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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS |
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Corporate Responsibility |
Corporate Responsibility
In 2023, we continued to further our commitment to corporate responsibility. Corporate responsibility is an integral part of our business strategy and how we work. We are committed to ethical and sustainable practices to protect the planet and people; give back to the community; provide a safe, diverse, and healthy workplace; and engage our associates in these efforts.
Goodyear defines sustainability as responsibly balancing environmental, societal and financial demands without compromising the ability of future generations to meet their needs. We have integrated sustainability throughout the organization, and we are creating value by identifying opportunities and risks, developing strategies to address them and collaborating with our customers and other stakeholders to understand their goals and how we can work together to help achieve them.
Goodyear Better Future, our corporate responsibility governance structure focuses on enhancing the management, transparency and communication of our high-priority sustainability topics. The pillars of our corporate responsibility framework are highlighted on the following page.
ENVIRONMENTAL SUSTAINABILITY AND CLIMATE CHANGE
We are committed to reaching net-zero greenhouse gas (GHG) emissions across our value chain by 2050 from a 2019 base year. In addition, we are committed to reducing absolute Scope 1 and 2 GHG emissions 46% by 2030 from a 2019 base year, and absolute Scope 3 GHG emissions from purchased goods and services, fuel and energy-related activities and upstream transportation by 28% within the same timeframe. In 2023, our science-based near-term and net-zero GHG reduction targets were validated by the Science Based Targets initiative (SBTi).
Moving forward, we will continue to integrate actions to achieve our ambitions into our operations and will hold ourselves accountable to disclose our progress to our stakeholders. Goodyear intends to continue disclosing through our annual corporate responsibility report as well as our annual CDP submission.
BOARD AND MANAGEMENT OVERSIGHT
While our full Board oversees and guides our strategic direction, the Board’s Committee on Corporate Responsibility and Compliance oversees our corporate responsibility and climate strategy objectives and regularly monitors our progress towards achieving them.
Our senior leadership team acts as a steering committee for Goodyear’s sustainability strategy and performance. Each member of the senior leadership team has compensation metrics and targets that are linked to achieving certain sustainability-focused goals.
The Better Future Steering Committee, led by Goodyear’s Vice President and Chief Sustainability Officer, and currently comprised of 17 cross-functional, global leaders representing each region, as well as corporate functions in the areas of Procurement, Technology, Risk, Law, Manufacturing Operations, Communications, Government and Public Affairs, Human Resources, Strategy, Finance and Marketing, ensures functional goals are established for Goodyear’s high-priority sustainability topics.
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COMPENSATION DISCUSSION AND ANALYSIS |
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Retirement and Other Benefits |
SEVERANCE AND CHANGE IN CONTROL BENEFITS
Our Executive Severance Plan provides for the payment of severance benefits to our officers, including all of the named executive officers, if their employment is terminated under certain circumstances during certain periods before or within two years following a change-in-control of the Company. The Executive Severance Plan does not provide for any excise tax gross-ups or walk-away rights.
The Executive Severance Plan is designed to attract, retain and motivate officers, provide for stability and continuity in the event of an actual or threatened change-in-control, and ensure that our officers are able to devote their full time and attention to the Company’s operations in the event of an actual or threatened change-in-control.
The Executive Severance Plan and the related change-in-control triggers (commonly referred to as “double triggers”) generally provide for the payment of severance benefits if employment is terminated under certain circumstances during certain periods before or within two years following a change-in-control of the Company. The change-in-control triggers in our equity compensation plans are substantially similar to those in the Executive Severance Plan. We selected the specific change-in-control triggers used in the Executive Severance Plan and our equity compensation plans, such as the acquisition of 20% or more of Goodyear’s Common Stock, a significant change in the composition of the Board of Directors or the acquisition of actual control of Goodyear, based upon our review of market practices, including provisions included in similar agreements of other public companies. Based upon that review, we determined that the terms and conditions of the Executive Severance Plan, including the specific change-in-control triggers, were consistent with market practices.
The Executive Severance Plan also provides severance benefits to our officers, including each of the named executive officers, if their employment is terminated by us other than for Cause (as defined in the Executive Severance Plan), death or disability, and other than in connection with a change-in-control.
To be eligible to receive benefits under the Executive Severance Plan, an officer must execute a release and agree, among other things, to certain confidentiality, non-disparagement, non-solicitation and non-competition covenants.
The Compensation Committee believes that our severance benefits are in the best interests of the Company and our shareholders, are a necessary component of a competitive compensation program, and are in line with severance benefits in place at other companies.
For additional information regarding the terms of the Executive Severance Plan and benefits payable under that plan, see “Potential Payments Upon Termination or Change-in-Control” at page 68.
PERQUISITES
We provide certain executive officers, including our named executive officers, with limited personal benefits and perquisites, as described below and in footnote 5 to the Summary Compensation Table at page 57. The Compensation Committee has reviewed and approved the perquisites described below. The Compensation Committee recognizes that these perquisites are an important factor in protecting our executive officers and in enabling them to focus on our business with minimal disruption. We do not provide any tax reimbursements to our executive officers for any of the perquisites we provide them.
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EXECUTIVE COMPENSATION |
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Potential Payments Upon Termination or Change-in-Control |
date, each stock option will become immediately exercisable and remain exercisable until the earlier of three years after the date of death of the optionee or its expiration date, and (c) for options granted on or after June 8, 2010, in the event of the termination of the optionee’s employment by us other than for cause, each vested stock option will remain exercisable for 90 days following the date of termination of their employment.
Additional Retirement Benefits. The table below shows the additional retirement benefits, if any, that would be payable to the named executive officer if the named executive officer’s employment was terminated on December 31, 2023, and that named executive officer was vested in the benefit as of that date. Mr. Kramer, Mr. Wells and Mr. McClellan are vested in their Supplementary Plan benefit and will receive benefits upon their respective retirement dates in 2024. Ms. Zamarro and Mr. Delaney are not yet vested in a Supplementary Plan benefit, are not eligible to participate in the Salaried Plan or the defined benefit Excess Benefit Plan, and would instead receive substantially smaller benefits from the defined contribution Excess Benefit Plan. The Supplementary Plan and Salaried Plan amounts shown in the Pension Benefits table are the present values at December 31, 2023 of benefits that would be payable in lump sum form at the later of age 62 and the age at which 10 years of service is attained (or age at December 31, 2023, if older than 62 (or for Mr. Kramer and Mr. Wells, age 60 and 58, respectively)). The amounts shown in the table below are the additional amounts that would be payable, together with the amounts shown in the Pension Benefits table, in lump sum form after termination of employment at December 31, 2023. The additional amounts are solely due to differences in the assumptions used to value the benefit as of December 31, 2023 and Mr. Kramer’s and Mr. McClellan’s fulfillment of their service obligations under their respective retention agreements. See “Compensation Discussion and Analysis — Retirement and Other Benefits — Retirement Benefits” for more information.
In the event of an “Involuntary Termination Within Two Years of Change in Control,” Ms. Zamarro’s and Mr. Delaney’s benefits under the Supplementary Plan will become vested since they each have five years of credited service. For Ms. Zamarro, the difference between the amount payable from the Supplementary Plan upon a triggering event ($1,722,113) and the value presented in the Pension Benefits table ($1,532,960) is solely due to differences in the assumptions used in the calculations. For Mr. Delaney, the difference between the amount payable from the Supplementary Plan upon a triggering event ($3,161,015) and the value presented in the Pension Benefits table ($2,763,360) is solely due to differences in the assumptions used in the calculations.
All Other Benefits. The amounts shown for all other benefits for each scenario include the payment of accrued vacation. In addition, the amounts shown in the row captioned “Termination Without Cause” include reimbursement of COBRA payments and payments for outplacement services (capped at $25,000), and the amounts shown in the row captioned “Involuntary Termination Within Two Years of Change in Control” include reimbursement of COBRA payments, payments for outplacement services (capped at $25,000), and reimbursement for legal fees, if any (assumed to be $0 for purposes of the table below).
For purposes of the table below, resignations, terminations without cause, and involuntary terminations upon a change in control are treated like a retirement if the employee is eligible for retirement as of the date of termination. Mr. Kramer and Mr. McClellan were eligible for retirement on December 31, 2023.
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EXECUTIVE COMPENSATION |
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Director Compensation Table |
Directors’ Equity Plan also permits each participant annually to elect to have 25%, 50%, 75% or 100% of his or her cash retainer and meeting fees deferred and converted into share equivalent units based on the closing market price of our Common Stock on the payment date. Under the Directors’ Equity Plan, the restricted stock units and share equivalent units receive dividend equivalents at the same rate as our Common Stock, which dividends will be converted into restricted stock units or share equivalent units, as the case may be, based on the closing market price of our Common Stock on the dividend payment date. Share equivalent units accrued prior to October 1, 2010 will be converted to a dollar value at the closing market price of our Common Stock on the later of the first business day of the seventh month following the month during which the participant ceased to be a director and the fifth business day of the year next following the year during which the participant ceased to be a director. Amounts earned and vested on or after January 1, 2005, will be paid out in a lump sum on the fifth business day following the conversion from share equivalent units to a dollar value. Share equivalent units accrued on or after October 1, 2010 will be paid to directors in shares of Common Stock on the fifth business day of the quarter following the quarter during which the director leaves the Board.
The stockholding guidelines for directors specify that a director must accumulate and hold a number of shares equal in value to five times the annual cash retainer. Shares owned directly and restricted stock units and share equivalent units accrued to a Directors’ Equity Plan account are counted as ownership in assessing compliance with the guidelines. The stock price to be used in assessing compliance with the guidelines as of May 1st of each year will be the average closing stock price for the prior 200-day period. During 2023, each of our directors complied with our stockholding guidelines.
Risks Related To Compensation Policies And Practices
We have reviewed our compensation policies and practices for our employees and have concluded that the risks arising from those policies and practices are not reasonably likely to have a material adverse effect on us.
Pay Ratio
For 2023, the annual total compensation of the CEO, as set forth in the Summary Compensation Table, was $14,740,302, and the median of the annual total compensation of all employees, other than the CEO, was $45,812, resulting in a ratio of 322:1 (the “pay ratio”).
In determining the median employee, we collected information regarding taxable wages for all employees, defined consistently with applicable SEC regulations, of the Company and its consolidated subsidiaries as of October 1, 2022 for the period beginning January 1, 2022 and ending September 30, 2022. Taxable wages generally included an employee’s actual income, including wages, overtime, bonuses and other cash incentives, that are subject to taxation in the applicable jurisdiction. We converted earnings paid in local currencies to U.S. dollars by applying the average exchange rate used for the preparation of our financial statements for the period from January 1, 2022 to September 30, 2022.
For 2023, we used the same median employee that was identified in 2022 since there has been no change in our employee population or employee compensation arrangements that we believe would significantly impact our pay ratio disclosure.
We did not utilize the “de minimis” exception, statistical sampling or other similar methods, or any cost-of-living adjustment, as permitted by applicable SEC regulations, in calculating the pay ratio.
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GENERAL INFORMATION |
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Confidentiality |
Confidentiality
Your vote will be confidential except (a) as may be required by law, (b) as may be necessary for Goodyear to assert or defend claims, (c) in the case of a contested election of director(s), or (d) at your express request.
Shareholders Sharing the Same Address
Goodyear has adopted a procedure called “householding,” which has been approved by the SEC. Under this procedure, Goodyear is delivering only one copy of the Annual Report and Proxy Statement to multiple shareholders who share the same address and have the same last name, unless Goodyear has received contrary instructions from an affected shareholder. This procedure reduces Goodyear’s printing costs, mailing costs and fees. Shareholders who participate in householding will continue to receive separate proxy cards.
Goodyear will deliver promptly upon written or oral request a separate copy of the Annual Report and Proxy Statement to any shareholder at a shared address to which a single copy of either of those documents was delivered. To receive a separate copy of the Annual Report or Proxy Statement, you may write or call Goodyear’s Investor Relations Department at The Goodyear Tire & Rubber Company, 200 Innovation Way, Akron, Ohio 44316-0001, Attention: Investor Relations, telephone (330) 796-3751. You may also access Goodyear’s Annual Report and Proxy Statement on the Investor Relations section of Goodyear’s website at www.goodyear.com or at www.proxyvote.com.
If you are a holder of record and would like to revoke your householding consent and receive a separate copy of the Annual Report or Proxy Statement in the future, please contact Broadridge Financial Solutions, either by calling toll free at (866) 540-7095 or by writing to Broadridge Financial Solutions, 51 Mercedes Way, Edgewood, New York 11717, Attention: Householding Department. You will be removed from the householding program within 30 days of receipt of the revocation of your consent.
Any shareholders of record who share the same address and currently receive multiple copies of Goodyear’s Annual Report and Proxy Statement who wish to receive only one copy of these materials per household in the future should contact Goodyear’s Investor Relations Department at the address or telephone number listed above to participate in the householding program.
A number of brokerage firms have instituted householding. If you hold your shares in “street name,” please contact your bank, broker or other holder of record to request information about householding.
Form 10-K
Goodyear will mail without charge, upon written request, a copy of Goodyear’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, including the Consolidated Financial Statements, schedules and list of exhibits, and any particular exhibit specifically requested. Requests should be sent to: The Goodyear Tire & Rubber Company, 200 Innovation Way, Akron, Ohio 44316-0001, Attn: Investor Relations. The Annual Report on Form 10-K is also available at www.goodyear.com.
Pay vs Performance Disclosure - USD ($)
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12 Months Ended |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
| Pay vs Performance Disclosure |
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| Pay vs Performance Disclosure, Table |
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Value of Initial
Fixed $100
Investment Based
on: |
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Year |
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Summary Compensation Table (SCT) Total for PEO 1 |
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Compensation Actually Paid to PEO 2 |
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Average Compensation Actually Paid to Non-PEO NEOs 3 |
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TSR |
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EBIT
(Company-
Selected
Measure) |
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| 2023 |
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$ |
14,740,302 |
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$ |
16,802,641 |
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$ |
5,336,338 |
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$ |
5,688,099 |
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$ |
93.18 |
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$ |
104.54 |
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$ |
(687 |
) |
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$ |
965 |
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| 2022 |
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10,317,348 |
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(11,700,294 |
) |
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3,264,573 |
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(2,598,280 |
) |
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66.05 |
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104.59 |
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209 |
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1,188 |
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| 2021 |
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21,415,578 |
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39,794,054 |
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6,743,039 |
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11,818,873 |
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138.73 |
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142.18 |
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780 |
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|
988 |
5 |
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| 2020 |
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16,003,113 |
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13,870,027 |
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4,333,433 |
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4,338,563 |
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70.99 |
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117.51 |
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(1,250 |
) |
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(85 |
) |
| 1 |
During 2020-2023, Mr. Kramer was our Chief Executive Officer. During 2020-2021, our non-PEO NEOs consisted of Messrs. Wells, McClellan, Delaney and Patterson. During 2022, our non-PEO NEOs consisted of Messrs. Wells, McClellan, Delaney, Phillips and Patterson. During 2023, our non-PEO NEOs consisted of Ms. Zamarro and Messrs. Wells, McClellan and Delaney. |
| 2 |
The following table sets forth the adjustments made to the SCT Total for PEO during 2023 to determine compensation actually paid (CAP) to PEO, with “fair value” calculated in accordance with ASC Topic 718 as of the end of the specified period: |
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| |
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Covered Year
2023 |
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SCT Total for PEO |
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$ |
14,740,302 |
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Deduct aggregate change in actuarial present value of accumulated benefit under pension plans reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the SCT |
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(1,666,533 |
) |
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Add “service cost” for pension plans a |
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551,386 |
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Add “prior service cost” for pension plans b |
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0 |
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Deduct amounts reported under “Stock Awards” Column of the SCT |
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(4,915,483 |
) |
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Deduct amounts reported under “Option Awards” Column of the SCT |
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0 |
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Add the fair value of awards granted in the covered year that remain outstanding and unvested as of covered year-end c |
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5,167,080 |
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Add(Subtract) change in fair value of awards granted in any prior year that remain outstanding and unvested as of the covered year-end d |
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1,791,571 |
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Add the fair value of awards granted and vested during the covered year e |
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410,784 |
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Add(Subtract) change in fair value from prior year-end to vesting date of awards granted in any prior year that vested during the covered year f |
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723,534 |
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Subtract fair value of awards granted in any prior year that were forfeited or failed to vest during the covered year |
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0 |
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Add dividends on unvested awards paid during the covered year |
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0 |
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Add incremental fair value of awards modified during the covered year |
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0 |
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Compensation Actually Paid: |
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16,802,641 |
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| |
a |
Service cost is actuarially determined for services rendered during the covered year. |
| |
b |
There were no plan amendments or initiations during the covered year. |
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c |
For 2023, the value includes the fair value of the 2023 RSU awards and 1/3 of the 2022-2024 and 2023-2025 PSU awards, each with respect to the 2023 performance period. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting. |
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d |
For 2023, the value includes the change in fair value of the 2021 RSU awards, 2022 RSU awards, 1/3 of the 2022-2024 PSU awards with respect to the 2022 performance period, Value Creation Plan awards, if applicable, and various stock option awards. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting. |
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e |
For 2023, the value includes 1/3 of the 2021-2023 PSU awards with respect to the 2023 performance period. |
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f |
For 2023, the value includes the 2020 RSU awards and 2/3 of the 2021-2023 PSU awards with respect to the 2021 and 2022 performance periods and various stock option awards. |
| 3 |
The following table sets forth the adjustments made to the Average SCT Total for Non-PEO NEOs during 2023 to determine the average CAP to the Non-PEO NEOs, with “fair value” calculated in accordance with ASC Topic 718 as of the end of the specified period: |
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Average SCT Total for non-PEO NEOs |
|
$ |
5,336,338 |
|
|
|
Deduct aggregate change in actuarial present value of accumulated benefit under pension plans reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the SCT |
|
|
(632,092 |
) |
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Add “service cost” for pension plans a |
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271,645 |
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|
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Add “prior service cost” for pension plans b |
|
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0 |
|
|
|
Deduct amounts reported under “Stock Awards” Column of the SCT |
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|
(1,557,770 |
) |
|
|
Deduct amounts reported under “Option Awards” Column of the SCT |
|
|
0 |
|
|
|
Add the fair value of awards granted in the covered year that remain outstanding and unvested as of covered year-end c |
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|
1,638,271 |
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|
|
Add(Subtract) change in fair value of awards granted in any prior year that remain outstanding and unvested as of the covered year-end d |
|
|
413,134 |
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|
|
Add the fair value of awards granted and vested during the covered year e |
|
|
83,983 |
|
|
|
Add(Subtract) change in fair value from prior year-end to vesting date of awards granted in any prior year that vested during the covered year f |
|
|
134,590 |
|
|
|
Subtract fair value of awards granted in any prior year that were forfeited or failed to vest during the covered year |
|
|
0 |
|
|
|
Add dividends on unvested awards paid during the covered year |
|
|
0 |
|
|
|
Add incremental fair value of awards modified during the covered year |
|
|
0 |
|
Compensation Actually Paid: |
|
|
5,688,099 |
|
| |
a |
Service cost is actuarially determined for services rendered during the covered year. |
| |
b |
There were no plan amendments or initiations during the covered year. |
| |
c |
For 2023, the value includes the fair value of the 2023 RSU awards and 1/3 of the 2022-2024 and 2023-2025 PSU awards, each with respect to the 2023 performance period. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting. |
| |
d |
For 2023, the value includes the change in fair value of the 2021 RSU awards, 2022 RSU awards, 1/3 of the 2022-2024 PSU awards with respect to the 2022 performance period, Value Creation Plan awards, if applicable, and various stock option awards. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting. |
| |
e |
For 2023, the value includes 1/3 of the 2021-2023 PSU awards with respect to the 2023 performance period. |
| |
f |
For 2023, the value includes the 2020 RSU awards and 2/3 of the 2021-2023 PSU awards with respect to the 2021 and 2022 performance periods and various stock option awards. |
| 4 |
Dow Jones US Auto Parts Index |
| 5 |
As reported in the 2022 Proxy Statement. This figure excludes results from Cooper Tire. Following the acquisition of Cooper Tire in June 2021, the Compensation Committee did not alter any of the previously established targets for the Company’s annual incentive plan and evaluated performance against the metrics for the Company, excluding results of operations attributable to Cooper Tire. |
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| Company Selected Measure Name |
EBIT
|
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|
| Named Executive Officers, Footnote |
During 2020-2023, Mr. Kramer was our Chief Executive Officer. During 2020-2021, our non-PEO NEOs consisted of Messrs. Wells, McClellan, Delaney and Patterson. During 2022, our non-PEO NEOs consisted of Messrs. Wells, McClellan, Delaney, Phillips and Patterson. During 2023, our non-PEO NEOs consisted of Ms. Zamarro and Messrs. Wells, McClellan and Delaney.
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| Peer Group Issuers, Footnote |
Dow Jones US Auto Parts Index
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|
| PEO Total Compensation Amount |
$ 14,740,302
|
$ 10,317,348
|
$ 21,415,578
|
$ 16,003,113
|
| PEO Actually Paid Compensation Amount |
$ 16,802,641
|
(11,700,294)
|
39,794,054
|
13,870,027
|
| Adjustment To PEO Compensation, Footnote |
| 2 |
The following table sets forth the adjustments made to the SCT Total for PEO during 2023 to determine compensation actually paid (CAP) to PEO, with “fair value” calculated in accordance with ASC Topic 718 as of the end of the specified period: |
|
|
|
|
|
| |
|
Covered Year
2023 |
|
|
|
|
|
SCT Total for PEO |
|
$ |
14,740,302 |
|
|
|
Deduct aggregate change in actuarial present value of accumulated benefit under pension plans reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the SCT |
|
|
(1,666,533 |
) |
|
|
Add “service cost” for pension plans a |
|
|
551,386 |
|
|
|
Add “prior service cost” for pension plans b |
|
|
0 |
|
|
|
Deduct amounts reported under “Stock Awards” Column of the SCT |
|
|
(4,915,483 |
) |
|
|
Deduct amounts reported under “Option Awards” Column of the SCT |
|
|
0 |
|
|
|
Add the fair value of awards granted in the covered year that remain outstanding and unvested as of covered year-end c |
|
|
5,167,080 |
|
|
|
Add(Subtract) change in fair value of awards granted in any prior year that remain outstanding and unvested as of the covered year-end d |
|
|
1,791,571 |
|
|
|
Add the fair value of awards granted and vested during the covered year e |
|
|
410,784 |
|
|
|
Add(Subtract) change in fair value from prior year-end to vesting date of awards granted in any prior year that vested during the covered year f |
|
|
723,534 |
|
|
|
Subtract fair value of awards granted in any prior year that were forfeited or failed to vest during the covered year |
|
|
0 |
|
|
|
Add dividends on unvested awards paid during the covered year |
|
|
0 |
|
|
|
Add incremental fair value of awards modified during the covered year |
|
|
0 |
|
|
|
Compensation Actually Paid: |
|
|
16,802,641 |
|
| |
a |
Service cost is actuarially determined for services rendered during the covered year. |
| |
b |
There were no plan amendments or initiations during the covered year. |
| |
c |
For 2023, the value includes the fair value of the 2023 RSU awards and 1/3 of the 2022-2024 and 2023-2025 PSU awards, each with respect to the 2023 performance period. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting. |
| |
d |
For 2023, the value includes the change in fair value of the 2021 RSU awards, 2022 RSU awards, 1/3 of the 2022-2024 PSU awards with respect to the 2022 performance period, Value Creation Plan awards, if applicable, and various stock option awards. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting. |
| |
e |
For 2023, the value includes 1/3 of the 2021-2023 PSU awards with respect to the 2023 performance period. |
| |
f |
For 2023, the value includes the 2020 RSU awards and 2/3 of the 2021-2023 PSU awards with respect to the 2021 and 2022 performance periods and various stock option awards. |
|
|
|
|
| Non-PEO NEO Average Total Compensation Amount |
$ 5,336,338
|
3,264,573
|
6,743,039
|
4,333,433
|
| Non-PEO NEO Average Compensation Actually Paid Amount |
$ 5,688,099
|
(2,598,280)
|
11,818,873
|
4,338,563
|
| Adjustment to Non-PEO NEO Compensation Footnote |
| 3 |
The following table sets forth the adjustments made to the Average SCT Total for Non-PEO NEOs during 2023 to determine the average CAP to the Non-PEO NEOs, with “fair value” calculated in accordance with ASC Topic 718 as of the end of the specified period: |
|
|
|
|
|
| |
|
|
|
|
|
|
Average SCT Total for non-PEO NEOs |
|
$ |
5,336,338 |
|
|
|
Deduct aggregate change in actuarial present value of accumulated benefit under pension plans reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the SCT |
|
|
(632,092 |
) |
|
|
Add “service cost” for pension plans a |
|
|
271,645 |
|
|
|
Add “prior service cost” for pension plans b |
|
|
0 |
|
|
|
Deduct amounts reported under “Stock Awards” Column of the SCT |
|
|
(1,557,770 |
) |
|
|
Deduct amounts reported under “Option Awards” Column of the SCT |
|
|
0 |
|
|
|
Add the fair value of awards granted in the covered year that remain outstanding and unvested as of covered year-end c |
|
|
1,638,271 |
|
|
|
Add(Subtract) change in fair value of awards granted in any prior year that remain outstanding and unvested as of the covered year-end d |
|
|
413,134 |
|
|
|
Add the fair value of awards granted and vested during the covered year e |
|
|
83,983 |
|
|
|
Add(Subtract) change in fair value from prior year-end to vesting date of awards granted in any prior year that vested during the covered year f |
|
|
134,590 |
|
|
|
Subtract fair value of awards granted in any prior year that were forfeited or failed to vest during the covered year |
|
|
0 |
|
|
|
Add dividends on unvested awards paid during the covered year |
|
|
0 |
|
|
|
Add incremental fair value of awards modified during the covered year |
|
|
0 |
|
Compensation Actually Paid: |
|
|
5,688,099 |
|
| |
a |
Service cost is actuarially determined for services rendered during the covered year. |
| |
b |
There were no plan amendments or initiations during the covered year. |
| |
c |
For 2023, the value includes the fair value of the 2023 RSU awards and 1/3 of the 2022-2024 and 2023-2025 PSU awards, each with respect to the 2023 performance period. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting. |
| |
d |
For 2023, the value includes the change in fair value of the 2021 RSU awards, 2022 RSU awards, 1/3 of the 2022-2024 PSU awards with respect to the 2022 performance period, Value Creation Plan awards, if applicable, and various stock option awards. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting. |
| |
e |
For 2023, the value includes 1/3 of the 2021-2023 PSU awards with respect to the 2023 performance period. |
| |
f |
For 2023, the value includes the 2020 RSU awards and 2/3 of the 2021-2023 PSU awards with respect to the 2021 and 2022 performance periods and various stock option awards. |
|
|
|
|
| Compensation Actually Paid vs. Total Shareholder Return |
The Pay versus Performance Table demonstrates the strong link between Compensation Actually Paid (CAP) and Company performance. The following table illustrates the value of our CEO and other NEOs’ CAP and the Company’s TSR. Compensation Actually Paid and Company TSR During the covered years, the CAP to the CEO and other NEOs moved in parallel to the Company’s TSR.
|
|
|
|
| Compensation Actually Paid vs. Net Income |
The following table illustrates the value of our CEO and other NEOs’ CAP and net income: Compensation Actually Paid and Net Income Our CEO and other NEOs’ annual CAP moved in the same direction as our net income during the covered years, except for 2023 primarily due to higher rationalization charges and a non-cash goodwill impairment charge. During the covered years, our long-term incentive plans included net income, adjusted to exclude certain items.
|
|
|
|
| Compensation Actually Paid vs. Company Selected Measure |
The following table illustrates the value of our CEO and other NEOs’ CAP and the Company’s EBIT (Company-Selected Measure): Compensation Actually Paid and EBIT Our CEO and other NEOs’ annual CAP moved in parallel to EBIT, except for 2022. Although the Company achieved higher EBIT in 2022 than in 2021, the results were below the target set by the Compensation Committee under our annual incentive plan, which included Cooper Tire for the first time.
|
|
|
|
| Total Shareholder Return Vs Peer Group |
The following table compares the Company’s TSR to the Peer Group TSR: Company TSR and Peer Group TSR On a cumulative basis the Company’s TSR is lower than the Dow Jones US Auto Parts Index during the 2020-2023 period. The Company’s TSR generally experienced the same directional changes as the Dow Jones US Auto Parts Index during 2020-2023, although it was more volatile.
|
|
|
|
| Tabular List, Table |
REQUIRED TABULAR DISCLOSURE OF MOST IMPORTANT MEASURES The six items listed below represent the most important metrics we used to determine executive compensation for 2023 as further described in our Compensation Discussion and Analysis within the sections titled “Annual Compensation” and “Long-Term Compensation.”
|
Most Important Performance Measures for Determining NEO Pay |
|
1. EBIT |
|
2. Cash (Free Cash Flow) |
|
3. Share |
|
4. Cost |
|
5. Adjusted Net Income |
|
6. Cash Flow Return on Capital | In 2023, our performance targets continued to emphasize Share, Cost, Cash and EBIT, reflecting the importance of our balance sheet and the generation of free cash flow and profitability. As the industry continues to recover from the impact of the COVID-19 pandemic and related macroeconomic impacts, we determined that EBIT is the most important measure to link compensation to our performance in 2023. In 2023, the Compensation Committee increased the weighting of EBIT from 15% to 20% in the annual incentive plan. The Compensation Committee also set rigorous structural cost improvement goals for the 2023-2025 awards in order to drive EBIT improvements over that 3-year period . |
|
|
|
| Total Shareholder Return Amount |
$ 93.18
|
66.05
|
138.73
|
70.99
|
| Peer Group Total Shareholder Return Amount |
104.54
|
104.59
|
142.18
|
117.51
|
| Net Income (Loss) |
$ (687,000,000)
|
$ 209,000,000
|
$ 780,000,000
|
$ (1,250,000,000)
|
| Company Selected Measure Amount |
965,000,000
|
1,188,000,000
|
988,000,000
|
(85,000,000)
|
| PEO Name |
Mr. Kramer
|
|
|
|
| Measure:: 1 |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Name |
EBIT
|
|
|
|
| Measure:: 2 |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Name |
Cash (Free Cash Flow)
|
|
|
|
| Measure:: 3 |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Name |
Share
|
|
|
|
| Measure:: 4 |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Name |
Cost
|
|
|
|
| Measure:: 5 |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Name |
Adjusted Net Income
|
|
|
|
| Measure:: 6 |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Name |
Cash Flow Return on Capital
|
|
|
|
| PEO | Change in Pension Value and Nonqualified Deferred Compensation Earnings [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
$ (1,666,533)
|
|
|
|
| PEO | Service Cost [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
551,386
|
|
|
|
| PEO | Prior Service Cost [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
|
|
|
| PEO | Stock Awards [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(4,915,483)
|
|
|
|
| PEO | Option Awards [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
|
|
|
| PEO | The Fair Value Of Awards Granted In The Covered Year That Remain Outstanding And Unvested As Of Covered Year End [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
5,167,080
|
|
|
|
| PEO | Change in Fair Value of Awards Granted Outstanding and Unvested [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
1,791,571
|
|
|
|
| PEO | The Fair Value of Awards Granted and Vested [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
410,784
|
|
|
|
| PEO | Change in Fair Value to Vesting Date of Awards Granted [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
723,534
|
|
|
|
| PEO | Fair Value of Awards Granted or Failed to Vest During the Covered Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
|
|
|
| PEO | Dividends on Unvested Awards Paid [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
|
|
|
| PEO | Incremental Fair Value of Awards Modified [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
|
|
|
| Non-PEO NEO | Change in Pension Value and Nonqualified Deferred Compensation Earnings [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(632,092)
|
|
|
|
| Non-PEO NEO | Service Cost [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
271,645
|
|
|
|
| Non-PEO NEO | Prior Service Cost [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
|
|
|
| Non-PEO NEO | Stock Awards [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(1,557,770)
|
|
|
|
| Non-PEO NEO | Option Awards [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
|
|
|
| Non-PEO NEO | The Fair Value Of Awards Granted In The Covered Year That Remain Outstanding And Unvested As Of Covered Year End [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
1,638,271
|
|
|
|
| Non-PEO NEO | Change in Fair Value of Awards Granted Outstanding and Unvested [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
413,134
|
|
|
|
| Non-PEO NEO | The Fair Value of Awards Granted and Vested [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
83,983
|
|
|
|
| Non-PEO NEO | Change in Fair Value to Vesting Date of Awards Granted [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
134,590
|
|
|
|
| Non-PEO NEO | Fair Value of Awards Granted or Failed to Vest During the Covered Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
|
|
|
| Non-PEO NEO | Dividends on Unvested Awards Paid [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
|
|
|
| Non-PEO NEO | Incremental Fair Value of Awards Modified [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
$ 0
|
|
|
|