terms applied to each NEO are the same as applied for all employees of the Company and based on the Compensation Committee’s determination that each measure is integral to the overall success of the Company. Our NEOs may not defer payment of any portion of their STI payout and the Company does not sponsor any deferred compensation program that would permit such a deferral.

The Compensation Committee established the following performance metrics and target performance levels for the following 2023 STI Plan measures:

To further demonstrate our commitment to improving robust operational performance to create shareholder value, we determined that the remaining twenty-five percent (25%) of the target annual bonus should be based on the successful execution of key strategic “Emerge Stronger” projects designed to provide a mix of short-term and long-term benefits. These key projects focus on creating commercial value, enhancing competitiveness, and employee training and development.The Compensation Committee reviews and approves the inclusion of these key strategic projects as part of the STI Plan and the corresponding payouts. The award payout is calculated based on the achievement of each individual project with the opportunity for each project to earn a 50% of target payout at the threshold level, 100% payout at the target level and 200% payout at the maximum level. The achievement result for each project are equally weighted and summed to determine the total payout for the key strategic Emerge Stronger projects metric. Most employees across the company, except for example production plant employees who have more manufacturing-based objectives, participate in an incentive plan with the same Emerge Stronger targets.

Our “Emerge Stronger” projects were established with the following achievement levels:

The Compensation Committee establishes the STI performance goals, where applicable, based on our Board-approved business plan and strategic priorities. Our 2023 goals were set at the beginning of the year, reflecting our expectations about the performance of our business. We believe our performance metrics (and resulting compensation) reflect a focused, but well-balanced view of performance that supports our expectations to drive strong business results, provide sound risk management and lead to long-term shareholder value.

The Compensation Committee established a combination of three performance measures (Adjusted EBITDA, Safety and Sustainability) and the execution of key strategic projects for our 2023 STI plan to align with our key business goals and objectives and our business operating plan. The Compensation Committee determined the relative weights of the performance measures to drive financial results while maintaining a focus on critical non-financial objectives to create a sustainable business and long-term value. The Compensation Committee desires to harmonize all Company employees’ STI plan measures and efforts. More specifically:

The Compensation Committee retains discretion to take into account extraordinary or infrequently occurring events, or significant corporate transactions in deciding whether to adjust the performance metrics for the STI plan. The Compensation Committee also retains discretion in determining the actual STI amounts paid, in order to ensure that the STI bonus remains consistent with its stated objectives.

The following tables summarize the Company’s actual performance against its 2023 STI targets and payout level as approved by the Compensation Committee:

As shown in the table above, in 2023, we fell short of our threshold Adjusted EBITDA goal, resulting in a zero payout for this measure. Our Safety performance fell short of the threshold and equated to a zero payout. Our Sustainability performance exceeded the maximum achievement level, resulting in a 200% payout for this measure.

In 2023, we maintained a performance measure under our STI program to continue to incentivize completing specific improvement projects. Our Compensation Committee find this to be an effective way to link variable compensation to specific actions and weighted this metric at 25% of the overall STI target bonus. The actual result for the remaining 25% of the 2023 STI bonus calculation are summarized in the table below.

The actual achievement levels of the key strategic Emerge Stronger projects were determined based on a scorecard that resulted in a score commensurate with a 25% of target bonus STI payout. After adding the Adjusted EBITDA measure payout of 0%, the Safety measure payout of 0% and Sustainability measure payout of 10%, the Compensation Committee applied 35% to each NEO’s target bonus in 2023.

The following table illustrates the actual payout level for the 2023 STI for each of our NEOs:

The purpose of our LTI plan is to incentivize our executives to increase shareholder value over the long term, to align their efforts with our shareholders’ interests through ownership, to provide retention through vesting criteria and to have competitive compensation to attract and retain our leadership. Our LTI Plan is from 2024 and onwards is governed by the 2023 Omnibus Equity Plan which shareholders approved at the 2023 Annual General Meeting. The 2023 Omnibus Equity Plan became effective on June 7, 2023. Under this plan, 70% of our annual LTI equity award are issued as PSUs, which vest on the last day of a three-year performance period and are contingent on the successful completion of both performance-based and time-based requirements. The vesting of PSUs is subject to continued employment, further strengthening the link between individual pay opportunities and our long-term performance. 30% of our annual LTI award are issued as time-based RSUs, one-third of which vest annually over a period of three years, subject to continued employment on the applicable vesting date, ensuring the retention of key executives, management, and high-potential individuals. In determining annual LTI award opportunities, the Compensation Committee determines a target monetary value for the individual awards which are then converted into a number of Common Shares based on our stock price on the date of grant. Existing executive equity ownership levels are generally not a factor or guarantee in the Compensation Committee’s granting of LTI awards.

The 2023 LTI awards granted by the Compensation Committee were designed to provide our NEOs with long-term incentive opportunities that are competitive against our industry peer companies and reflect our overall executive compensation philosophy of aligning pay with long-term performance and shareholder value. With respect to the 2023 LTI awards, 70% of the target value was awarded in PSUs, which vest based on the satisfaction of approved performance targets over a three- year performance period, and 30% of the target value was awarded as RSUs with one-third vesting annually, in each case, subject to continued employment through the applicable vesting date.

Each year, the Compensation Committee determines the amount of each NEO’s annual LTI award, based on a percentage of the NEO’s base salary, with input from its independent compensation consultant Korn Ferry, and referencing external benchmark comparisons of overall target compensation (cash plus equity). The target value of our CEO’s annual LTI award is fixed at 350% of his base salary. The target value is based on market comparisons for CEO positions, using both peer group and general industry market data, in addition to an evaluation of his performance over the prior year. Each NEO’s (other than the CEO) award opportunity is determined prior to the beginning of the performance period assigned to his or her position based on market comparisons for similar positions, using both peer group and general industry market data, in addition to an evaluation of the executive’s individual performance over the prior year.

The Compensation Committee did not make any changes to our 2023 LTI Plan and target award levels as percentage of base salary. The target value of the 2023 LTI awards for each of our NEOs as determined by the Compensation Committee was as follows:

The 2023 LTI award grants to our NEOs were approved by the Compensation Committee under our shareholder-approved 2014 Omnibus Incentive Compensation Plan. The 2023 LTI award agreements provide for settlement in Common Shares or cash at the conclusion of the three-year performance period.

The ultimate realized value of the 2023 PSU award opportunity over the three-year performance period (2023-2025) is determined as follows:

 

The ultimate number of PSUs to be earned with respect to any PSU granted is determined at the end of the performance period depending on actual results as compared to the target performance metrics, and ranges from 0% to 200% of the target number of PSUs granted.

If our rTSR is at the average of the two applicable indices, then that portion of the PSU award will be earned at target level. However, the number of Common Shares earned in respect of the PSUs tied to the achievement of rTSR is capped at 100% of the target number of PSUs granted if the Company’s total shareholder return declines by 10% or more during the performance period, regardless of rTSR performance. The threshold payout for rTSR occurs at 15 percentage points below the average of the S&P Small-Cap 600 Index and the S&P 600 Chemicals Indices and the maximum occurs at 30 percentage points above the average of the indices. Our ROCE measure is based on the Company’s annual achievement percentage with the opportunity to earn 1/3^rd payout for each calendar year. Due to competitive reasons, we are not disclosing the ROCE targets. Our Sustainability measure is based on a third-party Sustainability Index measuring the Company’s latest sustainability score and industry-specific percentile ranking near the end of the three-year performance period. Our Employee Engagement measure is based on our latest performance near the end of the three-year performance period versus a third-party Employee Effectiveness measure of the Company’s industry specific percentile ranking as compared to top performing companies.

The 2023 PSUs will vest on the last day of the three-year performance period (the vesting date, which is December 31, 2025) and the earned value will be based on the actual results measured over the three-year period. Each earned unit is settled by delivery of a Common Share and requires that the recipients continue to be employed by the Company through the vesting date.

The 2021 LTI awards included 30% RSUs and 70% PSUs, of which the PSUs vested on the last day of the three-year performance period, which was December 31, 2023. The 2020 RSUs vested ratably 1/3rd on each anniversary date during the three-year performance period (2021-2023) and were converted to shares delivered after the third and final vesting on December 31, 2023.

The table below summarizes the 2021 RSUs granted to our NEOs that vested on each anniversary date during the three-year performance period (2021-2023) and were delivered after the third and final vesting on December 31, 2023:

50% of the 2021 PSUs was based on rTSR (as compared to the average of the total relative shareholder return of the S&P Small-Cap 600 Index and the S&P 600 Chemicals Index). 25% of the 2021 PSUs was based on ROCE for each of the three years in the performance period (2021, 2022 and 2023) as compared to approved targets of 14.8%, 17.8%, and 16.1%, respectively. 12.5% of the calculation was based on the Company’s latest independent Sustainability percentile ranking from EcoVadis during the three-year performance period as compared to an industry-specific percentile ranking target of 90. 12.5% of the calculation was based on the Company’s latest Employee Engagement score during the three-year performance period as measured independently by Korn Ferry with a target of 45% of employees falling into the “most effective” category. The target levels and performance payout ranges for such award are determined and approved by the Compensation Committee on an annual basis . The tables below summarize the target 2021 PSU awards granted to our NEOs, actual achievement level for each of the performance measures as measured over the three-year performance period ending December 31, 2023, and actual earned units for each of the performance measures at the end of the three-year performance period:

The actual achieved results of each of the rTSR, ROCE, Sustainability and Employee engagement performance measures for the 2021 PSUs are as follows: