| Filed by the Registrant ☒ | | |
Filed by a party other than the Registrant ☐
|
| | | |
| Attachments | | | | | 76 | | | |||
| | | Pre-Approval Policies and Procedures for Audit and Non-Audit Services | | | | | 76 | | | |
| | | Howmet Aerospace Inc. Peer Group Companies | | | | | 78 | | | |
| | | Calculation of Financial Measures | | | | | 79 | | |
|
Date and Time:
|
| | Tuesday, May 25, 2021, at 9:00 a.m. Eastern Time | |
|
Place:
|
| | Webcast: online at www.virtualshareholdermeeting.com/HWM2021. | |
|
Record Date:
|
| | March 29, 2021 | |
|
Voting:
|
| |
Howmet Aerospace shareholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote on all matters to be voted on. As of March 29, 2021, the record date for the Annual Meeting, there were 434,076,077 shares of common stock outstanding and expected to be entitled to vote at the 2021 Annual Meeting. There are no other securities of the Company outstanding and entitled to vote at the 2021 Annual Meeting.
|
|
|
Additional Information:
|
| |
Please see “Information regarding the Virtual Annual Meeting Format” on page 75 for further information.
|
|
|
|
| |
|
| |
|
|
|
By Internet
www.proxyvote.com |
| |
By Phone
1-800-690-6903 Toll-free from the U.S., U.S. Territories or Canada
|
| |
By Mail
Mark, Sign, Date and Return your proxy card |
|
|
Voting Matters
|
| | |
Unanimous Board
Recommendation |
| | |
Page Reference
(for more detail) |
| |||
|
Item 1.
Election of 11 Director Nominees to Serve for a One-Year Term Expiring in 2022
|
| | |
✓ FOR Each Nominee
|
| | | |
|
7
|
| |
|
Item 2.
Ratification of Appointment of PricewaterhouseCoopers LLP as the Company's Independent Registered Public Accounting Firm for 2021
|
| | |
✓ FOR
|
| | | |
|
38
|
| |
|
Item 3.
Advisory Vote to Approve Executive Compensation
|
| | |
✓ FOR
|
| | | |
|
41
|
| |
|
Item 4.
Shareholder Proposal regarding an Independent Board Chairman
|
| | |
✗ AGAINST
|
| | | |
|
67
|
| |
| | | | | | | | | | | | | | | | | |
|
(dollars in millions, except share and per share amounts)
|
| | |
2020
|
| | | | | | | | | |||
| Sales | | | | | $ | 5,259 | | | | | | | | |
|
|
| Operating income | | | | | $ | 626 | | | | | ||||||
| Operating income excluding special items* | | | | | $ | 809 | | | | | ||||||
| Income from continuing operations after income taxes | | | | | $ | 211 | | | | | ||||||
| Income from continuing operations excluding special items* | | | | | $ | 354 | | | | | ||||||
| Total assets | | | | | $ | 11,433 | | | | | ||||||
| Total liabilities | | | | | $ | 7,866 | | | | | ||||||
| Common stock outstanding (on December 31) | | | | | | 433 | | | | | ||||||
| Per common share data | | | | | | | | | | | ||||||
|
Diluted earnings per share (continuing operations)
|
| | | | $ | 0.48 | | | | | ||||||
|
Diluted earnings per share excluding special items*
|
| | | | $ | 0.80 | | | | |
|
Name
|
| | |
Age
|
| | |
Director
Since |
| | |
Professional Background
|
| | |
Independent
|
| | |
Committee
Memberships |
| | |
Other Current
Public Company Boards |
|
| James F. Albaugh | | | |
70
|
| | |
2017
|
| | | Former President and Chief Executive Officer of Commercial Airplanes, The Boeing Company | | | |
Yes
|
| | | Audit; Governance and Nominating | | | | American Airlines Group Inc. | |
| Amy E. Alving | | | |
58
|
| | |
2018
|
| | | Former Senior Vice President and Chief Technology Officer, Leidos Holdings, Inc. | | | |
Yes
|
| | | Governance and Nominating (Chair); Cybersecurity Advisory Subcommittee (Chair) | | | | DXC Technology Company; Federal National Mortgage Association (Fannie Mae) | |
| Sharon R. Barner | | | |
63
|
| | |
April
2021 |
| | | Vice President, Chief Administrative Officer and Corporate Secretary, Cummins Inc. | | | |
Yes
|
| | | Governance and Nominating | | | |
—
|
|
| Joseph S. Cantie | | | |
57
|
| | |
2020
|
| | | Former Executive Vice President and Chief Financial Officer of ZF TRW Automotive, ZF Friedrichshafen AG | | | |
Yes
|
| | | Audit; Compensation and Benefits; Finance | | | | Summit Materials Inc.; TopBuild Corporation | |
| Robert F. Leduc | | | |
65
|
| | |
2020
|
| | | Former President of Pratt & Whitney Former President of Sikorsky, United Technologies Corporation | | | |
Yes
|
| | | Compensation and Benefits (Chair) | | | | AAR Corporation; JetBlue Airways Corporation | |
| David J. Miller | | | |
42
|
| | |
2017
|
| | | Equity Partner, Senior Portfolio Manager and Head of U.S. Restructuring, Elliott Management Corporation | | | |
Yes
|
| | | Finance | | | |
—
|
|
| Jody G. Miller | | | |
63
|
| | |
2020
|
| | | Co-Chief Executive Officer, Business Talent Group; Former Venture Partner, Maveron | | | |
Yes
|
| | | Governance and Nominating | | | | LKQ Corporation | |
| Tolga I. Oal | | | |
49
|
| | |
2020
|
| | | Co-Chief Executive Officer, Howmet Aerospace Inc. | | | |
No
|
| | |
—
|
| | |
—
|
|
| Nicole W. Piasecki | | | |
58
|
| | |
2020
|
| | | Former Vice President and General Manager, Propulsion Systems Division, Commercial Airplanes, The Boeing Company | | | |
Yes
|
| | | Compensation and Benefits; Cybersecurity Advisory Subcommittee | | | | Weyerhaeuser Co. | |
| John C. Plant | | | |
67
|
| | |
2016
|
| | | Executive Chairman and Co-Chief Executive Officer, Howmet Aerospace Inc. | | | |
No
|
| | |
—
|
| | | Jabil Circuit Corporation; Masco Corporation | |
| Ulrich R. Schmidt | | | |
71
|
| | |
2016
|
| | | Former Executive Vice President and Chief Financial Officer, Spirit Aerosystems Holdings, Inc. | | | |
Yes
|
| | | Audit (Chair); Finance (Chair) | | | |
—
|
|
| Board Independence and Accountability | | ||||
| Board Independence | | | |
✓
9 of 11 director nominees are independent. Our Co-Chief Executive Officers, John C. Plant (who is also Executive Chairman) and Tolga I. Oal, are employee directors.
|
|
| Board Leadership | | | |
✓
Current Board leadership structure comprises an Executive Chairman of the Board, an independent Lead Director and independent chairs of each Board committee.
✓
The independent Lead Director has substantial responsibilities, including presiding at all meetings of the Board at which the Executive Chairman is not present, and presiding at executive sessions of the independent directors.
|
|
| Board Engagement | | | |
✓
Attendance:
•
All directors attended more than 75% of Board and their respective Committee meetings in 2020; in fact, director attendance in 2020 averaged 97.5%.
•
All directors are expected to attend the annual meeting of shareholders.
✓
Independent directors meet in executive session at every regular Board and Board committee meeting.
|
|
| Board Composition and Diversity | | | |
✓
Directors have a diversity of experience that spans a broad range of industries.
✓
Directors have a broad array of attributes and skills directly relevant to the Company and its businesses.
✓
4 of our 11 director nominees are female or racially/ethnically diverse.
✓
No director should stand for election if the director has reached age 75, unless the Board determines that such director's continued service is in the Company's interest.
See "Item 1 Election of Directors" for additional information.
|
|
| Board Committees | | | |
✓
Fully independent Audit, Compensation and Benefits, Finance, and Governance and Nominating Committees.
✓
Each committee has a written charter that is reviewed on an annual basis and available on our website.
|
|
| Board Accountability | | | |
✓
Annual elections of all directors.
✓
Majority voting standards for election of directors.
✓
Annual certification of compliance with the Business Conduct and Conflict of Interest Survey and related governance and ethics policies.
✓
Annual Say-on-Pay vote.
✓
Annual shareholder ratification of the Audit Committee's selection of our independent auditor.
✓
No supermajority voting provisions in the Company's Certificate of Incorporation or Bylaws.
|
|
| Responsiveness to Shareholders | | | |
✓
Following each annual meeting of shareholders, the appropriate committees of the Board consider the vote outcomes of the management and shareholder proposals and, depending on those vote outcomes, may recommend proposed courses of action.
|
|
| Proxy Access | | | |
✓
Shareholders may nominate director candidates to the Board and include those nominees in the Company's proxy statement in accordance with the Company's Bylaws.
|
|
| Shareholders Action | | | |
✓
Shareholders are permitted to call special meetings in accordance with the Company's Certificate of Incorporation and Bylaws.
✓
Shareholders may act by written consent in accordance with the Company's Certificate of Incorporation and Bylaws.
|
|
| Board Effectiveness | | ||||
| Board, Committee and Director Evaluations | | | |
✓
Annual Board and Committee self-evaluation process.
✓
Annual director performance evaluations.
✓
Ongoing assessment of corporate governance best practices appropriate for Howmet Aerospace.
|
|
| Overboarding Limits | | | |
✓
Directors are subject to overboarding limitations as a general rule:
•
A director who is chief executive officer of a public company should not serve on more than two boards of public companies in addition to the board of the company at which such director serves as chief executive officer.
•
Directors should not serve on more than four other public company boards in addition to the Howmet Aerospace Board.
•
An Audit Committee member should not serve on the audit committees of more than two other public companies.
|
|
| Shareholder Engagement | | | |
✓
Directors are committed to meaningful engagement with shareholders and welcome input and suggestions.
✓
Board members routinely meet with top shareholders for conversations focused on Board skills, diversity and its oversight on a variety of topics, including company strategy, growth, compensation, and environmental, social and governance (ESG) matters.
|
|
| Board Oversight of Risk and ESG Programs | | | |
✓
Our full Board is responsible for risk oversight and the Board committees oversee certain key risks relating to their areas.
✓
The Board and Board committees provide oversight of ESG risks and opportunities, including review of ESG strategies and challenges.
✓
The Company publishes an annual Environmental, Social and Governance Report, which can be found at www.howmet.com/esg-report/.
|
|
| Succession Planning | | | |
✓
The Board oversees and engages in Board and executive succession planning.
|
|
| Alignment with Shareholder Interests | | ||||
| Claw-back and Short Sales, Hedging, Margin Accounts and Pledging Policies | | | |
✓
Our annual cash incentive compensation plan and our stock incentive plans contain claw-back provisions, providing for Company reimbursement of incentive compensation from executive officers in certain circumstances.
✓
Short sales of Company securities and derivative or speculative transactions inCompany securities are prohibited.
✓
Purchase or use of financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to hedge or offset any decrease in the market value of Company securities, is prohibited.
✓
Directors and Section 16 officers are prohibited from holding Company securities in margin accounts or pledging Company securities as collateral.
|
|
| Stock Ownership | | | |
✓
Non-employee directors and executive officers are subject to robust stock ownership guidelines:
•
Non-employee directors must retain equity of at least $750,000 in value until retirement.
•
Executives are required to hold substantial equity in the Company until retirement, including that each Co-CEO must retain equity equal in value to six-times his base salary.
|
|
|
WHAT WE DO
|
| | |
WHAT WE DON'T DO
|
|
|
✓
Pay for Performance
✓
Robust Stock Ownership Guidelines
✓
Double-Trigger Change-in-Control Provisions
✓
Active Engagement with Investors
✓
Independent Compensation Consultant
✓
Conservative Risk Profile
✓
Claw-Back Policy
|
| | |
✗
No Guaranteed Bonuses
✗
No Parachute Tax Gross-Ups
✗
No Short Sales, Derivative Transactions or Hedging
✗
No Dividends on Unvested Equity Awards
✗
No Share Recycling or Option Repricing
✗
No Significant Perquisites
|
|
|
|
| |
|
| |
|
|
|
Name
|
| | |
Albaugh
|
| | |
Alving
|
| | |
Barner
|
| | |
Cantie
|
| | |
Leduc
|
| | |
D. Miller
|
| | |
J. Miller
|
| | |
Oal
|
| | |
Piasecki
|
| | |
Plant
|
| | |
Schmidt
|
| |||||||||||||||||||||||||||||||||
|
Age
|
| | |
70
|
| | |
58
|
| | |
63
|
| | |
57
|
| | |
65
|
| | |
42
|
| | |
63
|
| | |
49
|
| | |
58
|
| | |
67
|
| | |
71
|
| |||||||||||||||||||||||||||||||||
|
Year of
Joining Board |
| | | | | 2017 | | | | | | | 2018 | | | | | | |
April 2021 |
| | | | | | 2020 | | | | | | | 2020 | | | | | | | 2017 | | | | | | | 2020 | | | | | | | 2020 | | | | | | | 2020 | | | | | | | 2016 | | | | | | | 2016 | | |
| Experience | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Finance
|
| | | | | ✓ | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | |
|
Industry
|
| | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | | | | | | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| |
|
International
|
| | | |
|
✓
|
| | | | | | | | | | | |
|
✓
|
| | | | | | | | | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| |
|
Leadership
|
| | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| |
|
Public
Company Board |
| | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | | | | | | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| |
|
Risk
Management |
| | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | |
|
Technology
|
| | | |
|
✓
|
| | | | |
|
✓
|
| | | | | | | | | | | | | | | | | | |
|
✓
|
| | | | | | | | | | | |
|
✓
|
| | | | |
|
✓
|
| | | | |
|
✓
|
| | | | | | | | | | | | | | | |
|
|
| |
James F. Albaugh
|
|
|
Lead Director since: April 2020
Director since: 2017
Age: 70
Committees: Audit Committee; Governance and Nominating Committee
Other Current Public Directorships: American Airlines Group Inc.
|
|
|
|
| |
Amy E. Alving
|
|
|
Director since: 2018
Age: 58
Committees: Governance and Nominating Committee (Chair); Cybersecurity Advisory Subcommittee (Chair)
Other Current Public Directorships: DXC Technology Company; Federal National Mortgage Association (Fannie Mae)
|
|
|
|
| |
Sharon R. Barner
|
|
|
Director since: April 2021
Age: 63
Committees: Governance and Nominating Committee
|
|
|
|
| |
Joseph S. Cantie
|
|
|
Director since: 2020
Age: 57
Committees: Audit Committee; Compensation and Benefits Committee; Finance Committee
Other Current Public Directorships: Summit Materials, Inc.; TopBuild Corporation
|
|
|
|
| |
Robert F. Leduc
|
|
|
Director since: 2020
Age: 65
Committees: Compensation and Benefits Committee (Chair)
Other Current Public Directorships: AAR Corporation; JetBlue Airways Corporation
|
|
|
|
| |
David J. Miller
|
|
|
Director since: 2017
Age: 42
Committees: Finance Committee
|
|
|
|
| |
Jody G. Miller
|
|
|
Director since: 2020
Age: 63
Committees: Governance and Nominating Committee
Other Current Public Directorships: LKQ Corporation
|
|
|
|
| |
Tolga I. Oal
|
|
|
Director since: 2020
Age: 49
|
|
|
|
| |
Nicole W. Piasecki
|
|
|
Director since: 2020
Age: 58
Committees: Compensation and Benefits Committee; Cybersecurity Advisory Subcommittee
Other Current Public Directorships: Weyerhaeuser Co.
|
|
|
|
| |
John C. Plant
|
|
|
Chair of the Board since: 2017
Director since: 2016
Age: 67
Other Current Public Directorships: Jabil Circuit Corporation; Masco Corporation
|
|
|
|
| |
Ulrich R. Schmidt
|
|
|
Director since: 2016
Age: 71
Committees: Audit Committee (Chair);
Finance Committee (Chair) |
|
|
Compensation Element
|
| | |
January 1, 2020
−March 31, 2020 |
| | |
April 1, 2020
−Present1 |
|
| Annual Cash Retainer | | | |
$120,000
|
| | |
$120,000
|
|
| Annual Equity Award (Deferred Restricted Share Units Granted Following Each Annual Meeting of Shareholders) | | | |
$150,000
|
| | |
$150,000
|
|
| Other Annual Fees2: | | | | | | | | | |
|
•
Lead Director Fee
|
| | |
$40,000
|
| | |
$30,0003
|
|
|
•
Audit Committee Chair Fee (includes Audit Committee Member Fee)
|
| | |
$27,500
|
| | |
$20,0003
|
|
|
•
Audit Committee Member Fee
|
| | |
$11,000
|
| | |
N/A
|
|
|
•
Compensation and Benefits Committee Chair Fee
|
| | |
$20,000
|
| | |
$15,0003
|
|
|
•
Other Committee Chair Fee
|
| | |
$16,500
|
| | |
$15,0003
|
|
| Per Meeting Fee for Meetings in Excess of Regularly Scheduled Meetings | | | |
$1,5004
|
| | |
$1,2005
|
|
|
Ownership Requirements and Annual Compensation Limits
|
| | | | |
| Stock Ownership Requirement | | | |
$750,000
|
|
| Timeline to Achieve Stock Ownership | | | |
6 years
|
|
| Total Annual Director Compensation Limit | | | |
$750,000
|
|
|
Directors
|
| | |
Director
Since |
| | |
Value of Holdings in Howmet
Aerospace Stock, Deferred Share Units and Deferred Restricted Share Units |
| |||
| James F. Albaugh | | | |
2017
|
| | | | $ | 1,413,028 | | |
| Amy E. Alving | | | |
2018
|
| | | | $ | 1,360,751 | | |
| Sharon R. Barner | | | |
April 2021
|
| | | | $ | 31,650 | | |
| Joseph S. Cantie | | | |
2020
|
| | | | $ | 553,421 | | |
| Robert F. Leduc | | | |
2020
|
| | | | $ | 404,100 | | |
| David J. Miller | | | |
2017
|
| | | | $ | 1,215,877 | | |
| Jody G. Miller | | | |
2020
|
| | | | $ | 370,194 | | |
| Tolga I. Oal | | | |
2020
|
| | | | $ | 3,097,3891 | | |
| Nicole W. Piasecki | | | |
2020
|
| | | | $ | 370,194 | | |
| John C. Plant | | | |
2016
|
| | | | $ | 49,479,4012 | | |
| Ulrich R. Schmidt | | | |
2016
|
| | | | $ | 1,520,321 | | |
| Name1 (a) |
| | |
Fees Earned or Paid
in Cash ($)(b)2 |
| | |
Stock
Awards ($)(c)3 |
| | |
All Other
Compensation ($)(g) |
| | |
Total
($)(h) |
| ||||||||||||
| James F. Albaugh | | | | | $ | 158,000 | | | | | | $ | 149,998 | | | | | | | — | | | | | | $ | 307,998 | | |
| Amy E. Alving | | | | | $ | 141,750 | | | | | | $ | 149,998 | | | | | | | — | | | | | | $ | 291,748 | | |
| Christopher L. Ayers4 | | | | | $ | 40,250 | | | | | | | — | | | | | | | — | | | | | | $ | 40,250 | | |
| Joseph S. Cantie5 | | | | | $ | 90,000 | | | | | | $ | 167,669 | | | | | | | — | | | | | | $ | 257,669 | | |
| Elmer L. Doty4 | | | | | $ | 37,500 | | | | | | | — | | | | | | | — | | | | | | $ | 37,500 | | |
| Rajiv L. Gupta6 | | | | | $ | 73,625 | | | | | | | — | | | | | | | — | | | | | | $ | 73,625 | | |
| Robert F. Leduc5 | | | | | $ | 101,250 | | | | | | $ | 167,669 | | | | | | | — | | | | | | $ | 268,919 | | |
| Sean O. Mahoney6 | | | | | $ | 70,875 | | | | | | | — | | | | | | | — | | | | | | $ | 70,875 | | |
| David J. Miller | | | | | $ | 129,000 | | | | | | $ | 149,998 | | | | | | | — | | | | | | $ | 278,998 | | |
| Jody G. Miller5 | | | | | $ | 90,000 | | | | | | $ | 167,669 | | | | | | | — | | | | | | $ | 257,669 | | |
| E. Stanley O'Neal4 | | | | | $ | 38,750 | | | | | | | — | | | | | | | — | | | | | | $ | 38,750 | | |
| Nicole W. Piasecki5 | | | | | $ | 90,000 | | | | | | $ | 167,669 | | | | | | | — | | | | | | $ | 257,669 | | |
| Ulrich R. Schmidt | | | | | $ | 150,875 | | | | | | $ | 149,998 | | | | | | | — | | | | | | $ | 300,873 | | |
|
Our independent
Lead Director has substantial responsibilities. |
| |
Our Lead Director:
•
Serves as a liaison between the Chairman and the independent directors;
•
Presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors;
•
Responds directly to shareholder and other stakeholder questions and comments that are directed to the Lead Director or to the independent directors as a group, with such consultation with the Chairman or other directors as the Lead Director may deem appropriate, and if requested, ensuring that he or she is available for consultation and direct communication with major shareholders, as appropriate;
•
Approves meeting agendas and schedules to assure that there is sufficient time for discussion of all agenda items;
•
Ensures personal availability for consultation and communication with independent directors and with the Chairman, as appropriate;
•
Calls executive sessions of the Board; and
•
Calls meetings of the independent directors, as the Lead Director may deem to be appropriate.
|
|
|
Shareholders' interests are protected by effective and independent oversight of management:
•
Independence. 9 of our 11 directors are independent as defined by the listing standards of the New York Stock Exchange ("NYSE") and the Company's Director Independence Standards.
•
Committees. Each of the Board's key standing committees—the Audit Committee, the Compensation and Benefits Committee, the Finance Committee and the Governance and Nominating Committee—is composed solely of independent directors.
•
Executive Sessions. Our independent directors meet at every regular Board Meeting in executive session without management present. These meetings are led by the independent Lead Director. Committee meeting also include an executive session at which Committee members meet without management in attendance.
|
| |
The Company's
corporate governance practices and policies are designed to protect shareholders' long-term interests. |
|
|
The following chart shows the tenure of the directors on our Board following the 2021 Annual Meeting of Shareholders, assuming that all of the director nominees are elected to new terms. The board tenure provides a mix of fresh perspectives and Company experience, which contributes to a rich dialogue representing a range of viewpoints.
|
| |
|
|
| Our policy on Board retirement age, as outlined in our Corporate Governance Guidelines, is that no director should stand for election or re-election to the Board if the director has reached age 75 before the date of election or will reach age 75 during the term for the which the director is being considered for nomination, unless the Board determines that such director's continued service is in the Company's interest. | | |
| | | | |
Audit
|
| | |
Cybersecurity
Advisory Committee of the Audit Committee |
| | |
Compensation
and Benefits |
| | |
Finance
|
| | |
Governance
and Nominating |
|
| James F. Albaugh* | | | |
X
|
| | | | | | | | | | | | | | |
X
|
|
| Amy E. Alving* | | | | | | | |
Chair
|
| | | | | | | | | | |
Chair
|
|
| Sharon R. Barner* | | | | | | | | | | | | | | | | | | | |
X
|
|
| Joseph S. Cantie* | | | |
X
|
| | | | | | |
X
|
| | |
X
|
| | | | |
| Robert F. Leduc* | | | | | | | | | | | |
Chair
|
| | | | | | | | |
| David J. Miller* | | | | | | | | | | | | | | | |
X
|
| | | | |
| Jody G. Miller* | | | | | | | | | | | | | | | | | | | |
X
|
|
| Tolga I. Oal | | | | | | | | | | | | | | | | | | | | | |
| Nicole W. Piasecki* | | | | | | | |
X
|
| | |
X
|
| | | | | | | | |
| John C. Plant | | | | | | | | | | | | | | | | | | | | | |
| Ulrich R. Schmidt* | | | |
Chair
|
| | | | | | | | | | |
Chair
|
| | | | |
|
2020 Committee Meetings1
|
| | |
10
|
| | |
4
|
| | |
11
|
| | |
4
|
| | |
4
|
|
| |
COMMITTEE
|
| |
RESPONSIBILITIES
|
| |
| |
Audit Committee
|
| |
•
Oversees the integrity of the financial statements and internal controls, including review of the scope and the results of the audits of the internal and independent auditors
•
Appoints the independent auditors and evaluates their independence and performance
•
Reviews the organization, performance and adequacy of the internal audit function
•
Pre-approves all audit, audit-related, tax and other services to be provided by the independent auditors
•
Oversees the Company's compliance with legal, ethical and regulatory requirements
•
Discusses with management and the auditors the policies with respect to risk assessment and risk management, including major financial risk exposures
|
| |
| | Each member of the Audit Committee is financially literate, and the Board of Directors has determined that each of Joseph S. Cantie and Ulrich R. Schmidt qualifies as an "audit committee financial expert" under applicable SEC rules. | | | |||
| |
Cybersecurity
Advisory Subcommittee |
| |
•
Assists the Audit Committee and Board in regularly reviewing the state of the Company's cybersecurity
•
Regularly brings cybersecurity developments or issues to the attention of the Board and/or the Audit Committee
|
| |
| |
Compensation and Benefits Committee
|
| |
•
Establishes the Co-Chief Executive Officers' compensation for Board ratification, based upon an evaluation of performance in light of approved goals and objectives
•
Reviews and approves the compensation of the Company's officers
•
Oversees the implementation and administration of the Company's compensation and benefits plans, including pension, savings, incentive compensation and equity-based plans
•
Reviews and approves general compensation and benefit policies
•
Approves the Compensation Discussion and Analysis for inclusion in the proxy statement
•
Has the sole authority to retain and terminate a compensation consultant, as well as to approve the consultant's fees and other terms of engagement (see "Corporate Governance—Compensation Consultants" regarding the committee's engagement of a compensation consultant)
|
| |
| |
The Compensation and Benefits Committee may form and delegate its authority to subcommittees, including subcommittees of management when appropriate. Executive officers do not determine the amount or form of executive or director compensation although the Co-Chief Executive Officers provide recommendations to the Compensation and Benefits Committee regarding compensation changes and incentive compensation for executive officers other than themselves. For more information on the responsibilities and activities of the committee, including its processes for determining executive compensation, see the "Compensation Discussion and Analysis" section.
|
| | |||
| |
Finance Committee
|
| |
Reviews and provides advice and counsel to the Board regarding the Company's:
•
capital structure;
•
financing transactions;
•
capital expenditures and capital plan;
•
acquisitions and divestitures;
•
share repurchase and dividend programs;
•
policies relating to interest rate, commodity and currency hedging; and
•
pension plan performance and funding.
|
| |
| |
Governance and Nominating Committee
|
| |
•
Identifies individuals qualified to become Board members and recommends them to the full Board for consideration, including evaluating all potential candidates, whether initially recommended by management, other Board members or shareholders
•
Reviews and makes recommendations to the Board regarding the appropriate structure and operations of the Board and Board committees
•
Makes recommendations to the Board regarding Board committee assignments
•
Develops and annually reviews corporate governance guidelines of the Company, and oversees other corporate governance matters
•
Reviews related person transactions
•
Oversees an annual performance review of the Board, Board committees and individual directors
•
Periodically reviews and makes recommendations to the Board regarding director compensation
|
| |
|
In the Company's Corporate Governance Guidelines, the Board recognizes that independence depends not only on directors' individual relationships, but also on the directors' overall attitude. Providing objective, independent judgment is at the core of the Board's oversight function. Under the Company's Director Independence Standards, which conform to the corporate governance listing standards of the New York Stock Exchange, a director is not considered "independent" unless the Board affirmatively determines that the director has no material relationship with the Company or any subsidiary in the consolidated group. The Director Independence Standards comprise a list of all categories of material relationships affecting the determination of a director's independence. Any relationship that falls below a threshold set forth in the Director Independence Standards, or is not otherwise listed in the Director Independence Standards, and is not required to be disclosed under Item 404(a) of SEC Regulation S-K, is deemed to be an immaterial relationship.
|
| |
|
|
|
Name and Address of Beneficial Owner
|
| | |
Title of Class
|
| | |
Amount and Nature
Of Beneficial Ownership (#) |
| | |
Percent
of Class1 |
| |||
| Elliott Investment Management L.P. 40 West 57th Street New York, NY 10019 |
| | |
Common Stock
|
| | | | | 41,565,6582 | | | | |
9.6%
|
|
| The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 |
| | |
Common Stock
|
| | | | | 40,233,4233 | | | | |
9.3%
|
|
| BlackRock, Inc. 55 East 52nd Street New York, NY 10055 |
| | |
Common Stock
|
| | | | | 36,133,5854 | | | | |
8.3%
|
|
| Orbis Investment Management Limited Orbis House 25 Front Street Hamilton, Bermuda HM11 Orbis Investment Management (U.S.), L.P. 600 Montgomery Street, Suite 3800 San Francisco, CA 94111 Allan Gray Australia Pty Ltd Level 2, Challis House 4 Martin Place Sydney, NSW2000 Australia |
| | |
Common Stock
|
| | | | | 28,205,2545 | | | | |
6.5%
|
|
|
Name of Beneficial Owner
|
| | |
Shares of
Common Stock1 |
| | |
Deferred
Share Units2 |
| | |
Deferred
Restricted Share Units3 |
| | |
Total
|
| ||||||||||||
| Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
James F. Albaugh
|
| | | | | 10,000 | | | | | | | — | | | | | | | 33,842 | | | | | | | 43,842 | | |
|
Amy E. Alving
|
| | | | | 3,347 | | | | | | | — | | | | | | | 38,873 | | | | | | | 42,220 | | |
|
Sharon R. Barner
|
| | | | | — | | | | | | | — | | | | | | | 982 | | | | | | | 982 | | |
|
Joseph S. Cantie
|
| | | | | 40 | | | | | | | — | | | | | | | 17,131 | | | | | | | 17,171 | | |
|
Robert F. Leduc
|
| | | | | — | | | | | | | — | | | | | | | 12,538 | | | | | | | 12,538 | | |
|
David J. Miller
|
| | | | | — | | | | | | | — | | | | | | | 37,725 | | | | | | | 37,725 | | |
|
Jody G. Miller
|
| | | | | — | | | | | | | — | | | | | | | 11,486 | | | | | | | 11,486 | | |
|
Nicole W. Piasecki
|
| | | | | — | | | | | | | — | | | | | | | 11,486 | | | | | | | 11,486 | | |
|
Ulrich R. Schmidt
|
| | | | | 5,333 | | | | | | | 4,210 | | | | | | | 37,628 | | | | | | | 47,171 | | |
| Named Executive Officers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
John C. Plant*
|
| | | | | 1,496,3564 | | | | | | | 4,435 | | | | | | | 34,406 | | | | | | | 1,535,197 | | |
|
Tolga I. Oal*
|
| | | | | 87,159 | | | | | | | 8,944 | | | | | | | — | | | | | | | 96,103 | | |
|
Kenneth J. Giacobbe
|
| | | | | 195,820 | | | | | | | — | | | | | | | — | | | | | | | 195,820 | | |
|
Neil E. Marchuk
|
| | | | | 75,829 | | | | | | | — | | | | | | | — | | | | | | | 75,829 | | |
|
Paul Myron
|
| | | | | 140,383 | | | | | | | | | | | | | | | | | | | | | 140,383 | | |
|
Katherine H. Ramundo5
|
| | | | | 25,570 | | | | | | | — | | | | | | | — | | | | | | | 25,570 | | |
| All Directors and Executive Officers as a Group (14 individuals) | | | | | | 2,014,267 | | | | | | | 17,589 | | | | | | | 236,097 | | | | | | | 2,267,953 | | |
|
Fees for Services Provided1
|
| | |
2020
|
| | |
2019
|
| ||||||
| Audit Fees | | | | | $ | 7.5 | | | | | | $ | 9.8 | | |
| Audit-Related Fees | | | | | $ | 0.3 | | | | | | $ | 6.7 | | |
| Tax Fees | | | | | $ | 0.1 | | | | | | $ | 0.0 | | |
| All Other Fees | | | | | $ | 0.0 | | | | | | $ | 0.0 | | |
| John C. Plant | | | Chairman and Co-Chief Executive Officer | |
| Tolga I. Oal | | | Co-Chief Executive Officer | |
| Kenneth J. Giacobbe | | | Executive Vice President and Chief Financial Officer | |
| Katherine H. Ramundo | | | Executive Vice President, Chief Legal Officer and Secretary | |
| Neil E. Marchuk | | | Executive Vice President and Chief Human Resources Officer | |
| Paul Myron | | | Vice President and Controller | |
|
Shareholder Concern
|
| | |
Compensation Committee Response
|
|
|
•
Although investors acknowledge the alignment of Mr. Plant's 2019 compensation with shareholder returns, there was a concern regarding the size of his 2019 pay relative to the length of his agreement.
|
| | |
•
Mr. Plant's 2019 compensation was the result of a significant negotiation to encourage him out of retirement. He was the ideal Chief Executive Office to lead Arconic Inc. out of a difficult period and unlock shareholder value.
•
Ensure that Mr. Plant's post-Separation compensation package is aligned with the length of the agreement and appropriate for a seasoned Chief Executive Officer of his caliber relative to market data (see discussion beginning on page 46)
•
Recognized that Mr. Plant was the architect of the revised Company strategy to separate into two focused companies and had the unique skills and experiences to execute the strategy.
|
|
|
•
The use of only time-vested equity awards in 2019 for NEOs other than Mr. Plant
|
| | |
•
Given the Separation on April 1, 2020 and the challenge of measuring performance in the pre-Separation to post-Separation period, the Compensation Committee decided to only grant time-vested restricted share units to the NEOs other than Mr. Plant in 2019.
•
For 2020, equity grants to our NEOs, other than Mr. Plant, are 40% time-vested RSUs and 60% performance-based RSUs. See page 54 for a complete discussion of 2020 equity awards.
|
|
|
•
Retaining Mr. Plant post Separation. In late 2019/early 2020, while the Board was conducting a search for a Chief Executive Officer to succeed Mr. Plant, the Board received formal communication from several shareholders regarding their strong desire to retain Mr. Plant post-Separation. Additional shareholders also voiced similar concerns through regular shareholder outreach efforts.
|
| | |
•
For a full discussion of the Chief Executive Officer search process, the decision to reach a new 3-year agreement with Mr. Plant, and the decision to create a formal succession plan by implementing a Co-CEO structure, see “Co-CEO Structure and Related Compensation Decisions” below.
|
|
|
•
Restructuring Mr. Plant's agreement and the Company's other compensation structures to reflect the impact of COVID-19. Post-Separation, the Board received formal communications from several shareholders regarding their desire to rework Mr. Plant's compensation to ensure his continuation at the Company.
|
| | |
•
For a full discussion of the changes made to the Company's 2020 compensation structure, including the changes made to Mr. Plant's agreement, see "Impact of COVID-19 on 2020 Compensation Structure and Decisions" on page 46. Also included is a discussion of the largely positive shareholder feedback that the Company received after the change was made to Mr. Plant's agreement.
|
|
|
Equity Award
|
| | |
February 2020
Agreement |
| | |
Anticipated
Grant Value |
| | |
Actual Fair
Market Value at Grant |
| | |
June 2020
Revised Agreement |
| | |
Actual Fair
Market Value at Grant |
| |||||||||||||||
|
RSUs
|
| | | | | 1,000,000 | | | | | | $ | 24.0M | | | | | | $ | 12.5M | | | | | | | 1,485,000(2) | | | | | | $ | 20.4M | | |
|
PRSUs (1)
|
| | | | | 1,800,000 | | | | | | $ | 17.5M | | | | | | $ | 4.6M | | | | | | | 2,100,000 | | | | | | $ | 16.9M | | |
|
Totals:
|
| | | | | 2,800,000 | | | | | | $ | 41.5M | | | | | | $ | 17.1M | | | | | | | 3,585,000 | | | | | | $ | 37.3M | | |
|
Shareholder Question
|
| | |
Director Response
|
|
| Why restructure the agreement in June versus waiting until later in the year? | | | |
Shareholders were asking the Board to ensure Mr. Plant would not leave due to the impact of COVID-19 causing his targets to be so far out of reach, and to re-establish a similar opportunity for him over the three-year agreement. Furthermore, the share price targets reset each year based on the higher of the previously achieved hurdles and the average closing price at the end of each performance period.
|
|
| How did the Company set the stock price performance hurdles? | | | |
The Board believed the aviation industry was significantly impacted and would be one of the last market segments to shed COVID-19 effects, with recovery taking two to four years. The stock price hurdles set would require significant value creation through operational improvements and long-term customer agreements.
|
|
| Would Mr. Plant be eligible for future equity awards? | | | |
No, this award covers three years and even if performance hurdles are met, Mr. Plant needs to remain at the Company for three years for the awards to vest.
|
|
|
Design Element
|
| | |
Original Construct
|
| | |
Revised Construct
|
|
|
Financial Measures
|
| | |
•
Controllable Free Cash Flow—50% weight
•
Adjusted Operating Income—50% weight
|
| | |
•
Financial Metrics—60% weight
◦
Second quarter to fourth quarter Adjusted Free Cash Flow
◦
Fourth quarter EBITDA Margin
•
Discretion*—40%
|
|
|
Targets and Payout Curves
|
| | |
•
Targets set based on full-year forecast
•
Payout curve ranges from 0% to 200% payout
|
| | |
•
Align targets with external guidance
•
No payout curve—maximum payout of 100%
|
|
|
Design Element
|
| | |
Original Construct
|
| | |
Revised Construct
|
|
|
Financial Metrics and Measurement Period
|
| | |
•
EBITDA Margin—50% weight
•
Revenue—25% weight
•
Pre-tax RONA—25% weight
•
Measured against 3-year average targets
|
| | |
•
EBITDA Margin—100% weight
•
Three one-year performance periods with target set at the beginning of each year
|
|
|
Relative TSR Multiplier
|
| | |
•
Up to +/- 10%
•
Measured over 3 years
•
Total result cannot exceed 200%
•
Relative TSR measured against same Proxy Peer Group used for CEO compensation benchmarking
|
| | |
•
Up to +/- 50%
•
Measured over 33 months (Separation through December 31, 2022)
•
Total result cannot exceed 200%
•
Relative TSR measured against peer set of 19 Aerospace and Defense companies likely to be facing similar COVID-19 related challenges
|
|
|
WHAT WE DO
|
| | |
WHAT WE DON’T DO
|
|
|
✓
Pay for Performance—We link compensation to measured performance in key areas. The Company’s strategic priorities are reflected in its metrics at the corporate, group and individual levels.
✓
Robust Stock Ownership Guidelines—Officers and directors are subject to stock ownership guidelines to align their interests with shareholder interests.
✓
Double-Trigger Change-in-Control Provisions—Equity awards for NEOs generally require a “double-trigger” of both a change-in-control and termination of employment for vesting acceleration benefits to apply.
✓
Active Engagement with Investors—We engage with investors throughout the year to obtain insights that guide our executive compensation programs.
✓
Independent Compensation Consultant—The Compensation Committee retains a compensation consultant, who is independent and without conflicts of interest with the Company.
✓
Conservative Risk Profile—We generally apply varied performance measures in incentive programs to mitigate risk that executives will be motivated to pursue results with respect to any one performance measure to the detriment of Howmet Aerospace as a whole.
✓
Claw-Back Policy—Both our annual cash incentive compensation plan and our stock incentive plan contain “claw-back” provisions providing for reimbursement of incentive compensation from NEOs in certain circumstances.
|
| | |
✗
No Guaranteed Bonuses—Our annual incentive compensation plan is performance-based and does not include any minimum payment levels.
✗
No Parachute Tax Gross-Ups—Our Change in Control Severance Plan provides that no excise or other tax gross-ups will be paid.
✗
No Short Sales, Derivative Transactions or Hedging—We do not allow short sales or derivative or speculative transactions in, or hedging of, Company securities by our directors, officers or employees. Directors and certain officers are also prohibited from pledging Company securities as collateral.
✗
No Dividends on Unvested Equity Awards—We do not pay dividends on unvested equity awards but accrue dividend equivalents that only vest when and if the award vests.
✗
No Share Recycling or Option Repricing—Our equity plans prohibit share recycling, the adding back of shares tendered in payment of the exercise price of a stock option award or withheld to pay taxes and repricing underwater stock options.
✗
No Significant Perquisites—We limit the perquisites we pay to our NEOs to those that serve reasonable business purposes.
|
|
|
Compensation Element
|
| | |
Guiding Principle
|
| | |
Design/Structure
|
|
|
Base Salary
|
| | | Target the market median | | | | Target the market median | |
|
Annual Incentive
Compensation |
| | |
•
Choose annual IC weighted metrics that focus management's actions on achieving the greatest positive impact on the Company's financial performance
•
Set annual IC targets that challenge management to achieve continuous improvement in performance as part of an overall strategy to deliver long-term growth
•
Take into account individual performance that may include non-financial goals contributing to the success of the Company
|
| | |
•
NEO annual incentives are paid in cash and determined through a two-step performance measurement process:
(1)
Performance against financial goals is used to determine the payout level and fund the incentive pool
(2)
Individual NEO performance is assessed and an individual multiplier is applied to the funded payout results, thus allocating the incentive pool across the eligible population
|
|
|
Long-Term Incentive Compensation
|
| | |
•
Make LTI equity the most significant portion of total compensation for senior executives and managers
•
Set equity target grant levels in line with industry peers that are competitive to attract, retain and motivate executives and factor in individual performance and future potential for long-term retention
|
| | |
•
NEO long-term incentives are granted as 40% time-vested RSUs and 60% PRSUs
•
Financial metrics used are aligned with driving long-term stock price performance and are typically measured over three years, except as discussed above
•
A relative TSR multiplier is used to further reinforce shareholder alignment
|
|
|
Financial Metrics
|
| | |
Weight
|
| | |
Min (0%)
|
| | | Target (100%) |
| | | Max (200%) |
| | |
Result
|
| | |
Payout
|
| | | Weighted Payout |
|
|
Q2 – Q4 Adjusted
Free Cash Flow |
| | | 30% | | | | <$350M | | | | $350M−$400M | | | | N/A | | | | $487M | | | | 100% | | | | 30% | |
|
Q4 EBITDA Margin
|
| | | 30% | | | | <19% | | | | 19%−21% | | | | N/A | | | | 22.8% | | | | 100% | | | | 30% | |
|
Compensation Committee Discretion
|
| | |
Up to 40%
|
| | | | | | | | | | | | | | | | | | | | | | |
+30%
|
|
| | | | |
Total Payout:
|
| | |
90%
|
|
|
Financial Metric
|
| | |
Weight
|
| | |
Min (0%)
|
| | |
Target (100%)
|
| | | Max (200%) |
| | |
Result
|
| | |
Payout %
|
|
|
2020 EBITDA Margin
|
| | | 100% | | | | <18% | | | | 20% | | | | 22% | | | | 20.8% | | | | 140% | |
| | Percentile Rank vs. Peer Group |
| | |
Multiplier
|
| | |
Definitions
|
| |
| |
0 – 20th
|
| | |
50%
|
| | |
• TSR measured over 33 months with:
o Starting period = average closing price in April 2020 (post-Separation)
o Ending period = average trading price in December 2022
• TSR result multiplied by payout for financial metrics capped at 200%
|
| |
| |
21st – 40th
|
| | | 75% | | | ||||
| |
41st – 60th
|
| | | 100% | | | ||||
| |
61st – 80th
|
| | | 125% | | | ||||
| |
81st – 100th
|
| | | 150% | | |
|
Compensation Element
|
| | |
February 2020 Agreement
|
| | |
June 2020 Agreement
|
|
|
Base Salary
|
| | | $1,600,000 / year | | | | No change | |
|
Annual Cash Incentive
|
| | | None | | | | No change | |
|
Time-Vested RSUs
|
| | | 1,000,000 shares vesting 1/3 each year over three years | | | | Additional 485,000 share vesting 1/3 on 6/9/2021, 1/3 on 3/31/2022, and 1/3 on 3/31/2023 | |
|
PRSUs
|
| | | 1,800,000 | | | | Increased to 2,100,000 | |
|
Number of PRSU Tranches and Performance Hurdles
|
| | |
•
Three Tranches of 600,000 shares each
•
6 hurdles for each Tranche set at +10% to +35% over the baseline price for each year
|
| | |
•
Tranche 1 is 600,000 shares
•
4 hurdles for Tranche 1 set at +5% to +20% over the initial baseline price
•
Tranches 2 and 3 are 750,000 shares each
•
6 hurdles set for each of Tranche 2 and Tranche 3 set at +5% to +30% over the baseline price for each year
|
|
|
Baseline Prices to Set Performance Hurdles
|
| | |
Year 1—Price on grant date, but no less than $22 or greater than $24 (actual price was $12.50, so set to $22)
Years 2 and 3—Greater of the maximum hurdle achieved in the previous year and the average over last five trading days of the period
|
| | |
Year 1—Price on the date of the amendment ($16.22)
Years 2 and 3—Greater of the maximum hurdle achieved in the previous year and the average over last five trading days of the period
|
|
|
Performance Periods
|
| | |
•
Performance Period 1 runs from 4/1/2020 through 3/31/2021
•
Performance Period 2 runs from 4/1/2021 through 3/31/2022
•
Performance Period 3 runs from 4/1/2022 through 3/31/2023
|
| | |
•
Performance period 1 runs from 6/9/2020 through 3/31/2021
•
No change to Performance Periods 2 and 3
|
|
|
Price Needed to Obtain Hurdle
|
| | | Average price over five consecutive trading days | | | | No change | |
|
Pull-Forward Feature
|
| | |
•
The performance hurdles for Tranche #2 can be obtained in Performance Period 1 using the final hurdle of Tranche #1 as the baseline price
•
The performance hurdles for Tranche #3 can be obtained in Performance Period 2 using the final hurdle of Tranche #2 as the baseline price
|
| | | No change | |
|
Vesting
|
| | | Any earned shares vest 3 years from the start of the agreement (3/31/2023) | | | | No change | |
|
Stock Price Hurdles
for Tranche 1 (Baseline Price of $16.22) |
| | |
# of Shares Earned
(Tranche 1—Cumulative) |
| | |
Pull-Forward Hurdles for
Tranche 2 into Performance Period 1 (Baseline Price of $19.46) |
| | |
# of Shares Earned
(Tranche 2—Cumulative) |
|
|
+5% = $17.03
|
| | |
150,000
|
| | |
+5% = $20.43
|
| | |
125,000
|
|
|
+10% = $17.84
|
| | |
300,000
|
| | |
+10% = $21.41
|
| | |
250,000
|
|
|
+15% = $18.65
|
| | |
450,000
|
| | |
+15% = $22.38
|
| | |
375,000
|
|
|
+20% = $19.46
|
| | |
600,000
|
| | |
+20% = $23.35
|
| | |
500,000
|
|
| | | | | | | | |
+25% = $24.33
|
| | |
625,000
|
|
| | | | | | | | |
+30% = $25.30
|
| | |
750,000
|
|
|
Stock Price Hurdles
for Tranche 3 (Baseline Price of $31.39) |
| | |
# of Shares Earned (Tranche 3—Cumulative)
|
|
|
+5% = $32.96
|
| | |
125,000
|
|
|
+10% = $34.53
|
| | |
250,000
|
|
|
+15% = $36.10
|
| | |
375,000
|
|
|
+20% = $37.67
|
| | |
500,000
|
|
|
+25% = $39.24
|
| | |
625,000
|
|
|
+30% = $40.81
|
| | |
750,000
|
|
|
Executive
|
| | |
Salary Increase
Effective 3/1/2020 |
| | |
Annual Equity
Award Granted as 60% PRSUs and 40% RSUs |
| | |
Annual Incentive Payout for 2020 Performance
|
| ||||||||
|
Plan Result
|
| | |
Individual Multiplier
|
| | |
Annual Incentive
Payment |
| ||||||||||||
|
Kenneth J. Giacobbe
|
| | | 2.7% to $575,000 | | | | $1,400,007 | | | | 90% | | | | 100% | | | | $515,250 | |
| Neil E. Marchuk | | | | 3.0% to $618,000 | | | | $1,650,013 | | | | 90% | | | | 100% | | | | $553,500 | |
|
Katherine H. Ramundo
|
| | | 2.6% to $585,000 | | | | $1,000,012 | | | | N/A—voluntary resignation prior to payment date | | ||||||||
| Paul Myron | | | | No increase | | | | $302,507 | | | | 90% | | | | 120% | | | | $291,600 | |
| Name and Principal Position |
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Stock
Awards ($) |
| |
Option
Awards ($) |
| |
Non-Equity
Incentive Plan Compensation ($) |
| |
Change in
Pension Value and Non-Qualified Deferred Compensation Earnings ($) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| | |||||
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
| |
(g)
|
| |
(h)
|
| |
(i)
|
| |
(j)
|
| | |||||
| John C. Plant | | |
2020
|
| | | $ | 1,600,000 | | | |
$0
|
| |
$37,351,008
|
| |
$0
|
| |
$0
|
| |
$0
|
| |
$140,000
|
| |
$39,091,008
|
| | | |
|
Chairman and
|
| |
2019
|
| | | $ | 1,446,667 | | | |
$0
|
| |
$29,941,500
|
| |
$0
|
| |
$20,000,000
|
| |
$0
|
| |
$324,411
|
| |
$51,712,578
|
| | | |
| Co-Chief | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Executive Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tolga I. Oal | | |
2020
|
| | | $ | 794,917 | | | |
$0
|
| |
$3,500,012
|
| |
$0
|
| |
$679,372
|
| |
$0
|
| |
$85,870
|
| |
$5,060,171
|
| |
|
|
| Co-Chief Executive | | |
|
| | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Officer | | |
|
| | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Kenneth J. Giacobbe
|
| |
2020
|
| | | $ | 572,500 | | | |
$0
|
| |
$1,400,007
|
| |
$0
|
| |
$515,250
|
| |
$261,707
|
| |
$74,755
|
| |
$2,824,219
|
| | | |
|
Executive Vice
|
| |
2019
|
| | | $ | 552,500 | | | |
$0
|
| |
$2,275,201
|
| |
$0
|
| |
$1,350,000
|
| |
$358,758
|
| |
$35,769
|
| |
$4,572,228
|
| | | |
|
President and Chief
|
| |
2018
|
| | | $ | 512,500 | | | |
$0
|
| |
$960,089
|
| |
$240,051
|
| |
$94,813
|
| |
$0
|
| |
$105,621
|
| |
$1,913,074
|
| | | |
| Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Neil E. Marchuk | | |
2020
|
| | | $ | 615,000 | | | |
$0
|
| |
$1,650,013
|
| |
$0
|
| |
$553,500
|
| |
$0
|
| |
$59,510
|
| |
$2,878,023
|
| |
|
|
|
Executive Vice
|
| |
2019
|
| | | $ | 500,000 | | | |
$200,000
|
| |
$3,191,850
|
| |
$0
|
| |
$0
|
| |
$0
|
| |
$83,200
|
| |
$3,975,050
|
| |
|
|
|
President and Chief
|
| |
|
| | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Human Resources | | |
|
| | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Officer | | |
|
| | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Katherine H. | | |
2020
|
| | | $ | 582,500 | | | |
$0
|
| |
$1,000,012
|
| |
$0
|
| |
$0
|
| |
$0
|
| |
$81,325
|
| |
$1,663,837
|
| | | |
|
Ramundo
|
| |
2019
|
| | | $ | 566,667 | | | |
$0
|
| |
$1,100,155
|
| |
$0
|
| |
$963,333
|
| |
$0
|
| |
$54,053
|
| |
$2,684,208
|
| | | |
|
Former Executive Vice
|
| |
2018
|
| | | $ | 550,000 | | | |
$0
|
| |
$1,960,185
|
| |
$240,051
|
| |
$101,750
|
| |
$0
|
| |
$60,953
|
| |
$2,912,938
|
| | | |
|
President, Chief Legal
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Officer and Secretary
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Paul Myron
|
| |
2020
|
| | |
$
|
450,000
|
| | |
$0
|
| |
$302,507
|
| |
$0
|
| |
$291,600
|
| |
$369,165
|
| |
$45,575
|
| |
$1,458,847
|
| |
|
|
| Vice President and | | |
|
| | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Controller | | |
|
| | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Name
|
| | |
Company Matching
Contribution |
| | |
3% Retirement
Contribution |
| | |
Total Company
Contribution |
| |||||||||||||||||||||||
|
Savings
Plan |
| | |
Def. Comp.
Plan |
| | |
Savings
Plan |
| | |
Def. Comp.
Plan |
| | ||||||||||||||||||||||
|
John C. Plant
|
| | | | | $17,100 | | | | | | | $78,900 | | | | | | | $8,550 | | | | | | | $35,450 | | | | | | | $140,000 | | |
|
Tolga I. Oal
|
| | | | | $8,550 | | | | | | | $36,973 | | | | | | | $8,550 | | | | | | | $31,797 | | | | | | | $85,870 | | |
|
Kenneth J. Giacobbe
|
| | | | | $17,100 | | | | | | | $0 | | | | | | | $8,550 | | | | | | | $49,125 | | | | | | | $74,775 | | |
|
Neil E. Marchuk
|
| | | | | $17,100 | | | | | | | $18,360 | | | | | | | $8,550 | | | | | | | $15,900 | | | | | | | $59,910 | | |
|
Katherine H. Ramundo
|
| | | | | $17,100 | | | | | | | $17,850 | | | | | | | $8,550 | | | | | | | $37,825 | | | | | | | $81,325 | | |
|
Paul Myron
|
| | | | | $17,100 | | | | | | | $0 | | | | | | | $8,550 | | | | | | | $19,925 | | | | | | | $45,575 | | |
|
Name
|
| |
Grant
Dates |
| |
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards1 |
| |
Estimated Future Payouts Under
Equity Incentive Plan Awards2 |
| |
All Other
Stock Awards: Number of Shares of Stock or Units3 (#) |
| |
All Other
Option Awards: Number of Securities Underlying Options (#) |
| |
Exercise
or Base Price of Option Awards ($/sh) |
| |
2020 Grant
Date Fair Value of Stock and Option Awards ($) |
| | |||||||||||||||||
|
Threshold
($) |
| |
Target
($) |
| |
Maximum
($) |
| |
Threshold
(#) |
| |
Target
(#) |
| |
Maximum
(#) |
| | |||||||||||||||||||||||
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
| |
(g)
|
| |
(h)
|
| |
(i)
|
| |
(j)
|
| |
(k)
|
| |
(l)
|
| | |||||
| John C. Plant | | | | | | | | | | | | | | |||||||||||||||||||||||||||
| | | |
4/2/2020
|
| | | | | | | | | | | | | | | | | | | | | | |
1,000,000
|
| | | | | | | |
$12,500,000
|
| | | |
| | | |
6/9/2020
|
| | | | | | | | | | | | | | | | | | | | | | |
485,000
|
| | | | | | | |
$7,834,600
|
| | | |
| | | |
4/2/2020
|
| | | | | | | | | | | | | |
0
|
| |
2,100,000
|
| |
2,100,000
|
| | | | | | | | | | |
$16,916,408
|
| | | |
|
Tolga I. Oal
|
| |
|
| | | $ | 383,592 | | | |
$767,183
|
| |
$2,301,549
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| | | |
5/7/2020
|
| | | | | | | |
|
| |
|
| |
0
|
| |
176,917
|
| |
353,834
|
| |
117,945
|
| |
|
| |
|
| |
$3,500,012
|
| |
|
|
|
Kenneth J.
|
| | | | | | $ | 286,250 | | | |
$572,500
|
| |
$1,717,500
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Giacobbe
|
| |
5/7/2020
|
| | | | | | | | | | | | | |
0
|
| |
70,767
|
| |
141,534
|
| |
47,178
|
| | | | | | | |
$1,400,007
|
| | | |
|
Neil E.
|
| |
|
| | | $ | 307,500 | | | |
$615,000
|
| |
$1,845,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Marchuk
|
| |
5/7/2020
|
| | | | | | | |
|
| |
|
| |
0
|
| |
83,404
|
| |
166,808
|
| |
55,603
|
| |
|
| |
|
| |
$1,650,013
|
| |
|
|
|
Katherine H.
|
| | | | | | $ | 292,750 | | | |
$582,500
|
| |
$1,747,500
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Ramundo
|
| |
5/7/2020
|
| | | | | | | | | | | | | |
0
|
| |
50,548
|
| |
101,096
|
| |
33,699
|
| | | | | | | |
$1,000,012
|
| | | |
|
Paul Myron
|
| |
|
| | | $ | 135,000 | | | |
$270,000
|
| |
$810,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| | | |
5/7/2020
|
| | | | | | | |
|
| |
|
| |
0
|
| |
15,291
|
| |
30,582
|
| |
10,194
|
| |
|
| |
|
| |
$302,507
|
| |
|
|
|
Name
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||
|
Number of
Securities Underlying Unexercised Options (Exercisable)1 (#) |
| |
Number of
Securities Underlying Unexercised Options (Unexercisable)1 (#) |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number of
Shares or Units of Stock That Have Not Vested2 (#) |
| |
Market Value
of Shares or Units of Stock That Have Not Vested3 ($) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested4 (#) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested3 ($) |
| ||||||
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
| |
(g)
|
| |
(h)
|
| |
(i)
|
| |
(j)
|
| |||
| John C. Plant | | | | | |||||||||||||||||||||||||||
|
Stock Awards
|
| | | | | | | | | | | | | | | | | | | |
2,835,000 5
|
| |
$80,910,900
|
| |
810,833
|
| |
$23,141,174
|
|
| Tolga I. Oal | | | | | |||||||||||||||||||||||||||
|
Stock Awards
|
| | | | | | | | | | | | | | | | | | | |
173,230 6
|
| |
$4,943,984
|
| |
176,917
|
| |
$5,049,211
|
|
| Kenneth J. Giacobbe | | |
|
| | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Stock Awards
|
| | | | | | | | | | | | | | | | | | | |
163,826 7
|
| |
$4,675,594
|
| |
70,767
|
| |
$2,019,690
|
|
|
Time-Vested Options
|
| |
5,255
|
| | | | — | | | |
—
|
| |
$21.98
|
| |
1/20/2022
|
| | | | | | | | | | | | |
| | | |
53,978
|
| | | | — | | | |
—
|
| |
$20.27
|
| |
1/13/2027
|
| | | | | | | | | | | | |
| | | |
17,047
|
| | | | 8,523 | | | |
—
|
| |
$28.98
|
| |
1/19/2028
|
| | | | | | | | | | | | |
| Neil E. Marchuk | | | | | |||||||||||||||||||||||||||
|
Stock Awards
|
| | | | | | | | | | | | | | | | | | | |
156,991 8
|
| |
$4,480,523
|
| |
83,404
|
| |
$2,380,350
|
|
| Katherine H. Ramundo9 | | |
|
| | | | | | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Stock Awards
|
| | | | | | | | | | | | | | | | | | | |
143,777 9
|
| |
$4,103,396
|
| |
50,548
|
| |
$1,442,640
|
|
|
Time-Vested Options
|
| |
39,983
|
| | | | — | | | |
—
|
| |
$20.27
|
| |
1/13/2027
|
| | | | | | | | | | | | |
| | | |
17,047
|
| | | | 8,523 | | | |
—
|
| |
$28.98
|
| |
1/19/2028
|
| | | | | | | | | | | | |
|
Paul Myron
|
| | | | |||||||||||||||||||||||||||
|
Stock Awards
|
| | | | | | | | | | | | | | | | | | | |
72,020 10
|
| |
$2,055,451
|
| |
15,291
|
| |
$436,405
|
|
|
Time-Vested Options
|
| |
7,386
|
| | | | — | | | |
—
|
| |
$21.98
|
| |
1/20/2022
|
| | | | | | | | | | | | |
| | | |
26,313
|
| | | | — | | | |
—
|
| |
$19.19
|
| |
1/16/2023
|
| | | | | | | | | | | | |
| | | |
9,511
|
| | | | 4,755 | | | |
—
|
| |
$28.98
|
| |
1/19/2028
|
| | | | | | | | | | | | |
|
Name
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||
|
Number of Shares
Acquired on Exercise (#) |
| |
Value Realized on
Exercise ($) |
| |
Number of Shares
Acquired on Vesting (#) |
| |
Value Realized on
Vesting ($) |
| |||
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
|
|
John C. Plant
|
| |
—
|
| |
—
|
| |
1,669,165
|
| |
$43,552,035
|
|
|
Tolga I. Oal
|
| |
—
|
| |
—
|
| |
27,643
|
| |
$297,715
|
|
|
Kenneth J. Giacobbe
|
| |
—
|
| |
—
|
| |
108,030
|
| |
$3,432,554
|
|
|
Neil E. Marchuk
|
| |
—
|
| |
—
|
| |
86,517
|
| |
$1,534,867
|
|
|
Katherine H. Ramundo
|
| |
—
|
| |
—
|
| |
35,580
|
| |
$1,084,478
|
|
|
Paul Myron
|
| |
—
|
| |
—
|
| |
39,032
|
| |
$1,152,207
|
|
|
Name1
|
| |
Plan Name(s)
|
| |
Years of
Credited Service |
| |
Present
Value of Accumulated Benefits |
| |
Payments
During Last Fiscal Year |
|
|
Kenneth J. Giacobbe
|
| |
Howmet Aerospace Retirement Plan
|
| |
13.78
|
| |
$627,4007
|
| | | |
| | | |
Excess Benefits Plan C
|
| | | | |
$868,769
|
| | | |
| | | |
Total
|
| | | | |
$1,496,176
|
| |
N/A
|
|
|
Paul Myron
|
| |
Howmet Aerospace Retirement Plan
|
| |
29.27
|
| |
$2,189,886
|
| |
|
|
| | | |
Excess Benefits Plan C
|
| |
|
| |
$1,455,339
|
| |
|
|
| | | |
Total
|
| |
|
| |
$3,645,225
|
| |
N/A
|
|
|
Name
|
| |
Executive
Contributions in 2020 ($) |
| |
Registrant
Contributions in 2020 ($) |
| |
Aggregate
Earnings in 2020 ($) |
| |
Aggregate
Withdrawals Distributions ($) |
| |
Aggregate
Balance at 12/31/2020 FYE ($) |
| |||||||||||||||
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
| |||||||||||||||
|
John C. Plant
|
| | | $ | 78,900 | | | | | $ | 114,350 | | | | | $ | 33,422E | | | | | $ | 0 | | | | | $ | 405,007 | | |
| | | | | | | | | | | | | | | | | $ | 0D | | | | | | | | | | | | | | |
|
Tolga I. Oal
|
| | | $ | 47,695 | | | | | $ | 68,770 | | | | | $ | 77,485E | | | | | $ | 0 | | | | | $ | 235,302 | | |
| | | | | | | | | | | | | | | | | $ | 29D | | | | | | | | | | | | | | |
|
Kenneth J. Giacobbe
|
| | | $ | 0 | | | | | $ | 49,125 | | | | | $ | 1,553E | | | | | $ | 0 | | | | | $ | 94,207 | | |
| | | | | | | | | | | | | | | | | $ | 0D | | | | | | | | | | |||||
|
Neil E. Marchuk
|
| | | $ | 36,900 | | | | | $ | 34,260 | | | | | $ | 12,351E | | | | | $ | 0 | | | | | $ | 136,915 | | |
| | | | | | | | | | | | | | | | | $ | 0D | | | | | | | | | | | | | | |
|
Katherine H. Ramundo
|
| | | $ | 17,850 | | | | | $ | 55,675 | | | | | $ | 29,247E | | | | | $ | 0 | | | | | $ | 266,921 | | |
| | | | | | | | | | | | | | | | | $ | 0D | | | | | | | | | | | | | | |
|
Paul Myron
|
| | | $ | 0 | | | | | $ | 19,925 | | | | | $ | 3,921E | | | | | $ | 0 | | | | | $ | 30,438 | | |
| | | | | | | | | | | | | | | | | $ | 0D | | | | | | | | | | | | | | |
|
Name
|
| | |
Cash Severance
Payment |
| | |
Two Years
Additional Retirement Accrual |
| | |
Value of continued
active health care benefits |
| | |
Total
|
| ||||||||||||
|
Tolga I. Oal
|
| | | | $ | 3,500,000 | | | | | | $ | 105,000 | | | | | | $ | 45,733 | | | | | | $ | 3,650,733 | | |
|
Kenneth J. Giacobbe
|
| | | | $ | 1,150,000 | | | | | | $ | 119,828 | | | | | | $ | 45,184 | | | | | | $ | 1,315,012 | | |
|
Neil E. Marchuk
|
| | | | $ | 1,236,000 | | | | | | $ | 74,160 | | | | | | $ | 15,655 | | | | | | $ | 1,325,815 | | |
|
Katherine H. Ramundo
|
| | | | $ | 1,170,000 | | | | | | $ | 70,200 | | | | | | $ | 618 | | | | | | $ | 1,240,818 | | |
|
Paul Myron
|
| | | | $ | 900,000 | | | | | | $ | 53,857 | | | | | | $ | 23,124 | | | | | | $ | 976,981 | | |
|
Name
|
| | |
Value of
change in control severance and benefits |
| | |
Value of
equity awards on 12/31/2020 that would have immediately vested |
| ||||||
| Tolga I. Oal | | | | |
$
|
5,635,616
|
| | | | |
$
|
9,993,195
|
| |
|
Kenneth J. Giacobbe
|
| | | | $ | 2,534,012 | | | | | | $ | 6,695,284 | | |
|
Neil E. Marchuk
|
| | | | $ | 2,635,975 | | | | | | $ | 6,860,873 | | |
|
Katherine H. Ramundo
|
| | | | $ | 2,481,018 | | | | | | $ | 5,546,036 | | |
|
Paul Myron
|
| | | | $ | 1,293,417 | | | | | | $ | 2,491,856 | | |
|
($ in millions)
|
| | |
Year ended
|
| ||||||||||
| | | | |
December 31,
2020 |
| | |
December 31,
2019 |
| ||||||
| Engine Products: | | | | | | | | | | | | | | | |
|
Third-party sales
|
| | | | $ | 2,406 | | | | | | $ | 3,320 | | |
|
Segment operating profit
|
| | | | $ | 417 | | | | | | $ | 621 | | |
|
Segment operating profit margin
|
| | | | | 17.3% | | | | | | | 18.7% | | |
| Fastening Systems: | | | | | | | | | | | | | | | |
|
Third-party sales
|
| | | | $ | 1,245 | | | | | | $ | 1,561 | | |
|
Segment operating profit
|
| | | | $ | 247 | | | | | | $ | 396 | | |
|
Segment operating profit margin
|
| | | | | 19.8% | | | | | | | 25.4% | | |
| Engineered Structures: | | | | | | | | | | | | | | | |
|
Third-party sales
|
| | | | $ | 927 | | | | | | $ | 1,255 | | |
|
Segment operating profit
|
| | | | $ | 73 | | | | | | $ | 120 | | |
|
Segment operating profit margin
|
| | | | | 7.9% | | | | | | | 9.6% | | |
| Forged Wheels: | | | | | | | | | | | | | | | |
|
Third-party sales
|
| | | | $ | 679 | | | | | | $ | 969 | | |
|
Segment operating profit
|
| | | | $ | 153 | | | | | | $ | 253 | | |
|
Segment operating profit margin
|
| | | | | 22.5% | | | | | | | 26.1% | | |
|
|
($ in millions)
|
| | |
Year ended December 31,
|
| ||||||||||
| | | | |
2020
|
| | |
2019
|
| ||||||
| Engine Products | | | | | | | | | | | | | | | |
|
Aerospace – Commercial
|
| | | | $ | 1,247 | | | | | | $ | 2,229 | | |
|
Aerospace – Defense
|
| | | | | 557 | | | | | | | 475 | | |
|
Commercial Transportation
|
| | | | | — | | | | | | | 20 | | |
|
Industrial and Other
|
| | | | | 602 | | | | | | | 596 | | |
|
Third-party sales end-market revenue
|
| | | | $ | 2,406 | | | | | | $ | 3,320 | | |
| Fastening Systems | | | | | | | | | | | | | | | |
|
Aerospace – Commercial
|
| | | | $ | 158 | | | | | | $ | 1,060 | | |
|
Aerospace – Defense
|
| | | | | 36 | | | | | | | 158 | | |
|
Commercial Transportation
|
| | | | | 37 | | | | | | | 227 | | |
|
Industrial and Other
|
| | | | | 32 | | | | | | | 116 | | |
|
Third-party sales end-market revenue
|
| | | | $ | 263 | | | | | | $ | 1,561 | | |
| Engineered Structures | | | | | | | | | | | | | | | |
|
Aerospace – Commercial
|
| | | | $ | 808 | | | | | | $ | 897 | | |
|
Aerospace – Defense
|
| | | | | 156 | | | | | | | 256 | | |
|
Commercial Transportation
|
| | | | | 155 | | | | | | | — | | |
|
Industrial and Other
|
| | | | | 126 | | | | | | | 102 | | |
|
Third-party sales end-market revenue
|
| | | | $ | 1,245 | | | | | | $ | 1,255 | | |
| Forged Wheels | | | | | | | | | | | | | | | |
|
Aerospace – Commercial
|
| | | | $ | — | | | | | | $ | — | | |
|
Aerospace – Defense
|
| | | | | — | | | | | | | — | | |
|
Commercial Transportation
|
| | | | | 679 | | | | | | | 970 | | |
|
Industrial and Other
|
| | | | | — | | | | | | | (1) | | |
|
Third-party sales end-market revenue
|
| | | | $ | 679 | | | | | | $ | 969 | | |
|
|
($ in millions)
|
| | |
Year Ended
|
| ||||||||||
| | | | |
December 31,
2020 |
| | |
December 31,
2019 |
| ||||||
| Operating income | | | | | $ | 626 | | | | | | $ | 579 | | |
| Special items: | | | | | | | | | | | | | | | |
|
Restructuring and other charges
|
| | | | | 182 | | | | | | | 582 | | |
|
Costs associated with the Arconic Inc. Separation Transaction
|
| | | | | 7 | | | | | | | 5 | | |
|
Impairment of energy business assets
|
| | | | | — | | | | | | | 10 | | |
|
Legal and other advisory (reimbursements) costs related to Grenfell Tower, net
|
| | | | | (12) | | | | | | | 8 | | |
|
Strategy and portfolio review costs
|
| | | | | — | | | | | | | 6 | | |
|
Plant fire costs, net
|
| | | | | 3 | | | | | | | 9 | | |
|
Impairment costs related to facilities closures
|
| | | | | 3 | | | | | | | — | | |
| Operating income excluding Special items | | | | | $ | 809 | | | | | | $ | 1,199 | | |
|
($ in millions except per share and share amounts)
|
| | |
Year ended
|
| ||||||||||
| | | | |
December 31,
2020 |
| | |
December 31,
2019 |
| ||||||
| Income from continuing operations | | | | | $ | 211 | | | | | | $ | 126 | | |
| Diluted earnings per share (EPS) | | | | | | | | | | | | | | | |
|
Continuing operations
|
| | | | $ | 0.48 | | | | | | $ | 0.27 | | |
|
Discontinued operations
|
| | | | $ | 0.11 | | | | | | $ | 0.76 | | |
|
Special items:
|
| | | | | | | | | | | | | | |
|
Restructuring and other charges
|
| | | | | 182 | | | | | | | 582 | | |
|
Discrete tax items1
|
| | | | | (115) | | | | | | | (25) | | |
|
Other special items2
|
| | | | | 135 | | | | | | | 37 | | |
|
Tax impact3
|
| | | | | (59) | | | | | | | (130) | | |
| Income from continuing operations excluding Special items | | | | | $ | 354 | | | | | | $ | 590 | | |
| Diluted EPS excluding Special items | | | | | $ | 0.80 | | | | | | $ | 1.29 | | |
| Average number of shares outstanding – diluted | | | | | | 439,296,141 | | | | | | | 462,827,223 | | |
|
($ in millions)
|
| | |
Quarter ended
December 31, 2020 |
| |||
| Income from continuing operations after income taxes | | | | | $ | 106 | | |
| Add: | | | | | | | | |
| Benefit for income taxes | | | | | | (35) | | |
| Other expense, net | | | | | | 74 | | |
| Interest expense | | | | | | 76 | | |
| Restructuring and other charges | | | | | | 16 | | |
| Provision for depreciation and amortization | | | | | | 67 | | |
| Adjusted EBITDA | | | | | $ | 304 | | |
| Add: | | | | | | | | |
| Plant fire reimbursements, net | | | | | $ | (19) | | |
| Legal and other advisory costs related to Grenfell Tower | | | | | | (3) | | |
| Adjusted EBITDA excluding Special items | | | | | $ | 282 | | |
| Third-party sales | | | | | $ | 1,238 | | |
| Adjusted EBITDA excluding Special items margin | | | | | | 22.8% | | |
|
($ in millions)
|
| | |
Twelve months ended
December 31, 2020 (2020 LTIP Result) |
| |||
| Income from continuing operations after income taxes | | | | | $ | 211 | | |
| Add: | | | | | | | | |
|
Benefit for income taxes
|
| | | | | (40) | | |
|
Other expense, net
|
| | | | | 74 | | |
|
Interest expense
|
| | | | | 381 | | |
|
Restructuring and other charges
|
| | | | | 182 | | |
|
Provision for depreciation and amortization
|
| | | | | 279 | | |
| Adjusted EBITDA | | | | | $ | 1,087 | | |
| Add: | | | | | | | | |
|
Costs associated with the Arconic Inc. Separation Transaction
|
| | | | | 7 | | |
|
Plant fire reimbursements, net1
|
| | | | | (3) | | |
|
Legal and other advisory costs related to Grenfell Tower
|
| | | | | (12) | | |
|
Impairment costs related to facilities closures
|
| | | | | 3 | | |
| Adjustment for performance-based restricted share units2 | | | | | | 10 | | |
| Adjusted EBITDA excluding Special items | | | | | $ | 1,092 | | |
| Third-party sales | | | | | $ | 5,259 | | |
| Adjustment for performance-based restricted share units2 | | | | | | (13) | | |
| Adjusted Sales | | | | | $ | 5,246 | | |
| Adjusted EBITDA excluding Special items margin | | | | | | 20.8% | | |
|
($ in millions)
|
| | |
2Q20
|
| | |
3Q20
|
| | |
4Q20
|
| | |
Total 2Q-4Q
2020 |
| ||||||||||||
| Cash provided from operations | | | | | $ | 31 | | | | | | $ | 35 | | | | | | $ | 151 | | | | | | $ | 217 | | |
| Cash receipts from sold receivables | | | | | | 66 | | | | | | | 144 | | | | | | | 164 | | | | | | | 374 | | |
| Capital expenditures | | | | | | (32) | | | | | | | (36) | | | | | | | (47) | | | | | | | (115) | | |
| Adjusted free cash flow | | | | | | 65 | | | | | | | 143 | | | | | | | 268 | | | | | | | 476 | | |
| Cost associated with the Arconic Inc. Separation Transaction | | | | | | 11 | | | | | | | — | | | | | | | — | | | | | | | 11 | | |
| Adjusted free cash flow, excluding costs associated with the Arconic Inc. Separation Transaction |
| | | | $ | 76 | | | | | | $ | 143 | | | | | | $ | 268 | | | | | | $ | 487 | | |
|