|WESTLAKE CHEMICAL CORP filed this Form DEF 14A on 04/06/2018|
highest paid position. The relationship in pay among the other NEOs is driven by variation in job scope and level of responsibility, the Reference Points data, individual performance, internal equity and other factors as determined by the Committee as appropriate.
Prior Votes on Executive Compensation
In approving the 2017 compensation of the NEOs, the Committee considered the results of the advisory vote on the say-on-pay proposal at the 2017 annual meeting of stockholders, at which a substantial majority of the votes cast on the say-on-pay proposal were voted in favor of the proposal. The Committee did not change its executive compensation approach based on the vote. The Committee will continue to consider the outcome of the Companys say-on-pay votes when making future compensation decisions for the NEOs. At the 2017 annual meeting, a substantial majority of the votes cast on the advisory vote on the frequency of the say-on-pay proposal were voted in favor of holding that vote every three years.
Establishing Compensation Levels
On an annual basis as the Committee meets to set the target compensation for the PEO, other NEOs and other Executives, the Committee considers the responsibility and scope of the individual job assignments as well as the Executives job performance and achievements measured against a variety of goals and objectives. As a first step, the PEO provides his evaluation of each Executive based upon the achievement of goals and objectives unique to a business segment or a corporate assignment and an assessment of the Executives individual contribution and effort and a variety of managerial success factors. Next, the Committee may make its own assessment of each Executive based upon the interaction Committee members have had with the Executive throughout the year. Lastly, once the Committee considers all of these factors in tandem with the Reference Points, the Committee establishes the compensation target for each element of the total compensation program.
Base PayThis element is the principal cash compensation component of the Companys program and is designed to provide the Executive with a market-competitive minimum level of compensation. In setting base pay rates for 2017, the Committee considered the Reference Points, the scope and range of responsibility, accountability and business impact of the position as well as current economic conditions to aid it in evaluating and matching the positions with the market and setting fair-market competitive base pay targets. In setting base pay rates for Executives, the Committee has determined that, based on advice of its independent consultant, Willis Towers Watson, the base pay of the Executives can generally be considered as competitive if targeted to be within 90% to 110% of the 50th percentile of the market depending on the performance of the individual Executive, the magnitude of adjustments deemed necessary by the Committee to ensure retention of the Executive and the performance of the Company. The Committee also recognizes that market pricing is an inexact science and that base pay above or below that range may be required to meet market demand or to recognize individual performance or experience levels. The Committee does not set a specific fixed target percentage for any of the NEOs but generally works to set the base pay of each NEO to be within the range at its discretion based upon market and performance factors. Base pay is evaluated on an annual basis using then current market information, and the Committee may authorize an adjustment to:
For additional information on the salaries paid to the PEO and the other NEOs during 2017, see Executive Compensation2017 Summary Compensation Table. In February 2018, the Committee set the base salaries for the NEOs as follows: $1,100,000 for Mr. Albert Chao, $880,000 for Mr. James Chao, $600,000 for Mr. Bender, $530,000 for Mr. Buesinger, and $520,000 for Mr. Ederington. The salaries of Mr. Albert Chao, Mr. James Chao, Mr. Bender, Mr. Buesinger and Mr. Ederington were increased from $1,034,000, $818,000, $550,000, $475,000 and $457,000, respectively, after consideration of the Reference Points. During the course of 2017, the Committee increased the salary of Mr. Buesinger from $457,000 to $475,000 in recognition of the strong performance of the vinyls business.
Cash Incentive Plans/BonusesFor 2017, the PEO, other NEOs and other Executives were eligible to be considered to receive payments under the Companys Annual Incentive Plan (AIP) and Quarterly Incentive Plan (QIP). The AIP is designed to conform to the provisions of the Westlake Chemical Corporation 2013 Omnibus Incentive Plan, as amended and restated on May 18, 2017 (the 2013 Plan). The Committee administers the AIP with respect to the Executives,