UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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DEAR FELLOW SHAREHOLDERS  

On behalf of our Board of Directors, we are pleased to provide you with our 2021 proxy statement.

For most of us around the world, 2020 was an extremely challenging year. Like many others, our Company swiftly adapted our business strategies to address the COVID-19 pandemic, associated recession, and low oil price environment. We are very proud of the work done to navigate 2020 while continuing to invest in our future and deliver on our commitment to sustainability.  

COVID-19 RESPONSE

At LyondellBasell, we prioritize safety each and every day. The COVID-19 pandemic required us to alter the way we operate, and our focus on safety drove quick action. We activated global and regional response teams and implemented new health and safety protocols. Essential employees at our manufacturing sites put social distancing and sanitizing measures in place, while a large number of our office-based employees adapted to remote work for extended periods of time. Together, our manufacturing sites and business functions worked to meet customer demand, including for the products needed to produce facemasks, disinfectants, and COVID-19 testing supplies.

We protected our greatest asset – our people – by avoiding large-scale workforce reductions, maintaining our 401(k) match and other benefits programs, and working to ensure our offices and sites do not contribute to the spread of the virus. We are proud to report zero instances of confirmed workplace transmission of the COVID-19 virus across our global operations to date, while maintaining a total recordable incident rate in the top decile of our industry.

Our Company has been equally nimble in responding to market challenges stemming from both the pandemic and low oil prices. Cost discipline is vital to our success through business cycles, and our lean cost structure underpinned the Company’s resilience during the sudden downturn. We aggressively managed inventory and deferred non-safety related capital expenditures. We proactively accessed the capital markets to strengthen our balance sheet, maximize liquidity, and protect the dividend. Ultimately, we funded both our dividend and capital investments with cash generated from operating activities.

CONTINUED INVESTMENT IN GROWTH

2020 was also a year of growth. We advanced two large projects with partners in China – an integrated ethylene and polyethylene joint venture with Bora Liaoning Enterprises which began operations in September 2020, and a new propylene oxide and styrene monomer joint venture with Sinopec, which is expected to commence start up activities before the end of 2021. We also expanded our core business in the U.S. by acquiring a 50% stake in an integrated ethylene and polyethylene joint venture with Sasol in Louisiana.

Delivering on our investments from prior years, we successfully started up the Hyperzone polyethylene plant on the U.S. Gulf Coast and completed the integration of A. Schulman into our Advanced Polymer Solutions segment.

SUSTAINABILITY COMMITMENT

We reaffirmed our commitment to sustainability in 2020 by focusing our sustainability strategy on the global challenges of eliminating plastic waste in the environment, addressing climate change, and supporting a thriving society. We announced an ambitious new goal to produce and market 2 million metric tons of recycled and renewable-based polymers annually by 2030; joined the United Nations Global Compact; appointed a Chief Talent & Diversity Officer; and established an employee Diversity Council. We also enhanced our sustainability reporting with GRI and SASB-aligned disclosures.

STRONG BOARD OVERSIGHT

Our directors are committed to providing strong, independent oversight of the Company’s strategy and risk management. In a year which asked more of everyone, our directors invested even more time and effort in the Company. The Board worked closely with management to monitor our response to the pandemic, including making adjustments to the Company’s operating strategy and capital spending plans, with continued focus on strengthening the balance sheet. Our directors also met frequently with management regarding strategic growth investments and financing transactions.

Collectively, the Board and its Finance Committee held seven meetings in the three months following acceleration of the pandemic in March, in addition to numerous informal calls and discussions among the Board, its Committee Chairs, and Company leadership. Our directors also led an increased focus on environmental, social, and governance matters, with deep dives into the Company’s sustainability strategy at three of the Board’s five standing meetings in 2020. Our Board believes close partnership with management, combined with deep commitment to oversight, is vital to the Company’s continued success.  

We would like to thank Bella Goren, who is not standing for re-election in 2021, for her service over the last seven years and her contributions to our Board, and especially to our Audit and Compensation and Talent Development Committees. We are also pleased to nominate Tony Chase and Bob Dudley as new, highly-qualified director candidates for election to our Board. Mr. Chase is the Chairman, Chief Executive Officer, and founder of ChaseSource, a Houston-based staffing and real estate development firm. He has significant entrepreneurial experience and has served on numerous public company, civic, and philanthropic boards. Mr. Dudley is the recently retired group chief executive of BP, a position he rose to over the course of a 40-year career with the multinational oil and gas company. He brings extensive executive management and international business experience, as well as deep knowledge of the energy industry. He also chairs the international industry-led Oil & Gas Climate Initiative. We strongly believe the diverse perspectives and backgrounds of these two nominees will further enhance the functioning of our Board.

We and our fellow directors thank you for your continued support of LyondellBasell Industries.

		Very truly yours,
JACQUES AIGRAIN		BHAVESH (BOB) PATEL
Chair of the Board		CEO

FORWARD-LOOKING STATEMENTS

The statements in this proxy statement relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management of LyondellBasell which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. When used in this proxy statement, the words “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Actual results could differ materially based on factors including, but not limited to, our ability to attract and retain a highly skilled and diverse workforce; actions taken by customers, suppliers, regulators, and others in response to increasing concerns about the environmental impact of plastic in the environment or other general sustainability initiatives; factors that could affect our ability to meet our stated goals with respect to reducing emissions, or that could impact our efforts to expand our goal to reflect our alignment with the Paris Agreement; water scarcity and quality; the pace of climate change and legal or regulatory responses thereto; and technological developments, and our ability to develop new products and process technologies. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the “Risk Factors” sections of our Form 10-K for the year ended December 31, 2020, which can be found at www.LyondellBasell.com on the Investor Relations page and on the Securities and Exchange Commission’s website at www.sec.gov. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Forward-looking statements speak only as of the date they were made and are based on the estimates and opinions of management of LyondellBasell at the time the statements are made. LyondellBasell does not assume any obligation to update forward-looking statements should circumstances or management’s estimates or opinions change, except as required by law.

References to our website in this proxy statement are provided as a convenience, and the information on our website is not, and shall not be deemed to be a part of this proxy statement or incorporated into any other filings we make with the Securities and Exchange Commission.

NOTICE OF AND AGENDA FOR 2021
ANNUAL GENERAL MEETING OF SHAREHOLDERS

ITEMS OF BUSINESS

We will also discuss our corporate governance, dividend policy, and executive compensation program.

By order of the Board,

CHARITY R. KOHL

Corporate Secretary

April [__], 2021

HOW TO VOTE

 

Your vote is important. You are eligible to vote if you are a shareholder of record at the close of business on April 30, 2021.

 

ONLINE	BY MOBILE DEVICE	BY PHONE	BY MAIL
Visit the website on your proxy card	Scan this QR code to vote with your mobile device	Call the telephone number on your proxy card	Sign, date and return your proxy card in the enclosed envelope

 

If you are a registered shareholder, you may vote online at www.proxyvote.com, by telephone, or by mailing a proxy card. If you hold your shares through a bank, broker, or other institution, you may vote your shares through the method specified on the voting instruction form provided to you.

 

Due to the coronavirus (COVID-19) outbreak and related health and safety concerns, in person attendance at the 2021 annual general meeting may be unavailable or extremely limited. We are providing virtual access to shareholders through a live teleconference and will provide the opportunity for shareholders to discuss matters on the agenda and ask questions during and in advance of the meeting. Shares cannot be voted via teleconference and must be voted by proxy in advance. If you would like to attend the meeting via teleconference or in person (if possible), notice must be given to the Company on or before May 21, 2021. Additional information regarding in person attendance or access to the teleconference will be provided at that time. See pages 88-89 for more information.

 

Important Notice Regarding Availability of Proxy Materials for the 2021 Annual General Meeting

This proxy statement and our 2020 annual report to shareholders are available on our website at www.LyondellBasell.com by clicking “Investors,” then “Company Reports.” This proxy statement is first being mailed and delivered electronically to shareholders on or about April [__], 2021.

 

If you wish to receive future proxy statements and annual reports electronically rather than receiving paper copies in the mail, please see page 90 for instructions. This approach can provide information to you more conveniently, while reducing the environmental impact of our annual general meeting and helping to reduce our distribution costs.

TABLE OF CONTENTS

PROXY STATEMENT SUMMARY

This summary highlights information contained elsewhere in this proxy statement. The summary does not include all of the information you should consider before voting your shares, and we encourage you to read the full proxy statement carefully.

ANNUAL GENERAL MEETING

DATE AND TIME	PLACE	RECORD DATE
FRIDAY, MAY 28, 2021, 3:00 P.M. LOCAL TIME	LYONDELLBASELL INDUSTRIES, DELFTSEPLEIN 27E 3013 AA, ROTTERDAM, THE NETHERLANDS	FRIDAY, APRIL 30, 2021

AGENDA AND VOTING RECOMMENDATIONS

CORPORATE GOVERNANCE HIGHLIGHTS

	Annual election of directors			Board diversity (women and minority directors comprise 50% of our nominees)
	Independent Board (11 of 12 director nominees)			Code of Conduct supported by whistleblower helpline and robust compliance program
	Independent Committees (100% of directors on each Board Committee are independent)			Board engagement on strategy, long range planning, and capital allocation
	Independent Board Chair			Board oversight of enterprise risk management function and sustainability strategy
	Executive sessions at each regularly scheduled Board and Committee meeting			Regular succession planning for executive management with focus on talent development
	Annual self-assessments for the Board and each Committee			Board leadership of the Company’s response to the COVID-19 pandemic
	Board refreshment supported by mandatory retirement age			Stock ownership guidelines for directors and executives and policy against hedging

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2021 DIRECTOR NOMINEES

Board Chair and Committee Chairs are also members of the Executive Committee

Board Diversity		Board Refreshment (since 2018)

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2020 PERFORMANCE OVERVIEW

In 2020, the pandemic and market headwinds resulted in a challenging year, as lower demand impacted volumes and margins leading to significantly decreased EBITDA across nearly all parts of our business. Against that backdrop, however, the Company continued to operate efficiently and safely, and we capitalized on opportunities to grow and invest in our future.

* See Appendix A for information about our non-GAAP financial measures and a reconciliation of net income to EBITDA, including and excluding adjustments.

	GROWTH	Invested efficiently for long-term returns, advancing two new joint ventures in China and acquiring a 50% stake in a new integrated polyethylene joint venture in Louisiana			LIQUIDITY	Increased liquidity through aggressive inventory reductions and an actively managed balance sheet
	SAFETY	Achieved top-decile safety performance while implementing new COVID-19 protocols and socially distanced operations			MARKET POSITION	Maintained leading market positions through nimble reaction from commercial groups
	COST DISCIPLINE	Demonstrated cost discipline in day-to-day operations and by deferring non-safety-related capital expenditures			SUSTAINABILITY	Progressed sustainability programs and goals, including new recycling targets, and joined the United Nations Global Compact

2020 EXECUTIVE COMPENSATION HIGHLIGHTS

We are committed to a pay for performance philosophy, and our compensation programs align executive and shareholder interests by tying a significant amount of compensation to our financial, business, and strategic goals. The compensation of our CEO and other Named Executive Officers is heavily weighted toward performance-based and variable compensation.

CEO		ALL OTHER NEOs

Due to the COVID-19 pandemic and difficult market environment in 2020, and resulting EBITDA performance, annual bonuses for our executives paid out below target. Similarly, total shareholder returns over recent years resulted in no payout for the 2018-2020 performance share units under our long term incentive program.

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The Board recommends that you vote FOR the election of each of the nominees to our Board of Directors.

The Board of Directors of LyondellBasell Industries N.V. (“LyondellBasell” or the “Company”) recommends that each of the twelve director nominees introduced below be elected to our Board, in each case for a term ending at our 2022 annual general meeting of shareholders. The nominees include ten current directors who were elected by shareholders at the 2020 annual general meeting and two new director nominees, Tony Chase and Bob Dudley.

OUR BOARD

Our goal is to have a Board that provides effective oversight of the Company through the appropriate balance of experience, expertise, skills, specialized knowledge, and other qualifications and attributes. Director candidates also must be willing and able to devote the time and attention necessary to engage in relevant, informed discussion and decision-making. Our Nominating and Governance Committee focuses on Board succession planning and refreshment and is responsible for recruiting and recommending nominees to the full Board for election. The Committee considers the qualifications, contributions, and outside commitments of each current director in determining whether he or she should be nominated for reelection. Many of our directors serve on the boards and board committees of other companies, and the Committee believes this service provides additional experience and knowledge that improve the functioning of our own Board.

Our Board considers diversity a priority and seeks representation across a range of attributes, including race, ethnicity, nationality, and gender. Our Board is committed to increasing the representation of women in its membership. In accordance with our Corporate Governance Guidelines, the Committee and any outside consultants engaged to assist in identifying potential director candidates include women and minority candidates in each pool from which a director candidate is selected.

These recruitment efforts are evidenced by our current Board composition and the qualities and qualifications of each of our nominees.

DIRECTOR NOMINEES’ INDEPENDENCE, TENURE, AND DIVERSITY

Our director nominees provide the Board with a broad range of perspectives due to their diverse gender, age, ethnicity, nationality, and tenure profiles, as well as the qualifications and skills identified below. Each of the eleven non-executive directors nominated to our Board is independent.

Our Nominating and Governance Committee recognizes the importance of regular Board refreshment to provide new perspectives, skill sets, and diversity to its membership. Since 2018, the Board has nominated five new directors for election, elected a new independent Chair, appointed new Chairs of the Audit Committee and Compensation and Talent Development Committee (including promoting a second woman to a Board leadership position), and regularly rotated Committee member appointments.

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DIRECTOR EXPERIENCE AND EXPERTISE

Aigrain

Benet

Bindra

Buchanan

Chase

Cooper

Dicciani

Dudley

Farley

Hanley

Manifold

Patel

INDUSTRY EXPERIENCE Experience with and understanding of the chemicals and refining industries

HSE EXPERIENCE Experience with social responsibility issues related to health, safety, and the environment

STRATEGIC PLANNING Knowledge of corporate strategy and strategic planning

MERGERS & ACQUISITIONS Experience with mergers, acquisitions, and other strategic transactions

CORPORATE FINANCE Financial expertise and experience with corporate finance

EXECUTIVE MANAGEMENT / CEO EXPERIENCE Executive management experience with large or international organizations

CORPORATE GOVERNANCE Knowledge of corporate governance issues applicable to companies listed on the NYSE

RISK MANAGEMENT Experience identifying, managing, and mitigating key enterprise risks

PUBLIC COMPANY DIRECTOR Service on the boards of other public companies

DIVERSITY AND DEMOGRAPHICS

Race/Ethnicity

African American or Black

Alaskan Native or American Indian

Asian

Caucasian or White

Hispanic or Latinx

Native Hawaiian or Pacific Islander

Gender

Male

Female

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DIRECTOR NOMINATIONS

Although our Nominating and Governance Committee is responsible for recommending director candidates to the Board, candidates may also be proposed by other directors, management, and our shareholders.

Any shareholder who wishes to recommend a director candidate should submit a written recommendation to our Corporate Secretary by email or regular mail. The recommendation must include the name of the nominated individual, relevant biographical information, and the individual’s consent to nomination.

BY EMAIL send an email to CorporateSecretary@ LyondellBasell.com	BY MAIL LyondellBasell Industries N.V. c/o Corporate Secretary 4th Floor, One Vine Street London W1J 0AH, United Kingdom

Our Nominating and Governance Committee uses the same process to evaluate shareholder nominees as it does in evaluating nominees identified by other sources. For our 2022 annual general meeting of shareholders, recommendations must be received by December [__], 2021 to be considered.

2021 NOMINEES TO THE BOARD

On the recommendation of the Nominating and Governance Committee, the Board has nominated ten continuing directors and two new director nominees, Tony Chase and Bob Dudley, for election to the Board. These twelve individuals have a high caliber and diverse array of expertise, experience, and leadership skills. Each of these nominees has consented to serve as a director if elected. Bella Goren is not standing for re-election following the completion of her current term at the 2021 annual general meeting (the “Annual Meeting”).

We introduce our twelve nominees below.

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Our Board has considered Mr. Hanley’s concurrent service on the audit committees of three additional public companies beginning in late 2020 and has determined that such simultaneous service does not impair his ability to effectively serve as a member and Chair of our Audit Committee. Mr. Hanley will not stand for re-election to the board of directors of Shawcor, where he currently serves on the audit committee. Following his departure in May 2021, he will only serve on two public company audit committees in addition to LyondellBasell.

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CORPORATE GOVERNANCE

LyondellBasell recognizes the importance of good corporate governance as a driver of long-term stakeholder value. Our Board has adopted, and regularly reviews and strives to improve upon, LyondellBasell’s robust corporate governance policies, practices, and procedures with consideration given to regulatory developments and evolving U.S. and Dutch governance best practices.

Our governance guidelines and policies, including those listed below, are available on our website at www.LyondellBasell.com by clicking either (i) “Investors,” then “Corporate Governance” or (ii) “Sustainability,” then “Report and Policy Library.”

	Corporate Governance Guidelines		Rules for the Board of Directors
	Articles of Association		Board Committee Charters
	Code of Conduct		Financial Code of Ethics
	Conflict Minerals Policy		Human Rights Policy
	Human Trafficking and Anti-Slavery Statement		Supplier Code of Conduct

DIRECTOR INDEPENDENCE

Our Board annually reviews the independence of its members. In February 2021, the Board affirmatively determined that all of our non-executive directors and director nominees are independent under the rules of the New York Stock Exchange (the “NYSE”).

The Board has adopted categorical standards of independence that meet, and in some instances exceed, the requirements of the NYSE. In order to qualify as independent under our categorical standards, a director must be determined to have no material relationship with LyondellBasell other than as a director. The categorical standards include strict guidelines for non-executive directors and their immediate families regarding employment or affiliation with LyondellBasell and its independent registered public accounting firm. Our categorical independence standards are included in our Corporate Governance Guidelines.

The Board has determined that there are no relationships or transactions that prohibit any of our non-executive directors or nominees from being deemed independent under the categorical standards and that each of our non-executive directors and nominees is independent. In addition to the relationships and transactions that would bar an independence finding under the categorical standards, the Board considered all other known relationships and transactions in making its determination, including those set forth below under “–Other Governance Matters–Related Party Transactions.” In determining that no known transactions or relationships affect the independence of any of the non-executive directors, the Board considered that all of the identified transactions are ordinary course and none of the dollar amounts involved were material to the Company or the relevant counterparty.

BOARD LEADERSHIP STRUCTURE

Jacques Aigrain has led our Board as its independent Chair since 2018. The Chair’s responsibilities include:

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The Board regularly reviews LyondellBasell’s leadership structure and the responsibilities of its Chair, and may from time to time delegate additional duties to the role.

Under Dutch law, only a non-executive director may serve as Chair of our Board. Our Board believes that the separation of the positions of Chair and Chief Executive Officer that results from this governance structure promotes strong Board governance, independence, and oversight. The separation of the two roles additionally allows Mr. Aigrain to focus on managing Board matters while our CEO, Mr. Patel, focuses on managing our business.

EXECUTIVE SESSIONS

Executive sessions of our independent directors, with no members of management present, take place at every regular Board and committee meeting. During executive sessions, independent directors have an opportunity to meet with the Board’s outside consultants and independent accountants and review and discuss any matters they deem appropriate, such as the performance of the Chief Executive Officer and other members of management and the criteria against which performance is evaluated, including the impact of performance on compensation matters. Mr. Aigrain leads these executive sessions of the Board. If he is unavailable, the non-executive director with the longest tenure will preside. If two or more individuals have equal tenure, the eldest of them will chair.

BOARD EVALUATIONS

Our Board and its committees evaluate their own effectiveness by participating in a robust annual self-assessment process overseen by the Nominating and Governance Committee. Each year, directors respond to survey questions soliciting information used to improve the effectiveness of the Board and its committees and individual directors. Survey results are supplemented by one-on-one interviews conducted by either the Chair or third parties, and the Nominating and Governance Committee periodically engages independent outside consultants to facilitate and refresh the evaluation process.

For 2020, the Board conducted its evaluation process as described below.

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DIRECTOR ONBOARDING, TRAINING, AND SITE VISITS

Our Board is committed to understanding its governance responsibilities, evolving best practices, and all aspects of our Company and business. The Company provides an extensive orientation program that enables each new director joining the Board to become familiar with LyondellBasell and to meet with key members of the Company’s management and functional leaders. Mr. Hanley and Mr. Manifold, who joined our Board in 2018 and 2019, respectively, completed our onboarding program and met with the Company’s Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, Chief Compliance Officer, and additional executives to discuss our corporate structure, business strategy, operations, and segments, as well as tax, accounting, compliance, investor relations, human resources, and health, safety, and environment (HSE) matters, among other topics. Mr. Chase and Mr. Dudley will complete a similar orientation program prior to joining our Board.

All of our directors are encouraged to participate in industry and governance organizations and seek out training opportunities that will provide them with continuing education on key topics. The Company will reimburse directors for the costs of such continuing education. During Board meetings, our directors hear from management on a wide range of subjects, including regulatory developments, shareholder updates, and environmental, social, and corporate governance issues and trends. Our directors also have regular opportunities to visit the Company’s manufacturing and technology centers and meet with site management. In early 2020, the Chair of the HSE&O Committee visited two manufacturing facilities within our Advanced Polymer Solutions segment. Although a group site visit could not be arranged for 2020 given travel restrictions related to COVID-19, the Board has toured the Company’s Cincinnati Technology Center and Hyperzone plant construction site in recent years.

SHAREHOLDER ENGAGEMENT

We recognize the value of regular and consistent communication with our shareholders and engage with investors on strategy, risk management, sustainability, corporate governance, executive compensation, and other matters. We regularly review general governance trends and emerging best practices and invite feedback from our shareholders and other stakeholders, which is brought to our Board and part of its decision-making process. Engagement with shareholders occurs in one-on-one meetings and calls with shareholder representatives, at our annual general meeting of shareholders, and through our regular participation in industry conferences, investor road shows, and analyst meetings.

In 2020, we discussed the Company’s strategy and environmental, social, and governance profile with multiple investors and engaged their questions or concerns on these and other topics. Our independent Board Chair has made himself available for these discussions, and management updates the Board regularly on conversations with shareholders and feedback received. We are committed to remaining proactive in our engagement efforts and shareholder outreach.

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COMMUNICATION WITH THE BOARD

Shareholders and other interested parties may communicate with the Board or any individual director. Communications should be addressed to our Corporate Secretary by email or regular mail.

BY EMAIL send an email to CorporateSecretary@ LyondellBasell.com	BY MAIL LyondellBasell Industries N.V. c/o Corporate Secretary 4th Floor, One Vine Street London W1J 0AH, United Kingdom

Communications are distributed to the Board or to one or more individual directors, as appropriate, depending on the facts and circumstances outlined in the communication. Communications such as business solicitations or advertisements; junk mail and mass mailings; new product suggestions; product complaints; product inquiries; and resumes and other forms of job inquiries will not be relayed to the Board. In addition, material that is unduly hostile, threatening, illegal, or similarly unsuitable will be excluded. Any communication that is filtered out is made available to any director upon request.

CEO AND MANAGEMENT SUCCESSION PLANNING

One of the primary responsibilities of the Board is to ensure that we have a high-performing management team in place. On an annual basis, the Board conducts a detailed review of development and succession planning activities to maximize the pool of internal candidates who can assume executive officer positions without undue interruption. The Board reviews CEO and executive succession planning and ensures that executive officer reviews and evaluations are conducted at least annually, by either the Compensation and Talent Development Committee or the Board as a whole. The Board also reviews in-depth assessments of the Company’s bench strength, retention, progression, and succession readiness for all other senior level managers.

Monitoring the Company’s leadership development, talent management, and succession planning is also a key responsibility of our Compensation and Talent Development Committee, which devotes significant time to discussion and oversight of the Company’s human resources strategy.

In connection with the 2020 retirement of the Company’s Executive Vice President, Global Manufacturing, Projects, and Refining, the Company re-allocated significant responsibility to other members of its senior executive team in accordance with existing leadership development and succession plans.

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HUMAN CAPITAL MANAGEMENT

Our success as a company is tied to the passion, knowledge, and talent of our global team. To achieve our vision of being the best operated and most valued company in the industry, we must attract top performers and equip them with the tools needed to continuously grow and leverage their potential.

What We Do
	We believe in integrity, diversity, and fairness
	We focus on creating a work environment that is safe, respectful, and inspires employees to strive for excellence
	We believe in the "power of many" and place a strong emphasis on teamwork
	We reward performance based on personal, team, and company results
	We engage in open and ongoing dialogue with employees and their representatives to ensure a proper balance between the best interests of the Company and its employees
	We have a comprehensive Human Rights Policy, available on our website at www.LyondellBasell.com by clicking “Sustainability,” then “Report and Policy Library”

Key 2020 Focus Areas

In 2020, we continued our focus on building an engaged, talented workforce by developing skill sets, supporting diversity, and ensuring fair employment and work practices.

COVID-19

As cases of the COVID-19 virus spread across the globe, LyondellBasell continued to operate with three key objectives: protecting the health and safety of our people; ensuring the safety and security of our work locations; and maintaining business continuity with our customers and suppliers.

A globally coordinated, locally implemented plan to protect our workforce was quickly put in place at the beginning of the pandemic. Strict social distancing and facial coverage protocols were introduced, critical personal protective equipment was procured and provided to employees, and a number of initiatives to support our employees’ mental health were put into place. Processes and tools were implemented so employees could easily and confidentially report if they have symptoms of, or have tested positive for, COVID-19; all are contacted by medical personnel or human resources to ensure they have sufficient support.

In addition, the COVID-19 pandemic required our office-based workforce to quickly shift to remote working. To date, many employees continue to work from home for various pandemic-related reasons, including back-to-school and childcare challenges as well as personal or health-related reasons. We have also increased the availability of virtual learning and development opportunities.

DIVERSITY, EQUITY, AND INCLUSION

In July 2020, we accelerated our efforts in the area of diversity, equity, and inclusion (DEI) with the appointment of a Chief Talent & Diversity Officer, the establishment of a DEI Leadership Council, and the development of a multi-year DEI strategy. We are launching new employee initiatives focused on obtaining our employees’ perspectives on DEI, including formalized employee inclusion groups and a series of employee “listening circles,” and providing DEI training to all employees and senior managers.

HEALTH, WELLNESS, WELFARE, AND FAMILY RESOURCES

We provide competitive benefits and, at our large sites, access to health services at an on-site clinic on paid worktime. We have defined benefit pension plans that cover employees in the U.S. and various non-U.S. countries. In addition, we provide other post-employment benefits such as early retirement and deferred compensation severance benefits to employees of certain non-U.S. countries.

In 2020, new family-friendly policies were adopted that expanded the availability of paid parental leave, provided financial reimbursement for certain adoption expenses, and ensured all employees globally have a minimum of ten paid vacation or personal leave days. Our Employee Assistance Plan, which offers tools and provides referrals to financial and legal resources, was expanded and since January 2021 is available to all employees globally.

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BOARD OVERSIGHT OF RISK

While the Company’s CEO is responsible for assessing and managing the Company’s day-to-day risks and related control systems, the Board has broad oversight of the Company’s risk profile and risk management. In this oversight role, the Board is responsible for satisfying itself that the risk management processes designed and implemented by management, including the Company's Enterprise Risk Management (ERM) organization, are functioning and that necessary steps are taken to foster a culture of risk-adjusted decision-making throughout the organization. The Company believes that this division of responsibilities achieves sound risk management and that the Board’s involvement ensures effective oversight.

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Enterprise Risk Management Function

The Company has an Enterprise Risk Management (ERM) organization, with a group of employees dedicated to deploying the enterprise-wide risk management framework. The CEO and Chief Financial Officer are responsible for overseeing these risk management programs, including assessing risk tolerances, evaluating whether such tolerances are aligned with the Company’s strategic goals, and defining our overall risk profile. Each year, ERM leads a risk workshop with the CEO and his leadership team to refresh the Company’s risk profile. Together, the participants validate existing enterprise risks (both opportunities and threats), select new and emerging risks to add to the risk register, and ensure risk ownership is assigned to the appropriate leadership team executives and the Board and Board committees.

Examples of the Company’s enterprise risks include major health, safety, environment, and security events, cyber security, climate change, workforce planning, and political and regulatory uncertainty.

The CEO has delegated to an internal Risk Management Committee the authority to review and approve transactions, including hedging strategies, that are in accordance with the Company’s approved risk management policies and procedures. The standing members of the Risk Management Committee include the CEO, the Chief Financial Officer, and the Chief Legal Officer. Under the Committee's oversight, the Company's Financial Risk Management Group manages foreign exchange, interest rate, and other financial risks across the Company's global operations. Through a variety of policies and procedures, senior management and their leadership teams identify, monitor, mitigate, and report on risks and develop risk management plans aligned with the Company’s enterprise risk management framework.

The results of the risk management processes and updates on material risks are reported to the Board and its committees on a regular basis. The Audit Committee is responsible for ensuring that an effective risk assessment process is in place, and reports are made to the Audit Committee in accordance with NYSE requirements.

In recent years, members of the Board have participated in dedicated workshops, interviews, and surveys with the Company’s ERM organization and outside consultants. During these sessions, Board members and management identify and assess the Company’s primary risks. In 2020, in response to director feedback and requests, the ERM team conducted an accelerated evaluation of risks related to the Company’s operations and investments in China.

The direct line of communication between the Board and members of management facilitated at Board meetings and through these workshops allows the Board to further evaluate and assess the management of the Company’s day-to-day risks.

LYONDELLBASELL  2021 PROXY STATEMENT    25

APPROACH TO SUSTAINABILITY

LyondellBasell is taking action to help tackle the global challenges of eliminating plastic waste, addressing climate change, and supporting a thriving society. As one of the world’s largest producers of plastics and chemicals, we have the potential – and responsibility – to use our scale and reach to make a positive impact across value chains. In 2020, we further developed our sustainability strategy and identified five pillars that frame LyondellBasell’s response to these challenges.

GLOBAL CHALLENGES
PLASTIC WASTE	CLIMATE CHANGE	THRIVING SOCIETY

OUR PILLARS
End plastic waste in the environment	Advance the circular economy	Address climate change	Grow sustainable solutions	Enhance our workplace, operations and communities
We believe that ending plastic waste in the environment is a critical issue of our time. We are committed to helping eliminate plastic waste and are engaged in collaborative efforts across the value-chain to direct action where it is needed most.	We believe that transitioning to a circular economy will reduce resource use and enable a more sustainable future. We are advancing technologies and innovations that will help conserve finite resources and retain their value for as long as possible.	We believe that climate change is one of the most important global challenges both now and for future generations. We support the ambitions of the Paris Agreement and are reducing greenhouse gas emissions intensity from our operations to deliver solutions that help advance a low-carbon economy.	We believe growing our portfolio of sustainable solutions will help address society’s most pressing challenges. By doing so, we will continue to reliably produce products and offer solutions that are critical to improving the quality of life for billions around the world.	We believe the health and safety of our people and the communities where we operate are our highest priorities. We are committed to operating our company sustainably to deliver industry-leading performance, and enhancing our workplace and communities through the power of many.

2020 Actions and Milestones

In addition to defining our longer-term sustainability priorities, we are taking substantive action to achieve those goals.

RECYCLED AND RENEWABLE-BASED POLYMERS

In 2020, we announced our ambition to produce and market 2 million metric tons of recycled and renewable-based polymers annually by 2030.

Furthering this ambition, the Company’s mechanical recycling joint venture with SUEZ, Quality Circular Polymers, acquired additional recycling assets in December 2020, increasing its capacity for the production of recycled materials to approximately 55,000 tons per year. 2020 also marked the successful start-up of the Company’s MoReTec molecular recycling pilot plant in Ferrara, Italy. The plant uses our advanced recycling technology to return post-consumer plastic waste to its molecular form, for use as a feedstock for new plastic materials. Unlike traditional recycled plastics, these materials can be used in food packaging and healthcare items, which must meet strict regulatory requirements.

UNITED NATIONS GLOBAL COMPACT AND POLICY COMMITMENTS

In December 2020, LyondellBasell joined the United Nations Global Compact, the world’s largest corporate sustainability initiative, and committed to further align our operations and strategies with shared principles on human rights, labor, and anti-corruption. The Company also assessed the United Nations Sustainable Development Goals and identified the goals most material to our Company and aligned with our sustainability strategy, for future reporting.

The Company’s Supplier Code of Conduct, adopted in July 2020, establishes LyondellBasell’s expectations of suppliers and our commitment to support strong environmental, social, and governance (“ESG”) practices throughout our supply chain. LyondellBasell also adopted its first Human Rights Policy, which affirms and builds on existing Company policies and documents our commitment to respecting the human rights of our employees and all individuals, across our global operations.

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DIVERSITY, EQUITY, AND INCLUSION

In 2020, we appointed a Chief Talent & Diversity Officer and established an employee Diversity Council. Together with management and our Compensation and Talent Development Committee, they are evaluating our policies and practices to further emphasize diversity, equity, and inclusion (“DEI”) in our cultural and talent management programs. Also in 2020, our Nominating and Governance Committee amended our Corporate Governance Guidelines to explicitly require that the Committee and its outside consultants include women and minority candidates in each pool from which a director candidate is selected.

GRI AND SASB-ALIGNED REPORTING

The Company’s 2019 Sustainability Report, published in September 2020, aligned disclosures to the guidelines of the Global Reporting Initiative (“GRI”) and the Sustainability Accounting Standards Board (“SASB”). We are expanding our climate risk and opportunity assessment in the first half of 2021 and will include disclosures aligned with Task Force for Climate-Related Financial Disclosures (“TCFD”) reporting beginning in 2021.

Board and Management Oversight of ESG

Our Board leads our commitment to sustainability and maintains oversight of the Company’s ESG profile. Management reports on key topics and initiatives at each regularly scheduled Board meeting, and directors participate in a deep dive on sustainability strategy at least annually. In 2020, the Board focused on the Company’s ESG progress during dedicated sessions at three of its five regularly scheduled meetings.

The HSE&O, Compensation and Talent Development, Nominating and Governance, and Audit Committees also provide guidance regarding specific ESG issues in accordance with their charters and responsibilities. Specifically, the HSE&O Committee reviews program information and indicators on HSE performance at each meeting, and the Company’s Senior Vice President of R&D, Technology and Sustainability, who functions as the Chief Sustainability Officer, reports to the Committee regularly on sustainability initiatives and reporting. The HSE&O Committee reviews and approves the Company’s sustainability report each year.

The Nominating and Governance Committee oversees the Company’s corporate governance policies, and the Compensation and Talent Development Committee reviews our executive compensation, talent management, and DEI programs. The Chief Compliance Officer, who has a direct reporting line to the Audit Committee, presents information to that Committee regarding the Company’s compliance programs and EthicsPoint reporting helpline complaints at least quarterly. The Audit Committee also reviews the Company’s audit and internal controls.

BOARD OVERSIGHT OF ESG

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At the management level, our CEO oversees the Company’s ESG profile through regular reporting and discussion on key topics and initiatives with his direct reports.

MANAGEMENT OVERSIGHT OF ESG

SUSTAINABILITY STEERING COMMITTEE

The Sustainability Steering Committee, a subset of the CEO’s leadership team, meets monthly throughout the year and serves to align and embed the Company’s sustainability strategy within our corporate strategy, including by assessing progress toward the Company’s 2030 sustainability ambitions. The Committee is chaired by the Senior Vice President of R&D, Technology and Sustainability, who also functions as our Chief Sustainability Officer, and its membership includes the heads of each of the Company’s business segments as well as our finance, legal, public affairs, and HSE functions.

SUSTAINABILITY TEAM

The Chief Sustainability Officer is supported by a global group of employees, led by our Director, Global Sustainability, who is responsible for the management of sustainability programs. This group collaborates with leaders across the organization to bring together the functional expertise and skills needed to achieve our sustainability and ESG objectives.

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Commitments, Initiatives, and Partnerships

	CLIMATE CHANGE	PLASTIC WASTE	THRIVING SOCIETY
	Achieve a 15% reduction in CO2 emissions per ton of product produced, compared with 2015     We are committed to developing our climate ambition beyond our 2030 goal	Produce and market 2 million metric tons of recycled and renewable-based polymers annually	Continue to operate safely with a goal of zero incidents, zero injuries and zero accidents

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BOARD AND COMMITTEE INFORMATION

The Board currently has six standing committees, each consisting entirely of independent directors:

Our Compensation and Talent Development Committee, Nominating and Governance Committee, and HSE&O Committee meet in connection with each regularly scheduled Board meeting (other than the Board’s strategy session held in July) and hold additional meetings as needed, while other committees meet independently as the matters under their respective responsibilities require. Committees regularly receive reports from LyondellBasell management, report on committee actions to the Board, and may retain outside advisors.

In 2020, the Board held five regularly scheduled meetings and four special meetings. Our directors’ average attendance rate at Board and committee meetings was 95%, and each of our directors attended at least 85% of the meetings of the Board and committees of which he or she was a member. In addition, our Chair regularly attends meetings of the Audit Committee and the Compensation and Talent Development Committee. Although the Company does not maintain a policy regarding directors’ attendance at its general meetings of shareholders, both our Chair and CEO attend the Company’s annual general meeting each year and will attend the 2021 Annual Meeting.

The table below provides membership and meeting information for each of the Board’s committees as of the date of this proxy statement.

			Compensation &	Nominating &
Name		Audit	Talent Development	Governance	HSE&O	Finance	Executive
Jacques Aigrain				•		•
Lincoln Benet				•			•
Jeet Bindra		•					•
Robin Buchanan			•	•
Tony Chase(1)		○	○
Stephen Cooper					•
Nance Dicciani						•	•
Bob Dudley(1)					○	○
Claire Farley			•				•
Bella Goren(1)		•	•
Michael Hanley					•		•
Albert Manifold		•			•	•
Bob Patel
2020 MEETINGS		5	4	4	4	7	0(2)

 Chair   • Member   ○ As of Annual Meeting

Each of our committees has a written charter, approved by the Board. The charters can be found on our website at www.LyondellBasell.com by clicking on “Investors,” then “Corporate Governance,” then “Board of Directors.” Each committee annually reviews and recommends any changes to its charter and conducts an evaluation of committee performance with respect to delegated duties and responsibilities.

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Our Board has determined that all Compensation and Talent Development Committee members are independent under the NYSE listing standards, our categorical independence standards, and other independence requirements applicable to compensation committee members under NYSE rules.

Compensation Committee Interlocks and Insider Participation – No member of the Compensation and Talent Development Committee serves or has served as an officer or employee of the Company or any of our subsidiaries and, during 2020, no executive officer served on the compensation committee or board of any entity that employed any member of our Compensation and Talent Development Committee or Board.

For additional information on the Compensation and Talent Development Committee, including information regarding compensation consultants engaged during 2020, see the “Compensation Discussion and Analysis” beginning on page 44.

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LYONDELLBASELL  2021 PROXY STATEMENT    32

OTHER GOVERNANCE MATTERS

Retirement Policy and Term Limits

Our Corporate Governance Guidelines and Rules for the Board of Directors provide that directors will not be re-nominated for election to the Board after they reach the age of 75. While the Board does not believe there is a specific age after which directors should no longer serve on boards, it does believe mandatory retirement ages are useful for promoting board refreshment. Since 2018, the Board has nominated two new directors to fill vacancies created by director retirements after reaching our mandatory retirement age.

The Board has not adopted term limits for its members. The Nominating and Governance Committee and the full Board regularly discuss board succession and refreshment and strive to maintain a balance of directors with varying lengths of service and ages. While the Board recognizes that term limits could assist in this regard, they may have the unintended consequence of causing the Board and the Company to lose the contribution of directors who over time have developed enhanced knowledge and valuable insight into the Company and its operations. The Board believes that the mandatory retirement age and an annual evaluation process for deciding whether to re-nominate individuals for election are currently more effective means of ensuring board refreshment and renewal, while also allowing for continuity of service.

Code of Conduct

The Company has a Code of Conduct for all employees and directors and a Financial Code of Ethics specifically for our CEO, CFO, Chief Accounting Officer and persons performing similar functions. Copies of these codes can be found on our website at www.LyondellBasell.com by clicking on “Investors,” then “Corporate Governance.” Any waivers of the codes must be approved, in advance, by our Board, and any amendments to or waivers from the codes that apply to our executive officers and directors will be posted on the “Corporate Governance” section of our website.

We expect all employees to report possible violations or concerns regarding our Code of Conduct. We offer an independent whistleblower helpline and website, EthicsPoint, that enables employees and other stakeholders to report complaints anonymously. Our Chief Compliance Officer, who has a direct reporting line to the Audit Committee, provides regular reports to the Committee on compliance with the Company’s Code of Conduct, related training programs, and complaints received and investigated by the compliance function.

Public Policy & Political Engagement

We believe active participation in the political process is essential to our long-term success. LyondellBasell advances our public policy agenda through direct lobbying, involvement in various trade associations, and the LyondellBasell Political Action Committee (PAC). Transparency and accountability are embedded into our public policy, political spending and lobbying actions. The Company maintains policies and procedures consistent with our Code of Conduct that support continued compliance with applicable political laws and regulations. Our engagement, including public policy advocacy and management of the PAC, is subject to oversight by the PAC Board and CEO. In addition, all PAC spending is reviewed and approved by the PAC Board.

LyondellBasell generally does not make political contributions other than through the PAC, which is funded voluntarily by employees. Effective January 2021, the PAC Board has paused political contributions in order to review its policies and criteria for donating to candidates and ensure support continues to reflect our Company’s values.

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Our advocacy activities are directed toward advancing LyondellBasell’s business interests, to foster the protection and advancement of strong petrochemical and refining industries and not the personal political preferences of our executives or employees. Our strategy is grounded in safe and reliable operation of all assets. We support policies promoting reasonable regulations based on sound science; fair and equitable tax policies that promote economic investment, job creation and global competitiveness; and transportation infrastructure to meet the needs of our industry.

In all of the Company’s advocacy activities, we are committed to the highest standards in corporate responsibility, compliance, and transparency. The Company discloses its U.S. federal, state and local lobbying activity and expenditures as required by law. More information is available on our website at www.LyondellBasell.com by clicking “Sustainability,” then “Public Policy & Political Engagement.”

Dutch Corporate Governance Code

As a Dutch incorporated entity, we are subject to the Dutch Corporate Governance Code. The Code, most recently amended in 2016 and a copy of which can be found at www.mccg.nl/english, is a statement of principles and best practices for Dutch companies with an emphasis on integrity, transparency, and accountability as the primary means of achieving good governance. The Code’s compliance principle is “comply-or-explain,” which permits a Dutch company to comply with the best practices outlined in the Code or explain why the company has chosen to apply different practices.

The principles and practices prescribed by the Code are largely consistent with NYSE and SEC requirements and best practices for U.S. companies. In our Dutch Annual Report, which accompanies our 2020 Dutch Annual Accounts and can be found on our website at www.LyondellBasell.com by clicking “Investors,” then “Company Reports,” we disclose those instances where we have chosen to apply practices that differ from the Code. In general, these instances arise from our decision to apply practices that are more common or appropriate for NYSE traded companies than those called for by the Code. For example, although the Board’s categorical standards for director independence incorporate the standards of both the Code and the NYSE, our Board has chosen to apply the standards of the NYSE where the two conflict, including with respect to the independence classification of directors nominated by Access Industries, a greater than 10% shareholder. Our Board believes that application of the NYSE independence standards is more appropriate for LyondellBasell, which is listed only on the NYSE and not on any exchange in the Netherlands. Our Board further believes that the service of Access nominees on the Company’s key independent committees provides those committees with shareholder perspective and the significant skills, experience, and qualifications of these directors, to the benefit of the Board, the Company, and our stakeholders more generally.

Related Party Transactions

We have adopted a written Related Party Transaction Approval Policy, which requires the disinterested members of the Audit Committee to review and approve certain transactions that we may enter into with related parties, including members of the Board, executive officers, and certain shareholders. The policy applies to any transaction:

Related party relationships are identified and disclosed on an ongoing basis, as well as through responses to annual questionnaires completed by all directors, director nominees, and executive officers.

The Audit Committee reviews all the relevant facts of each related party transaction, including the nature of the related person’s interest in the transaction, and determines whether to approve the transaction by considering, among other factors, (i) whether the terms of the transaction are fair to the Company and on the same basis as those which could be obtained from non-related parties, (ii) the business reasons for the Company to enter into the transaction, (iii) whether the related party transaction would impair the independence of any independent Board member, and (iv) whether the transaction would present an improper conflict of interest for any director or executive officer of the Company. No director votes on approval or, unless requested by the Audit Committee, participates in the discussion of a related party transaction in which he or she has an interest. The Audit Committee also conducts an annual review of all transactions with related parties, including those that do not meet the thresholds for related party transactions described above.

The following is a description of related party transactions in existence since the beginning of fiscal year 2020.

LYONDELLBASELL  2021 PROXY STATEMENT    34

ACCESS INDUSTRIES

In 2010, we entered into certain agreements with affiliates of Access Industries, including a registration rights agreement, which obligates us to register and bear the costs for the resale of equity securities owned by Access Industries or its affiliates, and a nomination agreement. Pursuant to the nomination agreement, Access Industries has the right to nominate individuals for appointment to the Board if certain ownership thresholds are met. Access Industries currently owns more than 18% of our outstanding shares and has nominated Messrs. Benet, Buchanan, and Cooper pursuant to the nomination agreement. The Company entered into these agreements with Access Industries before it became publicly traded and the Related Party Transaction Approval Policy was adopted. Amendments to the nomination agreement are approved by disinterested directors.

CALPINE CORPORATION

Calpine Corporation, the owner and operator of power plants across the United States and Canada, supplies power and steam to the Company’s Houston refinery and electricity to certain other U.S. sites and is owned by a group of investors including a minority investment by Access Industries. The Audit Committee has reviewed and approved, most recently in October 2020, the Company’s contracts with Calpine, which were determined to be on terms fair to the Company and more advantageous than those offered by other parties. In 2020, the Company purchased approximately $62 million of power, steam, and water from Calpine and sold approximately $13 million of excess gas and raw water to Calpine.

PLASTO-CARGAL GROUP

From time to time, the Company’s Advanced Polymer Solutions segment sells certain additives to Plasto-Cargal Group, a manufacturer of plastic container and film products, in which Access Industries holds an indirect minority investment. Sales are conducted in the ordinary course and no approval is required under the Company’s Related Party Transaction Approval Policy; however, the Audit Committee has reviewed and approved the continuation of such transactions, which totaled less than $0.5 million for 2020.

OTHER TRANSACTIONS & RELATIONSHIPS

The Board was also made aware of, and considered the fairness of, certain transactions and relationships between the Company and other organizations where our directors and director nominees have relationships. These transactions and relationships were also considered in evaluating the independence of the non-executive members of our Board and the outside commitments of our executive director, Mr. Patel.

Each commercial transaction described below was entered into on an arm’s-length basis in the ordinary course of business, and no director initiated or participated in negotiation of the relevant purchases or sales.

Indemnification

We indemnify members of our Board to the fullest extent permitted by law so they will be free from undue concern about personal liability in connection with their service to the Company. Our Articles of Association establish this indemnification right, and we have also entered into agreements with each of our non-executive directors and our CEO contractually obligating us to indemnify them.

LYONDELLBASELL  2021 PROXY STATEMENT    35

DIRECTOR COMPENSATION

Our Nominating and Governance Committee reviews director compensation on an annual basis and recommends any changes in compensation determined advisable. The Board seeks to award compensation that fairly compensates directors for the work required by membership on our Board and aligns director interests with those of our shareholders. The Nominating and Governance Committee periodically receives advice from Pearl Meyer & Partners, LLC (“Pearl Meyer”), the Board’s independent compensation consultant, on director compensation practices and gives consideration to the qualifications and caliber of the Company’s directors and significant commitment required for service on our Board, including the additional time and effort required by overseas travel for a majority of our Board meetings.

Our non-executive directors receive cash compensation and equity compensation, in the form of restricted stock units (“RSUs”), for their service on the Board and its committees. Members of the Board have the option to elect to receive all or a portion of the cash component of their compensation in Company shares. Our CEO does not receive any additional compensation for his service as a director.

In addition to the retainers shown above, we provide members of the Board with a cash payment of $5,000 for each intercontinental trip taken in performing board service.

Share Ownership Guidelines

Members of our Board are subject to Share Ownership Guidelines. Under the Share Ownership Guidelines, non-executive directors are prohibited from selling any shares of the Company until they own shares that are valued at no less than six times their annual cash retainer for Board service, or $690,000 for all directors other than our Chair, whose ownership requirement is $1,950,000. Once a director has reached his or her required ownership level, he or she may not sell shares that would bring ownership below the threshold level.

Prohibition on Hedging and Pledging Shares

Pursuant to our Policy Prohibiting Insider Trading, directors are prohibited from purchasing, selling, or writing options on the Company’s shares, engaging in short sales, participating in other derivative or short-term purchase or sale transactions, or otherwise engaging in transactions that would enable them to hedge against any decrease in our share price. Directors are also prohibited from pledging Company shares as collateral for personal loans or other obligations, including holding shares in a brokerage margin account. These restrictions extend to directors’ immediate family members and certain related entities and are intended to keep the interests of our directors aligned with the long-term interests of the Company and our shareholders.

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DIRECTOR COMPENSATION IN 2020

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The Board recommends that you vote FOR the discharge of our directors from liability for the performance of their duties in 2020.

Under Dutch law, shareholders may discharge the Company’s Board of Directors from liability in connection with the exercise of duties during the most recently completed fiscal year. The discharge does not affect any potential liability under the laws of The Netherlands relating to liability upon bankruptcy and does not extend to matters that have not been disclosed to shareholders. It is proposed that shareholders resolve to discharge the Company’s executive and non-executive directors in office in 2020 from liability in connection with the exercise of their respective duties during the year.

The Board recommends that you vote FOR the adoption of our 2020 Dutch statutory annual accounts.

At the Annual Meeting, you will be asked to adopt our Dutch statutory annual accounts for the year ended December 31, 2020, as required under Dutch law and our Articles of Association. Our Dutch statutory annual accounts are prepared in accordance with international financial reporting standards (“IFRS”) and Dutch law. A copy of the 2020 Dutch statutory annual accounts can be accessed through our website at www.LyondellBasell.com by clicking “Investors,” then “Company Reports,” and may be obtained free of charge by request to our Corporate Secretary at CorporateSecretary@LyondellBasell.com or LyondellBasell Industries, 4th Floor, One Vine Street, London W1J 0AH, United Kingdom, Attention: Corporate Secretary.

The Company paid an aggregate of $4.20 per share in dividends from its 2020 Dutch statutory annual accounts, for a total of approximately $1.4 billion. This includes interim dividends of $1.05 per share paid in each of the second, third and fourth quarters of 2020 and the first quarter of 2021.

DISCUSSION OF DIVIDEND POLICY

Pursuant to the Dutch Corporate Governance Code, we provide shareholders with an opportunity to discuss our dividend policy and any major changes in that policy each year at our annual general meeting.

Our dividend policy continues to be to pay a consistent quarterly dividend, with the goal of increasing the dividend over time. Through March 31, 2021, we have paid an aggregate of approximately $16.8 billion in dividends since we began our dividend program in 2011, increasing the dividend payments from $0.10 per share in the second quarter of 2011 to the current rate of $1.05 per share. The Company’s strong balance sheet and results of operations support the continuation of this dividend program.

Pursuant to our Articles of Association, the Board has determined the amount, if any, out of our annual profits to be allocated to reserves prior to the payment of dividends. The portion of our annual profits that remains after the reservation is available for dividend payments as approved by shareholders. The determination to pay any dividends will be made after a review of the Company’s expected earnings, the economic environment, financial position, and prospects of the Company, and any other considerations deemed relevant by the Board.

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The Board recommends that you vote FOR the appointment of PricewaterhouseCoopers Accountants N.V. (“PwC N.V.”) as the auditor of our 2021 Dutch statutory annual accounts.

The Board has selected PwC N.V. to serve as the auditor of our Dutch statutory annual accounts to be prepared in accordance with IFRS for the year ending December 31, 2021, and, in accordance with our Articles of Association, we are requesting that shareholders appoint PwC N.V. as auditor of such annual accounts. PwC N.V. has acted as the auditor of our Dutch statutory annual accounts since 2010. Representatives of PwC N.V. will be present at the Annual Meeting either in person or by joining the teleconference and may be questioned by shareholders in relation to PwC N.V.’s report on the fairness of the financial statements.

The Board recommends that you vote FOR the ratification of PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for 2021.

The Board has selected PwC to serve as our independent registered public accounting firm for the year ending December 31, 2021. PwC has acted as our independent registered public accounting firm since 2010. The Audit Committee, which annually recommends selection of the Company’s independent accountants, reviews PwC’s performance and independence on an ongoing basis and believes the continued retention of PwC as the Company’s independent registered public accounting firm for 2021 is in the best interest of the Company and its stakeholders.

Although shareholder ratification of the selection of PwC is not required, our Board is submitting the selection to shareholders for ratification because we value our shareholders’ views on the Company’s auditors. If our shareholders fail to ratify the selection of PwC, it will be considered as notice to the Board and Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may recommend that the Board select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interest of the Company and its stakeholders.

Representatives of PwC are not expected to attend the Annual Meeting; however, representatives of PwC N.V., the auditor of the Company’s Dutch statutory annual accounts, will be present at the Annual Meeting either in person or by joining the webcast and will have the opportunity to respond to appropriate shareholder questions and make a statement if they desire to do so.

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PROFESSIONAL SERVICES FEE INFORMATION

Fees for professional services provided by PwC in each of the last two fiscal years, in each of the following categories, were as follows:

Audit fees consist of the aggregate fees and expenses billed or expected to be billed for professional services rendered by PwC for the audit of our consolidated financial statements, the review of financial statements included in our Quarterly Reports on Form 10-Q, and services that are normally provided by an independent auditor in connection with statutory and regulatory filings or engagements, including comfort letters, statutory audits, attest services, and consents.

Audit-related fees consist of the aggregate fees billed for assurance and related services by PwC that are reasonably related to the performance of its audit or review of the Company’s financial statements and are not reported as audit fees herein. This category includes fees related to audits of benefit plans; agreed-upon or expanded audit procedures relating to accounting records required to respond to or comply with financial, accounting, or regulatory reporting requirements; and consultations as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards, or interpretations by regulatory or standard-setting bodies.

Tax fees consist of international tax compliance and corporate tax consulting.

The Audit Committee has adopted procedures for the approval of PwC’s services and related fees. Each year, the Audit Committee discusses the scope of the audit plan with PwC and all audit and audit-related services, tax services, and other services for the upcoming fiscal year are provided to the Audit Committee for pre-approval. The services, which may be provided in the upcoming twelve-month period, are grouped into significant categories substantially in the format shown above.

The Audit Committee is updated on the status of all PwC services and related fees on a periodic basis or more frequently as matters warrant. In 2020 and 2019, the Audit Committee pre-approved all audit, audit-related, tax and other services performed by PwC.

As set forth in the Audit Committee Report below, the Audit Committee has considered whether the provision of non-audit services by PwC is compatible with maintaining auditor independence and has determined in the affirmative with respect to the services provided in 2020.

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AUDIT COMMITTEE REPORT

The role of the Audit Committee is, among other things, to oversee the Company’s financial reporting process on behalf of the Board, to recommend to the Board whether the Company’s financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “Annual Report”), and to select the Company’s independent auditor for ratification by shareholders. Company management is responsible for the Company’s financial statements as well as for its financial reporting process, accounting principles, and internal controls. The Company’s independent auditor is responsible for performing an audit of the Company’s financial statements and expressing an opinion as to the conformity of such financial statements with accounting principles generally accepted in the United States.

The Audit Committee has reviewed and discussed the Company’s audited financial statements as of and for the year ended December 31, 2020 with management and PricewaterhouseCoopers LLP (“PwC”), the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2020. In addition, the Audit Committee has taken the following steps in making its recommendation that the Company’s financial statements be included in the Annual Report:

The Audit Committee also discussed with the head of the Company’s internal audit department and PwC the overall scope and plans of their respective audits. The Audit Committee meets periodically with both the head of the internal audit department and PwC, with and without management present, to discuss the results of their examinations and their respective evaluations of the Company’s internal control over financial reporting.

In the performance of their oversight function, the members of the Audit Committee necessarily relied upon the information, opinions, reports, and statements presented to them by Company management and by PwC as the Company’s independent registered public accounting firm.

Based on the reviews and discussions explained above (and without other independent verification), the Audit Committee recommended to the Board of Directors (and the Board of Directors approved) that the Company’s financial statements be included in the Annual Report. The Audit Committee has also approved the selection of PwC as the Company’s independent registered public accounting firm for fiscal year 2021.

The Audit Committee

Michael Hanley, Chair

Jagjeet Bindra

Bella Goren

Albert Manifold

LYONDELLBASELL  2021 PROXY STATEMENT    41

The Board recommends that you vote FOR the approval, on an advisory basis, of the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement.

We believe that LyondellBasell’s executive compensation program supports our executive compensation philosophy and goals, drives performance, encourages an appropriate sensitivity to risk, and increases shareholder value. Our philosophy, which is set by the Compensation and Talent Development Committee, is intended to align each executive’s compensation with the Company’s short-term and long-term performance and to provide the compensation and incentives needed to attract, motivate, and retain high-caliber executives who are crucial to our long-term success.

A significant portion of the total compensation opportunity for each of our executives is directly tied to the Company’s progress against our strategic and operating goals.

We implement our philosophy and achieve our program goals by following certain key principles, including:

RESULTS OF LAST YEAR’S SAY-ON-PAY VOTE

Our executive compensation program received substantial shareholder support and was approved, on an advisory basis, by approximately 97% of votes cast at the 2020 annual general meeting of shareholders. Our Compensation and Talent Development Committee and Board believe this level of approval of our executive compensation program demonstrates our shareholders’ strong support of our compensation philosophy and goals and the decisions made by the Compensation and Talent Development Committee. They also believe the consistently high level of shareholder support for our executive compensation is a result of our Compensation and Talent Development Committee’s commitment to compensating our executives in a manner that ensures a strong link between pay and performance and is reflective of our philosophy and goals, market best practices, and strong shareholder engagement.

PAY FOR PERFORMANCE IN 2020

The Compensation and Talent Development Committee believes that the compensation of our Named Executive Officers for 2020 is reasonable and appropriate, is supported by the Company’s performance, and works to ensure management’s interests align with increasing shareholder value. The Board requests that you consider the structure of our executive compensation program in connection with our 2020 performance, which is more fully discussed in the Compensation Discussion and Analysis (“CD&A”) section of this proxy statement that follows. The CD&A explains how we implement our compensation philosophy and goals and how we apply these principles to our compensation program.

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2021 ADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with Section 14A of the Securities Exchange Act of 1934, we are requesting that shareholders vote on an advisory basis to approve the compensation of our Named Executive Officers in 2020, as described in this proxy statement. Shareholders have the opportunity to share their opinion regarding our executive compensation program by voting for or against the following resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Named Executive Officers as disclosed in the Company’s proxy statement for the 2021 Annual General Meeting of Shareholders, including the Compensation Discussion and Analysis, the Summary Compensation Table and other related tables and disclosure.”

Although the advisory vote is non-binding, the Board values our shareholders’ opinions. The Compensation and Talent Development Committee will review the results of the vote and consider shareholders’ input when considering future decisions regarding our executive compensation programs. If you have concerns relating to our executive compensation programs, we encourage you to contact us. A vote against this proposal will not provide the Compensation and Talent Development Committee with information about shareholders’ specific concerns.

The Company provides for annual say-on-pay votes, and accordingly the next say-on-pay vote will occur at our 2022 annual general meeting of shareholders.

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COMPENSATION DISCUSSION AND ANALYSIS

This section explains the decisions made concerning the compensation of the Company’s Named Executive Officers (“NEOs”) for fiscal year 2020. It also describes the Company’s compensation philosophy, our executive compensation program, the process our Compensation and Talent Development Committee (the “Compensation Committee”) followed, and the factors the Compensation Committee considered in determining the amount of compensation awarded. The NEOs for 2020 and their current positions are provided below.

BOB PATEL CHIEF EXECUTIVE OFFICER	MICHAEL MCMURRAY EVP AND CHIEF FINANCIAL OFFICER	TORKEL RHENMAN EVP – GLOBAL INTERMEDIATES & DERIVATIVES AND REFINING	KEN LANE EVP – GLOBAL OLEFINS & POLYOLEFINS	JEFF KAPLAN EVP AND CHIEF LEGAL OFFICER

Mr. Coombs, our former EVP, Global Manufacturing, Projects, and Refining, retired from his position effective August 1, 2020 and is also included as an NEO.

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EXECUTIVE SUMMARY

2020 Performance Highlights

In 2020, the pandemic and market headwinds created a challenging environment for our Company. Lower demand impacted volumes and margins across all parts of our business and especially in our refining and oxyfuels businesses. The Company demonstrated continued cost discipline and extended our track record of efficient cash generation, but reported overall EBITDA results below our original expectations for the year.

$1.4 B	$3.3 B	$4.24	$3.4 B	$1.4 B
Net Income	EBITDA	Diluted EPS	Cash from Operating Activities	Paid in Dividends
$1.9 B	$3.9 B	$5.61
Net Income ex. LCM and impairment	EBITDA ex. LCM and impairment	Diluted EPS ex. LCM and impairment

Through the difficult market environment, the Company continued to operate efficiently and safely, maintaining our dividend and capitalizing on opportunities to grow and invest in our future.

Sustainability. Building on several years of increased focus on sustainability issues, including significant investments in mechanical and chemical recycling, 2020 saw the progression of our sustainability programs and goals. We defined our sustainability strategy and focus areas and announced a new target to produce and market 2 million metric tons of recycled and renewable-based polymers annually by 2030. We also aligned our annual Sustainability Report disclosures with the Global Reporting Initiative and Sustainability Accounting Standards Board frameworks and joined the United Nations Global Compact, the world’s largest corporate sustainability initiative. We recognize the extent and immediacy of the challenges facing our world, including eliminating plastic waste in the environment, addressing climate change, and supporting a thriving society, and we are taking action – today – to help address them.

Pay for Performance. As a result of our strong pay-for-performance culture, below target EBITDA resulted in an annual bonus payout for 2020 at 66% of target. There was no payout under the Company’s performance share units (“PSUs”) for the three-year performance period ended December 31, 2020 due to relative total shareholder return (“TSR”) performance. The performance metrics under the Company’s annual bonus program and PSUs are described under “2020 Executive Compensation Decisions in Detail.”

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Key Compensation Practices

Our executive compensation practices support our pay for performance philosophy, align our executives’ interests with those of our shareholders, and reflect best governance without encouraging unnecessary risk-taking. 

What We Do
	Pay for performance. We tie a significant amount of compensation to our financial, business, and strategic goals.
	Emphasize long-term performance. We balance long-term and short-term incentives and use long-term equity incentive awards, including PSUs, RSUs, and stock options, to reward sustained long-term performance.
	Double-trigger vesting. We provide for “double-trigger” vesting in connection with any change-in-control event.
	Clawbacks. We have adopted strong clawbacks so we can recover performance-based compensation in certain circumstances.
	Share ownership guidelines. We restrict our executives’ and directors’ ability to sell shares unless they first meet robust share ownership guidelines.
	Independent compensation consultant. We engage an independent consultant to advise on executive compensation matters, and our independent Compensation and Talent Development Committee meets regularly with the consultant in executive session.
	Peer group benchmarking. We use appropriate peer groups when establishing compensation.
	Annual say-on-pay. We hold an annual say-on-pay advisory vote.
What We Don’t Do
	Excise tax gross-ups. We do not provide for excise tax gross-ups in connection with change-in-control events or terminations.
	Hedging or pledging. We do not allow our officers and directors to hedge or pledge our stock.
	Guaranteed bonuses. We do not pay guaranteed or multi-year bonuses.
	Automatic compensation increases. We do not automatically increase executive base salaries each year or make lock-step changes in compensation based on peer group compensation levels or metrics.
	Reprice or exchange underwater options. We do not permit option repricing or the buyout of underwater options without shareholder approval.

Say-on-Pay and Shareholder Outreach

Our executive compensation program has received substantial and consistent shareholder support over the past several years. At the 2020 annual general meeting of shareholders, approximately 97% of votes were cast in favor of our executive compensation program. Our Compensation and Talent Development Committee (the "Compensation Committee") and Board believe that this consistent high level of support from our shareholders is a result of our commitment to ensuring that our executives are compensated in a manner that provides a strong link between pay and performance.

The Compensation Committee and Board value our shareholders’ insights and are committed to ongoing, regular dialogue with shareholders regarding executive compensation, among other matters. We consider shareholder feedback, evolving business needs, and our desire to maintain a strong link between executive pay and performance when evaluating our compensation program.

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CEO Performance and Compensation Decisions

Each February, the Compensation Committee reviews CEO performance and compensation and approves our CEO’s annual bonus payout for the prior year as well as any changes to his base salary, target bonus, or the grant date value of long-term incentive ("LTI") awards. In setting target compensation, the Committee considers median compensation levels at our peer group companies, as well as the other factors described under “Competitive Positioning and Our Peer Group,” below. When evaluating compensation for our CEO, Mr. Patel, specifically, the Committee also takes into account the Company’s flat organization (with no Chief Operating Officer or President and the heads of each function or business reporting directly to the CEO) and Mr. Patel’s resulting expanded role and additional responsibilities.

The Compensation Committee approved a slight decrease to our CEO’s target compensation (base salary, target bonus, and grant date value of equity awards) for 2020, reducing LTI from 2019 and returning compensation to the same level as 2018.

In recognition of the central role Mr. Patel plays in shaping and executing on the Company’s strategy, the CEO’s overall performance is measured by considering the performance of the Company, as a whole, with respect to its financial, operational, and strategic goals. To assess Mr. Patel’s overall performance, the Compensation Committee considered the Company’s 2020 performance in:

In addition, the Board considered Mr. Patel's vision and leadership in delivering on LyondellBasell's value-driven growth strategy and advancing the Company's strategic objectives against the backdrop of the unprecedented pandemic, including:

In consideration of the Company’s achievements and financial results in 2020, including EBITDA that fell below the Company’s adjusted budget for the year, Mr. Patel was paid an annual bonus of $1,663,200 under the Company’s short-term incentive (STI) program. This payout reflects Company performance at 66% of target (as described in detail on pages 51-54). Mr. Patel received long-term incentive awards consisting of PSUs, RSUs, and stock options with an aggregate grant date value of $11,812,570.

WHAT GUIDES OUR PROGRAM

Executive Compensation Philosophy

Our executive compensation program is designed to:

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Components of Executive Compensation

Our compensation program is structured to incorporate the following compensation components:

Compensation Mix

Our executive compensation program emphasizes the alignment of pay with performance and shareholder value creation, and the mix of compensation components for our NEOs is heavily weighted toward performance-based and variable compensation. Our CEO’s compensation package emphasizes performance-based and variable compensation even more than those of the other NEOs to reflect the fact that the CEO’s actions have the greatest influence on the Company’s overall performance. For 2020, the Total Target Direct Compensation (“TTDC”) of our NEOs was as follows:

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The Decision-Making Process

The Compensation and Talent Development Committee (the "Compensation Committee") oversees our executive compensation program, working closely with its independent consultant to ensure the effectiveness of the program throughout the year. Details of the Compensation Committee’s authority and responsibilities are specified in its charter, which can be found on our website at www.LyondellBasell.com by clicking on “Investors,” then “Corporate Governance,” then “Board of Directors.”

THE ROLE OF THE COMPENSATION COMMITTEE

The Compensation Committee, comprising solely independent directors, is responsible for determining the compensation of our executive officers (including the NEOs) and designing our executive compensation program. With input from the Committee’s independent compensation consultant, the Committee annually conducts a comprehensive analysis and assessment of our executive compensation program, including an evaluation of each component of target compensation for our executive officers, and approves TTDC for the coming year. The Committee also approves performance metrics and target performance levels for the Company’s STI program and performance-based equity grants, after receiving input from management and from the HSE&O Committee regarding the design and payout for annual HSE performance metrics. Members of the Board review and provide input on the Compensation Committee’s decisions relating to the compensation of our executive officers.

THE ROLE OF THE CEO

Each year, Mr. Patel presents the Compensation Committee with recommendations regarding the compensation of each of the other executive officers (including the other NEOs). These recommendations are based on his assessment of each executive’s performance, the performance of the executive’s business unit or function, benchmark information, and retention risk. Mr. Patel also provides input on the overall executive compensation program design. The Committee reviews Mr. Patel’s recommendations and makes adjustments as it deems appropriate. Mr. Patel does not have any role in the Committee’s determination of his own compensation.

THE ROLE OF THE INDEPENDENT COMPENSATION CONSULTANT

The Compensation Committee has retained Pearl Meyer as its independent compensation consultant to provide advice regarding executive compensation matters. As required by SEC rules, the Committee engaged Pearl Meyer after assessing the firm’s independence and determining that the engagement of Pearl Meyer did not raise any conflict of interest or other concerns.

The services provided by Pearl Meyer generally include advising on the design of our executive compensation program and evolving industry practices, providing market data and analysis regarding the competitiveness of our executive compensation program, and evaluating proposed compensation decisions and program updates. Additionally, Pearl Meyer attends regularly-scheduled meetings of the Compensation Committee and telephone conferences with members of the Committee or its Chair throughout the year to assist with the review and discussion of executive compensation matters.

Competitive Positioning and Our Peer Group

Annually, the Compensation Committee reviews the TTDC for each of our executive officers, which includes base salaries, target bonuses, and the grant date value of long-term incentive awards. The Committee strives to set our NEOs’ TTDC and each individual component of executive compensation near the median compensation levels of our peer group companies, while considering other factors described below. A large portion of the TTDC opportunity for our NEOs is directly tied to the achievement of financial and operational metrics that measure our performance in both absolute terms and relative to peers.

The Committee reviews publicly available financial and compensation information reported by our peer group companies (described below) and general survey data. The survey data used to inform the Committee’s 2020 compensation decisions was collected from the 2019 Willis Towers Watson Executive Compensation Database. This survey data reflects a combination of general industry and chemical industry compensation for executives with responsibilities similar to those of our executives.

The Committee reviews the peer group and survey data to determine the median compensation for each executive’s position and then sets each executive’s base salary and compensation targets for the current year. This generally involves establishing an annual bonus target and the target value of LTI awards as a percentage of base salary. Median compensation is used as a reference point for pay recommendations. Actual pay and targets vary from median based on the executive’s industry experience; experience and performance in his or her role and at the Company; value of the role to the Company; internal pay parity among our executives; and any other factors the Committee deems relevant.

The compensation peer group is also used more generally when the Committee reviews our compensation program design, including the types of compensation awarded and the terms and conditions of compensation components.

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OUR 2020 PEER GROUP

The Compensation Committee conducts an annual review of the Company’s executive compensation peer group to determine if any changes are necessary. In choosing our peers, the Committee involves management and uses research and advice from the Committee’s independent compensation consultant to inform the following approach:

Using this process, in November of 2019, the Committee approved the removal of two 2019 peers that were recently acquired (Andeavor (now a subsidiary of Marathon Petroleum Company) and Monsanto (now a subsidiary of Bayer AG)). In addition, the Committee expanded the peer group to add the six new peers listed below.

The new peer group includes 18 companies, with the Company between the 50th and 60th percentiles for (projected) 2019 revenues (measured at the time of approval) and between the 25th and 50th percentiles for enterprise value. The Committee believes the new peer group represents a reasonable balance in terms of industry mix and financial size while providing a robust set of data points for benchmarking executive pay. In addition, the Committee believes the new peer group will provide a robust and stable data set year-over-year going forward.

2020 COMPENSATION PEER GROUP COMPANIES

The 2020 peer group reported 2020 revenue that ranged from approximately $11 billion to $70 billion, with a median revenue of approximately $32 billion. In comparison, the Company’s 2020 revenue was approximately $28 billion. The 2020 peer group was used to develop the market data and benchmarking materials that were provided to the Compensation Committee to assist with the 2020 decision making process.

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2020 EXECUTIVE COMPENSATION DECISIONS IN DETAIL

The compensation of our executive officers, including our NEOs, is reviewed and approved by the Compensation Committee at the time of each executive’s hiring or promotion and annually during a regularly scheduled meeting held in February. Decisions are made based on the Company’s and each executive’s performance in the prior year, other than with respect to PSU payouts, for which decisions are based on Company performance over a three-year period.

February 2020 compensation decisions include the approval of 2020 base salaries; target values, criteria and metrics for the 2020 annual bonuses to be paid in 2021; and 2020 grants of annual long-term incentive awards, including PSUs, RSUs and stock options, as described on pages 55-57. In February 2021, the Committee approved payout of 2020 annual bonuses and the percentage earned for the PSUs granted in 2018 with a performance period that ended December 31, 2020.

2020 Base Salaries

The table below shows the base salaries for our NEOs in 2019 and 2020. Salary changes are generally approved at the Compensation Committee’s February meeting and effective on April 1. The Committee reviews market data and considers internal pay parity when making its decisions. The Committee also considers each executive’s performance during the prior year, any changes in responsibilities, and the executive’s time in his or her role. The 2020 salary increases for Messrs. Rhenman, Lane, and Kaplan, each effective April 1, 2020, were intended to recognize 2019 performance and maintain alignment with the salaries of similarly positioned executives in the Company’s peer group and the median of market generally.

2020 Annual Bonus Payments

The Company’s annual bonus program rewards participants for achieving the Company’s annual objectives. Under this short-term incentive, or STI, program, the Compensation Committee establishes metrics and target performance levels and sets a target bonus, determined as a percentage of base salary, for each executive. In 2020, our NEOs’ target bonuses were as follows:

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The amount of target bonus earned depends on the Compensation Committee’s determination of Company and individual performance under each of the STI program metrics. STI awards for 2020 were calculated as follows:

COMPANY PERFORMANCE – PAYOUT AT 66% OF TARGET

Payout for the Company performance component of the STI award is based on achievement of target performance levels for three metrics: business results, HSE performance, and costs, weighted as described below.

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BUSINESS RESULTS (60%)

The Compensation Committee considers the Company’s EBITDA relative to the adjusted EBITDA budget. No payout was earned under the business results metric for 2020 due to EBITDA that fell below the Company’s adjusted EBITDA budget for the year, by 29%.

EBITDA BUDGET ADJUSTMENTS

Each year at its regularly scheduled November meeting, the Board reviews and approves the Company’s annual EBITDA budget for the coming year. After completion of the year, and in order to ensure that our executives are compensated on the basis of differential rather than circumstantial performance, the Company’s EBITDA budget may be adjusted in three primary ways. These adjustments can increase the EBITDA budget in an upcycle or lower the budget in a downturn, and are used as a tool to ensure the Committee pays for actual performance, not performance due to the volatility and cyclicality of the chemicals industry, which is heavily influenced by energy prices.

Specifically, these adjustments account for (i) differences between actual market margins or spreads and budget assumptions, (ii) movements in foreign-exchange rates, the mark-to-market of certain assets (e.g., precious metals), and the same fixed cost exclusions taken into account when measuring the Company’s cost performance, and (iii) the budget impact of significant unanticipated events. All adjustments are reviewed and approved by the Compensation Committee and are subject to certain thresholds before an adjustment will be considered.

Adjustments for actual market margins or spreads are calculated using independent third-party sources whenever available, including IHS Markit (IHS) and Phillip Townsend Associates (PTAI). No market adjustments are made for businesses that do not have market references, including our Advanced Polymer Solutions (APS) and Technology segments. In 2020, the impact of the COVID-19 pandemic caused non-adjusted businesses such as APS, which is heavily exposed to the automotive industry, to significantly underperform EBITDA budget assumptions. Similarly, while unfavorable margins customarily have a negative impact on realized sales volumes, no adjustments are made to the EBITDA budget to account for those impacts. The shortfall between anticipated and realized sales volumes for 2020 was significant, across all segments, due to the impact of the COVID-19 pandemic.

The table below summarizes the approved adjustments, both positive and negative, to the Company’s 2020 EBITDA budget by segment, which collectively reduced the EBITDA budget by 12%. To avoid disclosing competitively-sensitive information, we do not provide specific details on market impacts. 

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We define EBITDA as Income from continuing operations before interest expense (net), provision for (benefit from) income taxes and depreciation and amortization. For a reconciliation of EBITDA to net income for the year ended December 31, 2020, please refer to Appendix A. At the Compensation Committee’s discretion, the Company’s annual EBITDA results may be adjusted for the impact of certain extraordinary events during the year. For 2020, approved EBITDA adjustments included the impacts of the U.S. Gulf Coast hurricanes and the Refinery impairment, as well as lower of cost or market adjustments.

HSE PERFORMANCE (20%)

The Compensation Committee primarily considers the Company’s performance in personal safety (70%) and process safety (30%) and has discretion to adjust the resulting payout to account for environmental incidents and extraordinary trends and circumstances. Personal safety is measured by the Company’s total recordable incident rate (“TRIR”), calculated as the number of injuries per 200,000 hours worked. Process safety is measured by the Company’s process safety incident rate (“PSIR”), which represents the number of Tier 1 incidents, as measured by the American Chemistry Council, per 200,000 hours worked. Payout at 128% of target was based on strong TRIR performance in the top decile for the industry, with lower severity of injuries compared to prior years, offset by an increase in PSIR.

COSTS (20%)

The Compensation Committee considers the Company’s adjusted fixed costs as compared to our annual cost budget, adjusted downward by 0.8% for the impact of foreign exchange rates. 2020 adjustments to fixed costs (cumulative impact of approximately 0.4%), all of which were approved by the Compensation Committee and subject to de minimis thresholds, accounted for the positive and negative impacts of the true-up of current and prior year bonus payments, unbudgeted expenditures on strategic transaction activity, cost savings resulting from delayed corporate initiatives and capital projects, and the impacts of the U.S. Gulf Coast hurricanes. Payout at 200% of target recognized that the Company’s strong commitment to cost discipline during a challenging year resulted in adjusted fixed costs that were below budget, by 6%.

INDIVIDUAL PERFORMANCE

The payouts awarded for the individual performance component of the NEOs’ STI award reflect their individual contributions to achieving successful Company performance, whether they met or exceeded expectations for their respective roles, and any other significant factors during the year, such as special projects, challenges, or other performance issues. Individual performance ratings range from 0 to 200%. 

The Compensation Committee has determined that Mr. Patel’s payout under the STI program should be directly tied to, and determined by reference to, Company performance, which is described on page 47. There is no individual performance component to his annual STI award. The Committee’s evaluation of each other NEO’s individual performance is described below.

LYONDELLBASELL  2021 PROXY STATEMENT    54

Mr. McMurray’s individual performance rating of 120% is a result of his leadership of the treasury, accounting, finance, and tax teams through a challenging financial year, including skillfully managing the Company’s liquidity, navigating multiple banking and capital markets transactions, strong performance managing the accounting function, improving the investor relations function, and setting and achieving agreed investor relations KPIs.

Mr. Rhenman’s individual performance rating of 150% reflects his strong leadership of the Intermediates & Derivatives segment and delivery of results throughout a challenging year for the entire segment, which was disproportionately affected by pandemic-related mobility declines, his strategic work on the Refinery segment in the second half of 2020, and progress toward closing a joint venture with China Petroleum & Chemical Corporation (Sinopec).

Mr. Lane’s individual performance rating of 150% is based on his leadership of the Company’s Olefins & Polyolefins – Americas and Olefins & Polyolefins – Europe, Asia, International segments, including through inventory management, building customer relationships, and feedstock optimization, as well as the teamwork involved in closing the Company’s joint ventures with Liaoning Bora Enterprise Group and Sasol.

Mr. Kaplan’s individual performance rating of 140% is a result of key litigation outcomes, support of the finance function and capital markets transactions, joint venture negotiation and closing, and strategic risk management efforts, as well as his leadership roles with respect to environmental, social, and governance matters and the legal, public affairs, and real estate and facilities functions.

Mr. Coombs’s individual performance rating of 100% was agreed in connection with his retirement.

2020 Long-Term Incentives

2020 GRANTS OF AWARDS

The long-term incentive awards granted to the NEOs in 2020 included PSUs (50%), RSUs (25%), and stock options (25%). The allocation among these types of awards was determined by the Compensation Committee to be the most appropriate split between equity that is performance-based (PSUs) and time-based (RSUs and stock options). RSUs cliff vest after three years while stock options vest ratably over a three-year period, balancing executive retention with the ability to offer partial, near-term vesting to potential executive hires.

	Performance-based awards that pay out at 0 to 200% of target based on the Company’s total shareholder return (“TSR”) over a three-year period. PSUs only reward our executives if our shareholder return over the performance period compares favorably to that of our peers.
	Time-based awards that cliff vest after three years. RSUs provide retention value and encourage executives to consider the Company’s long-term success, strengthening the alignment between their interests and those of our shareholders.
	Time-based awards that are intended to direct executives’ focus toward increasing the market value of our shares. Options vest ratably over three years, expire ten years from the date of grant, and only provide value to the executive if there is an appreciation of our stock price over time.

The value of long-term incentive awards granted to the NEOs is determined as a percentage of base salary. The Compensation Committee reviews the target awards annually and recommends changes based on the executive’s time and experience in the position, changes in job responsibilities, and market data. At the February 2020 Compensation Committee meeting, it was determined that Mr. Patel would receive a modest decrease in LTI target value. The 2020 LTI target values for Messrs. McMurray, Lane, and Rhenman were negotiated as part of each executive’s 2019 employment offer and maintained or increased based on each executive’s role and experience, internal parity, and the competitive marketplace. 

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For a description of the vesting and forfeiture of LTI awards upon termination, please see “Potential Payments Upon Termination or Change in Control” at pages 67-69.

2020 GRANTS OF PSUs WITH A PERFORMANCE PERIOD ENDING DECEMBER 31, 2022 (50%)

One-half of the value of our NEOs’ annual equity award in 2020 was granted in the form of PSUs. The number of units awarded was determined by dividing that dollar amount by the fair market value of our stock on the grant date. PSUs accrue dividend equivalents during the performance period, which will be converted to additional units using the closing stock price as of the end of the performance period on December 31, 2022. Each unit deemed earned on the basis of Company performance will pay out in one share of the Company’s common stock after the performance period concludes.

The number of 2020 PSUs earned will depend on the Company’s total shareholder return (“TSR”) over the performance period as compared to selected industry peers. We believe use of relative TSR as the metric for performance provides transparency for shareholders and our executives, rewards our executives if we out-perform our peers, and promotes executive accountability to and alignment with our shareholders. The Compensation Committee compares TSR for the entire three-year performance period, using a 20-day closing average stock price at the beginning and the end of the period and assuming all dividends are reinvested. As shown below, payout will range from 0 to 200%. There is no payout for TSR in the bottom quartile of the peer group.

PAYOUT BY COMPANY TSR RANK