BALCHEM CORP filed this DEF 14A on April 25, 2025
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BALCHEM CORP - DEF 14A - 20250425 - DIRECTOR_COMPENSATION

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CORPORATE GOVERNANCE
Communicating with the Board of Directors and Shareholder Engagement
We maintain an active dialogue with our shareholders. We value the opinions of our shareholders and other stakeholders and welcome their views on key issues. We engage with shareholders in a number of ways, including the following:
•
Hold annual election of directors
•
Hold advisory approval by shareholders of executive compensation (“Say-on-Pay” votes) annually
•
Senior management attends major investor conferences each year
•
Majority voting in uncontested director elections
•
Hold “Say-on-Frequency” votes regarding advisory approval of executive compensation at least every six years (Note: Based on the results of the 2023 Say-on-Frequency vote, the Company will hold Say-on-Pay votes annually)
•
Share information through the Company website, Annual Report, press releases, and SEC filings, including 10-K, 10-Q, 8-K, and Proxy Statement
Members of the Board and executive officers are accessible by mail in care of the Company. Any matter intended for the Board or for any individual member or members of the Board should be directed to the Secretary with a request to forward the communication to the intended recipient. In the alternative, shareholders may direct correspondence to the Board via the Chairman or to the attention of the Lead Director in care of the Company at the Company’s principal executive office address, 5 Paragon Drive, Montvale, New Jersey, 07645. The Company will forward such communications, unless of an obviously inappropriate nature, to the intended recipient.
Please see further details regarding our shareholder engagement and Say-on-Pay vote in 2024 on page 36 of this Proxy Statement.
Director Compensation
The Compensation Committee periodically reviews, in consultation with their independent executive compensation advisory firm, to ensure alignment of Non-Executive Director compensation with current market and peer group practices.
The non-equity components of the non-executive director compensation structure remain unchanged for 2024 compared to the prior year. For 2024, these amounts are as follows:
(1)
Annual Cash Retainer for each non-executive director – $65,000;
(2)
Annual Fee for Lead Director – $20,000;
(3)
Annual Fee for Audit Committee Chair – $15,000;
(4)
Annual Fee for Compensation Committee Chair – $10,000; and
(5)
Annual Fee for the Governance Committee Chair – $10,000.
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CORPORATE GOVERNANCE
Directors also received equity awards composed of Time-Based Restricted Shares and Stock Options (in each case as defined below) as more fully discussed in the table below.
The following table sets forth the fees, equity awards, and other compensation earned, paid, or awarded to each of the Company’s Non-Executive Directors for the fiscal year ended December 31, 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Name
 
 
Retainer
& Fees
 
 
Stock Awards(1)
 
 
All Other
Compensation ($)
 
 
Total ($)
 
 
David Fischer
 
 
$65,000
 
 
$153,653
 
 
$2,000(3)
 
 
$ 220,653
 
 
Kathleen Fish
 
 
$75,000
 
 
$153,653
 
 
$0
 
 
$228,653
 
 
Daniel Knutson
 
 
$80,000
 
 
$153,653
 
 
$0
 
 
$233,653
 
 
Joyce Lee(2)
 
 
$65,000
 
 
$153,653
 
 
$0
 
 
$218,653
 
 
Olivier Rigaud
 
 
$65,000
 
 
$153,653
 
 
$0
 
 
$218,653
 
 
Monica Vicente
 
 
$65,000
 
 
$153,653
 
 
$0
 
 
$218,653
 
 
Matthew Wineinger
 
 
$95,000
 
 
$153,653
 
 
$0
 
 
$248,653
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
On February 8, 2024, each Non-Executive Director, was granted 540 Time-Based Restricted Shares and 1,730 Stock Options. The Time-Based Restricted Shares cliff vest after three years. The grant date fair value per share of each share of restricted stock was $143.43. The Stock Options have a strike price of $143.43 per share and expire on February 8, 2034.
(2)
On October 16, 2024, the Corporate Governance and Nominating Committee accepted the resignation of Ms. Lee as a Director. Ms. Lee’s 2024 grant of Time-Based Restricted Shares and Stock Options were forfeited as a result.
(3)
Reflects matching Company contributions under Balchem’s matching charitable donation program available to all employees and directors up to $2,000 per year.
The following table shows the aggregate number of Stock Options and stock awards outstanding for each outside director as of December 31, 2024:
 
 
 
 
 
 
 
 
 
 
Name
 
 
Aggregate
Stock Options Outstanding
as of 12/31/2024
 
 
Aggregate
Unvested
Stock Awards
as of 12/31/2024
 
 
David Fischer
 
 
17,307
 
 
1,579
 
 
Kathleen Fish
 
 
5,267
 
 
1,579
 
 
Daniel Knutson
 
 
17,307
 
 
1,579
 
 
Joyce Lee(1)
 
 
0
 
 
0
 
 
Olivier Rigaud
 
 
1,730
 
 
540
 
 
Monica Vicente
 
 
1,730
 
 
540
 
 
Matthew Wineinger
 
 
17,307
 
 
1,579
 
 
 
 
 
 
 
 
 
 
(1)
As explained above, Ms. Lee resigned as Director as of October 16, 2024.
Under the Time-Based Restricted Shares grant agreements for grants made in 2024, restricted shares vest in full, three years from grant, or upon an earlier change in control of the Company, provided the director is a director of the Company on that date. The Time-Based Restricted Shares will also vest in full upon the director’s death.
In the event of the director’s disability, retirement (in accordance with our Director Retirement Policy) or the director’s resignation due to a conflict of interest or serious health issue, the number of Time-Based Restricted Shares that vest equals the product of:
(A)
1/36 of the total number of Time-Based Restricted Shares subject to the applicable grant; and
(B)
the number of full months that the director has served on the Board from the date of the grant to the date of the director’s retirement or resignation, as applicable; and all Restricted Shares not so vested shall be immediately forfeited.
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CORPORATE GOVERNANCE
Under the Stock Option grant agreements for grants made in 2024, the Stock Options have a term of ten years from the grant date and become exercisable 20% after 1 year, 40% after 2 years and 40% after 3 years, beginning on the first anniversary of the grant date, or upon an earlier change in control of the Company, provided the director is a director of the Company on that date. The Stock Options will also become fully exercisable in full upon the director’s death.
In the event of the director’s disability, retirement (in accordance with our Director Retirement Policy) or the director’s resignation from the Board of Directors due to a conflict of interest or serious health issue, the options continue to vest and become exercisable in accordance with the applicable vesting schedule.
If a director voluntarily retires:
(1)
in accordance with the Director Retirement Policy discussed above and the combination of the Director’s age and years of service as a member of the Board is equal to or greater than 75; or
(2)
prior to the conclusion of his or her term in which he or she reaches the age of 70 and the combination of the Director’s age and years of service as a member of the Board is equal to or greater than 75 and he/she has given the Company one (1) year’s prior written notice to the Company of his/her intention to retire;
then:
(A)
all Stock Options shall continue to vest and become exercisable in accordance with their original vesting schedule; and
(B)
All Time-Based Restricted Shares shall continue to vest in accordance with their original vesting schedule.
The Company does not pay any other direct or indirect compensation to directors.
The Company has a Stock Ownership Policy that applies to directors. See “Stock Ownership Requirements; Trading Limitations” on page 42 of this Proxy Statement.
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) provides a detailed description of our executive compensation philosophy and programs, the compensation decisions the Compensation Committee has made under those programs and the factors considered in making those decisions. This CD&A focuses on the compensation of our NEOs.
Named Executive Officers
Our NEOs for 2024 are the following individuals:
 
 
 
 
 
 
 
Name
 
 
Position
 
 
Theodore L. Harris
 
 
Chairman, President and Chief Executive Officer
 
 
C. Martin Bengtsson
 
 
Executive Vice President and Chief Financial Officer
 
 
Frederic Boned
 
 
Senior Vice President and General Manager,
Human Nutrition and Health
 
 
Hatsuki Miyata
 
 
Executive Vice President, Chief Legal Officer and Secretary
 
 
Martin L. Reid
 
 
Senior Vice President and Chief Supply Chain Officer
 
 
 
 
 
 
 
Compensation Objectives and Philosophy
At Balchem, we strive to attract and retain key executives who will consistently deliver short- and long-term value to our shareholders through the realization of our specific business objectives. These include consistent, sustained growth in earnings, cash flow and return on investments. We seek to offer competitive salaries, cash incentives, equity awards and benefit plans consistent with peer entities, while also considering the Company’s financial performance. Rewarding key employees who contribute to the continued success of the Company through cash compensation and equity participation are key elements of the Company’s compensation policy.
The Company’s executive compensation policy is designed to establish a direct link between executive compensation and the performance of the Company by rewarding individual results and the achievement of annual corporate goals through salary and cash bonus awards, and to provide equity awards to incentivize executives to generate enhanced shareholder value.
Consistent with this philosophy, the Compensation Committee favors a “pay for performance” approach. As a result, our compensation program contains a mix of stable and at-risk compensation components, where a significant percentage of executive compensation is variable and tied to corporate performance.
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COMPENSATION DISCUSSION AND ANALYSIS
What We Do and Don’t Do
 
 
 
 
 
 
 
What We DO
 
 
What We DON’T DO
 
 
Target total direct compensation for our NEOs around relevant market data, while also considering tenure, experience, and other factors.
 
 
Allow hedging or pledging of Company securities for any employee (including our NEOs) or director.
 
 
Pay for performance and, accordingly, a significant portion of each NEO’s total compensation opportunity is “at risk” and dependent upon achievement of specific corporate and individual performance goals, resulting in lesser emphasis on fixed base salary.
 
 
Encourage unnecessary or excessive risk-taking as a result of our compensation policies and practices.
 
 
Base our short-term incentive plan on explicit and quantifiable Corporate and business segment financial performance metrics that are set at the beginning of each year.
 
 
Have employment agreements with any of our NEOs other than as described in the section of this proxy statement titled “Executive Compensation.”
 
 
Complement our annual compensation to each NEO with time-based and performance-based multi-year vesting schedules and performance cycles for equity incentive awards.
 
 
Provide a defined benefit pension plan for our NEOs.
 
 
Have annual base salary adjustments that are based, primarily, on prior-year individual performance.
 
 
Provide for “gross ups” for excise taxes imposed with respect to Section 280G (change-in-control payments) or Section 409A (nonqualified deferred compensation) of Internal Revenue Code of 1986, as amended (the “Code”).
 
 
Adopted an Incentive-Based Compensation Recovery Policy, or clawback policy, pursuant to which the Company can seek reimbursement of either cash or equity-based incentive compensation in the event of a financial restatement due to the Company’s material noncompliance with any financial reporting requirement under the securities laws.
 
 
Provide for single-trigger vesting acceleration upon a change in control under the Company’s Executive Severance Policy.
 
 
Maintain a Compensation Committee, which is comprised solely of independent directors.
 
 
Allow: (i) any repricing of options and Stock Appreciation Rights (“SARs”) without shareholder approval or (ii) for the unlimited transferability of awards.
 
 
Have stock ownership guidelines for our directors and executive officers.
 
 
 
 
 
Subject awards under the Amended 2017 Plan to minimum vesting periods and maximum annual per-person limits.
 
 
 
 
 
Double-trigger vesting acceleration upon a change in control under the Company’s Executive Severance Policy.
 
 
 
 
 
Ensure that a significant portion of our non-employee director compensation consists of long-term equity awards.
 
 
 
 
 
Consult with outside experts to determine the overall competitiveness of the Company’s executive compensation program.
 
 
 
 
 
 
 
 
 
 
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COMPENSATION DISCUSSION AND ANALYSIS
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