PRE 14A 1 d108785dpre14a.htm PRE 14A PRE 14A
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

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  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
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DuPont de Nemours, Inc.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Table of Contents

 

 

 

LOGO

  

 

2021 ANNUAL MEETING

 

AND PROXY STATEMENT

 

 


Table of Contents

Preliminary Proxy Statement — Subject to Completion

 

LOGO

NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS

Dear Stockholder:

At the 2021 Annual Meeting of Stockholders (the “Annual Meeting”), stockholders will vote on the following matters either by proxy or by voting online during the Annual Meeting:

 

 

Date:

 

Wednesday, April 28, 2021

 

Time:

 

1:00 P.M. Eastern Daylight Time

 

Location*:

 

Online at www.virtualshareholdermeeting.com/DD2021

    

 

Agenda:

 

1.    Election of the 12 directors named in the Proxy Statement.

 

2.    Advisory resolution to approve executive compensation.

 

3.    Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2021.

 

4.    Approval of an Amendment and Restatement of the Company’s Certificate of Incorporation.

 

5–7.  Stockholder proposals.

 

8.    Transaction of any other business as may properly come before the Annual Meeting.

 

How to Vote

Your vote is important. Whether or not you plan on attending the Annual Meeting virtually, please vote your shares as soon as possible by internet, telephone or mail.

 

LOGO  

  BY INTERNET

 

  www.proxyvote.com

  LOGO  

BY PHONE

 

1-800-690-6903 or the

number provided on your

voting instructions

  LOGO  

  BY MAIL

 

  Use the postage-paid

  envelope provided

The Board of Directors (the “Board”) of DuPont de Nemours, Inc. (the “Company” or “DuPont”) has set the close of business on March 8, 2021 as the record date for determining stockholders who are entitled to receive notice of the Annual Meeting and to vote.

As permitted by U.S. Securities and Exchange Commission (the “SEC”) rules, proxy materials were made available via the internet. Notice regarding availability of proxy materials and instructions on how to access those materials were mailed to certain stockholders of record on or about March 12, 2021 (the “Notice”). The instructions included how to vote online and how to request a paper copy of the proxy materials. This method of notice and access gives the Company a lower-cost way to furnish stockholders with their proxy materials.

Please see page 2 of the Proxy Statement for information on attending the Annual Meeting virtually.

Thank you for your continued support and your interest in DuPont de Nemours, Inc.

 

LOGO

Peter W. Hennessey

VP, Associate General Counsel and Corporate Secretary

March 12, 2021

 

*

The Annual Meeting will be online and a completely virtual meeting of stockholders due to the ongoing public health impact of the coronavirus (COVID-19) pandemic. This decision was made in light of the protocols that federal, state, and local governments have imposed or may impose in the near future and taking into account the health and safety of our stockholders, directors and members of management and is consistent with the Company’s safety and health core values. The enclosed materials include instructions on how to participate in the Annual Meeting, including by voting and asking questions both before and during the Annual Meeting.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

STOCKHOLDER MEETING TO BE HELD ON APRIL 28, 2021

The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.


Table of Contents

Cautionary Statement Regarding Forward Looking Statements

This proxy statement contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” and similar expressions and variations or negatives of these words.

Effective August 31, 2017, E. I. du Pont de Nemours and Company (“EID”) and The Dow Chemical Company (“TDCC”) each merged with subsidiaries of DowDuPont Inc. (n/k/a “DuPont”) and, as a result, EID and TDCC became subsidiaries of the Company (the “DWDP Merger”). On April 1, 2019, the Company completed the separation of the materials science business through the spin-off of Dow Inc., (“Dow”) including Dow’s subsidiary TDCC (the “Dow Distribution”). On June 1, 2019, the Company completed the separation of the agriculture business through the spin-off of Corteva, Inc. (“Corteva”) including Corteva’s subsidiary EID, (the “Corteva Distribution and together with the Dow Distribution, the “DWDP Distributions”). Following the Corteva Distribution, DuPont holds the specialty products business as continuing operations. On February 1, 2021, the Company completed the divestiture of the Nutrition & Biosciences (“N&B”) business to International Flavors & Fragrance Inc. (“IFF”) in a Reverse Morris Trust transaction (the “N&B Transaction”) that resulted in IFF issuing shares to DuPont stockholders.

Forward-looking statements address matters that are, to varying degrees, uncertain and subject to risks, uncertainties and assumptions, many of which that are beyond DuPont’s control, that could cause actual results to differ materially from those expressed in any forward-looking statements. Forward-looking statements are not guarantees of future results. Some of the important factors that could cause DuPont’s actual results to differ materially from those projected in any such forward-looking statements include, but are not limited to: (i) ability to achieve anticipated tax treatments in connection with the N&B Transaction or the DWDP Distributions; (ii) changes in relevant tax and other laws; (iii) indemnification of certain legacy liabilities of EID in connection with the Corteva Distribution; (iv) risks and costs related to the DWDP Distributions and the N&B Transaction and potential liability arising from fraudulent conveyance and similar laws; (v) risks and costs related to the performance under and impact of the cost sharing arrangement by and between DuPont, Corteva and The Chemours Company related to future eligible PFAS costs; (vi) failure to effectively manage acquisitions, divestitures, alliances, joint ventures and other portfolio changes, including meeting conditions under the Letter Agreement entered in connection with the Corteva Distribution, related to the transfer of certain levels of assets and businesses; (vii) uncertainty as to the long-term value of DuPont common stock; (viii) potential inability or reduced access to the capital markets or increased cost of borrowings, including as a result of a credit rating downgrade; (ix) risks and uncertainties related to the novel coronavirus (COVID-19) and the responses thereto (such as voluntary and in some cases, mandatory quarantines as well as shut downs and other restrictions on travel and commercial, social and other activities) on DuPont’s business, results of operations, access to sources of liquidity and financial condition which depend on highly uncertain and unpredictable future developments, including, but not limited to, the duration and spread of the COVID-19 outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions resume; and (x) other risks to DuPont’s business, operations; each as further discussed in detail in and results of operations as discussed in DuPont’s annual report on Form 10-K for the year ended December 31, 2020 and its subsequent reports on Form 10-Q and Form 8-K. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on DuPont’s consolidated financial condition, results of operations, credit rating or liquidity. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. DuPont assumes no obligation to publicly provide revisions or updates to any forward-looking statements whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

 

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LOGO

PROXY STATEMENT SUMMARY

Annual Meeting of Stockholders

 

Date and Time      Place    Record Date       

April 28, 2021

1:00 P.M. Eastern Daylight Time

    

Online at

www.virtualshareholdermeeting.com/DD2021

   March 8, 2021           

Meeting Agenda and Voting Recommendations

 

    Agenda Item

  

Board Recommendation

  

Page  

 

   1:

 

  

 

ELECTION OF DIRECTORS

 

  

 

FOR EACH NOMINEE

 

   17

 

   2:   

ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION

 

  

FOR

 

   60

 

   3:   

RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

   FOR    61
   4:   

AMENDMENT AND RESTATEMENT OF THE COMPANY’S CERTIFICATE OF INCORPORATION TO DECREASE THE OWNERSHIP THRESHOLD FOR STOCKHOLDERS TO CALL A SPECIAL MEETING

 

   FOR    64
   5:   

STOCKHOLDER PROPOSAL – RIGHT TO ACT BY WRITTEN CONSENT

 

   AGAINST    66
   6:   

STOCKHOLDER PROPOSAL  – ANNUAL DISCLOSURE OF EEO-1 DATA

 

   AGAINST    68
   7:   

STOCKHOLDER PROPOSAL – ANNUAL REPORT ON PLASTIC POLLUTION

 

   AGAINST    71

This summary highlights information contained elsewhere in this Proxy Statement. It does not contain all information that you should consider, and you should read the entire Proxy Statement carefully before voting.



 

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PROXY STATEMENT SUMMARY (continued)

 

Executive Summary

We are a global innovation leader with technology-based materials and solutions that help transform industries and everyday life. Our employees apply diverse science and expertise to help customers advance their best ideas and deliver essential innovations in key markets including electronics, transportation, construction, water, healthcare and worker safety.

On February 1, 2021, we completed the divestiture of our Nutrition & Biosciences (“N&B”) business to International Flavors & Fragrance Inc. (“IFF”) in a Reverse Morris Trust transaction (the “N&B Transaction”) that resulted in IFF issuing shares to DuPont stockholders.

In conjunction with the closing of the N&B Transaction on February 1, 2021, we announced changes to our management and reporting structure. These changes resulted in the following:

   

Realignment of certain businesses from Transportation & Industrial to Electronics & Imaging which was renamed Electronics & Industrial;

   

Dissolution of the Non-Core segment with the businesses to be divested and previously divested reflected in Corporate;

   

Realignment of the remaining Non-Core businesses to Transportation & Industrial which was renamed Mobility & Materials; and

   

Safety & Construction was renamed Water & Protection.

To assist you in reviewing the proposals to be acted upon at the Annual Meeting, we call your attention to the following information about the Company’s 2020 financial performance, our key corporate governance policies and practices, and key executive compensation actions and decisions. The following description is only a summary. For more complete information about these topics, please review the Company’s Annual Report on Form 10-K and this Proxy Statement. The financial performance highlights contained herein are presented on the same basis as the Company’s Annual Report on Form 10-K.

2020 Financial Performance Highlights

   

Full year 2020 GAAP EPS from continuing operations of $(3.95); and adjusted EPS* of $3.36

 
   

Full year 2020 Net Sales of $20.4 billion

 
   

Full year 2020 GAAP Loss from continuing operations of $(2.9) billion and total Operating EBITDA* of $5 billion

 

 

  *

See Appendix A for a reconciliation of non-GAAP measures to the most directly comparable U.S. GAAP financial measures.



 

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PROXY STATEMENT SUMMARY (continued)

 

Director Nominees

You are being asked to vote on the election of 12 directors. All directors are elected annually. Detailed information about each director’s background, skills and expertise can be found in Agenda Item 1 — Election of Directors.

 

  (As of the date of the Proxy Statement)

  Name

  Age

  Current Position

Independent

Audit

Committee

Nomination
and

Governance

Committee

People and
Compensation

Committee

Environment,

Health, Safety

& Sustainability

Committee

Other  

Current  

Public  

Boards  

  Amy G. Brady

Age 54

Chief Information Officer &
Executive Vice President,
KeyCorp

  X   X   X

  Edward D. Breen

Age 64

Executive Chairman and
Chief Executive Officer,
DuPont de Nemours, Inc.

            2

  Ruby R. Chandy

Age 59

Former President, Industrial Division Pall Corporation

  X   X   CH             2

  Franklin K. Clyburn, Jr.

Age 56

Executive Vice President,
Chief Commercial Officer,
Merck

  X   X   CH elect

  Terrence R. Curtin

Age 52

Chief Executive Officer,
TE Connectivity

  X   X   X             1

  Alexander M. Cutler

Age 69

Retired Chair and Chief
Executive Officer, Eaton

  X   CH   X             1

  Eleuthère I. du Pont

Age 54

President, Longwood Foundation

  X   X   X             1

  Luther C. Kissam

Age 56

Partner, Bernhard Capital Partners Management, LP

  X   X   X             2

  Frederick M. Lowery

Age 50

Senior Vice President, Thermo Fisher, President Life Sciences and Laboratory Products
Groups

  X   X   X

  Raymond J. Milchovich

Age 71

Chief Executive Officer, NTS

  X   X   X

  Deanna M. Mulligan*

Age 57

Former Board Chair, Director, CEO & President, Guardian Life Insurance Company

  X

  Steven M. Sterin

Age 49

Former Executive Vice President & Chief Financial Officer, Andeavor

  X   CH   X             1

CH = Chair

* Rajiv L. Gupta is of retirement age under the terms of our Corporate Governance Guidelines and is not standing for reelection in 2021. Ms. Mulligan has been nominated by the Board to fill the vacancy created by Mr. Gupta’s retirement. The Board expects to appoint Ms. Mulligan to the Board in advance of its April meeting which will occur prior to the Annual Meeting.



 

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PROXY STATEMENT SUMMARY (continued)

 

Corporate Governance Best Practices

As part of DuPont’s commitment to high ethical standards, the Board follows sound governance practices. These practices, which are summarized below, are described in more detail beginning on page 4 of the Proxy Statement.

 

Board

Independence
and Diversity

 

     

Director

Elections

 

     

Board

Practices

 

     

Stock Ownership
Requirements

 

     

Stockholder

Rights

 

11 of 12

director
nominees are

independent

 

Independent

Board Committees

 

25% of

director nominees

are

women

 

25% of

director nominees identify as

diverse

   

Annual

Board elections

 

Directors are

elected by a

majority

of votes cast

 

Directors

not elected

by a majority of

votes cast are

subject to the
Company’s

resignation policy

   

Non-employee
directors meet in

executive session without

management at
each
regularly scheduled
Board meeting

 

Annual Board

and Committee

self-evaluations

 

Annual director

evaluations

 

Board retirement policy

 

   

Directors are
required to hold
Company granted
shares until

retirement

 

Executives and
directors

prohibited from
hedging
or
pledging

Company stock

 

   

Stockholder right

to call special meetings

(with a 25%*

ownership
threshold)

 

No super-majority

stockholder voting
requirements

 

Eligible
stockholders are
able to nominate
directors through

proxy
access

* Management has included a proposal in this Proxy Statement to reduce the ownership threshold to 15%. Please see Agenda Item 4 on page 64.

Executive Compensation

In February 2020, the Board made key leadership changes in a move to aggressively accelerate operational performance and ensure the Company was able to deliver business improvement commitments. Mr. Breen was appointed Chief Executive Officer, a role he previously held from 2017 through June 2019 and from 2015 to 2017 at EID, and Ms. Koch was appointed Chief Financial Officer. Restoring Mr. Breen to the CEO role enabled the Company to draw more directly on his substantial operating experience.

As 2020 began to unfold, it became evident that senior leadership needed to quickly change 2020 priorities in response to the pandemic and work collectively to ensure the safety and well-being of employees, maintain business continuity, and strengthen the Company’s balance sheet and financial position. As an essential provider of personal protective equipment and important materials in other companies’ supply chains, the Company announced a number of initiatives in the first half of the year to combat the COVID-19 pandemic, including a significant increase in the production of Tyvek® garments. The Company also implemented a number of proactive measures early in the pandemic to enhance its already strong liquidity position and improve working capital, including completion of a bond offering in May to satisfy debt maturities due in November 2020, delay of certain capital investments, idling production at several manufacturing sites, accelerating working capital initiatives and taking actions to reduce run-rate costs on a going forward basis.



 

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PROXY STATEMENT SUMMARY (continued)

 

The Company also continued to focus on the advancement of key strategic actions throughout 2020. On February 1, 2021, DuPont completed the N&B Transaction. In connection with the N&B Transaction, the Company received a one-time cash payment of about $7.3 billion (subject to potential post-closing adjustments). In addition, in the third quarter of 2020, the Company completed the sale of its trichlorosilane business (“TCS Business”) along with its equity ownership interest in DC HSC Holdings LLC and Hemlock Semiconductor L.L.C. (“The HSC Group”) to The Hemlock Group. In the fourth quarter of 2020, the Company entered into a definitive agreement to sell its Biomaterials business unit. In January 2021, the Company entered into separate definitive agreements to sell its Clean Technologies and Solamet businesses.

The 2020 compensation of our NEOs appropriately reflects and rewards their significant contributions to the Company’s performance in a year that presented unique and unprecedented challenges for our senior leadership team to manage.

Executive Compensation Governance Practices

Compensation of the executive officers of the Company, including that of the named executive officers, is overseen by the People and Compensation Committee (the “Compensation Committee”) (or, in the case of the Executive Chairman and Chief Executive Officer, by the Compensation Committee and the independent members of the Board). The Board and the Compensation Committee were assisted in performance of their oversight duties by an independent compensation consultant.

The following summarizes key governance characteristics related to the executive compensation programs in which the NEOs participate:

 

 

Key Executive Compensation Practices

 

 

What We Do

 

 

 

What We Don’t Do

 

   Active stockholder engagement

 

   Strong links between executive compensation outcomes and company financial and market performance

 

   Each component of target pay benchmarked with respect to the peer group or the general market, as applicable

 

   Carefully structured peer group with annual Compensation Committee review

 

   Significant focus on performance-based pay

 

   Stock ownership requirements of six times base salary for the CEO and three times base salary for the other NEOs

 

   100% independent Compensation Committee

 

   Clawback policy covering both cash and equity

 

   Use of executive compensation statements (“tally sheets”)

 

   Independent compensation consultant reporting to the Compensation Committee

 

×   No single-trigger change in control agreements

 

×  No option repricing, reloads, exchanges or options granted below market value without stockholder approval

 

×   No excise tax gross ups

 

×   No plans that encourage excess risk taking

 

×   No hedging or pledging of Company’s securities

 

×   No liberal share counting

 

×   No excess dilution through careful monitoring of burn rate and overhang

 

×   No minimum payouts under the Long-Term Incentive Plan



 

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2021 Annual Meeting of Stockholders

DuPont de Nemours, Inc.

TABLE OF CONTENTS

 

NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS         
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS      i  
PROXY STATEMENT SUMMARY      ii  
VOTING, QUESTION AND ATTENDANCE PROCEDURES      1  
CORPORATE GOVERNANCE      4  
AGENDA ITEM 1: ELECTION OF DIRECTORS      17  

Director Nominees

     19  
Director Compensation      25  
EXECUTIVE OFFICERS      28  
BENEFICIAL OWNERSHIP OF COMPANY STOCK      30  
COMPENSATION DISCUSSION & ANALYSIS      31  

EXECUTIVE SUMMARY

 

     33  

2020 Performance Highlights

     33  

Named Executive Officers

     34  

Program Structure and Alignment with Core Principles

     35  

Executive Compensation Governance Practices

     35  

COMPONENTS OF EXECUTIVE COMPENSATION AND BENEFITS

 

     36  

2020 NEO Targeted Total Direct Compensation Summary

     36  

Pay Mix

     37  

2020 Compensation Decisions

     37  

• Base Salary

     37  

• Annual Incentive Compensation

     37  

• Long-Term Incentive Compensation

     41  

Benefits and Perquisites

     43  

THE COMPENSATION PROCESS

 

     44  

Role of Company Management

     44  

Role of the Compensation Committee

     44  

Role of Independent Board Members

     44  

Role of the Independent Compensation Consultant

     44  

Peer Group and Benchmarking

     45  

OTHER CONSIDERATIONS

 

     46  

Consideration of Say on Pay Vote

     46  

Stock Ownership Guidelines

     46  

Anti-Hedging and Anti-Pledging Policies

     46  

Clawback Policy

     46  

Compensation and Risk Management

     46  

2020 Tax Considerations

     47  

COMPENSATION TABLES AND NARRATIVES

 

     48  

Summary Compensation Table

     48  

Grants of Plan-Based Awards

     50  

Outstanding Equity Awards

     51  

Option Exercises and Stock Vested

     53  

 

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BENEFITS

 

   53

Pension Benefits

   53

Defined-Benefit Retirement Plans

   53

Supplemental Retirement Plans

   54

Non-Qualified Deferred Compensation

   54

Other Retirement Benefits

   55

Potential Payments Upon Termination or Change in Control

   56

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

 

   58

COMPENSATION COMMITTEE REPORT

 

   58

CEO PAY RATIO

 

   58
AGENDA ITEM 2: ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION    60
AGENDA ITEM 3: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    61
AUDIT COMMITTEE REPORT    63
AGENDA ITEM 4: AMENDMENT AND RESTATEMENT OF THE COMPANY’S CERTIFICATE OF INCORPORATION    64
AGENDA ITEM 5: STOCKHOLDER PROPOSAL – RIGHT TO ACT BY WRITTEN CONSENT    66
AGENDA ITEM 6: STOCKHOLDER PROPOSAL – ANNUAL DISCLOSURE OF EEO-1 DATA    68
AGENDA ITEM 7: STOCKHOLDER PROPOSAL – ANNUAL REPORT ON PLASTIC POLLUTION    71
ADDITIONAL INFORMATION    73
APPENDIX A – NON-GAAP RECONCILIATION    A-1
APPENDIX B – THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION    B-1

 

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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

STOCKHOLDER MEETING TO BE HELD ON APRIL 28, 2021

The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.

Stockholders may request their proxy materials be delivered to them electronically in 2022 by visiting

https://enroll.icsdelivery.com/dd.

VOTING, QUESTION AND ATTENDANCE PROCEDURES

In this Proxy Statement, you will find information on the Board of Directors (the “Board”) of DuPont de Nemours, Inc., the candidates for election to the Board, and six other items to be voted upon at the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) and any adjournment or postponement of the Annual Meeting. The background information in this Proxy Statement has been supplied to you at the request of the Board to help you decide how to vote and to provide information on the Company’s corporate governance and compensation practices. This Proxy Statement is first being distributed to stockholders on or about March 12, 2021.

Vote Your Shares in Advance

You may vote your shares by internet, telephone or signing and returning the enclosed proxy or other voting instruction form. Your shares will be voted only if the proxy or voting instruction form is properly executed and received by the independent Inspectors of Election prior to the Annual Meeting. Except as provided below with respect to shares held in employee savings plans, if no specific instructions are given by you when you execute your voting instruction form, as explained on the form, your shares will be voted as recommended by the Board.

You may revoke your proxy or voting instructions at any time before their use at the Annual Meeting by sending a written revocation, by submitting another proxy or voting form on a later date, or by voting virtually at the Annual Meeting. No matter which voting method you choose, however, you should not vote any single account more than once unless you wish to change your vote. Be sure to submit votes for each separate account in which you hold DuPont common stock.

Confidential Voting

The Company maintains vote confidentiality. Proxies and ballots of all stockholders are kept confidential from the Company’s management and Board unless disclosure is required by law and in other limited circumstances. The policy further provides that employees may confidentially vote their shares of Company stock held by employee savings plans and requires the appointment of an independent tabulator and Inspectors of Election for the Annual Meeting.

Dividend Reinvestment Plan Shares and Employee Savings Plan Shares

If you are enrolled in the direct stock purchase and dividend reinvestment plan administered by Computershare Trust Company, N.A. (the “Computershare CIP”), the DuPont common stock owned on the record date by you directly in registered form, plus all shares of common stock held for you in the Computershare CIP, will appear together on a single proxy voting form. If no instructions are provided by you on an executed proxy voting form, your Computershare CIP shares will be voted as recommended by the Board.

Participants in various employee savings plans will receive a voting instruction form. Your executed form will provide voting instructions to the respective plan trustee. If no instructions are provided, the plan trustees and/or administrators for the relevant employee savings plan will vote the shares according to the provisions of the relevant employee savings plan. To allow sufficient time for voting, your voting instructions must be received by 11:59 P.M. Eastern Daylight Time on April 23, 2021. You may not vote your shares held in an employee savings plan virtually at the Annual Meeting.

 

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VOTING, QUESTION AND ATTENDANCE PROCEDURES (continued)

 

 

DuPont Shares Outstanding and Quorum

At the close of business on the record date, March 8, 2021, there were                  shares of DuPont common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote. The holders of at least 50% of the issued and outstanding shares of common stock entitled to vote that are present in person or represented by proxy constitute a quorum for the transaction of business at the Annual Meeting.

For Agenda Item 1: Election of Directors, each nominee must receive more FOR votes than AGAINST votes in order to be elected. For Agenda Item 4: Amendment and Restatement of the Company’s Certificate of Incorporation, the proposal must receive FOR votes from a majority of the outstanding shares of the Company’s capital stock in order to be approved. For Agenda Items 2 and 3 and Agenda Items 5 through 7, each such item must receive more FOR votes than AGAINST votes in order to be approved. Abstentions and broker non-votes will be included in determining the presence of a quorum at the Annual Meeting but will not be counted or have an effect on the outcome of any matter except as specified below with respect to Agenda Item 3.

Broker non-votes occur when a person holding shares through a bank or broker, meaning that their shares are held in a nominee name or beneficially through such bank or broker, does not provide instructions as to how to vote their shares and the bank or broker is not permitted to exercise voting discretion. Under New York Stock Exchange (“NYSE”) rules, your bank or broker may vote shares held in beneficial name only on Agenda Item 3: Ratification of the Appointment of the Independent Registered Public Accounting Firm, without instruction from you, but may not vote on any other matter to be voted on at the Annual Meeting.

Proxy Solicitation on Behalf of the Board

The Board is soliciting proxies to provide an opportunity for all stockholders to vote, whether or not the stockholders are able to attend the Annual Meeting or an adjournment or postponement thereof. Directors, officers and employees may solicit proxies on behalf of the Board in person, by mail, by telephone or by electronic communication. The proxy representatives of the Board will not be specially compensated for their services in this regard.

DuPont has retained Innisfree M&A Incorporated to aid in the solicitation of stockholders (primarily brokers, banks and other institutional investors) for an estimated fee of $25,000, plus reasonable expenses. Arrangements have been made with brokerage houses, nominees and other custodians and fiduciaries to send materials to their principals, and their reasonable expenses will be reimbursed by DuPont on request. The cost of solicitation will be borne by DuPont.

Participating in the Annual Meeting

The Annual Meeting will be online and a completely virtual meeting of stockholders due to the ongoing public health impact of the coronavirus (COVID-19) pandemic. This decision was made in light of the protocols that federal, state, and local governments have imposed or may impose in the near future and taking into account the health and safety of our stockholders, directors and members of management and is consistent with the Company’s safety and health core values. Conducting a virtual meeting will also allow stockholders whose travel may be restricted due to COVID-19 to partake in the meeting.

We cordially invite all stockholders to participate in the Annual Meeting. To participate in the Annual Meeting, you will need the 16-digit control number included on your notice of Internet availability of the proxy materials, on your proxy card, or on the voting instructions that accompanied your proxy materials. Please have your 16-digit control number readily available and log on to the Annual Meeting by visiting www.virtualshareholdermeeting.com/DD2021 and entering your 16-digit control number. You may begin to log into the meeting platform beginning at 12:30 p.m. EDT on April 28, 2021. The meeting will begin promptly at 1:00 p.m. EDT on April 28, 2021. A list of stockholders of record entitled to vote will be open to any stockholder for any purpose relevant to the Annual Meeting for ten days before the Annual Meeting, during normal business hours, at the Office of the Corporate Secretary. A list of stockholders as of the close of business on the record date will also be available for examination by the stockholders during the whole time of the meeting at www.virtualshareholdermeeting.com/DD2021.

The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and

 

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plugins. Participants should ensure that they have a strong Wi-Fi connection wherever they intend to participate in the meeting. Participants should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the meeting.

We are committed to ensuring our stockholders have the same rights and opportunities to participate in the Annual Meeting as if it been held in a physical location. If you wish to submit a question before the meeting, you may log into www.proxyvote.com and enter your 16-digit control number. Once past the login screen, click on “Question for Management,” type in your question, and click “Submit.” Alternatively, if you want to submit your question during the meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/DD2021, type your question into the “Ask a Question” field, and click “Submit.”

Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. Questions regarding personal matters, including those related to employment or product or service issues, are not pertinent to meeting matters and therefore will not be answered.

If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting login page. Technical support will be available starting at 12:30 p.m. EDT on April 28, 2021 and through the conclusion of the meeting.

Whether or not you expect to attend the Annual Meeting virtually, please vote your shares in one of the ways described in this Proxy Statement as promptly as possible.

Other Matters

The Board does not intend to present any business at the Annual Meeting that is not described in this Proxy Statement. The enclosed proxy or other voting instruction form confers upon the designated persons the discretion to vote the shares represented in accordance with their best judgment. Such discretionary authority extends to any other properly presented matter. The Board is not aware of any other matter that may properly be presented for action at the Annual Meeting.

 

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CORPORATE GOVERNANCE

Strong corporate governance is an integral part of DuPont’s core values. Within this section, you will find information about the Board and its governance structure and processes.

DuPont Board Corporate Governance Guidelines

The Corporate Governance Guidelines form an important framework for the Board’s corporate governance practices and assist the Board in carrying out its responsibilities. The Board reviews these guidelines periodically to consider the need for amendments or enhancements. Among other things, these guidelines delineate the Board’s responsibilities, leadership structure, independence, qualifications, election, annual self-evaluation, and access to management and advisors.

We invite you to visit the Company’s website at https://www.investors.dupont.com/investors/dupont-investors/corporate-governance to review the following governance documents:

 

   

Director Code of Conduct

 

   

Employee Code of Conduct

 

   

Amended and Restated Certificate of Incorporation

 

   

Fourth Amended and Restated Bylaws

 

   

Corporate Governance Guidelines

 

   

Code of Financial Ethics

 

   

Board Committee Charters and Membership

 

   

Conflict Minerals and Human Rights Reports and Policies

Director Independence

The Board has assessed the independence of each director who is currently on the Board or who served on the Board during the last fiscal year in accordance with the standards of independence of the NYSE, SEC rules and as described in the Corporate Governance Guidelines. Based upon these standards, the Board has determined that all of the directors who are currently on the Board or who served on the Board during the last fiscal year other than Mr. Breen are independent. The current independent directors constitute a “substantial majority” of the Board, consistent with Board policy. In addition, the Board has determined that each of the nominees for director other than Mr. Breen is independent. The Nomination and Governance Committee, as well as the Board, will annually review relationships that directors may have with the Company and members of management to make a determination as to whether there are any material relationships that would preclude a director from being independent.

All members of the Audit, People and Compensation, Nomination and Governance, and Environment, Health, Safety and Sustainability Committees are independent directors under the Corporate Governance Guidelines and applicable regulatory and listing standards.

Board Leadership Structure

The Board is responsible for broad corporate policy and overall performance of the Company through oversight of management and stewardship of the Company. Among other duties, the Board appoints the Company’s officers, assigns to them responsibility for management of the Company’s operations, and reviews their performance.

Mr. Breen served as the Chief Executive Officer of the Company from the closing of the DWDP Merger until the completion of the Corteva Distribution. Following the Corteva Distribution, Mr. Breen was appointed as the Executive Chairman of the Company and C. Marc Doyle was appointed Chief Executive Officer of the Company. Upon the departure of Mr. Doyle effective February 17, 2020, Mr. Breen became Executive Chairman and Chief Executive Officer of the Company. The Board believes that Mr. Breen’s service as both Executive Chairman and Chief Executive Officer is appropriate because of Mr. Breen’s role in orchestrating the DWDP Merger, the Dow Distribution, the Corteva Distribution and the N&B Transaction, as well as his proven track record of generating

 

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significant stockholder value. Because Mr. Breen serves in both the roles of Executive Chairman and Chief Executive Officer, the Board has established a robust Lead Independent Director role and appointed Mr. Cutler to serve as Lead Independent Director. As Lead Independent Director, Mr. Cutler’s responsibilities include:

 

   

presiding at all meetings of the Board at which the Executive Chairman is not present, including executive sessions of the Board’s independent directors;

 

   

serving as liaison between any non-independent directors (including the Executive Chairman), on the one hand, and the independent directors, on the other hand;

 

   

reviewing and approving information sent to the Board;

 

   

reviewing meeting agendas and schedules and consulting with the Executive Chairman regarding the same;

 

   

if requested by major stockholders, ensuring that he is available for consultation and direct communication;

 

   

serving as focal point for stockholder communications and requests for consultation that are, in each case, addressed to independent members of the Board;

 

   

reviewing and approving meeting schedules to assure that there is sufficient time for discussion of all agenda items;

 

   

calling meetings of the Board’s independent directors; and

 

   

seeking to promote a strong Board culture, including the participation of all directors in an environment of open dialogue, constructive feedback and effective communication across the Board’s committees and among the Executive Chairman, the Board as a whole, the Board’s committees and with regard to senior management.

Committees

Committees perform many important functions. The responsibilities of each Committee are stated in their respective Committee charters which are available at https://www.investors.dupont.com/investors/dupont-investors/corporate-governance. The Board, upon the recommendation of the Nomination and Governance Committee, elects members to each Committee and has the authority to change Committee chairs, memberships and the responsibilities of any Committee as set forth in the Bylaws.

The Board currently has four Committees: (i) Audit Committee; (ii) Nomination and Governance Committee; (iii) People and Compensation Committee; and the (iv) Environment, Health, Safety and Sustainability Committee (“EHS&S Committee”).

 

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A brief description of the responsibilities of the Committees are as follows:

Committees

 

   

Audit Committee

 

All members of the Audit Committee are independent directors under the Board’s Corporate Governance Guidelines and applicable regulatory and listing standards.

 

Held nine meetings during 2020.

 

  Nominates, engages and replaces, as appropriate, the Company’s independent registered public accounting firm, subject to stockholder ratification, to audit the Company’s Consolidated Financial Statements.

 

  Reviews and approves the Audit Committee Pre-Approval Policy of audit and non-audit services provided by the Company’s independent registered public accounting firm (the “Pre-Approval Policy”).

 

  Provides oversight on the external reporting process and the adequacy of the Company’s internal controls.

 

  Reviews effectiveness of the Company’s systems, procedures and programs designed to promote and monitor compliance with applicable laws and regulations and receives prompt reports on compliance matters that could adversely impact the Company’s external reporting process or adequacy of internal controls.

 

  Reviews the scope of the audit activities of the independent registered public accounting firm and the Company’s internal auditors and appraises audit efforts of both.

 

  Reviews services provided by the Company’s independent registered public accounting firm and other disclosed relationships as they bear on the independence of the Company’s independent registered public accounting firm.

 

  Establishes procedures for the receipt, retention and resolution of complaints regarding accounting, internal controls or auditing matters.

 

A Summary of the Pre-Approval Policy is included as part of Agenda Item 3: Ratification of the Appointment of the Independent Registered Public Accounting Firm in this Proxy Statement.

 

   

Nomination and Governance Committee

 

All members of the Nomination and Governance Committee are independent directors under the Board’s Corporate Governance Guidelines and applicable regulatory and listing standards.

 

Held six meetings during 2020.

 

  Develops and recommends to the Board a set of corporate governance guidelines for the Company.

 

  Establishes the process for identifying and evaluating director nominees, determines the qualifications, qualities, skills and other expertise required to be a director, and recommends to the Board nominees for election to the Board.

 

  Monitors the functioning of Board Committees.

 

  Oversees the Board’s new director orientation program.

 

  Oversees the annual assessment of the Board and its Committees.

 

  Oversees the Company’s corporate governance practices, including reviewing and recommending to the Board for approval any changes to the Company’s Code of Conduct and Code of Financial Ethics, Certificate of Incorporation, Bylaws and Committee charters.

 

  Oversees the Company’s compliance programs, including the Code of Conduct and Code of Financial Ethics.

 

 

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People and Compensation Committee

 

All members of the People and Compensation Committee are independent directors under the Board’s Corporate Governance Guidelines and applicable regulatory and listing standards.

 

Held eight meetings during 2020.

 

    Retains any compensation consultants that the Committee, in its sole discretion, deems appropriate to fulfill its duties and responsibilities; the Committee sets the compensation and oversees the work of the consultants, including approval of an applicable executive compensation peer group.

 

    Assesses current and future senior leadership talent for Company officers.

 

    Assists the Board in the CEO succession planning process.

 

    Reviews and approves the Company’s programs for executive development, performance and skills evaluations.

 

    Conducts an annual review of the Company’s diversity talent and diversity representation on the slate for key positions.

 

    Oversees the Company’s human capital management.

 

    Reviews and approves the goals and objectives relevant to the CEO’s compensation, oversees the performance evaluation of the CEO based on such goals and objectives and, together with the other independent members of the Board, determines and approves the CEO’s compensation based on this evaluation.

 

    Reviews and approves all compensation and employment arrangements, including severance agreements, of the Company’s executive officers and named executive officers other than the CEO.

 

    Reviews the Company’s incentive compensation arrangements to determine whether they encourage excessive risk-taking, and evaluates compensation policies and practices that could mitigate any such risk.

 

    Works with management to develop the Compensation Discussion and Analysis and other compensation disclosures for inclusion in the Company’s Annual Report on Form 10-K, annual meeting Proxy Statement or any other filings with the SEC.

 

    Considers the voting results of any say-on-pay or related stockholder proposals.

 

    Recommends non-employee directors’ compensation to the Board.

 

   

Environment, Health, Safety & Sustainability Committee

 

All members of the Environment, Health, Safety and Sustainability Committee are independent directors under the Board’s Corporate Governance Guidelines and applicable regulatory and listing standards.

 

Held five meetings during 2020.

 

    Assesses the effectiveness of, and advises the Board on, corporate responsibility programs and initiatives, including the Company’s public policy, environment, health, safety and sustainability (“EHS&S”) policies and programs and matters impacting the Company’s public reputation.

 

    Oversees and advises the Board on the Company’s corporate citizenship and corporate social responsibility programs and activities, including public policy management, advocacy priorities, philanthropic contributions, and corporate reputation management.

 

    Reviews the Company’s public policy positions, strategy regarding political engagement and corporate social responsibility initiatives.

 

    Assesses the Company’s EHS&S policies and performance and makes recommendations to the Board and the management of DuPont with regard to the same.

 

    Reviews and provides input to management regarding the management of current and emerging EHS&S issues and reports periodically to the Board on EHS&S matters affecting DuPont.

 

 

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Committee Membership

The following chart shows the current Committee membership:

 

     Committees
  Director    Audit   

Nomination and

Governance

  

People and

Compensation

  

EHS&S

  Amy G. Brady*

   X   

 

  

 

   X

  Edward D. Breen

  

 

  

 

  

 

  

 

  Ruby R. Chandy*

   X   

 

  

 

   CH

  Franklin K. Clyburn, Jr.*

  

 

   X    CH elect1   

 

  Terrence R. Curtin*

   X    X   

 

  

 

  Alexander M. Cutler*

  

 

   CH    X   

 

  Eleuthère I. du Pont*

   X    X   

 

  

 

  Rajiv L. Gupta*

  

 

  

 

   CH1    X

  Luther C. Kissam*

   X    X   

 

  

 

  Frederick M. Lowery*

  

 

  

 

   X    X

  Raymond J. Milchovich*

  

 

  

 

   X    X

  Steven M. Sterin*

   CH     

 

    

 

   X

* = Independent    CH = Chair

1 Mr. Gupta currently chairs the P&C Committee; however, he is of retirement age under the terms of our Corporate Governance Guidelines and is not standing for reelection in 2021. Mr. Clyburn will assume the role of Chair of the P&C Committee in April 2021.

Board’s Role in the Oversight of Risk Management

The Board is responsible for overseeing the overall risk management process for the Company. Risk management is considered a strategic activity within the Company and responsibility for managing risk rests with executive management while the Committees and the Board as a whole participate in the oversight of the process. Specifically, the Board as a whole has responsibility for overseeing the strategic planning process and reviewing and monitoring management’s execution of the corporate and business plan. The Board is also responsible for overseeing risks associated with business continuity, cybersecurity and innovation. Each Committee is responsible for oversight of specific risk areas relevant to their respective charters.

The Board, acting through its committee structure, is responsible for overseeing that management implements and follows this risk management process and for coordinating the outcome of reviews by Committees in their respective risk areas.

 

  Committee    Area(s) of Risk Management Oversight Responsibility

  Audit Committee

  

Management and effectiveness of accounting, auditing, external reporting, compliance and internal controls, and protection of intellectual property and trade secrets

  Nomination and Governance Committee

  

Director independence, potential conflicts of interest and other ethics and compliance

  People and Compensation Committee

  

The Company’s executive compensation practices, human capital management and leadership succession planning

  Environment, Health, Safety & Sustainability Committee

  

Emerging regulatory developments related to safety, health and environment and public policy management matters, as well as chemical stewardship, geopolitical risk, process safety and production quality

Although each Committee is responsible for overseeing the management of certain risks as described above, the full Board is regularly informed by the Committees about these risks. This enables the Board and the Committees to coordinate risk oversight and the relationships among the various risks faced by the Company.

 

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Succession Planning

The Board believes that one of its primary responsibilities is to oversee the development and retention of senior talent and to ensure that an appropriate succession plan is in place for the Chief Executive Officer and other members of senior management. The People and Compensation Committee, together with the Chief Executive Officer, regularly reviews senior management talent, including readiness to take on additional leadership roles and developmental opportunities needed to prepare senior leaders for greater responsibilities. In addition, the People and Compensation Committee regularly discusses recommendations and evaluations from the Chief Executive Officer as to potential successors to fill senior positions. The Chief Executive Officer also provides a regular review to the People and Compensation Committee assessing the members of the executive leadership team and his or her potential to succeed him. This review includes a discussion about development plans for senior leaders to help prepare them for future succession and contingency plans in the event the Chief Executive Officer is unable to serve for any reason (including death or disability). While the People and Compensation Committee has the primary responsibility to develop succession plans for the Chief Executive Officer position, it regularly reports to the Board and decisions are made at the Board level.

Stockholder Engagement

Throughout the year, the Company continued extensive outreach to stockholders. Through this outreach, the management team updated investors on a range of topics such as the N&B transaction with IFF, the overall business strategy, current business conditions, corporate citizenship and sustainability, corporate governance practices and executive compensation, as well as gained an understanding of the perspectives and concerns of each investor. The Board and management team carefully consider the feedback from these meetings, as well as stockholder support, when reviewing the business, corporate governance and executive compensation profiles of the Company.

Communications with the Board and Directors

Stockholders and other parties interested in communicating directly with the Board, the Executive Chairman, the Lead Independent Director or other independent directors, may do so by writing in care of the Office of the Corporate Secretary, 974 Centre Road, CRP Building 730, Wilmington, DE 19805. Pursuant to our Corporate Governance Guidelines, our Lead Independent Director is available for consultation and direct communication if requested by major stockholders.

The Board’s independent directors have approved procedures for handling correspondence received by the Company and addressed to the Board, the Executive Chairman, the Lead Independent Director or other outside directors. Communications will be distributed to any or all directors as appropriate depending upon the individual communication. However, the directors have requested that communications that do not directly relate to their duties and responsibilities as directors of the Company be excluded from distribution and deleted from email that they access directly. Such excluded items include “spam”; advertisements; mass mailings; form letters and email campaigns that involve unduly large numbers of similar communications; solicitations for goods, services, employment or contributions; surveys; and individual product inquiries or complaints. Additionally, communications that appear to be unduly hostile, intimidating, threatening, illegal or similarly inappropriate will also be screened for omission by the Office of the Corporate Secretary. Any omitted or deleted communication will be made available to any director upon such director’s request. Concerns relating to accounting, internal controls, auditing or ethical matters are brought to the attention of the internal audit function and handled in accordance with procedures established by the Audit Committee with respect to such matters.

Board, Committees and Annual Meeting Attendance

During 2020, DuPont held 15 Board meetings and 28 Committee meetings. All of the incumbent directors attended more than 75% of the sum of the total number of Board meetings and the total number of meetings of the Committees on which the director served during the past year. All directors are encouraged to attend the Annual Meetings of Stockholders, and in 2020, all 12 of the directors then serving on the DuPont Board attended the Annual Meeting of Stockholders held on May 27, 2020.

 

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Executive Sessions of Directors

The non-employee directors meet in executive session in connection with each regularly scheduled meeting of the Board, and at other times as they may determine appropriate. During 2020, there were thirteen executive sessions of the Board chaired by the Lead Independent Director for the Board. The Committees typically meet in executive session in connection with every Committee meeting.

Director Qualifications and Diversity

The Nomination and Governance Committee has adopted guidelines to be used in evaluating candidates for Board membership in order to ensure a diverse and highly qualified Board. Directors are selected for their integrity and character; sound, independent judgment; breadth of experience, insight and knowledge; and business acumen. Leadership skills, scientific or technology expertise, familiarity with issues affecting global businesses in diverse industries, prior government service, diversity, time availability in light of other commitments, dedication and conflicts of interest are among the relevant criteria, which will vary depending on the needs of the Board. In addition, the Board limits the number of other public company boards on which a director may serve. No director who is an executive officer of a public company may serve as a director of the Company if he or she serves on more than a total of three public company boards, including the Board and the board of the company with which the director is employed. If a director is not an executive officer of a public company, he or she may serve on a maximum of four public company boards, including the Board. Directors are required to advise the Executive Chairman in advance of serving on another company’s board.

Guidelines for director qualifications are included in the Corporate Governance Guidelines. The guidelines for director qualifications provide that a commitment to diversity is a consideration in the identification and nomination of director candidates, and that candidates are evaluated to provide for a diverse and highly qualified Board. The Nomination and Governance Committee and the full Board implement and assess the effectiveness of these guidelines and the commitment to diversity by referring to these guidelines in the review and discussion of Board candidates when assessing the composition of the Board and by including questions regarding the diversity of the Board membership in the Board’s annual self-evaluations.

As part of the nominee selection process for the Annual Meeting, the Nomination and Governance Committee reviewed the diversity of the Board, including the demographic information set forth below provided by all director nominees. Based upon the review of the Nomination and Governance Committee, it believes that the overall mix of the backgrounds of the nominees for election at the Annual Meeting provides for a diverse and highly qualified Board.

 

Annual Meeting Board Nominee Diversity Matrix

Board Size:

        

Total Number of Director Nominees

  12     

Gender:

      Male         Female     

Number of director nominees by gender identity

      9         3     

Number of director nominees who identify in any of the categories below:

        

African American or Black

      2         0     

Alaskan Native or American Indian

      0         0     

Asian

      0         1     

Hispanic or Latinx

      0         0     

Native Hawaiian or Pacific Islander

      0         0     

White

      7         2     

Two or More Races or Ethnicities

      0         0     

Race or Ethnicity Undisclosed

      0         0     

LGBTQ+

  0     

 

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Identifying Director Candidates

Among the Nomination and Governance Committee’s most important functions is the selection of directors who are recommended to the Board as candidates for election. The Nomination and Governance Committee has adopted a process for identifying new director candidates. Recommendations may be received by the Nomination and Governance Committee from various sources, including current or former directors, a search firm retained by the Nomination and Governance Committee to assist in identifying and evaluating potential candidates, stockholders, Company executives, and by self-nomination. The Nomination and Governance Committee is open to accepting stockholders’ suggestions of candidates to consider as potential Board members as part of the Nomination and Governance Committee’s periodic review of the size and composition of the Board and its Committees. Such recommendations should be sent to the Nomination and Governance Committee through the Office of the Corporate Secretary. The Nomination and Governance Committee uses the same process to evaluate director nominees recommended by stockholders as it does to evaluate nominees identified by other sources.

Director Candidate Nominations through Proxy Access

The Bylaws set forth procedural and content requirements for director candidate nominations through proxy access. As more specifically provided in the Bylaws, a stockholder or group of up to twenty stockholders owning 3% or more of the Company’s outstanding shares of common stock continuously for at least three years, may nominate and include in the Company’s proxy materials director nominees constituting up to the greater of two individuals or 20% of the Board, provided that the stockholder(s) and the nominee(s) satisfy the requirements detailed in the Bylaws. Nominations should be sent to the Office of the Corporate Secretary in accordance with the procedural and content requirements set forth in the Bylaws, the full text of which is available at https://www.investors.dupont.com/investors/dupont-investors/corporate-governance.

Board Term and Director Retirement Policy

The Certificate of Incorporation provides that all directors stand for election at each Annual Meeting of Stockholders.

The Corporate Governance Guidelines provide that directors should not be nominated for election to the Board after reaching age 75, unless it is determined that it is in the best interests of the Company to extend the retirement date.

Code of Conduct

The Board has adopted a Code of Conduct for all directors of the Company and a Code of Financial Ethics applicable to the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. In addition, the Company has a code of conduct applicable to all employees. The full text of Director Code of Conduct, Code of Financial Ethics and the Employee Code of Conduct are available at https://www.investors.dupont.com/investors/dupont-investors/corporate-governance. In addition, DuPont discloses on its website any waiver of or amendment to the Director Code of Conduct and the Code of Financial Ethics requiring disclosure under applicable rules.

Related Person Transactions

The Board adopted written policies and procedures relating to the approval or ratification of each “Related Person Transaction.” Under the policies and procedures, the Nomination and Governance Committee (or any other committee comprised of independent directors designated by the Board) reviews the relevant facts of all proposed Related Person Transactions and either approves, disapproves or ratifies the entry into a particular Related Person Transaction, by taking into account, among other factors it deems appropriate:

 

  (i)

the commercial reasonableness of the transaction;

 

  (ii)

the materiality of the Related Person’s direct or indirect interest in the transaction;

 

  (iii)

whether the transaction may involve a conflict of interest, or the appearance of one;

 

  (iv)

whether the transaction was in the ordinary course of business; and

 

  (v)

the impact of the transaction on the Related Person’s independence under the Corporate Governance Guidelines and applicable regulatory and listing standards.

 

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No director may participate in any discussion or approval of a Related Person Transaction for which he/she or any of his/her immediate family members is the Related Person. Related Person Transactions are approved or ratified only if they are determined to be in the best interests of DuPont and its stockholders.

If a Related Person Transaction that has not been previously approved or previously ratified is discovered, the Related Person Transaction will be presented to the Nomination and Governance Committee for ratification. If the Nomination and Governance Committee does not ratify the Related Person Transaction, then the Company either ensures all appropriate disclosures regarding the transaction are made or, if appropriate, takes all reasonable actions to attempt to terminate the Company’s participation in the transaction.

Under DuPont’s policies and procedures, a “Related Person Transaction” is generally any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships in which:

 

  (i)

DuPont was, is or will be a participant;

 

  (ii)

the aggregate amount involved exceeds $120,000 in any fiscal year; and

 

  (iii)

any Related Person had, has or will have a direct or indirect material interest.

A “Related Person” is generally any person who is, or at any time since the beginning of DuPont’s last fiscal year was:

 

  (i)

a director or an executive officer of DuPont or a nominee to become a director of DuPont;

 

  (ii)

any person who is known to be the beneficial owner of more than 5% of any class of DuPont’s outstanding common stock; or

 

  (iii)

any immediate family member of any of the persons mentioned above.

Certain Relationships and Related Transactions

DuPont and its subsidiaries purchase products and services from and/or sell products and services to companies of which certain of the directors and executive officers of DuPont, or their immediate family members, are employees. The Nomination and Governance Committee and the Board have reviewed such transactions and relationships and do not consider the amounts involved in such transactions material. Such purchases from and sales to each company involve less than either $1,000,000 or 2% of the consolidated gross revenues of each of the purchaser and the seller, and all such transactions are in the ordinary course of business. Some such transactions are continuing, and it is anticipated that similar transactions will occur from time to time.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers and persons who own more than 10% of a registered class of the Company’s equity securities (“Reporting Persons”) to file with the SEC reports on Forms 3, 4 and 5 concerning their ownership of and transactions in the common stock and other equity securities of the Company, generally within two business days of a reportable transaction. As a practical matter, the Company seeks to assist its directors and executives by monitoring transactions and completing and filing reports on their behalf.

Based solely upon a review of SEC filings, all Reporting Persons complied with these reporting requirements during 2020.

Sustainability Initiatives

A Purpose-Driven Company

Our purpose — to empower the world with the essential innovations to thrive — describes how we use our passion and proven expertise in science and innovation to create sustainable solutions for the complex challenges facing our world. Over the course of DuPont’s history, we have proven repeatedly that the most valuable and enduring business outcomes are the ones that are beneficial to society and keep the planet thriving. The Board believes that a continued focus on sustainability will help the Company deliver long-term stockholder value.

 

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Guided by Our Core Values

Our core values reflect the longstanding commitments of our heritage companies, demonstrate our steadfast commitment to our people and the planet, and exemplify the way we operate.

 

LOGO

 

  

LOGO

 

  

LOGO

 

  

LOGO

 

Safety and health

        

 

  

Respect for people

        

 

  

Highest ethical behavior

        

 

  

Protecting the planet

        

 

We’re committed to protecting the safety and health of our employees, our contractors, our customers, and the people in the communities where we operate.    We treat our employees and all our partners with professionalism, dignity, and respect, fostering and environment where people can contribute, innovate, and excel.    We conduct ourselves in accordance with the highest ethical standards, and in compliance with all applicable laws, always striving to be a respected corporate citizen worldwide.    We find science-enabled, sustainable solutions for our customers, always managing our businesses to protect the environment and preserve the earth’s natural resources-for today and for future generations.

Our Commitment to Sustainability

As a founding member of the World Business Council for Sustainable Development, DuPont and its predecessors have been sustainability leaders for decades and is committed to using a science-based approach to develop our innovations and achieving our goals. It is how we contribute to solving the world’s biggest challenges.

DuPont 2030 Sustainability Goals

In October 2019, DuPont announced its fifth-generation sustainability strategy — nine ambitious priorities that reflect our best opportunity to make a positive impact in the world. Over the course of the next decade, we pledge to work earnestly to make progress against these ambitions which we believe will have a meaningful impact on the sustainability of our business, our communities and our planet.

 

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LOGO     

    

 

    

 
  

 

Delivering solutions for global challenges

 

        Align 100% of the DuPont innovation portfolio to meaningfully advance the UN Sustainable Development Goals and create value for our customers
        
        
LOGO         
  

 

Enabling a circular economy

 

        Integrate circular economy principles into our business models considering lifecycle impacts in the markets we serve
        
        
LOGO         
  

 

Innovating safer by design

 

        Design 100% of our products and processes using sustainability criteria including the principles of green chemistry
        
        
LOGO         
  

 

Acting on climate

 

        Reduce Green House Gas (GHGs) emissions 30% including sourcing 60% of electricity from renewable energy
   
       Deliver carbon neutral operations by 2050
        
        
LOGO         
  

 

Leading water stewardship

 

        Implement holistic water strategies across all facilities
   
    Enable millions of people access to clean water by advancing water technology and enacting strategic partnerships
        
        
LOGO         
   Delivering world-class health & safety performance         Further our commitment to zero injuries, occupational illnesses and incidents
        
        
LOGO         
  

 

Accelerating diversity & inclusion

 

        Become one of the world’s most inclusive companies, with diversity well ahead of industry benchmarks
        
        
LOGO         
  

 

Cultivating well-being & fulfillment

 

        Create a workplace where employees report high levels of well-being and fulfillment
        
        
LOGO         
  

 

Building thriving communities

 

        Improve over 100 million lives through targeted social impact programs
        

 

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Sustainability Governance

Each DuPont business has a dedicated sustainability leader responsible for overseeing business and product-level sustainability efforts. These business sustainability leaders are part of a cross-business, cross-functional Sustainability Leadership Council, chaired by the VP of Corporate Sustainability. Executive responsibility for sustainability performance sits with the Chief Technology & Sustainability Officer (CTSO). The CTSO role was created specifically for DuPont to capitalize on the intrinsic link between sustainability and innovation in our operating model.

To ensure robust governance, the CTSO reports directly to the CEO and routinely engages the EHS&S Committee of the Board on matters of sustainability, product stewardship and community impact.

Communicating Our Progress

We will publish our progress against our goals in our annual sustainability report, available at www.dupont.com/sustainability. DuPont’s positions on Environmental, Social and Governance (ESG) topics such as Product Safety and Transparency, Climate Change, Human Rights, PFAS, and Safety, Health and Environment can be found at www.dupont.com/position-statements.html.

Human Capital Management

Foundational to the Company’s current and future success is its employees, who drive the Company’s strategic vision, manage operations and develop products. The Company focuses significant attention on attracting, motivating, and retaining talent at all levels. Through training and professional development initiatives, promoting a culture of diversity and inclusion, and emphasizing the importance of health, safety, and well-being, the Company’s aim is to create an environment that fully supports the needs of its employees. Annually, an enterprise-wide engagement survey is conducted, which provides insight into employee morale and aspects of workplace culture like core values, communication and employee development.

The Company is committed to creating innovative talent-management opportunities that are aligned to the strategic needs of its workforce. Learning is a continual process, and the Company offers a diverse set of training, education, and development opportunities, both formally and informally, throughout the year. Each segment within the Company has ongoing training programs that are designed specifically to maximize the performance of its employees in meeting business objectives, including better health and safety outcomes. All employees take part in a mix of on-the-job training and appropriate learning and training opportunities focusing on topics that are the most critical and relevant to each employees’ job function.

The Company believes that diversity and inclusion is central to high employee engagement and seeks to foster an environment where employees can bring their authentic selves to work each day. The more perspectives there are, the more ideas that can be generated, which makes diversity, equity, and inclusion (“DE&I”) a driver of innovation, and therefore, integral to the Company’s success. The Company’s employee-led Employee Resource Groups (“ERGs”) help cultivate a culture of acceptance where employees feel not only accepted, but celebrated, at every level. As of December 31, 2020, the Company had eight ERGs — DuPont Corporate Black Employees Network, DuPont Asian Group, DuPont Pride Network, DuPont Latin Network, DuPont Women’s Network, DuPont Veterans Network, DuPont Early Career Network, and DuPont Persons with Disabilities and Allies. Each group is actively sponsored by senior leadership, helping model and promote inclusive values and behaviors. The Company also offers DE&I tools and resources to educate managers and employees in how to utilize diversity as a resource and establish more inclusive work environments. These resources include unconscious bias workshops, networking and mentoring practices, and opportunities for participation in external conferences and events, among others.

The Company’s success also depends on the well-being of employees, including physical, mental and intellectual health. All employees have the support of the Company’s Integrated Health Services (“IHS”) teams, which provides onsite and intranet-based services to support and monitor the health and welfare of employees. The Company’s larger manufacturing and research sites have onsite clinics where employees can get occupational care, first aid treatment, travel vaccinations, and referrals for off-site medical care. The Company continuously strives for zero workplace injuries, occupational illnesses and incidents. The Company’s safety metrics are measured against this goal at least quarterly, and the Company’s Environment, Health, Safety & Sustainability Committee is charged with

 

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CORPORATE GOVERNANCE (continued)

 

 

driving improvements in the Company’s health and safety practices. IHS also assesses health risks across DuPont to find out which health concerns are most important to our employees, and conducts medical surveillance exams based on occupational risks and regulatory compliance priorities flagged by the Company’s Environment, Health and Safety team.

In response to the COVID-19 pandemic, the Company has corporate, regional and local crisis management teams in place actively monitoring, preparing and managing the Company’s response. The Company has implemented safety plans and protocols based on World Health Organization and Centers for Disease Control guidelines. This includes issuing health and safety guidance for sites that have remained open during the pandemic, and encouraging employees to work remotely, when possible.

 

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AGENDA ITEM 1: ELECTION OF DIRECTORS

Board Composition

The Board currently consists of twelve members, with Mr. Breen serving as Executive Chairman and Chief Executive Officer and Mr. Cutler serving as Lead Independent Director.

Recommendations and Nominations for Director

In accordance with the recommendation of the Nomination and Governance Committee, the Board has nominated the individuals listed in the following table for election as directors, to serve for a term that expires at the next annual meeting for the election of directors and until their successors are elected and qualified.

 

  (As of the date of the Proxy Statement)

  Name

  Age

  Current Position

Independent

Audit

Committee

Nomination
and

Governance

Committee

People and     
Compensation     

Committee     

Environment,
Health,
Safety &
Sustainability
Committee

Other  

Current  

Public  

Boards  

 

  Amy G. Brady

Age 54

Chief Information Officer & Executive Vice President, KeyCorp

X X         X

  Edward D. Breen

Age 64

Executive Chairman and Chief Executive Officer, DuPont de Nemours, Inc.

        2

  Ruby R. Chandy

Age 59

Former President, Industrial Division

Pall Corporation

X X         CH         2

  Franklin K. Clyburn, Jr.

Age 56

Executive Vice President, Chief

Commercial Officer, Merck

X         X         CH elect

  Terrence R. Curtin

Age 52

Chief Executive Officer,

TE Connectivity

X X         X         1

  Alexander M. Cutler

Age 69

Retired Chair and Chief Executive Officer, Eaton

X         CH         X         1

  Eleuthère I. du Pont

Age 54

President, Longwood Foundation

X X         X         1

  Luther C. Kissam

Age 56

Partner, Bernhard Capital Partners

Management LP

X X         X         2

  Frederick M. Lowery

Age 50

Senior Vice President, Thermo Fisher,

President Life Sciences and Laboratory

Products Groups

X         X         X

  Raymond J. Milchovich

Age 71

Chief Executive Officer, NTS

X         X         X

  Deanna M. Mulligan*

Age 57

Former Board Chair, Director CEO & President, Guardian Life Insurance Company

X

  Steven M. Sterin

Age 49

Former Executive Vice President & Chief Financial Officer, Andeavor

X CH         X         1

CH = Chair

*Rajiv L. Gupta is of retirement age under the terms of our Corporate Governance Guidelines and is not standing for reelection in 2021. Ms. Mulligan has been nominated by the Board to fill the vacancy created by Mr. Gupta’s retirement. The Board expects to appoint Ms. Mulligan to the Board in advance of its April meeting which will occur prior to the Annual Meeting.

 

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The Board unanimously recommends a vote FOR the election of ALL of these nominees as directors.

The Company’s Bylaws prescribe the voting standard for election of directors as a majority of the votes cast in an uncontested election, such as this one, where the number of nominees does not exceed the number of directors to be elected. Under the Corporate Governance Guidelines, if a nominee who already serves as a director is not elected, that nominee shall offer to tender his or her resignation to the Board. The Nomination and Governance Committee will then recommend to the Board whether to accept or reject the resignation, or whether other action should be taken. Within ninety days of the certification of election results, the Board will publicly disclose its decision regarding whether to accept or reject the resignation. As explained on the accompanying proxy card or voting information, it is the intention of the persons named as proxies to vote executed proxies FOR the candidates nominated by the Board unless contrary voting instructions are provided. If something unanticipated should occur prior to the Annual Meeting making it impossible for one or more of the candidates to serve as a director, votes will be cast in the best judgment of the persons authorized as proxies.

The NYSE rules do not permit brokers with discretionary authority to vote in the election of directors. Therefore, if you hold your shares beneficially and do not provide voting instructions to your bank or broker, your bank or broker will abstain from voting on your behalf and your shares will not be voted in the election of directors. We urge you to promptly provide voting instructions to your broker to ensure that your shares are voted on this matter. Please follow the instructions set forth in the voting information provided by your bank or broker.

 

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DIRECTOR NOMINEES

Information in the biographies summarizes key qualifications and diversity attributes as they apply to the individual directors to support the conclusion that these individuals are highly qualified to serve on the Board. The information is current as of the date of this Proxy Statement. Each nominee has consented to serve if elected.

 

 

      AMY G. BRADY

 

 

Executive Vice President and Chief Information Officer, KeyCorp

 

 

        LOGO

       Age 54

 

Ms. Brady is Chief Information Officer (CIO), Executive Vice President at KeyCorp, a bank-based financial services company. In this role, Ms. Brady leads the company’s shared services for technology, operations, data, client and account servicing, security services (including cybersecurity), and procurement. Prior to joining KeyCorp in 2012, Ms. Brady spent 25 years with Bank of America, including as CIO, Enterprise Technology and Operations, where she was responsible for technology and operations delivery for critical enterprise functions including Finance, Risk, Human Resources, Marketing, Legal and Audit. Ms. Brady joined the DuPont Board of Directors in October 2019.

 

 

Skills and Expertise

Ms. Brady’s technology, operations and cybersecurity expertise is a strong asset to the Board. Ms. Brady also has extensive management experience.

 

 

 

      EDWARD D. BREEN

 

 

Executive Chairman and Chief Executive Officer, DuPont de Nemours, Inc.

 

 

        LOGO

       Age 64

 

Mr. Breen has served as the Executive Chairman of the Board of Directors of DuPont since June 1, 2019 and as Chief Executive Officer since February 17, 2020. Prior to his current role, Mr. Breen served as the Chief Executive Officer of DowDuPont from September 1, 2017 to May 31, 2019. Mr. Breen was named Interim Chairman of the EID Board and Chief Executive Officer on October 16, 2015, and assumed those roles permanently on November 9, 2015. He served as Chairman, from July 2002 to March 2016, and Chief Executive Officer, from July 2002 to September 2012, of Tyco International, plc, a leading global provider of security products and services, fire detection and suppression products and services and life safety products. Prior to joining Tyco, Mr. Breen held senior management positions at Motorola, including as President and Chief Operating Officer, and General Instrument Corporation, including as Chairman, President and Chief Executive Officer. Mr. Breen became a director of IFF in February 2021 and also serves as a director of Comcast Corporation (since 2014 and 2005 to 2011). Mr. Breen is a member of the Advisory Board of New Mountain Capital LLC, a private equity firm. Mr. Breen previously served as a director of Corteva from June 2019 to April 2020. Mr. Breen served as a director of EID from February 2015 to September 2017, a director of DowDuPont from September 2017 to June 2019, and a director of DuPont since June 2019.

 

 

Skills and Expertise

Mr. Breen’s experience leading numerous global companies makes him well suited to lead DuPont and to help enhance the Board’s ability to consider, evaluate and maintain oversight over business strategies and risk management efforts.

 

 

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      RUBY R. CHANDY

 

 

Former President of the Industrial Division of Pall Corporation

 

 

        LOGO

       Age 59

 

Ms. Chandy was the President of the Industrial Division of Pall Corporation, a leading supplier of filtration, separation, and purification technologies, from April 2012 to November 2015. Prior to her time at Pall, Ms. Chandy held leadership positions with several major, global companies including The Dow Chemical Company, Rohm and Haas Corporation, Thermo Fisher Scientific Corporation and Boston Scientific Corporation. Ms. Chandy currently serves on the boards of Ametek Inc. and Flowserve Corporation. She also sits on the Executive Advisory Board of Pritzker Private Capital and, previously, on the Advisory Board of Gryphon Investors. Additionally, she serves on the MIT Sloan Americas Executive Board. Ms. Chandy joined the Specialty Products Advisory Committee in April 2018 and served as an ex-officio member of the DowDuPont Board from April 2018 to June 2019. Ms. Chandy joined the DuPont Board of Directors in June 2019.

 

 

Skills and Expertise

Ms. Chandy has experience in industrial, medical, life science, specialty materials and microelectronics companies. She is a proven executive with experience in international growth and innovation. Her financial, management, environmental and global expertise brings value to the Board.

 

 

 

 

      FRANKLIN K. CLYBURN, JR.

 

 

Executive Vice President and Chief Commercial Officer, Merck

 

 

        LOGO

       Age 56

 

Mr. Clyburn has served as the Executive Vice President and Chief Commercial Officer of Merck since 2019. Mr. Clyburn also serves as a member of Merck’s Executive Committee. In his roles at Merck, a publicly traded global pharmaceutical company, Mr. Clyburn is responsible for all operations and P&L across the human health commercial portfolio globally. He previously held various senior leadership positions within the company, most recently serving as President of Global Oncology from 2013 to 2018. He joined Merck in 2008 following eight years as Vice President of various business units at Sanofi-Aventis S. A. (now Sanofi). Earlier in his career, Mr. Clyburn served in a wide range of commercial roles of increasing responsibility at Hoechst Marion Roussel Inc. (now part of Sanofi) from 1994 to 2000. Mr. Clyburn serves as a member of the Executive Leadership Council and is on the board of Trustees of Thomas Edison State University. Mr. Clyburn joined the DuPont Board of Directors in June 2019.

 

 

Skills and Expertise

Mr. Clyburn’s tenure at Merck has provided him with vast experience in research and development operations, the regulatory environment, and marketing and sales. He is globally focused and has great depth in sales and marketing of complex, science-based products. Mr. Clyburn also has extensive management experience.

 

 

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      TERRENCE R. CURTIN

 

 

Chief Executive Officer and Board Member, TE Connectivity

 

 

        LOGO

       Age 52

 

Mr. Curtin assumed the role of CEO at TE Connectivity, a global technology leader in connectivity and sensor solutions, in March 2017. Prior to the CEO role, Mr. Curtin served as TE’s President, where he was responsible for all of the company’s businesses and mergers and acquisitions activities. Mr. Curtin previously led TE’s Industrial Solutions business segment and also served as TE’s Chief Financial Officer. Prior to his time with TE Connectivity, Mr. Curtin spent eleven years at Arthur Andersen LLP in positions of increasing responsibility. Mr. Curtin has served on the board of directors of TE Connectivity since March 2016. He is also a member of the board of directors of the US-China Business Council. Mr. Curtin joined the DuPont Board of Directors in June 2019.

 

 

Skills and Expertise

Mr. Curtin’s experience as the Chief Executive Officer of a global technology company provides him with expertise as a global-minded leader with strong corporate governance skills, M&A experience and technology. He also brings a depth of experience in finance and accounting.

 

 

 

      ALEXANDER M. CUTLER

 

 

Former Chairman and Chief Executive Officer, Eaton

 

 

        LOGO

       Age 69

 

Mr. Cutler served as the Chairman and Chief Executive Officer of Eaton, a global, diversified industrial manufacturer, from 2000 to 2016. Mr. Cutler formerly served as Eaton’s President and Chief Operating Officer, Executive Vice President and Chief Operating Officer-Controls and Executive Vice President-Operations. He serves on the boards of KeyCorp, United Way Services of Greater Cleveland, and the Musical Arts Association. Mr. Cutler served as a director of EID from 2008 until September 2017, he served as a director of DowDuPont from September 2017 to June 2019 and joined the DuPont Board of Directors in June 2019.

 

Skills and Expertise

Mr. Cutler has a wealth of global business management, finance, investor relations, marketing and supply chain and logistics experience as former Chairman and Chief Executive Officer of Eaton. As Lead Independent Director and Chair of the Nomination and Governance Committee, he provides the Board with important insights in the areas of corporate governance and government relations based on his past position as Chair of The Business Roundtable Corporate Governance Committee as well as his various board positions.

 

 

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AGENDA ITEM 1: ELECTION OF DIRECTORS (continued)

 

 

 

      ELEUTHÈRE I. DU PONT

 

 

President, Longwood Foundation

 

 

        LOGO

       Age 54

 

Mr. du Pont has served as President of the Longwood Foundation, a private foundation principally supporting charitable organizations, since 2008. He previously served as senior vice president, operations and chief financial officer of drugstore.com from 2007 to 2008. Prior to that time, Mr. du Pont served as president and chief financial officer of Wawa, Inc. Mr. du Pont serves on the boards of WSFS Financial Corporation and Burris Logistics. Mr. du Pont served on the EID board of directors from 2006 until September 2017. In September 2017, Mr. du Pont joined the Specialty Products Advisory Committee and served as an ex-officio member of the DowDuPont Board until June 2019. Mr. du Pont joined the DuPont Board of Directors in June 2019.

 

Skills and Expertise

From his experiences as president, chief financial officer and corporate director, Mr. du Pont brings to the Board expertise on corporate governance, accounting, finance, human resources, information technology, investment management, investor relations and procurement. He also brings a unique perspective from his roles leading safety, supply chain and operations.

 

 

 

      LUTHER C. KISSAM

 

 

Partner, Bernhard Capital Partners Management, LP

 

 

        LOGO

       Age 56

 

Mr. Kissam joined Bernhard Capital Partners Management, LP, as Partner in January 2021. He previously served as Chairman, President and CEO of Albemarle Corporation, a global specialty chemicals company with leading positions in lithium, bromine and refining catalysts, until his retirement in June 2020. Mr. Kissam served as President and Chief Executive Officer of Albemarle from September of 2011 to June 2020. He was elected to the company’s board of directors in 2011 and served as Chairman of the board from 2016 to June 2020. Mr. Kissam joined Albemarle in 2003 as Vice President, General Counsel and Corporate Secretary and served as Senior Vice President, Manufacturing and Law, and Corporate Secretary from January 2008 until his promotion to President in March 2010. Prior to joining Albemarle, Mr. Kissam served as President, General Counsel and Secretary of Merisant company, a manufacturer of artificial sweeteners. Mr. Kissam is a current director of Albemarle Corporation and OGE Energy Corp. He also serves on the Executive Committee of the Charlotte Sports Foundation. Mr. Kissam joined the Specialty Products Advisory Committee in April 2018 and served as an ex-officio member of the DowDuPont Board from April 2018 to June 2019. Mr. Kissam joined the DuPont Board of Directors of DuPont in June 2019.

 

 

Skills and Expertise

As the former CEO of a global company, Mr. Kissam has extensive knowledge in the areas of leadership, global business, corporate finance, safety, risk oversight, mergers and acquisitions, management and corporate governance.

 

 

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      FREDERICK M. LOWERY

 

 

Senior Vice President and President, Life Sciences Solutions and Laboratory Products, Thermo Fisher Scientific Inc.

 

 

        LOGO

       Age 50

 

Mr. Lowery has served as Senior Vice President and President, Life Sciences Solutions and Laboratory Products of Thermo Fisher Scientific Inc. (Thermo Fischer), a publicly traded provider of products and services for life sciences, healthcare and applied markets, since 2017. In his role, Mr. Lowery leads the BioProduction, Laboratory Products and Laboratory Chemicals businesses, as well as several functions within Life Sciences Solutions. Since joining Thermo Fisher in 2005, he has held a number of senior leadership positions across businesses. Prior to his time at Thermo Fisher, Mr. Lowery was with Maytag Corporation from 1999 to 2005 and began his career as an engineer at General Motors Company. Mr. Lowery is a member of the Boston Renaissance Charter Public School Board of Trustees and a member of the Tennessee Tech University Foundation Board. Mr. Lowery joined the DuPont Board of Directors in June 2019.

 

 

Skills and Expertise

With his engineering and science backgrounds, Mr. Lowery brings science and technology perspective combined with senior management capabilities to the Board. Mr. Lowery has a wealth of global experience and has developed operating teams, launched innovative new products and acquired businesses. Additionally, he brings strong manufacturing knowledge and experience.

 

 

 

      RAYMOND J. MILCHOVICH

 

 

Chief Executive Officer, National Technical Systems

 

 

        LOGO

       Age 71

 

Mr. Milchovich has served as the CEO and Lead Director of National Technical Systems (NTS) since May of 2020. He joined the NTS Board of Directors in 2013 and served as the Executive Chairman from July of 2018 to May 2020. Previously, Mr. Milchovich served as Chief Executive Officer from 2001 to 2010 and Non-Executive Chairman of the Board and Consultant from 2010 to November 2011 of Foster Wheeler AG, a company that engineered and constructed facilities for oil and gas, liquid natural gas, refining, chemical, pharmaceutical and power industries. He also served as a director of Nucor Corporation from 2002 to 2007 and 2012 to May 2017 and Lead Director from September 2013 to February 2017. Mr. Milchovich has served on the Executive Board of Aurora Capital Group since 2016. Mr. Milchovich served as a director of TDCC from 2015 until the effective date of the DWDP Merger when he became a director of DowDuPont. Mr. Milchovich resigned from the DowDuPont board of directors as of June 30, 2018, at which time he joined the Specialty Products Advisory Committee and then served as an ex-officio member of the DowDuPont board of directors. Mr. Milchovich joined the DuPont Board of Directors in June 2019.

 

 

Skills and Expertise

Mr. Milchovich brings global business and leadership experience as the Chief Executive Officer and Lead Director of NTS, former Lead Director of Nucor Corporation and former Chief Executive Officer of Foster Wheeler AG. He also possesses finance and accounting expertise including experience with, and direct involvement in and supervision of, the preparation of financial statements and risk management. His additional public company board experience provides additional corporate governance and compensation experience and financial expertise.

 

 

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AGENDA ITEM 1: ELECTION OF DIRECTORS (continued)

 

 

 

      DEANNA M. MULLIGAN

 

 

Former Board Chair, Director, Chief Executive Officer & President, Guardian Life Insurance Company

 

 

        LOGO

       Age 57

 

Ms. Mulligan served as CEO of The Guardian Life Insurance Company of America, a mutual life insurance company (Guardian), from 2019 to October 2020, as President and Chief Executive Officer of Guardian from 2011 to 2019 and as President and Chief Operating Officer of Guardian in 2010. She also served as a member of Guardian’s Board of Directors from 2011 until her retirement at year-end 2020 and as its Board Chair from October 2020 until her retirement date. Ms. Mulligan joined Guardian in 2008 as the Executive Vice President, Individual Life and Disability. Prior to joining Guardian in 2008, Ms. Mulligan founded DMM Management Solutions LLC where she served as President from 2007 to 2008. Previously, she held several other management positions at McKinsey & Company, AXA Financials, Inc. and New York Life Insurance Company. Ms. Mulligan currently serves as a director of The Vanguard Group, Inc., Trustee of the Vanguard Funds, Trustee of the Economic Club of New York, Trustee of New York Presbyterian Hospital, Director of Chief Executives for Corporate Purpose, Director of Partnership for New York City and Trustee of the Bruce Museum.

 

Ms. Mulligan does not currently serve on the DuPont Board of Directors. Ms. Mulligan was identified as a candidate for our Board by the search firm used to identify director candidates. The Nomination and Governance Committee assessed all candidates identified by the search firm and recommended to the Board that Ms. Mulligan be nominated to stand for election at the Annual Meeting. The Board expects to appoint Ms. Mulligan to the Board in advance of its April Meeting, which will occur prior to the Annual Meeting.

 

 

Skills and Expertise

Ms. Mulligan possesses deep executive management and leadership, finance, investment, risk management and corporate governance experience as former Board Chair, Director, Chief Executive Officer and President of Guardian and based on her numerous present and former board positions

 

 

 

      STEVEN M. STERIN

 

 

Former Executive Vice President and Chief Financial Officer, Andeavor

 

 

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       Age 49

 

Mr. Sterin served as an executive with Andeavor from 2014 until the merger of Andeavor with Marathon Petroleum Company in October 2018. He also served as President, Chief Financial Officer and a member of the board of directors for Andeavor Logistics GP, LLC from 2014 to 2018. From 2007 to 2014, Mr. Sterin was the Senior Vice President and Chief Financial Officer of Celanese Corporation, a global technology and specialty material company. He previously served as Corporate Controller and Principal Accounting Officer of Celanese. Mr. Sterin also spent six years with Reichhold, Inc., a global chemical company, in a variety of financial positions, including director of tax and treasury in the Netherlands, Global Treasurer and Vice President of Finance. Mr. Sterin’s career started with Price Waterhouse. Mr. Sterin currently serves as a Senior External Advisor to McKinsey & Company. He has served on the board of directors of Kosmos Energy since July 2019. Mr. Sterin joined the Specialty Products Advisory Committee in December 2017 and served as an ex-officio member of the DowDuPont Board until June 2019. Mr. Sterin joined the DuPont Board of Directors in June 2019.

 

 

Skills and Expertise

Mr. Sterin has over 10 years of large public company CFO experience and has led financial functions including investor relations, business planning and analysis, capital markets and treasury, accounting and controlling, customer credit, internal audit, enterprise risk management, and tax. Mr. Sterin also has vast industry experience as well as experience with information technology and cyber security services.

 

 

 

 

 

 

 

 

AGENDA ITEM 1: ELECTION OF DIRECTORS

The Board of Directors recommends that you vote FOR all 12 director nominees.

 

 

 

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DIRECTOR COMPENSATION

DuPont compares its non-employee director compensation programs, designs and compensation elements to the same peer group used for executive compensation, as described in the “Peer Group and Benchmarking” section of the Compensation Discussion and Analysis. DuPont targets the median compensation of the peer group for all director compensation elements. The following tables provide information concerning the compensation provided to DuPont’s non-employee directors in 2020. For a description of compensation paid to Mr. Breen as Executive Chair, see the Compensation Discussion & Analysis and Summary Compensation Table in this Proxy Statement.

Non-Employee Directors’ Fees

2020 directors’ fees, as stated below, are paid only to directors who are not employees of the Company. An overview of the 2020 compensation elements for non-employee directors is below.

 

   Compensation Element

 

        

($)

 

 

  Cash Retainer

     

 

115,000

 

  Equity Retainer

     

 

170,000

 

  Total Retainer

     

 

285,000

 

     
    

 

Audit

  

 

 

 

35,000

 

 

  Annual Committee Chair Fees

     Compensation      25,000  
    

All Other

 

    

 

20,000

 

 

 

 

  Lead Independent Director Fees

 

    

 

  

 

 

 

 

50,000

 

 

 

 

Director Compensation for 2020

 

   Name    Fees Earned or
Paid in Cash ($)(a)
     Stock
Awards ($)(b)
     Change in
Non-Qualified Deferred
Compensation Earnings ($)(c)
       All Other
Compensation ($)(d)
     Total ($)  

  Amy Brady

     95,833        170,043        41          300        266,218  

  Ruby Chandy

     135,000        170,043        -          300        305,343  

  Frank Clyburn

     115,000        170,043        -          300        285,343  

  Terrence Curtin

     115,000        170,043        -          300        285,343  

  Alexander M. Cutler

     185,000        170,043        -          21,654        376,697  

  Eleuthère I. du Pont

     115,000        170,043        -          13,547        298,590  

  Rajiv L Gupta

     140,000        170,043        -          300        310,343  

  Luther C. Kissam IV

     115,000        170,043        -          300        285,343  

  Fred Lowery

     115,000        170,043        -          300        285,343  

  Raymond J. Milchovich

     115,000        170,043        -          300        285,343  

  Steven M. Sterin

     150,000        170,043        -          300        320,343  

 

(a)

In addition to the annual retainer, the amount in this column includes lead independent director and committee chair fees.

 

(b)

The full grant date fair value of Restricted Stock Units granted on May 27, 2020 is based on $49.46 per share with a total value of $170,043 in accordance with the same standard applied for financial accounting purposes, Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718.

 

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DIRECTOR COMPENSATION (continued)

 

 

Outstanding equity awards for individual directors are noted below:

 

     Outstanding Stock Awards at December 31, 2020  
   Name    DD      CTVA      DOW  

  Amy Brady

     5,065        -        -  

  Ruby Chandy

     6,756        946        1,025  

  Frank Clyburn

     5,805        -        -  

  Terrence Curtin

     5,805        -        -  

  Alexander M. Cutler

     13,600        7,750        8,398  

  Eleuthère I. du Pont

     13,600        7,750        8,398  

  Rajiv L Gupta

     6,567        758        821  

  Luther C. Kissam IV

     6,756        946        1,025  

  Fred Lowery

     5,805        -        -  

  Raymond J. Milchovich

     5,805        -        -  

  Steven M. Sterin

     7,117        1,304        1,414  

 

(c)

This column reports above-market earnings on nonqualified deferred compensation balances. The interest rate used to credit earnings on deferrals under the DuPont Stock Accumulation and Deferred Compensation Plan for Directors is the 30-year Treasury rate. For 2020, Ms. Brady had above-market earnings on deferrals.

 

(d)

Includes DuPont-paid accidental death and disability insurance premiums and accruals made in 2020 for non-employee directors under EID’s discontinued directors’ charitable gift plan.

Non-Employee Directors Stock Grant

In May 2020, each acting non-employee director received a grant of 3,438 Restricted Stock Units (“RSUs”), with provisions limiting transfer until retirement or termination of service to the Company.

Non-Employee Directors’ Stock Ownership Guidelines

Equity, in the form of Restricted Stock, RSUs or Deferred Stock, is a key component of director compensation. Directors are generally required to hold all equity awards until retirement. This requirement applies with respect to equity awards granted since 2011.

Non-Employee Directors Deferred Compensation Plan

Non-employee directors may choose, prior to the beginning of each year, to have all or part of their fees credited to deferred compensation accounts.

A director may defer all or part of the Board retainer and Committee Chair fees in cash or stock units until retirement as a director or until a specified year after retirement. Interest accrues on deferred cash payments and dividend equivalents accrue on deferred stock units. As part of the retention requirements, equity grants will be held until retirement. However, a director may defer payments beyond retirement.

Business Travel Accident Insurance for Non-Employee Directors

DuPont maintains a rider on its Business Travel Accident insurance policies covering each non-employee director, which will cover accidental death and dismemberment if the director is traveling on DuPont business.

Directors’ Charitable Gift Plan

In October 2008, EID discontinued its legacy charitable gift plan with respect to future directors. After the death of a director, DuPont donated five consecutive annual installments of up to $200,000 each to tax-exempt educational institutions or charitable organizations recommended by the director and approved by EID.

A director was fully vested in the plan after five years of service as a director or upon death or disability. The plan is unfunded. EID does not purchase insurance policies to satisfy its obligations under the plan. The directors do not receive any personal financial or tax benefit from this program because any charitable, tax-deductible donations accrue solely to the benefit of DuPont. Employee directors were able to participate in the plan if they made a required annual contribution. Each of Messrs. Cutler and du Pont, who served as directors of EID, participate in the plan.

 

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DIRECTOR COMPENSATION (continued)

 

 

Equity Compensation Plan Information

The tables below show the Equity Compensation Plan Information as of December 31, 2020.

 

     (1)      (2)      (3)  
  Plan Category   

# of securities to

be issued upon

exercise of outstanding

options, warrants, rights

    

Weighted-average exercise

price of outstanding

options, warrants, rights ($)

    

# of securities

remaining available

for future issuance

under equity

compensation plans

(excluding securities

reflected in column (1))

 

  Equity Compensation Plans Approved by

  Security Holders

     10,922,132        71.11        29,001,889  

 

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EXECUTIVE OFFICERS

The following table provides information regarding our executive officers as of the date hereof:

 

   Name                        Age      Position

  Edward D. Breen

     64      Executive Chairman and Chief Executive Officer

  Lori D. Koch

     46      Executive Vice President and Chief Financial Officer

  Christopher Raia

     51      Senior Vice President and Chief Human Resources Officer

  Erik T. Hoover

     47      Senior Vice President and General Counsel

  Steve Larrabee

     59      Senior Vice President and Chief Information Officer

  Raj Ratnakar

     53      Senior Vice President and Chief Strategy Officer

  Jon Kemp

     44      President, Electronics & Industrial

  Rose Lee

     55      President, Water & Protection

  Randy Stone

     54      President, Mobility & Materials

Edward D. Breen has served as our Chief Executive Officer since February 2020 and has been Executive Chairman of our Board of Directors since 2019. Mr. Breen’s biographical details are contained under “Agenda Item 1: Election of Directors”.

Lori D. Koch has served as our Executive Vice President and Chief Financial Officer since February 2020. Prior to that Ms. Koch served as the Company’s Vice President, Investor Relations and Corporate Financial Planning & Analysis since June 2019. Ms. Koch previously served as the Director of Investor Relations of EID from July 2016 to May 2019; Global Finance Director of EID’s Performance Materials business from November 2015 to July 2016; and the Global Finance Manager for various EID businesses from April 2008 to November 2015. Ms. Koch currently serves as a director of Aceto Corporation, a leading global virtual manufacturer of life sciences materials and technology. Ms. Koch holds an M.S. in Accounting from Babson College and a B.S. in Finance and International Business from Pennsylvania State University.

Christopher Raia was appointed to Senior Vice President and Chief Human Resources Officer of the Company effective March 1, 2021. He had served as our Vice President and Interim Chief Human Resources Officer since December 2020. Previously, he served as Vice President Organization Effectiveness. Prior to joining DuPont in February 2019, Mr. Raia served as Senior Vice President Talent and Organization Effectiveness at Newell Brands from 2016 to 2018 and at Citizens Bank from 2014 to 2016. Prior to 2014, he worked with large corporate clients through his HR consulting practice, Provation LLC. Mr. Raia holds a M.A. in Organizational Psychology from Columbia University, and a B.S. with University Honors in Psychology from Brigham Young University.

Erik T. Hoover has served as our Senior Vice President and General Counsel since June 2019. From June 2019 to October 2019, he also served as Corporate Secretary. In his previous role as General Counsel for the Specialty Products Division of DowDuPont, Mr. Hoover oversaw all legal matters for that division. From 2017 to 2019, he also served as Assistant Corporate Secretary for DowDuPont and Chief Compliance Officer for EID. Prior to the DWDP Merger in 2017, Mr. Hoover was Secretary and Associate General Counsel for EID. Before joining EID, he was an associate at Blank Rome LLP in Philadelphia. Mr. Hoover earned a B.S. in accounting from Lehigh University and a J.D. degree from Rutgers School of Law at Camden.

Steve Larrabee has served as our Senior Vice President and Chief Information Officer since June 2019. Prior to that role, Mr. Larrabee served as Chief Information Officer for the Specialty Products Division of DowDuPont from June 2017 to June 2019. From March 2016 to May 2017, Mr. Larrabee consulted through At Last Business Solutions. Mr. Larrabee held the role of CIO for Mars, Incorporated from 2009, extending it in 2011 to become the President, Mars Global Services until 2016. Mr. Larrabee earned an MBA from Seton Hall University and a B.S. in Computer Science & Applied Mathematics from the State University of New York at Albany.

Raj Ratnakar has served as our Senior Vice President and Chief Strategy Officer since June 2019. Mr. Ratnakar joined DuPont in May 2019 immediately prior to the Corteva Distribution. Prior to joining DuPont, Mr. Ratnakar served as Chief Strategy Officer for Fortive, a publicly traded spin-off of Danaher, from 2015 to June 2019. Mr. Ratnakar’s previous experience also includes senior strategy roles at both Danaher and TE Connectivity and he was with McKinsey prior to that. He holds an M.B.A. from The Wharton School, University of Pennsylvania and an M.S. in Mechanical Engineering from the University of Maryland.

 

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EXECUTIVE OFFICERS (continued)

 

 

Jon Kemp has served as President, Electronics & Industrial since August 2019. Previously he served as Head of Strategy for the Specialty Products Division of DowDuPont from October 2017 to June 2019. Mr. Kemp served as President, DuPont Electronics & Communications from 2015 through 2017. Prior to that, Mr. Kemp held various roles at EID. Prior to joining EID, he was an economist and business development manager for the Utah Department of Community and Economic Development. Mr. Kemp earned a B.A. in economics from the University of Utah and a M.B.A. from the Darden School of Business at the University of Virginia.

Rose Lee has served as President, Water & Protection since June 2019. Prior to such role, Ms. Lee served as President, Safety & Construction for the Specialty Products Division of DowDuPont from September 2017 to June 2019. Ms. Lee joined EID in January 2015 as Global Business Director, DuPont Kevlar® and Aramid Intermediates. In 2016, she assumed the role of President, DuPont Protection Solutions. Prior to joining EID, Ms. Lee served in a series of roles with increasing responsibility at Saint-Gobain, Booz-Allen consultancy and United Technologies. Ms. Lee is a board member of Crown Holdings, Inc. Ms. Lee earned a B.S. in aerospace engineering from Cornell University, a M.S. in mechanical engineering from Rensselaer Polytechnic Institute, and an M.B.A. from Massachusetts Institute of Technology.

Randy Stone has served as President, Mobility & Materials since June 2019. Prior to this role, he served as President, Transportation and Advanced Polymers for the Specialty Products Division of DowDuPont from 2017 to June 2019. From 2016 to 2017, Mr. Stone served as President, DuPont Performance Materials. Mr. Stone began his career at EID in 2007, serving in progressive leadership roles for the DuPont Dow Elastomers joint venture and the DuPont Performance Elastomers business, the latter while located in Shanghai, China. Prior to joining EID, Mr. Stone served as a business director at Arkema and in various commercial roles at The Dow Chemical Company. Mr. Stone earned a Bachelor of Science degree in economics from South Dakota State University and an M.B.A. from Lehigh University.

 

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BENEFICIAL OWNERSHIP OF COMPANY STOCK

The following table presents the beneficial ownership of DuPont’s Common Stock as of February 16, 2021, except as noted, for (i) each director of the Company, (ii) each of DuPont’s current named executive officers, (iii) all directors and executive officers as a group, and (iv) each person beneficially owning more than 5% of the outstanding shares of DuPont’s Common Stock. As of February 16, 2021, there were 538,379,907 shares of DuPont’s Common Stock outstanding.

 

  Name    Current Shares
Beneficially Owned(a)
    Rights to Acquire
Beneficial
Ownership of
Shares(b)
     Total      Percent of Shares
Beneficially Owned(c)
 

  Amy G. Brady

     50       5,065        5,115        *  

  Edward D. Breen

     160,267       595,963        756,230        *  

  Ruby R. Chandy

     0       6,756        6,756        *  

  Franklin K. Clyburn, Jr.

     0       5,805        5,805        *  

  Terrence R. Curtin

     0       8,028        8,028        *  

  Alexander M. Cutler

     2,137       41,113        43,250        *  

  Jeanmarie F. Desmond

     2,456       -        2,456        *  

  C. Marc Doyle

     0       -        0        *  

  Eleuthère I. du Pont

     910       21,910        22,820        *  

  Rajiv L. Gupta

     12,302       6,567        18,869        *  

  Matthias Heinzel

     24,818       89,960        114,778        *  

  Luther C. Kissam

     0       6,756        6,756        *  

  Lori Koch

     1,893       32,428        34,321        *  

  Rose Lee

     21,005       68,801        89,806        *  

  Frederick M. Lowery

     0       8,920        8,920        *  

  Raymond J. Milchovich

     5,785       5,805        11,590        *  

  Deanna M. Mulligan

     0       -        0        *  

  Steven M. Sterin

     0       7,117        7,117        *  

  Randy Stone

     17,886       52,878        70,764        *  

  All Directors and Executive Officers as a Group

  (21 persons)

     254,028       1,015,940        1,269,968        *  
          

  Certain Other Owners:

          

  The Vanguard Group

     58,160,966.0 (d)            10.8%

  BlackRock, Inc.

     48,466,579.0 (e)            9.0%

  State Street Corporation

     36,400,924.0 (f)            6.76%

 

(a)

Except as otherwise noted and for shares held by a spouse and other members of the person’s immediate family who share a household with the named person, the named persons have or share voting and investment power over the indicated number of shares. This column also includes all shares held in a trust over which the person has or shares voting or investment power and shares, or shares held in trust for the benefit of the named party in the DuPont Retirement Savings Plan. Beneficial ownership of some or all of the shares listed may be disclaimed.

 

(b)

This column includes any shares that the person could acquire through April 17, 2021, by (1) exercise of an option granted by EID; or (2) performance shares granted by EID to be delivered prior to April 17, 2021.

 

(c)

The percentage of shares beneficially owned is calculated based on the number of shares of common stock outstanding as of February 16, 2021.

 

(d)

Based on an Amendment No. 3 to Schedule 13G filed by The Vanguard Group on February 10, 2021 with the SEC reporting beneficial ownership as of December 31, 2020. The Vanguard Group has sole voting power over 0 shares, shared voting power over 1,180,927 shares, sole dispositive power over 55,064,282 shares and shared dispositive power over 3,096,684 shares. The Vanguard Group’s address is 100 Vanguard Boulevard, Malvern, PA 19355.

 

(e)

Based on Amendment No. 1 to Schedule 13G filed by BlackRock, Inc. on January 29, 2021 with the SEC reporting beneficial ownership as of December 31, 2020. BlackRock, Inc. has sole voting power over 42,183,815 shares, shared voting power over 0 shares, sole dispositive power over 48,466,579 shares and shared dispositive power over 0 shares. BlackRock, Inc.’s address is 55 East 52nd Street, New York, NY 10055.

 

(f)

Based on an amendment to Schedule 13G filed by State Street Corporation on February 16, 2021 with the SEC reporting beneficial ownership as of December 31, 2020. State Street Corporation has shared voting power over 26,458,531 shares and shared dispositive power over 36,394,443 shares. State Street Corporation’s address is State Street Financial Center, One Lincoln Street, Boston, MA 02111.

 

*

Less than 1% of the total shares of DuPont common stock outstanding.

 

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COMPENSATION DISCUSSION & ANALYSIS

In the Compensation Discussion and Analysis, the details of the executive compensation programs applicable to the Named Executive Officers are described.

CD&A Table of Contents

 

     Page  

EXECUTIVE SUMMARY

     33  

2020 Performance Highlights

     33  

Executive Compensation

     33  

Named Executive Officers

     34  

Program Structure and Alignment with Core Principles

     35  

Executive Compensation Governance Practices

     35  

COMPONENTS OF EXECUTIVE COMPENSATION AND BENEFITS

     36  

2020 NEO Targeted Total Direct Compensation Summary

     36  

Pay Mix

     37  

2020 Compensation Decisions

     37  

Base Salary

     37  

Annual Incentive Compensation

     37  

Long-Term Incentive Compensation

     41  

E. Breen Employment Agreement

     42  

Benefits and Perquisites

     43  

Benefits

     43  

Perquisites

     43  

THE COMPENSATION PROCESS

     44  

Role of Company Management

     44  

Role of the Compensation Committee

     44  

Role of Independent Board Members

     44  

Role of the Independent Compensation Consultant

     44  

Peer Group and Benchmarking

     45  

OTHER CONSIDERATIONS

     46  

Consideration of Say on Pay Vote

     46  

Stock Ownership Guidelines

     46  

Anti-Hedging and Anti-Pledging Policies

     46  

Clawback Policy

     46  

Compensation and Risk Management

     46  

2020 Tax Considerations

     47  

COMPENSATION TABLES AND NARRATIVES

     48  

Summary Compensation Table

     48  

Grants of Plan-Based Awards

     50  

Outstanding Equity Awards

     51  

Option Exercises and Stock Vested

     53  

BENEFITS

     53  

Pension Benefits

     53  

Defined-Benefit Retirement Plans

     53  

Supplemental Retirement Plans

     54  

Non-Qualified Deferred Compensation

     54  

Other Retirement Benefits

     55  

Potential Payments upon Termination or Change in Control

     56  

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     58  

COMPENSATION COMMITTEE REPORT

     58  

CEO PAY RATIO

     58  

 

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COMPENSATION DISCUSSION & ANALYSIS (continued)

 

 

Defined Terms

CD&A – Compensation Discussion & Analysis

CEO – Chief Executive Officer

CFO – Chief Financial Officer

EPS – Earnings Per Share

U.S. GAAP or GAAP – Generally Accepted Accounting Principles in the United States of America

IRC – U.S. Internal Revenue Code, as amended

LTI – Long-Term Incentive

NEO – Named Executive Officer

PSU – Performance Share Unit

RSU – Restricted Stock Unit

SEC – U.S. Securities & Exchange Commission

SONon-Qualified Stock Option

STIP – Short-Term Incentive Program

Adjusted Corporate Net Income – Net (loss) income from continuing operations available for DuPont common stockholders excluding after-tax significant items, after-tax impact of amortization expense associated with intangibles acquired as part of the DWDP Merger and the after-tax impact of non-operating pension/other post-employment benefits/(“OPEB”)/charges. The Business Units that make up the Non-Core segment will be excluded.

Adjusted EPS* – Earnings per common share from continuing operations-diluted, excluding the after-tax impact of significant items, after-tax impact of amortization expense associated with intangibles acquired as part of the DWDP Merger and the after-tax impact of non-operating pension / OPEB benefits / charges.

Adjusted ROIC – Adjusted Net Operating Profit After Tax (“NOPAT”), (defined as Income from continuing operations after taxes, excluding after-tax significant items, after-tax amortization expense and after-tax

interest expense) / (Debt + Equity – certain Goodwill – certain Intangibles). The Business Units that make up the Non-Core segment will be excluded.

Net Trade Working Capital: Accounts Receivable – Trade plus Inventory less Accounts Payable – Trade.

Operating EBITDA* – Earnings (“Income (Loss) from continuing operations before income taxes”) before Interest, Depreciation, Amortization, non-operating pension / OPEB benefits / charges, and foreign exchange gains / losses, adjusted to exclude significant items.

Organic Revenue* – Net sales excluding Non-Core, adjusted for the change in currency from forecast and the change in portfolio from forecast.

Significant Items – Significant items are items that arise outside the ordinary course of the Company’s business that management believes may cause misinterpretation of underlying business performance, both historical and future, based on a combination of some or all of the item’s size, unusual nature and infrequent occurrence. Management classifies as significant items certain costs and expenses associated with integration and separation activities related to transformational acquisitions and divestitures as they are considered unrelated to ongoing business performance.

Total Shareholder Return – Total return on a company’s stock to an investor defined as the adjusted close price at the end of the performance period divided by the adjusted close price at the beginning of the performance period. Adjusted close price incorporates re-invested dividends, stock splits and new offerings. Beginning close price is based on average closing price over 20 trading days immediately prior to the first day of the performance period. Ending close price is based on average closing price over the last 20 trading days of the performance period.

*See Appendix A for further information, including a reconciliation of non-GAAP measures to the most directly comparable U.S. GAAP financial measures.

 

 

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COMPENSATION DISCUSSION & ANALYSIS (continued)

 

 

EXECUTIVE SUMMARY

In February 2020, the Board made key leadership changes in a move to aggressively accelerate operational performance and ensure the Company was able to deliver business improvement commitments. Mr. Breen was appointed Chief Executive Officer, a role he previously held from 2017 through June 2019 and from 2015 to 2017 at EID, and Ms. Koch was appointed Chief Financial Officer. Restoring Mr. Breen to the CEO role enabled the Company to draw more directly on his substantial operating experience.

As 2020 began to unfold, it became evident that senior leadership needed to quickly change 2020 priorities in response to the pandemic and work collectively to ensure the safety and well-being of employees, maintain business continuity, and strengthen the Company’s balance sheet and financial position. As an essential provider of personal protective equipment and important materials in other companies’ supply chains, the Company announced a number of initiatives in the first half of the year to combat the COVID-19 pandemic, including a significant increase in the production of Tyvek® garments. The Company also implemented a number of proactive measures early in the pandemic to enhance its already strong liquidity position and improve working capital, including completion of a bond offering in May to satisfy debt maturities due in November 2020, delay of certain capital investments, idling production at several manufacturing sites, accelerating working capital initiatives and taking actions to reduce run-rate costs on a going forward basis.

The Company also continued to focus on the advancement of key strategic actions throughout 2020. On February 1, 2021, DuPont completed the previously announced divestiture of our Nutrition & Biosciences (“N&B”) business to International Flavors & Fragrance Inc. (“IFF”) in a Reverse Morris Trust transaction (the “N&B Transaction”) that resulted in IFF issuing shares to DuPont stockholders. In connection with the N&B Transaction, the Company received a one-time cash payment of about $7.3 billion (subject to potential post-closing adjustments). In addition, in the third quarter of 2020, the Company completed the sale of its trichlorosilane business (“TCS Business”) along with its equity ownership interest in DC HSC Holdings LLC and Hemlock Semiconductor L.L.C. (“The HSC Group”) to The Hemlock Group. In the fourth quarter of 2020, the Company entered into a definitive agreement to sell its Biomaterials business unit. In January 2021, the Company entered into separate definitive agreements to sell its Clean Technologies and Solamet businesses.

The 2020 compensation of our NEOs appropriately reflects and rewards their significant contributions to the Company’s performance in a year that presented unique and unprecedented challenges for our senior leadership team to manage. This Compensation Discussion and Analysis explains the guiding principles and practices upon which our executive compensation program is based and the compensation paid to our NEOs.

2020 Financial Performance Highlights

 

   

Full year 2020 GAAP EPS from continuing operations of $(3.95); and adjusted EPS* of $3.36

   

Full year 2020 Net Sales of $20.4 billion

   

Full year 2020 GAAP Loss from continuing operations of $(2.9) billion and total Operating EBITDA* of $5 billion

 

  *

See Appendix A for a reconciliation of non-GAAP measures to the most directly comparable U.S. GAAP financial measures.

Executive Compensation

The DuPont People and Compensation Committee (the “Committee”) believes compensation for executive officers should be competitive compared to market with a strong focus on performance and alignment to stockholder interests.

 

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The Committee reviews executive officer compensation annually in February and throughout the year as needed. The following changes were made in 2020:

 

   

Certain NEOs received increases to their long-term incentive target opportunity in 2020. The Committee considered these changes appropriate after careful review of the market data and to improve retention and alignment to the long-term performance of the Company.

   

Mr. Breen’s compensation was adjusted to reflect his additional role of CEO. The Company entered into an amended and restated employment agreement with Mr. Breen as further described in the E. Breen Employment Agreement section, which, among other things, extended the term of Mr. Breen’s employment from December 31, 2020 to December 31, 2023.

   

Ms. Koch’s compensation was determined for her new role as CFO based on alignment to the market.

The Committee approved the 2020 short and long-term incentive design and performance targets in February 2020, prior to the onset of the COVID-19 pandemic.

Short-Term Incentive Program

 

   

Changes to the 2020 design included the introduction of a portfolio of metrics determined to be key measures of the Company’s performance for the year. Additionally, Business Unit performance was introduced as a part of the overall STIP design for Business Presidents to better align annual incentives with the results of their respective businesses.

   

The Committee discussed the impact of COVID-19 on DuPont’s 2020 STIP over five Committee meetings. The Committee determined actual STIP results were not a fair representation of the agile, strong performance and resulting financial outcomes delivered despite the pandemic. Therefore, the Committee determined a discretionary payout factor of 70% was appropriate based on a holistic assessment of performance as described in detail in the Annual Incentives Compensation section. The 70% payout factor was applied to all employees eligible for STIP.

   

For 2021, the STIP design will continue to incorporate Business Unit metrics. The Committee remains committed to the alignment of incentive payouts to Business Unit performance for Business Presidents and employees. Additionally, an environmental, social, and governance modifier aligned to progress toward DuPont’s Sustainability goals will be incorporated into the STIP design.

Long-Term Incentive Program

 

   

The Company introduced a significant performance-based element into long-term incentives, with 60% of the 2020 LTI program for executive offers delivered in the form of PSUs.

   

The Committee did not make any adjustments to LTI programs in consideration of the COVID-19 pandemic.

Named Executive Officers

This CD&A discusses the compensation of the 2020 DuPont NEOs listed in the table below:

 

Named Executive

Officer

  Title

  Edward D. Breen(a)

  Executive Chairman and Chief Executive Officer

  Lori Koch(b)

 

Executive Vice President and Chief Financial Officer

  Matthias Heinzel

  President, Nutrition & Biosciences

  Rose Lee

  President, Safety & Construction(c)

  Randy Stone

  President, Transportation & Industrial(d)

  C. Marc Doyle(e)

  Former Chief Executive Officer

  Jeanmarie F. Desmond(e)

  Former Chief Financial Officer

 

(a)

Mr. Breen served as Executive Chairman until February 16, 2020 and was appointed Executive Chairman and Chief Executive Officer on February 17, 2020.

 

(b)

Ms. Koch became Chief Financial Officer on February 17, 2020.

 

(c)

On February 1, 2021, the name of the Safety & Construction segment was changed to Water & Protection.

 

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(d)

On February 1, 2021, the name of the Transportation & Industrial segment was changed to Mobility & Materials.

 

(e)

Mr. Doyle and Ms. Desmond left the Company on February 17, 2020.

Program Structure and Alignment with Core Principles

DuPont’s executive compensation programs are designed to attract, engage, reward and retain the high-quality executives necessary to successfully execute the strategy of the Company and to deliver both short- and long-term business results that are aligned with the stockholder interests.

The DuPont compensation programs are designed and administered to follow these core principles:

 

   

Establish a strong link between pay and performance.

   

Align executives’ interests with stockholders’ interests, particularly over the longer term.

   

Reinforce business strategies and drive long-term sustained stockholder value.

Executive Compensation Governance Practices

Compensation of the executive officers of DuPont, including that of the NEOs, is overseen by the Committee (or, in the case of Mr. Breen, by the Committee and the independent members of the Board). The Board and the Committee were assisted in performance of their oversight duties by an independent compensation consultant.

The following table summarizes key governance characteristics related to the executive compensation programs in which the NEOs participate:

 

 

Key Executive Compensation Practices

 

   

      What We Do

 

 

         What We Don’t Do

 

   

      Active stockholder engagement

 

      Strong links between executive compensation outcomes and company financial and market performance

 

      Each component of target pay benchmarked with respect to the peer group or the general market, as applicable

 

      Carefully structured peer group with annual Compensation Committee review

 

      Significant focus on performance-based pay

 

      Stock ownership requirements of six times base salary for the CEO and three times base salary for the other NEOs

 

      100% independent Compensation Committee

 

      Clawback policy covering both cash and equity

 

      Use of executive compensation statements (“tally sheets”)

 

      Independent compensation consultant reporting to the Compensation Committee

 

 

      No single-trigger change in control agreements

 

      No option repricing, reloads, exchanges or options granted below market value without stockholder approval

 

      No excise tax gross ups

 

      No plans that encourage excess risk taking

 

      No hedging or pledging of Company’s securities

 

      No liberal share counting

 

      No excess dilution through careful monitoring of burn rate and overhang

 

      No minimum payouts under the Long-Term Incentive Plan

 

 

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COMPENSATION DISCUSSION & ANALYSIS (continued)

 

 

COMPONENTS OF EXECUTIVE COMPENSATION AND BENEFITS

Executives receive a mix of variable and fixed components of compensation which are aligned with the core principles as highlighted in the chart below:

 

Component

  

Purpose

Base Salary   

 

  Fixed cash compensation that reflects scope of core responsibilities, experience and potential to affect the Company’s overall performance.

 

   

Annual

Incentive

  

  Rewards employees for achieving critical financial and operational goals.

 

   
Long-Term
Incentive
  

  Aligns the interests of executives with stockholders by linking pay and performance with the goal of accelerating growth, profitability and stockholder value.

 

  Aids the Company in retaining its NEOs and other key employees.

 

   

Benefits
and
Perquisites

  

  Executives participate in the same benefit programs that are offered to other salaried employees.

 

  

 

  Limited perquisites are provided to executives to facilitate strong performance on the job and enhanced productivity.

2020 NEO Targeted Total Direct Compensation Summary

In addition to the Summary Compensation Table, the following table is provided to aid with understanding the target annual compensation of the NEOs. The table below lists the targeted annual total direct compensation for each NEO as of December 31, 2020 other than Mr. Doyle and Ms. Desmond who left the Company February 17, 2020. The Committee did not make any adjustments to Mr. Doyle or Ms. Desmond’s 2020 annual incentive target nor did either receive any equity awards in 2020.

 

  Name    2020 Base Salary ($)    2020 Target
Annual Incentive ($)
   2020 Target
Long-Term Incentive ($)
   Targeted Total Direct
Compensation ($)

  Edward D. Breen

  

1,000,000

  

1,500,000

  

10,000,000

  

12,500,000

  Lori Koch

  

700,000

  

700,000

  

2,500,000

  

3,900,000

  Matthias Heinzel(a)

  

896,979

  

896,979

  

1,400,000

  

3,193,959

  Rose Lee

  

625,000

  

625,000

  

1,750,000

  

3,000,000

  Randy Stone

  

600,000

  

600,000

  

1,750,000

  

2,950,000

 

(a)

Mr. Heinzel is a German employee and his salary and bonus are paid in Euros. U.S. Dollar amounts in this Proxy Statement with respect to Mr. Heinzel have been converted from Euros at a rate of 1.22 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each day in December 2020.

 

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Pay Mix

Executive compensation is linked strongly to the financial and operational performance of the business. Approximately 92% of the CEO’s target annual total compensation for 2020 was at risk, while over 78% of the other NEOs’ target compensation, on average, for 2020 was at risk.

 

CEO Target Annual Total Compensation for 2020    Other NEO Target Annual Total Compensation for 2020 (Average)

 

LOGO

  

 

LOGO

2020 Compensation Decisions

Base Salary

Base salary is fixed cash compensation that reflects scope of core responsibilities, experience and potential to affect the Company’s overall performance. The Committee annually reviews the salaries of our NEOs, as annual salary increases are not automatic or guaranteed.

The Committee considers a number of factors in determining the annual base salaries of the NEOs including an individual’s skills, job responsibilities and experience, as well as more subjective factors such as the assessment by the Compensation Committee of individual NEO performance. Base salaries for executives are benchmarked against similar jobs at other companies based on respective peer group and general industry information.

In February of 2020, the Committee approved an increase to Ms. Koch’s base salary to recognize her appointment to CFO. No other NEO received a base salary increase in 2020.

Base salaries for the NEOs as of December 31, 2020 are shown in the table below.

 

  Name    2020
Base Salary ($)
 

  Edward D. Breen

  

 

1,000,000 

 

  Lori Koch

  

 

700,000   

 

  Matthias Heinzel

  

 

896,979   

 

  Rose Lee

  

 

625,000   

 

  Randy Stone

  

 

600,000   

 

  C. Marc Doyle

  

 

1,200,000(a)

 

  Jeanmarie F. Desmond

  

 

700,000(a) 

 

 

  (a)

Reflects base salary as of February 17, 2020 when Mr. Doyle and Ms. Desmond left the Company.

Annual Incentive Compensation

Annual incentives are designed to reward executives for the achievement of short-term financial and operational performance goals and are an important component of the Company’s overall compensation program. Each year the Committee reviews the target annual cash incentive award opportunities (which are expressed as a percentage of annual base salary) for executive officers as part of its annual executive compensation review.

 

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COMPENSATION DISCUSSION & ANALYSIS (continued)

 

 

Increases to the 2020 annual incentive targets for Mr. Breen and Ms. Koch in recognition of their new roles as CEO and CFO, respectively, were approved by the Committee, and, in the case of Mr. Breen, the Board. No other NEO received an increase.

Annual incentive opportunities for the NEOs as of December 31, 2020 are shown in the table below.

 

  Name    2020
Target STIP (%)
     2020
Target STIP ($)    

  Edward D. Breen

  

150%

    

1,500,000

  Lori Koch

  

100%

    

700,000

  Matthias Heinzel

  

100%

    

896,979

  Rose Lee

  

100%

    

625,000

  Randy Stone

  

100%

    

600,000

  C. Marc Doyle

  

150%

    

236,712(a)

  Jeanmarie F. Desmond

  

100%

    

92,055(a)

 

  (a)

Under the Senior Executive Severance Plan, Mr. Doyle and Ms. Desmond were entitled to a prorated STIP for 2020 in connection with their departure for time employed in 2020. Value reflects prorated target.

 

Design Approved at Beginning of Fiscal Year

The 2020 STIP design and performance targets were approved by the Committee in February 2020, prior to the onset of the COVID-19 pandemic. Changes for 2020 included the introduction of a portfolio of metrics determined to be key measures of the Company’s performance for the year. Additionally, Business Unit performance was introduced as a part of the overall STIP design for Business Unit Presidents to better align annual incentives with the results of their respective businesses.

 

    

 

Metric

 

  

 

Weighting  

 

 

Corporate

 

    

 

Adjusted EPS

 

  

 

50%

 

  +        

 

Business Unit (a)

    

Organic Revenue

 

  

20%

 

    

Operating EBITDA

 

  

15%

 

    

Net Trade Working Capital

 

  

15%

 

 

  (a)

Corporate/Functional employees are aligned to the sum of the business unit metric results for Electronics & Imaging, Nutrition & Biosciences, Safety & Construction, and Transportation & Industrial (“Sum of Businesses”).

 

As in prior years, an individual performance factor ranging from 0% to 150% was maintained in the STIP design to allow the Committee to modify an executive’s award to reflect personal performance and contributions to the Company’s success. All awards are capped at a maximum payout of 200% of target.

At the time of the STIP design approval in February 2020, the Company could not have anticipated or taken into account the impact the COVID-19 pandemic would have on business and operations during the fiscal year.

Discussions Throughout the Fiscal Year

Starting in April 2020, during each regular meeting, the Committee carefully reviewed the Company’s overall performance, its continued response to the pandemic and 2020 STIP performance projections relative to the approved goals. A special meeting was also held in August devoted to the topic.

Given the difficulty of forecasting performance during the pandemic, the Committee did not change annual incentive metrics and/or goals from those set at the beginning of the year. Instead, the Committee determined it was appropriate to continue to assess the Company’s response to the evolving business impacts of the pandemic and to

 

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review overall results at the end of the year. The Committee and management assessed performance through a holistic framework that focused on a variety of factors such as Company financial performance, peer performance, shifting business priorities and the execution of Company strategy.

Payout Decisions at End of Fiscal Year

The calculated 2020 STIP payout, based on the STIP targets established at the beginning of 2020 (pre-pandemic), was 47.8% for Corporate participants and between 30.0% and 72.2% for Business Unit participants.

The Committee determined actual STIP results were not a fair representation of the agile, strong performance and resulting financial outcomes delivered despite the pandemic. In considering the use of discretion, the Committee sought to balance the interest of employees and stockholders. Based on its assessment of performance, the Committee determined a single discretionary payout factor of 70% was appropriate to fairly reward and recognize significant employee effort and contributions during 2020. Key results, actions and deliverables are summarized below.

 

   

Delivering for Stockholders: Stockholders experienced both a stock price recovery and dividend protection during 2020. In 2020 following the onset of the pandemic, DuPont outperformed market expectations, including relative total shareholder return which was in the top quartile relative to peers and the S&P 500.

   

Cost Savings: The Company implemented cost actions focused on structural changes to create favorable business momentum, which produced $280 million in cost savings in fiscal year 2020 from new initiatives implemented.

   

Business Continuity & Employee Safety: The Company was vigilant in enhancing safety and protection measures to safeguard the health of our employees working on site throughout the pandemic and minimize impact to customers.

   

Strategic Actions: The N&B Transaction was consummated on the expected timeline despite the majority of the relevant workforce shifting to remote working arrangements. Significant progress was also made on Non-Core divestitures including the divestiture of the trichlorosilane business (“TCS business”), along with our equity ownership interest in the DC HSC Holdings LLC and Hemlock Semiconductor L.L.C., and entry into an agreement to sell the Biomaterials business unit.

   

Focus on Employee Wellbeing: Management was acutely aware of the increased anxiety and stress employees experienced because of the pandemic and took immediate actions to provide support, resources and reassurance during this uncertain period. These actions included providing additional time off to employees who were adjusting to new child / elder care challenges; implementing special pay continuation programs to provide income continuity for employees who were temporarily unable to work due to government closures; introducing enhanced benefit offerings and programs to help employees manage their physical, mental and financial health; providing increased flexibility to help employees manage their “new normal” and changed priorities; and reinforcing our commitment to regular and open communications to keep employees informed on DuPont’s actions in response to the pandemic.

   

Prudence on Executive and Employee Pay: There were no special awards—either for retention or other purposes—provided to executives to shield them from the impact of the crisis. There were also no broad-based merit-based salary increases for employees delivered in 2020.

   

Contribution to the Fight Against the Pandemic: The Company partnered with industry leaders to deliver solutions that helped with prevention and control of the global pandemic such as the Tyvek® Together innovation to strengthen PPE production.

While the Company continues to focus on a performance-oriented culture, the Committee believes the decision to approve a discretionary payout factor over the use of the formulaic payout results was appropriate for a year that required significant collective efforts and unique contributions to successfully respond to the varying impacts the pandemic presented. As such, the Committee determined a single discretionary payout factor should be used versus business specific results. The Committee remains committed to the alignment of incentive payouts to the performance of individual business results for Business Presidents and employees, which will remain a design element in 2021.

 

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COMPENSATION DISCUSSION & ANALYSIS (continued)

 

 

The tables below detail 2020 results relative to set performance goals.

 

     

Corporate Metric  

(Weighting 50%)  

  +   

Business Metrics  

(Weighting 50%)  

  =   

Total Calculated  

Payout

  Sum of Businesses  

        0%        47.8%        47.8%

E&I

        0%        72.2%        72.2%

N&B

        0%        39.7%        39.7%

S&C

        0%        31.3%        31.3%

T&I

        0%        30.0%        30.0%

 

    

 

Metric

  

 

Target  
($MM)  

  

 

Actual
($MM)

     

Corporate

  -Adjusted EPS*(a)    $4.04      $3.36  
     

Sum of Businesses

  -Organic Revenue*(b)    $20,455      $18,918  
  -Operating EBITDA*(c)    $5,720      $5,000  
  -Net Trade Working Capital(b)    $4,531      $4,181  
     

Electronics &

Imaging

  -Organic Revenue*(b)    $3,675      $3,798  
  -Operating EBITDA*(c)    $1,197      $1,210  
  -Net Trade Working Capital (b)    $637      $576  
     

Nutrition &
Biosciences

  -Organic Revenue*(b)    $6,327      $6,065  
  -Operating EBITDA*(c)    $1,623        $1,523  
  -Net Trade Working Capital(b)    $1,608      $1,673  
     

Safety &
Construction

  -Organic Revenue*(b)    $5,456      $4,871  
  -Operating EBITDA*(c)    $1,576      $1,351  
  -Net Trade Working Capital(b)    $1,176      $1,110  
     

Transportation & Industrial

  -Organic Revenue*(b)    $4,997      $4,184  
  -Operating EBITDA*(c)    $1,324      $916  
  -Net Trade Working Capital(b)    $1,110      $822  

 

  (a)

Threshold and Max are set at 85% and 115% of Target respectively.

  (b)

Threshold and Max are set at 90% and 110% of Target respectively. Amounts shown in millions.

  (c)

Threshold and Max are set at 85% and 115% of Target respectively. Amounts shown in millions.

  *

See Appendix A for a reconciliation of non-GAAP measures to the most directly comparable U.S. GAAP financial measures. Organic Revenue and Operating EBITDA have been reconciled for the sum of businesses.

The discretionary payout factor of 70% was applied to 2020 STIP awards for NEOs.

 

  Name    Year End
Base Salary
($)
    

STIP Target

(%)

 

STIP Target

($)

    

Payout
Factor

(%)

     Individual
Performance
Factor (%)
    

Total STIP
Payout

($)

 

  Edward D. Breen

  

 

1,000,000

 

  

150%

 

 

1,500,000

 

  

 

70%

 

  

 

100%

 

  

 

1,050,000

 

  Lori Koch

  

 

700,000  

 

  

100%

 

 

700,000  

 

  

 

70%

 

  

 

125%(a)

 

  

 

612,500  

 

  Matthias Heinzel

  

 

896,979  

 

  

100%

 

 

896,979  

 

  

 

70%

 

  

 

100%

 

  

 

627,885  

 

  Rose Lee

  

 

625,000  

 

  

100%

 

 

625,000  

 

  

 

70%

 

  

 

100%

 

  

 

437,500  

 

  Randy Stone

  

 

600,000  

 

  

100%

 

 

600,000  

 

  

 

70%

 

  

 

115%(b)

 

  

 

483,000  

 

  C. Marc Doyle

  

 

-

 

  

-

 

 

236,712(c)

 

  

 

70%

 

  

 

-

 

  

 

236,712(c)

 

  Jeanmarie F. Desmond

  

 

-

 

  

-

 

 

92,055(c)

 

  

 

70%

 

  

 

-

 

  

 

92,055(c)

 

 

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(a)

The Committee approved a 125% Individual Performance Factor for Ms. Koch in light of the above expectation results delivered despite unprecedented market conditions and significant structural cost savings she was instrumental in implementing.

 

(b)

The Committee approved a 115% Individual Performance Factor for Mr. Stone due to the extraordinary actions he took to mitigate the impact of the pandemic on the Transportation & Industrial business during the year.

 

(c)

Under the Senior Executive Severance Plan, Mr. Doyle and Ms. Desmond were entitled to a prorated STIP for 2020 in connection with their departure based on the greater of actual or target performance for time employed in 2020. Value reflects prorated target value.

Long-Term Incentive Compensation

The Committee views long-term compensation as a critical executive compensation program element that aligns executives’ interests with those of stockholders. Long-term incentives represent a significant portion of an executives’ overall compensation package. The Committee reviews the target LTI award opportunities for executive officers each year as part of its annual executive compensation review.

The Committee approved increases to LTI targets for Mr. Stone and Ms. Lee. The Committee considered these changes appropriate after careful review of the market data and to improve retention and alignment to the long-term performance of the Company. Additionally, the Committee, and in the case of Mr. Breen, the Board, approved increases to LTI targets for Mr. Breen and Ms. Koch in recognition of their new roles as CEO and CFO, respectively.

2020 LTI awards for executive officers were majority weighted on performance driven awards with 60% of the grant value awarded as PSUs, 20% of the grant value awarded as Stock Options, and the remaining 20% as RSUs. There were no special LTI awards delivered to NEOs in 2020.

The table below details the 2020 LTI awards to NEOs except for Mr. Doyle and Ms. Desmond. Mr. Doyle and Ms. Desmond did not receive any LTI awards in 2020 prior to their departure on February 17, 2020.

 

  Named Executive Officer    RSU Grant
Value ($)(a)
     Stock
Options
Grant
Value ($)(a)
     PSU Grant
Value ($)(a)(b)
     Total Target
Grant
Value ($)(a)
 

  Edward D. Breen(c)

  

 

2,000,000

 

  

 

2,000,000

 

  

 

6,000,000

 

  

 

10,000,000

 

  Lori Koch

  

 

500,000  

 

  

 

500,000  

 

  

 

1,500,000

 

  

 

2,500,000  

 

  Matthias Heinzel

  

 

280,000  

 

  

 

280,000  

 

  

 

840,000  

 

  

 

1,400,000  

 

  Rose Lee

  

 

350,000  

 

  

 

350,000  

 

  

 

1,050,000

 

  

 

1,750,000  

 

  Randy Stone

  

 

350,000  

 

  

 

350,000  

 

  

 

1,050,000

 

  

 

1,750,000  

 

 

(a)

Actual values shown in the Grants of Plan Based Awards table will vary slightly from the amount shown above as DuPont only issues awards in whole shares.

 

(b)

Actual values show in the Grants of Plan Based Awards table will vary due to the fair market value being calculated using the Monte Carlo value, while number of shares was determined utilizing the close price on August 3, 2020 for Mr. Breen and February 19, 2020 for all other NEOs.

 

(c)

Mr. Breen’s annual award was issued August 3, 2020. The price used to determine the number of shares awarded and the strike price were set to match the management grant made on February 19, 2020, rather than utilizing the actual fair market price on the date of grant. This was done to align his compensation opportunity with the rest of management.

2020 Performance Share Unit Program

The 2020 PSUs are earned, and vest based on the achievement of Adjusted ROIC and Adjusted Corporate Net Income goals, weighted equally at 50%, modified by relative total shareholder return (“Relative TSR”). Relative TSR is used to promote alignment with stockholder interests.

 

    Metric    Weighting    Measurement    Period

    Adjusted ROIC Growth

  

50%

  

Average over period

  

January 1, 2020 - December 31, 2022

    Adjusted Corporate Net Income

  

50%

  

Three distinct measurements, with targets for periods 2 and 3 being a projected annual growth rate based off prior period actual performance

  

January 1, 2020 - December 31, 2020
January 1, 2021 - December 31, 2021
January 1, 2022 - December 31, 2022

    Relative TSR

  

Modifier

  

Point-to-point against S&P 500

  

January 1, 2020 - December 31, 2022

 

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  Period Relative TSR    Applied Modifier

  <25 percentile against S&P 500

  

0.75

  25 – 75 percentile against S&P 500

  

1.00

  >75 percentile against S&P 500

  

1.25

The initial payout range of the PSUs is 0% to 200% depending on achievement versus Adjusted ROIC Growth and Adjusted Corporate Net Income. The payout is then subject to a modification based on Relative TSR. The maximum payout is capped at 200%.

DuPont believes disclosing specific targets while the applicable performance period is ongoing could cause competitive harm. However, such targets will be disclosed once the applicable performance periods have ended as part of our discussion and analysis on awards earned by the NEOs.

The 2020 performance metrics were approved by the Committee in February of 2020 prior to the onset of the COVID-19 pandemic. No adjustments were made to the Long-Term Incentive plan awards with regard to COVID-19, as the Committee believes that the final overall impact is not possible to determine at this time. The Committee will continue to review all compensation plans to ensure they align to the DuPont pay-for-performance strategy.

E. Breen Employment Agreement

In light of the significant value Mr. Breen brings to the Company, the Board sought to extend the term of Mr. Breen’s employment with the Company. On December 28, 2020, the Company entered into an amended and restated employment agreement with Mr. Breen to extend the term of Mr. Breen’s employment from December 31, 2020 to December 31, 2023 (the “2020 Agreement”). This current agreement replaces Mr. Breen’s previous employment agreement, which was executed in connection with the spin-off of Corteva from the Company (the “2019 Agreement”).

The 2020 Agreement provides for an annual salary of $1 million, an annual bonus target of 150% of base salary and an annual long-term incentive grant with a grant date fair value of $10 million at target. Mr. Breen remains eligible for retirement vesting under his incentive awards as applicable upon any employment termination other than by the Company for Cause (as defined in the 2020 Agreement). Mr. Breen’s base salary, annual bonus target and annual long-term incentive target are subject to increase at the discretion of a majority of the independent members of the Board upon recommendation from the Committee.

Under the 2019 Agreement, Mr. Breen would have been entitled to a lump sum retention payment on December 31, 2020 equal to three times his base salary and target bonus as Executive Chairman. In light of Mr. Breen’s return to the Chief Executive Officer role, as part of the 2020 Agreement, the Board approved a successor retention benefit commensurate with that role. Under the 2020 Agreement, Mr. Breen is now eligible for a payment of $10 million on December 31, 2022 and $5 million on December 31, 2023, in each case generally subject to continued employment through the applicable date, with payment of the full amount (to the extent not yet paid) due upon certain earlier qualifying terminations of employment (including a termination by the Company without Cause or by him for “good reason”). In light of this retention benefit, Mr. Breen has waived his eligibility for cash severance payments under the severance arrangements otherwise available to our senior leadership team.

As under the 2019 Agreement, Mr. Breen is eligible for certain severance benefits upon any termination of his employment other than by the Company for Cause: a pro-rata annual bonus payment and the non-cash severance benefits payable upon a qualifying employment termination under the Company’s Senior Executive Severance Plan as in effect immediately before June 1, 2019 (certain employee benefit continuation rights, stock option exercise rights and financial counseling, tax preparation and outplacement benefits), but not any other cash severance payment other than the retention benefit described above. The severance is conditioned upon execution of a release of claims and compliance with certain noncompetition obligations.

 

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Benefits and Perquisites

Benefits

DuPont provides benefits (including retirement benefits) to eligible employees, including the eligible NEOs, through a combination of qualified and non-qualified plans. For details on each of the following retirement plans, see “Benefits” in the “Compensation Tables and Narratives” section of the Proxy Statement.

 

   

Supplemental Retirement Plans

   

401(k) Plans

   

Supplemental Savings Plans

   

Other Retirement Benefits

Perquisites

DuPont offers perquisites that the Committee believes are reasonable, yet competitive, in attracting and retaining the executive team. Perquisites provided to NEOs are regularly reviewed by the Committee as part of their overall review of executive compensation. Additional information on perquisites can be found in footnote (i) to the All Other Compensation column of the Summary Compensation Table in this Proxy Statement. The following outlines the limited perquisites provided to executives:

 

   

Financial planning support

   

Personal travel on corporate aircraft and related travel expenses

   

Company car for Mr. Heinzel

   

Commuter benefits for Mr. Heinzel

   

Tax equalization and host country tax payments for Mr. Heinzel

In October 2020, the Committee approved the adoption of a corporate policy regarding personal use of corporate aircraft. The policy, which became effective on January 1, 2021, generally limits personal use of the corporate aircraft by the Company’s CEO to $200,000 per year and by the other executive officers of the Company to $50,000 per year. The Committee will receive periodic reports of personal travel on the corporate aircraft in order to monitor compliance.

 

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THE COMPENSATION PROCESS

The Committee, with the support of an independent compensation consultant and Company management, develops and executes the executive compensation program. The Committee is responsible for recommending for approval by the independent directors the compensation of the CEO, and for approving the compensation of all other NEOs and executive officers. The Committee annually reviews and evaluates the executive compensation program to ensure that the program is aligned with the Company’s compensation philosophy and appropriately rewards performance.

The Committee reviews the following factors to determine executive compensation:

 

   

Competitive analysis: Median levels of compensation for similar jobs and job levels in the market, taking into account revenue relative to the peer group.

   

Company performance: Measured against financial metrics and operational targets approved by the Compensation Committee.

   

Market landscape: Business climate, economic conditions and other factors.

   

Individual roles: Each executive’s experience, knowledge, skills and personal contributions.

Role of Company Management

In 2020, the Executive Chairman and former CEO made recommendations to the Committee regarding compensation for senior executives after reviewing the Company’s overall performance, each executive’s personal contributions and relevant compensation market data from the peer group for similar jobs and job levels.

Role of the Compensation Committee

The Committee is responsible for establishing DuPont’s executive compensation philosophy and for approving NEO compensation, other than for the CEO, and has broad discretion when setting compensation types and amounts for such NEOs. As part of the process, Company management and the Committee also review summary total compensation scenarios for such NEOs. Additionally, the Committee annually reviews the corporate goals and objectives relevant to the compensation of the CEO. The Committee evaluates the CEO’s performance against his objectives and makes recommendations to the independent directors regarding the compensation level based on that evaluation.

Role of Independent Board Members

The independent members of the Board of Directors are responsible for assessing the performance of the CEO based on the recommendation of the Compensation Committee. They are also responsible for approving the compensation types and amounts for the CEO.

Role of the Independent Compensation Consultant

The Committee has retained Frederic W. Cook & Co., Inc. (“F.W. Cook”) as the independent compensation consultant on executive and director compensation matters. F.W. Cook reported directly to the Committee and did not provide services to DuPont other than those provided to the Committee.

F.W. Cook’s responsibilities included:

 

   

Advising the Committee on trends and issues in executive compensation.

   

Reviewing and advising on the group of companies in the peer group.

   

Consulting on the competitiveness of the compensation structure and levels of DuPont’s executive officers and non-employee directors.

 

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Providing advice and recommendations related to the compensation and design of DuPont’s compensation programs.

   

Reviewing and advising on materials provided to the Compensation Committee for discussion and approval.

   

Participating in Compensation Committee meetings as requested, including executive sessions of the Committee when management is not present, and communicating with the Chair of the Committee between meetings.

F.W. Cook has multiple safeguards and procedures in place to maintain the independence of the consultants in their executive compensation consulting practice, and the Committee has determined that the compensation consultant’s work has not raised any conflicts of interest. The Committee has considered factors relevant to F.W. Cook’s independence from management under SEC rules and has determined that F.W. Cook is independent from management.

Peer Group and Benchmarking

The Committee, with the support of the management team and F.W. Cook, created a DuPont peer group, that has been utilized throughout the year, including when making 2020 compensation decisions. The criteria reviewed when setting the peer group, that became the basis of the DuPont peer group, were as follows:

 

   

Revenues (1/3 to 3 times DuPont revenues)

   

Market Capitalization (1/3 to 3 times DuPont market capitalization)

   

Industry (Industrials, Specialty Chemicals, Construction and Materials)

   

Global presence

   

Capital Intensity

   

Profit Margin

   

Competitor for talent

The table below reflects the companies that comprise the peer group that was used for market comparisons, benchmarking, and setting executive compensation for 2020. The peer group was put in place in 2019 following the Dow and Corteva Distributions.

 

 

    3M Company

  

 

Ecolab Inc.

  

 

Johnson Controls International plc

    Air Products and Chemicals, Inc.

  

Emerson Electric Co.

  

Lockheed Martin Corporation

    Caterpillar, Inc.

  

Honeywell International Inc.

  

Medtronic plc

    Celanese Corporation

  

Illinois Tool Works Inc.

  

PPG Industries, Inc.

    Corning Incorporated

  

Ingredion Incorporated

  

The Sherwin-Williams Company

    Danaher Corporation

  

International Paper Company

  

United Technologies Corporation(a)

 

(a)

Merged with Raytheon in April 2020, now Raytheon Technologies Corporation.

 

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OTHER CONSIDERATIONS

Consideration of Say on Pay Vote

The Company conducts an annual “say on pay” vote to approve executive compensation. At the 2020 annual meeting of stockholders, approximately 92% of shares voted were in support of the compensation provided to our NEOs. Although the vote is advisory and non-binding on the Board, the Compensation Committee regularly considers the results of the “say on pay” vote in evaluating the Company’s executive compensation programs, including for 2020 executive compensation. In light of the feedback from our stockholders and the Compensation Committee’s evaluation, the Compensation Committee concluded that the Company provides competitive executive compensation programs that effectively attract, motivate, reward and retain executives in a manner aligned with stockholder interests.

Stock Ownership Guidelines

The Company requires that NEOs accumulate and hold shares of DuPont common stock with a value equal to a specified multiple of base pay.

Stock ownership guidelines include a retention ratio requirement. Under the policy, until the required ownership is reached, executives are required to retain 75% of net shares acquired upon any future vesting of stock units or exercise of stock options, after deducting shares used to pay applicable taxes and/or exercise price.

The multiples for specific executive levels are shown below. As of December 31, 2020, each NEO either met or exceeded their ownership goal or was within the five-year period allowed to meet the guidelines.

 

  Multiple of Salary

  

Target

  

Actual

  Executive Chairman and CEO

  

6x

  

15x

  Other NEOs average(a)

  

3x

  

4x

 

(a)

Includes only NEOs who were employed on December 31, 2020.

For purposes of meeting the stock ownership guidelines, direct ownership of shares, unvested RSUs, and stock units owned via qualified and non-qualified employee plans are included in actual ownership totals. Stock Options and PSUs are not included in determining whether an executive has achieved the ownership levels.

Anti-Hedging and Anti-Pledging Policies

Our directors and officers are prohibited from engaging in hedging transactions (such as prepaid variable forwards, equity swaps, collars and exchange funds) with respect to the Company’s securities. They also are prohibited from holding the Company’s securities in a margin account or otherwise pledging the Company’s securities as collateral for a loan. Employees, other than officers, are generally permitted to, but discouraged from, engaging in transactions designed to hedge or offset market risk.

Clawback Policy

Under the DuPont de Nemours, Inc. Incentive Compensation Clawback Policy, the Company may recover incentive compensation that was based on achievement of quantitative performance targets if an executive officer engaged in grossly negligent conduct or intentional misconduct that resulted in a financial restatement or in any increase in his or her incentive income. Incentive income includes income related to annual bonuses and long-term incentives.

Compensation and Risk Management

The Committee periodically reviews the Company’s compensation policies and practices and has determined that the incentive compensation programs do not create risks that are reasonably likely to have a material adverse effect

 

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on the Company. In conducting the review in 2020, the Company completed an inventory of its incentive compensation plans and policies. The evaluation covered a wide range of practices and policies including: the balanced mix between pay elements, the balanced mix between short-term and long-term programs, caps on incentive payouts, governance controls in place to establish, review and approve goals, use of multiple performance measures, discretion on individual awards, use of stock ownership guidelines, provisions in severance/change in control policies, use of a clawback policy, and Compensation Committee oversight of compensation programs.

2020 Tax Considerations

The Internal Revenue Code generally imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the Company’s applicable executives. Prior to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) this limitation generally did not apply to compensation that met the tax code requirements for “qualifying performance-based” compensation. Following enactment of the Tax Act, the Company generally expects that compensation paid to applicable NEOs in excess of $1 million will not be deductible, subject to an exception for compensation provided pursuant to a binding written contract in effect as of November 2, 2017.

 

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COMPENSATION TABLES AND NARRATIVES

Summary Compensation Table

The following table summarizes the compensation of the NEOs for the fiscal year ended December 31, 2020.

 

  Name and Principal
  Position
   Year    Salary
($)
   Bonus
($)(a)
   Stock
Awards
($)(b)
   Option
Awards
($)(c)
   Non-Equity
Incentive Plan
Compensation
($)(d)
   Change in
Pension
Value &
Nonqualified
Deferred
Compensation
Earnings
($)(e)
   All Other
Compensation
($)(i)
   Total
($)

  Edward D. Breen(f)

   2020    1,000,000    333,000    7,933,152    2,361,998    717,000    -    524,286    12,869,436

  Chief Executive Officer

   2019    1,387,833    -    15,700,061    -    2,583,700    -    601,156    20,272,750
   2018    1,930,800    -    -    12,700,004    3,300,510    -    743,988    18,675,301

  Lori Koch

  Chief Financial Officer

   2020    646,667    194,250    1,908,360    500,008    418,250    14,329    82,947    3,764,811
                          

  Matthias Heinzel(g)

  President, Nutrition & Biosciences

   2020

2019

   827,980

727,632

   340,782

62,777

   1,068,680

5,400,004

   280,007

600,001

   356,101

2,008,798

   223,611

286,864

   561,806

48,121

   3,658,968

9,134,197

  Rose Lee

  President, Safety & Construction

   2020
   625,000
   241,875
   1,335,915
   350,002
   195,625
   -
   112,119
   2,860,536

  Randy Stone

  President, Transportation & Industrial

   2020    600,000    276,000    1,335,915    350,002    207,000    -    108,044    2,876,961

  C. Marc Doyle(h)

   2020    155,000    -    -    -    236,712    -    6,095,044    6,486,756

  Former Chief

   2019    1,116,667    -    8,500,070    -    1,459,800    415,677    168,420    11,660,634

  Executive Officer

   2018    787,500    -    -    3,500,005    868,000    713,290    168,750    6,037,545

  Jeanmarie Desmond(h)

  Former Chief Financial Officer

   2020

2019

   90,417

680,000

   -

-

   -

3,200,073

   -

800,005

   92,055

1,729,700

   357,782

164,939

   2,179,939

87,880

   2,720,193

6,662,597

Totals in the above table might not equal the summation of the columns due to rounding amounts to the nearest dollar.

 

(a)

Bonus amount reflects the portion of the Individual Annual Incentive Compensation which is attributed to discretion as detailed in the “Annual Incentive Compensation” section of the CD&A. This income is paid in 2021 for performance in 2020. Mr. Heinzel’s amount also includes a 13th Month Payment equal to one month of his base salary in 2020.

 

(b)

Amounts represent the aggregate grant date fair value of awards in the year of grant in accordance with the same standard applied for financial accounting purposes, FASB ASC Topic 718. Value of the Performance Share program, shown at Target, if valued assuming a maximum payout, the value of the awards would be: Mr. Breen, $13,905,140; Ms. Koch, $3,316,708; Mr. Heinzel, $1,857,341; Ms. Lee, $2,321,779 and Mr. Stone, $2,321,779. A discussion of the assumptions used in calculating these values can be found in Note 20 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

 

(c)

DuPont’s valuation for financial accounting purposes uses the widely accepted Black-Scholes option valuation model. Options awarded on February 19, 2020 had a grant date fair value of $8.84 per option and an exercise price of $53.50. Options awarded to Mr. Breen on August 3, 2020 were determined based on a Black-Scholes value of $8.84 and have an exercise price of $53.50 to be consistent with awards granted on February 19, 2020 to all other members of management and have a fair market value of $10.44 per option. A discussion of the assumptions used in calculating these values can be found in Note 20 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

 

(d)

Individual Annual Incentive Compensation results are detailed in the Annual Incentive Compensation section of the CD&A and reflect income paid in 2021 for actual performance achieved in 2020.

 

(e)

Messrs. Breen and Stone and Ms. Lee were not participants in the DuPont Pension Restoration Plan. Amounts shown for Mr. Heinzel and Mses. Desmond and Koch represent the change in pension value. Mr. Doyle had a decrease in his pension value in the amount of $437,492. DuPont does not credit participants in the non-qualified plans with above-market earnings; therefore, no such amounts are reflected here.

 

(f)

Mr. Breen served as Executive Chairman through February 16, 2020. Mr. Breen also became Chief Executive Officer of the Company on February 17, 2020.

 

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(g)

Mr. Heinzel is a German employee and his salary, bonus, and other non-equity related compensation items are paid in Euros. U.S. Dollar amounts in this Proxy statement with respect to Mr. Heinzel have been converted from Euros at a rate of 1.22 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each day in December 2020.

 

(h)

Mr. Doyle and Ms. Desmond left the Company on February 17, 2020 pursuant to the Senior Executive Severance Plan.

 

(i)

All Other Compensation includes; post-employment payments, perquisites and other personal benefits; and employer contributions; to both qualified and non-qualified defined contribution plans, as applicable.

The following table details these amounts:

 

   Name Post-Employment
Payments ($)
Perquisites and
Other Personal Benefits ($)(1)
Contributions to Defined
Contribution Plans ($)

Edward D. Breen

- 201,753 322,533

Lori Koch

- 11,609 71,338

Matthias Heinzel

- 558,978 2,828

Rose Lee

- 10,250 101,869

Randy Stone

- 10,250 97,794

C. Marc Doyle

6,061,056 20,038 13,950

Jeanmarie Desmond

2,155,980 15,821 8,138

 

  (1)

The following other compensation items exceeded $10,000 in value:

i. Mr. Breen: Personal use of company car, legal fees associated with employment contract, and personal use of company aircraft ($194,137).

ii. Ms. Koch: Personal use of company aircraft.

iii. Mr. Heinzel: Company provided automobile, outplacement expenses, hotel expenses, and expenses related to his commuter assignment including host country tax, tax services, and tax equalization ($535,530). U.S. Dollar amounts for the host country tax have been converted from Danish Krone at a rate of 0.16 Dollars to one Krone. The exchange rate used was calculated by averaging exchange rates for each day in December 2020.

iv. Ms. Lee: Financial and tax planning.

v. Mr. Stone: Financial and tax planning.

vi. Mr. Doyle: Personal use of company car and legal fees associated with separation.

vii. Ms. Desmond: Financial and tax planning and legal fees associated with separation.

 

   

Personal use of aircraft includes use of corporate aircraft for travel to outside board meetings. The incremental cost to the Company of personal use of Company aircraft is calculated for the direct operating costs for each personal flight including fuel, landing, catering, handling, aircraft maintenance hourly maintenance service plan charges and crew travel costs. Fixed costs, which do not change based upon usage, such as pilot salaries or depreciation of the aircraft or maintenance costs not related to personal travel, are excluded. No NEO is provided a tax reimbursement for personal use of aircraft.

 

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Grants of Plan-Based Awards

The following table provides additional information about plan-based compensation disclosed in the Summary Compensation Table. This table includes both equity and non-equity awards.

 

  Name Grant
Date

Date of

Action

by the
Compensation
Committee

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
Estimated Future Payouts
Under Equity Incentive Plan
Awards

Stock
Awards:
Number
of
Shares
of Stock
or

Units

(#)(a)

All Other
Option
Awards:
Number of
Securities
Underlying
Options

(#)(b)

Exercise
or Base
Price of
Option
Awards

($/Sh)

Grant
    Date Fair    
Value of
Stock

and

Option
Awards

($)(c)

 

Threshold
($)

Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)

  Edward D. Breen(d)

8/3/2020 8/3/2020 - 1,500,000 3,000,000
8/3/2020 8/3/2020 56,075 112,150 224,300 5,971,988
8/3/2020 8/3/2020 37,384 1,961,165
8/3/2020 8/3/2020 226,245 53.50 2,361,998
  Lori Koch 2/19/2020 2/19/2020 - 700,000 1,400,000
2/19/2020 2/19/2020 14,019 28,038 56,076 1,408,349
2/19/2020 2/19/2020 9,346 500,011
2/19/2020 2/19/2020 56,562 53.50 500,008

  Matthias Heinzel

2/19/2020 2/19/2020 - 896,979 1,793,958
2/19/2020 2/19/2020 7,851 15,701 31,402 788,661
2/19/2020 2/19/2020 5,234 280,019
2/19/2020 2/19/2020 31,675 53.50 280,007
  Rose Lee 2/19/2020 2/19/2020 - 625,000 1,250,000
2/19/2020 2/19/2020 9,814 19,627 39,254 985,864
2/19/2020 2/19/2020 6,543 350,051
2/19/2020 2/19/2020 39,593 53.50 350,002

  Randy Stone

2/19/2020 2/19/2020 - 600,000 1,200,000
2/19/2020 2/19/2020 9,814 19,627 39,254 985,864
2/19/2020 2/19/2020 6,543 350,051
2/19/2020 2/19/2020 39,593 53.50 350,002

  C.Marc Doyle(e)

2/19/2020 2/19/2020 - 1,800,000 3,600,000

  Jeanmarie Desmond(e)

2/19/2020 2/19/2020 - 700,000 1,400,000

 

(a)

Restricted Stock Unit awards as described in the Long-Term Incentive Compensation section.

 

(b)

Stock Option awards as described in the Long-Term Incentive Compensation section.

 

(c)

Amounts represent the aggregate grant date fair value of awards in the year of grant in accordance with the same standard applied for financial accounting purposes consistent with the values shown in the Summary Compensation Table, FASB ASC Topic 178.

 

(d)

Mr. Breen’s annual award was issued August 3, 2020. The price used to determine the number of shares awarded and the strike price were set to match the management grant made on February 19, 2020, rather than utilizing the actual fair market price on the date of grant. This was done to align his compensation opportunity with the rest of management.

 

(e)

Mr. Doyle and Ms. Desmond left the Company on February 17, 2020 and as such were not awarded any equity compensation.

 

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Outstanding Equity Awards

The following table lists outstanding equity grants for each NEO as of December 31, 2020. The table includes outstanding equity grants from past years as well as the current year and includes awards denominated in Dow or Corteva common stock.

 

            Option Awards   Stock Awards
  Name   Grant Date   Stock
Ticker
  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(a)
  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(a)
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(b)
  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(b)(c)
  Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
(#)(d)
  Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights
That Have
Not Vested
($)(c)(d)
  Edward D. Breen   05/13/2015   DD           951   67,593    
  06/05/2015   DD           146   10,373    
  11/06/2015   DD   170,933   -   74.48   11/05/2022        
  02/02/2017   DD   113,955   -   85.81   02/01/2027        
  11/06/2017   DD   35,890   -   101.44   11/05/2027        
  02/15/2018   DD   182,550   91,275   103.76   02/14/2028        
  02/14/2019   DD           56,004   3,982,417    
  08/05/2019   DD               45,414   3,229,390
  08/03/2020   DD   -   226,245   53.50   08/02/2030   37,549   2,670,099   112,150   7,974,987
  05/13/2015   CTVA           945   36,591    
  06/05/2015   CTVA           145   5,615    
  11/06/2015   CTVA   170,933   -   30.10   11/05/2022        
  02/02/2017   CTVA   113,955   -   34.68   02/01/2027        
  11/06/2017   CTVA   35,890   -   41.00   11/05/2027        
  02/15/2018   CTVA   182,550   91,275   41.94   02/14/2028        
  02/14/2019   CTVA           55,677   2,155,826    
  05/13/2015   DOW           1,024   56,834    
  06/05/2015   DOW           157   8,721    
  11/06/2015   DOW   170,933   -   52.24   11/05/2022        
  02/02/2017   DOW   113,955   -   60.19   02/01/2027        
  11/06/2017   DOW   35,890   -   71.15   11/05/2027        
  02/15/2018   DOW   182,550   91,275   72.78   02/14/2028        
  02/14/2019   DOW           60,333   3,348,506    
  Lori Koch   02/04/2015   DD   2,402   -   80.07   02/03/2022        
  02/03/2016   DD   3,810   -   66.21   02/02/2026        
  02/02/2017   DD   2,932   -   85.81   02/01/2027        
  02/15/2018   DD   826   414   103.76   02/14/2028   96   6,846    
  02/14/2019   DD           1,514   107,643    
  08/05/2019   DD   -   25,317   66.06   08/04/2029       6,812   484,401
  02/19/2020   DD   -   56,562   53.50   02/18/2030   9,572   680,669   28,038   1,993,782
  02/15/2018   CTVA   826   414   41.94   02/14/2028   96   3,705    
  02/15/2018   DOW   827   413   72.78   02/14/2028   104   5,777    
  Matthias Heinzel   02/04/2015   DD   1,984   -   80.07   02/03/2022        
  02/03/2016   DD   6,183   -   66.21   02/02/2026        
  02/02/2017   DD   10,665   -   85.81   02/01/2027        
  02/15/2018   DD   11,499   5,750   103.76   02/14/2028        
  07/27/2018   DD           21,441   1,524,703    
  02/14/2019   DD           9,162   651,537    
  08/05/2019   DD   -   50,633   66.06   08/04/2029       13,624   968,803
  12/17/2019   DD           55,818   3,969,235    
  02/19/2020   DD   -   31,675   53.50   02/18/2030   5,361   381,192   15,701   1,116,498
  02/15/2018   CTVA   11,499   5,750   41.94   02/14/2028        
  02/15/2018   DOW   11,500   5,749   72.78   02/14/2028        
  Rose Lee   02/04/2015   DD   7,941   -   80.07   02/03/2022        
  02/03/2016   DD   13,251   -   66.21   02/02/2026        
  02/02/2017   DD   14,930   -   85.81   02/01/2027        
  02/15/2018   DD   11,499   5,750   103.76   02/14/2028        
  02/14/2019   DD           9,162   651,537    
  08/05/2019   DD   -   50,633   66.06   08/04/2029       13,624   968,803
  02/19/2020   DD   -   39,593   53.50   02/18/2030   6,701   476,527   19,627   1,395,676
  02/15/2018   CTVA   11,499   5,750   41.94   02/14/2028        
  02/15/2018   DOW   11,500   5,749   72.78   02/14/2028        

 

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Table of Contents

COMPENSATION DISCUSSION & ANALYSIS (continued)

 

 

            Option Awards   Stock Awards
  Name   Grant Date   Stock
Ticker
  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(a)
  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(a)
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(b)
  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(b)(c)
  Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
(#)(d)
  Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights
That Have
Not Vested
($)(c)(d)

  Randy Stone

  02/05/2014   DD   3,181   -   67.22   02/04/2021        
  02/04/2015   DD   4,565   -   80.07   02/03/2022        
  02/03/2016   DD   4,969   -   66.21   02/02/2026        
  02/02/2017   DD   10,665   -   85.81   02/01/2027        
  02/15/2018   DD   11,499   5,750   103.76   02/14/2028        
  02/14/2019   DD           9,162   651,537    
  08/05/2019   DD   -   50,633   66.06   08/04/2029       13,624   968,803
  02/19/2020   DD   -   39,593   53.50   02/18/2030   6,701   476,527   19,627   1,395,676
  02/15/2018   CTVA   11,499   5,750   41.94   02/14/2028        
  02/15/2018   DOW   11,500   5,749   72.78   02/14/2028        
  C. Marc Doyle   02/04/2015   DD   15,883   -   80.07   02/03/2022        
  02/02/2017   DD   42,658   -   85.81   02/01/2027        
  02/15/2018   DD   50,308   25,155   103.76   02/14/2028        
  08/05/2019   DD               10,962   779,508
  02/15/2018   CTVA   50,308   25,155   41.94   02/14/2028        
  02/15/2018   DOW   50,309   25,154   72.78   02/14/2028        

  Jeanmarie Desmond

  02/04/2015   DD   9,529   -   80.07   02/03/2022        
  02/03/2016   DD   8,745   -   66.21   02/02/2026        
  02/02/2017   DD   8,531   -   85.81   02/01/2027        
  02/15/2018   DD   8,624   4,312   103.76   02/14/2028        
  08/05/2019   DD               4,385   311,817
  02/15/2018   CTVA   8,624   4,312   41.94   02/14/2028        
    02/15/2018   DOW   8,624   4,312   72.78   02/14/2028                

 

  (a)

Stock Option award grants vest in three equal installments on the first, second and third anniversaries of the grant date shown in the table. Awards granted in August 2019 to Messrs. Heinzel and Stone and Mses. Koch and Lee vest on December 31, 2021.

 

  (b)

RSU award grants vest in three equal installments on the first, second, and third anniversaries of the grant date shown in the table. Awards granted to Mr. Breen in 2015 in his capacity as a non-employee director (prior to his being named CEO of EID) must be held until his retirement from service on the Board. Award granted to Mr. Heinzel in July 2018 will fully vest on the third anniversary of the grant date shown in the table. Award granted to Mr. Heinzel in December 2019 will have 75% of units vest March 31, 2021 and the remaining units vest December 17, 2022.

 

  (c)

Market values based on the December 31, 2020 closing stock price of $71.11 per share of DuPont common stock, $38.72 per share of Corteva common stock, and $55.50 per share of Dow common stock.

 

  (d)

PSUs granted August 5, 2019, February 19, 2020, and August 3, 2020 are shown at the target level of performance. The total actual number of shares to be delivered will be determined at the end of the performance period.

 

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Table of Contents

COMPENSATION DISCUSSION & ANALYSIS (continued)

 

 

Option Exercises and Stock Vested

The following table summarizes the value received from stock option exercises and stock grants vested during 2020.

 

     Option Awards    Stock Awards
  Name    Number of
Shares
Acquired
on Exercise
(#)
   Value
Realized
on Exercise
($)
  

Number of     

Shares     

Acquired     

on Vesting     

(#)(a)     

   Value
Realized
on Vesting
($)

Edward D. Breen

   -         -         82,802           3,661,802

Lori Koch

   -         -         1,248           63,443

Matthias Heinzel

   -         -         4,473           237,660

Rose Lee

   -         -         4,473           237,660

Randy Stone

   -         -         4,473           237,660

C. Marc Doyle

   42,560         194,938         126,808           6,737,921

Jeanmarie Desmond

   -         -         26,837           1,425,958

 

(a)

Reflects delivery of shares from the 2017, 2018, and 2019 Annual Restricted Stock Unit grants as well as Mr.  Doyle’s 2015 Restricted Stock Unit grant. Reflects vesting in DuPont, Corteva, and Dow shares.

BENEFITS

Pension Benefits

The following table lists the pension program participation and actuarial present value of each NEO’s defined benefit pension, if any, as of December 31, 2020.

 

  Name Plan Name Number of Years
of Credited Service
(#)
Present Value of
Accumulated Benefit
($)(a)
Payment During
Last Fiscal Year
($)

  Edward D. Breen(b)

DuPont Pension Restoration Plan - - -

  Lori Koch

DuPont Pension Restoration Plan 15.29 90,063 -

  Matthias Heinzel(b)

DuPont Alters—und Risikovorsorge II Plan 18.00 1,377,968 -
Versorgungslohn 16.00 729,404 -

  Rose Lee(b)

DuPont Pension Restoration Plan - - -

  Randy Stone(b)

DuPont Pension Restoration Plan - - -

  C. Marc Doyle

DuPont Pension Restoration Plan 23.23 - 3,167,283

  Jeanmarie Desmond

DuPont Pension Restoration Plan 29.54 - 2,111,778

 

(a)

The form of payment, interest rate, and mortality are based on assumptions noted in the description below.

 

(b)

Messrs. Breen, Heinzel, and Stone and Ms. Lee are not eligible to, and do not, participate in DuPont’s Pension Restoration Plan.

Defined-Benefit Retirement Plans

DuPont Alters- und Risikovorsorge II Plan

Mr. Heinzel is the only NEO who is eligible to participate in the “DuPont Alters- und Risikovorsorge II” plan (the DuPont Old age and risk pension II plan) (“DAUR II Plan”), which is a defined benefit pension plan for accounting purposes. Under the DAUR II Plan, participants are credited with annual contributions equal to 18% of their eligible income, which, in the case of Mr. Heinzel consists of his annual base salary and the “13th month salary,” in excess of the annual social ceiling in Germany (EUR 82,800, in 2020 ($101,016)). Accounts under the DAUR II Plan are credited with interest equal to at least 2.75%. The pension benefit under the DAUR II Plan is payable in a lump sum upon retirement (or, if earlier, upon a disability termination or death). Alternatively, upon application of the participant and consent of the company, the retirement benefit may be paid in five installments over five years.

 

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Table of Contents

COMPENSATION DISCUSSION & ANALYSIS (continued)

 

 

Versorgungslohn Plan

Mr. Heinzel is the only NEO who is eligible to participate in the Versorgungslohn Plan, a defined benefit pension plan for accounting purposes. This pension plan is financed via deferred compensation and Mr. Heinzel may decide to contribute part of his bonus under the Short-Term Incentive Plan (STIP). Under the Versorgungslohn Plan, the company makes annual contributions pursuant to a reinsurance policy equal to EUR 5,124 ($6,251). Mr. Heinzel’s account is credited with interest equal to at least 3.5%. The pension benefit under the Versorgungslohn Plan is payable in a lump sum upon retirement. Alternatively, upon application of the participant and if the total pension benefit amount exceeds EUR 50,000, the retirement benefit may be paid in five installments over five years.

Supplemental Retirement Plans

The DuPont Pension Restoration Plan

Prior to the spin-off of Corteva in 2019, an unfunded non-qualified plan was in place to provide pension benefits which exceeded the applicable IRC compensation or benefit limits. At the time of the spin-off, DuPont adopted the DuPont Pension Restoration Plan to provide this benefit based on the annuity value and years of credited service under the prior plan, frozen as of May 31, 2019. The form of benefit is a lump sum and the mortality tables and interest rates used to determine lump sum payments are the Applicable Mortality Table and the Applicable Interest Rate prescribed by the Secretary of the Treasury in IRC Section 417(e)(3).

Messrs. Breen and Stone and Ms. Lee were hired after December 31, 2006 and are not eligible to participate in the DuPont Pension Restoration Plan.

Non-Qualified Deferred Compensation

The following table provides information on compensation the NEOs have elected to defer as described in the narrative that follows.

 

   Name Executive
Contributions
in Last Fiscal
Year ($)(a)
Company
Contributions
in Last Fiscal
Year ($)(b)
Aggregate
Earnings
in Last Fiscal
Year ($)
Aggregated
Withdrawals/
Distributions
($)
Aggregate
Balance
at Last
Fiscal
Year-End
($)

  Edward D. Breen

197,922 296,883 579,530 - 3,829,027  

  Lori Koch

30,459 45,688 13,604 - 115,885  

  Matthias Heinzel(c)

- - - - -

  Rose Lee

50,813 76,219 7,253 - 402,142  

  Randy Stone

229,746 72,144 299,674 - 2,025,797  

  C. Marc Doyle

- - (28,605) 896,369 -

  Jeanmarie Desmond

- - 43,580 356,544