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March 11, 2022

To Ingevity Stockholders:

It is our pleasure to invite you to attend the 2022 annual meeting of stockholders (the “Annual Meeting”) of Ingevity Corporation (the “Company”). In light of guidance regarding the COVID-19 pandemic, and to protect the health and well-being of our stockholders, employees, Board members, and other members of our community, the Annual Meeting will be held virtually via live audio webcast on April 27, 2022 at 9:30 a.m. Eastern Time.

You will be able to participate in the Annual Meeting by visiting www.virtualshareholdermeeting.com/NGVT2022 and may submit questions and vote your shares of the Company’s common stock, par value $0.01 (the “Common Stock”), electronically. Further details regarding participation, voting, and the business to be conducted at the Annual Meeting, are described in the following notice of the Annual Meeting and this proxy statement.

2021 was a good year at Ingevity. We delivered strong overall financial performance over 2020, despite a dynamic environment challenged by supply chain and logistics disruptions. We did this while keeping safety first. Ingevity 2.0, our strategic approach to growth, is well underway as we work to be a best-in-class chemical company measured by our financial performance and culture of operational excellence. During the year, we continued our transformation into an innovation-driven enterprise leveraging our chemistries – products made from renewable materials and derivatized technologies that impart environmental benefits in their use - to purify, protect, and enhance the world around us.

Our segments performed well amidst ongoing pressure and uncertainty. The Performance Chemicals segment delivered a remarkable recovery. Despite persistent raw materials and energy inflation, the team drove impressive year-over-year sales growth, particularly in Engineered Polymers and Industrial Specialties. Because of the global semiconductor chip shortage, automotive production was unpredictable and pressured throughout the second half of 2021, but our Performance Materials team managed global planning, production, and inventory with great discipline and performed solidly for the year.

We advanced progress toward strategic growth and innovation efforts. Our Performance Chemicals team completed alternative fatty acid production using alternate raw materials to crude tall oil and saw our first sales of our new AltaVeg™ product. In Performance Materials, our wood-based alternative-fuel vehicle solution that enables the use of renewable natural gas (“RNG”) for cleaner mobility received a grant to fund 28 trucks powered with our unique gas storage technology, demonstrating the amplified emissions reduction benefits for fleets when using RNG as a vehicle fuel. We also completed testing of our on-site industrial storage tank leveraging this same gas storage innovation, became operational with our methane capture and storage strategic partner, GreenGasUSA Holdings LLC, and made additional investments in biosurfactants and capture-and-release technologies for odor, bacteria, and virus control.

We forged ahead with our sustainability program. This year, we increased our overall EcoVadis score for corporate social responsibility by almost 11% and maintained our Silver rating. Our 2020 Sustainability Report highlighted progress toward our current sustainability goals and included our first statements on climate change, discrimination, and racial injustice.

We further enriched and accelerated our culture and social impact. This year, we established a formal diversity, equity, and inclusion (“DEI”) function, welcomed our first Chief DEI Officer, and delivered a DEI strategic plan that aims to create sustainable progress by building diverse teams, elevating equity, demonstrating inclusivity, and supporting communities in ways that enable the vitality of the diverse locations where we operate. Their work will be critical as we continue to enrich our IngeviWay culture.

The right leadership continues to positively impact our growth and success. Today, our Board of Directors is 38% women and 13% racially and ethnically diverse. Additionally, our executive team – 29% women led and 14% racially and ethnically diverse - welcomed Mary Dean Hall as executive vice president and chief financial officer, Stacy Cozad as executive vice president, general counsel and secretary, Rich White, as senior vice president and president, Industrial Specialties and Pavement Technologies, and Steve Hulme, as senior vice president and president, Engineered Polymers.

A notice of internet availability or proxy card is being mailed beginning on March 11, 2022, to each holder of record of Common Stock as of the record date, February 28, 2022. Please see “Questions and Answers about the Annual Meeting, Proxy Solicitation, and Voting Information” for additional information about how to attend, vote, examine the list of stockholders, and submit questions during the Annual Meeting.

Whether or not you plan to attend the Annual Meeting virtually, we urge you to vote and submit your proxy in advance of the Annual Meeting by one of the methods described in the proxy materials for the Annual Meeting. Your vote will mean that you are represented at the Annual Meeting regardless of whether you attend virtually. Thank you for your ongoing support of Ingevity.

Best regards,

 

John C. Fortson

Due to the ongoing impacts of the COVID-19 pandemic and for the safety of all of our stockholders, employees, Board members, and other members of the community, our Annual Meeting will be held in a virtual meeting format only with no physical meeting location.

At the Annual Meeting, stockholders will be asked to act on the following items:

Whether or not you plan to attend the Annual Meeting virtually, we urge you to review these materials carefully and to vote in advance.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held

on April 27, 2022. This Proxy Statement and our Annual Report are available at www.proxyvote.com.

This summary highlights information about Ingevity Corporation (“Ingevity,” “we,” “our,” “us,” or the “Company”) and certain information contained elsewhere in this proxy statement (the “Proxy Statement”) for our 2022 Annual Meeting of Stockholders (the “Annual Meeting”). This summary does not contain all of the information that you should consider in deciding to vote, and you should read the entire Proxy Statement carefully before voting. The term “Common Stock,” as used herein, refers to the Company’s common stock, par value $0.01.

2021 was a good year at Ingevity. We delivered strong overall financial performance over 2020, despite a dynamic environment challenged by supply chain and logistics disruptions. During the year, we continued our transformation into an innovation-driven enterprise leveraging our value-added chemistries – products made from renewable materials and derivatized technologies that impart environmental benefits in their use - to purify, protect, and enhance the world around us.

(Comparisons versus full-year 2020)

WE DELIVERED STRONG OVERALL FINANCIAL PERFORMANCE.

PERFORMANCE CHEMICALS SAW A REMARKABLE RECOVERY.

PERFORMANCE MATERIALS EXECUTED WELL AMIDST UNCERTAINTY.

OUR SAFETY RECORD IMPROVED.

WE INVESTED IN OUR FACILITIES AND TECHNOLOGY.

WE ADVANCED PROGRESS TOWARD STRATEGIC GROWTH INITIATIVES.

WE EMBRACED SUSTAINABILITY ENTERPRISE-WIDE TO ACCELERATE OUR PURPOSE AND IMPACT.

Sustainability is a key driver behind Ingevity’s strategic approach to growth. The environmental, social, and governance (“ESG”) goals we established in 2019 set the foundation for a sustainability agenda that aligns our efforts toward creating value for our Company, customers, and stakeholders, enriching our culture by developing and empowering our people, and making a lasting positive impact in our communities and the world.

In 2021, we accelerated our ESG programs and broadened the scope of our reporting capabilities to increase transparency as we advance our initiatives and goals and strive for top-quartile excellence among our peers.

Ingevity recognizes that climate change caused by increasing GHG levels poses serious consequences for our planet. As a company dedicated to purifying, protecting, and enhancing the world, we’re innovating economical and effective solutions to protect the environment. Building on our strong history of imagining new possibilities, collaborating with customers to create high-performing, sustainable products, and innovating cleaner-energy alternatives, Ingevity is actively working to address climate change. We aim to reduce our GHG intensity by 5% by 2025, grow our participation in the renewable energy and fuel landscape, and further reduce the ecological impacts of our products and operations, including greater use of renewable energy.

LD&C – The Leadership Development and Compensation Committee

Governance and Sustainability – The Nominating, Governance, and Sustainability Committee

Executive – The Executive Committee

We recognize that strong corporate governance practices contribute to long-term stockholder value. We are committed to sound governance practices, including those described below.

The LD&C Committee continues to implement and maintain practices in our compensation programs and related areas that reflect responsible corporate governance and compensation policies. These practices include the following:

Our Nominating, Governance, and Sustainability Committee has recommended, and the Board of Directors (the “Board”) has nominated for election as directors at the Annual Meeting, the eight nominees named below. Each nominee currently serves as a director of the Company, and each nominee was elected by our stockholders to serve until the Annual Meeting and until his or her successor has been elected and qualified.

Each director elected at the Annual Meeting will serve until the 2023 annual meeting of stockholders and until his or her successor has been elected and qualified. Each director nominee has consented to being named in this Proxy Statement and to serving as a director if elected. If any nominee is unable to stand for election for any reason, the Common Stock represented at our Annual Meeting by proxy may be voted for another candidate proposed by our Board, or our Board may choose to reduce its size.

The information below provides information as to the particular experiences, qualifications, attributes, and skills of each nominee. The Nominating, Governance, and Sustainability Committee and the Board believe that, as a group, these nominees provide our Board with an optimal balance of experience, leadership, qualifications, attributes, and skills and that each individual nominee can make a significant contribution to the Board and should serve as a director of the Company.

At any meeting of stockholders for the election of directors at which a quorum is present, the election will be determined by a majority of the votes cast by the stockholders entitled to vote in the election, except that in the case of a contested election, the election will be determined by a plurality of the votes cast by the stockholders entitled to vote in the election.

Because the election is not contested at the Annual Meeting, to be elected as a director, each nominee will need to receive a majority of the votes cast at the Annual Meeting, which means that the number of votes cast “for” a director nominee must exceed the number of votes cast “against” the director nominee. Abstentions and broker non-votes will have no effect on the outcome of the election of directors.

The Board recommends a vote “FOR” each of the eight director nominees named in this Proxy Statement.

The Company’s Board consists of a diverse group of respected leaders who possess the requisite skills, experience, character, time, and diversity, to effectively oversee Ingevity’s evolving needs and strategy. In their current and prior roles, our Board members have obtained significant skills and experience, some of which are highlighted in the chart below.

 

In addition, many of our directors have experience as members of non-profit, academic, and philanthropic institutions, which adds additional perspective to their roles at Ingevity. Additional information on each director nominee is available under their biographies, above.

Ingevity is governed by its Board. The members of the Board are elected annually by the Company’s stockholders.

The Board is responsible for overseeing and providing guidance on the Company’s strategy, business, and performance, and protecting stockholder interests and value. The Board is responsible for appointing, overseeing, and evaluating the Company’s executive officers who manage the Company’s day-to-day operations. The Board oversees management’s activities in connection with the proper safeguarding of the assets of the Company, maintaining appropriate financial and other internal controls, compliance with applicable laws, regulations and ethical standards, and proper governance. One of the Board’s most important functions is oversight of risk management, including cybersecurity. This is discussed further below under the section titled “Board’s Role in Risk Oversight.”

The Board actively oversees the development and execution of our strategies, including those related to business, operations, and finance, as well as strategies focused on legal and regulatory matters, corporate responsibility and sustainability, stockholder engagement, innovation and protection of intellectual property, cybersecurity, talent development, and executive succession.

In carrying out its responsibilities, the Board has created and delegated responsibilities to four committees:

Each committee’s responsibilities are further described under “Committees of our Board of Directors.”

The Board is committed to sound corporate governance policies and practices that are designed to enable the Company to operate its business responsibly, with integrity, enabling the Company to compete effectively, sustain its business, and build long-term stockholder value. The Company’s Board-approved Corporate Governance Guidelines (the “Guidelines”) are available on our website at http://ir.ingevity.com/governance/documents.

The Guidelines form a transparent framework for the effective governance of the Company, addressing matters such as the respective roles and responsibilities of the Board and management, the Board’s leadership structure, director independence, and Board and committee membership criteria. The Guidelines are reviewed at least annually by the Governance and Sustainability Committee in light of changing regulations, evolving best practices, and other governance developments.

Our Board regularly reviews the Company’s Board leadership structure, how the structure is functioning, and whether the structure continues to be in the best interest of our stockholders. The Company’s current Board leadership structure consists of the following:

Except in connection with a leadership transition in 2020, the Company has separated the roles of Chair and CEO. The Board believes that separating the positions of CEO and Chair allows the CEO to focus on executing the Company’s strategic plan and managing the Company’s operations and performance, and facilitates improved communications and relations between the Board, the CEO, and other senior leaders of the Company.

Because Ms. Blackwell is an independent director, the Board has not deemed it necessary to appoint a lead independent director. Under our Guidelines, our Board Chair is elected to serve a two-year term, unless otherwise determined by the Board.

Notwithstanding the foregoing, our Guidelines do not contain a firm policy regarding separation of the offices of CEO and Chair. Instead, the Guidelines provide flexibility to the Board to make the right determination that is in the best interests of the stockholders based on applicable circumstances at the time of the decision. The Guidelines do provide, however, that in the event that the Chair is not independent (whether due to the Chair and CEO position being combined or otherwise), the Board shall appoint a Lead Independent Director. During the leadership transition in 2020 (the only time in the Company’s history when the Chair and CEO roles were not separate), Mr. Lynch served as Lead Independent Director.

Our Board has established four standing committees to assist with the performance of its responsibilities. Committee members are elected annually by the Board based on the recommendations of the Governance and Sustainability Committee. Each committee operates under a charter, which is available at https://ir.ingevity.com/corporate-governance/corporate-governance-documents/default.aspx.

The Board has determined that each member of its four standing committees is independent under the relevant SEC and New York Stock Exchange (“NYSE”) standards. For more information on independence standards, see “Director Nominees and Selection – Director Independence.”

In addition, each of the Audit Committee, LD&C Committee, and Governance and Sustainability Committee are responsible for annually reviewing their charter and performance.

Pursuant to our Guidelines, the Board strives to select as director candidates a mix of individuals who represent experience, background, and thought at policy-making levels that are relevant to the Company’s activities, as well as other characteristics that will contribute to the overall ability of the Board to perform its duties and meet changing conditions.

The Governance and Sustainability Committee is responsible for evaluating and recommending qualified director candidates to the Board for its consideration. In evaluating potential director nominees, the Governance and Sustainability Committee considers the following, among other things:

In addition, the Governance and Sustainability Committee also considers character, financial literacy, diversity (as further described below), relevant skills, and experience in light of the Board’s needs.

The Governance and Sustainability Committee considers director candidate nominations from Board members, stockholders, and other third-parties such as search firms that are engaged to identify candidates. The Governance and Sustainability Committee evaluates candidates recommended by stockholders using the same criteria as for other candidates recommended by its members, other members of the Board, or other persons. Any stockholder wishing to recommend a director candidate should provide the Governance and Sustainability Committee with the information required by the Company’s Bylaws to be provided with respect to director nominees submitted by stockholders. The process for stockholders to nominate an individual for election as a director is discussed under “Questions and Answers Regarding Stockholder Communications, Stockholder Proposals, and Company Documents.”

Director Independence

Our Guidelines and the NYSE require that a majority of our directors be independent under the applicable rules and regulations of the SEC, and the general listing standards of the NYSE. Our Board, with the assistance of the Governance and Sustainability Committee, annually (or more frequently if circumstances require) assesses the independence of each director.

In conducting its independence assessment, the Board reviews all relevant facts and circumstances including each directors’ affiliations and relationships, potential conflicts of interest, and all specific criteria included in the NYSE’s general listing standards. For these purposes, the NYSE requires the Board to consider certain relationships that existed during a three-year look-back period. The Board considers the materiality and importance of such relationships not merely from the standpoint of the director, but also from the standpoint of persons or organizations with which the director has an affiliation. An independent director is a director who our Board affirmatively determines has no material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company) other than in connection with his or her role as a director.

In February 2022, the Governance and Sustainability Committee and Board conducted their review of each director’s affiliations that are relevant to independence. These affiliations were provided by the directors in their responses to annual questionnaires distributed by the Company in December 2021 (“Annual Questionnaires”). Once the Company received the list of affiliations, it conducted additional diligence on each relationship and ran searches against the Company’s books and records to determine whether any financial transactions existed with the affiliations. Results of the diligence and searches were reported to the Governance and Sustainability Committee and the Board.

After reviewing the affiliations and report described above, upon the recommendation of the Governance and Sustainability Committee, the Board affirmatively determined that all directors other than Mr. Fortson (Ingevity’s President and CEO) are independent, in accordance with applicable rules and regulations of the SEC and the general listing standards of the NYSE.

Board Diversity

In selecting directors, the Board’s policy is to encourage a selection of candidates for Board membership comprised of a mix of individuals who represent diversity in various aspects, including gender, racial, and ethnic diversity, diversity of experience, background, and thought at policy-making levels that are relevant to the Company’s activities, as well as other characteristics that will contribute to the overall ability of the Board to perform its duties and meet changing conditions. The Governance and Sustainability Committee is committed to including in each director search qualified candidates who reflect a diversity of backgrounds, including diversity of gender and race/ethnicity.

Among our eight directors, three self-identify as gender diverse, and one self-identifies as racially/ethnically-diverse.

 

The Governance and Sustainability Committee assists the Board in annually assessing the effectiveness of the Board and its committees in carrying out their respective roles, as described below.

Examples of actions the Board has taken in recent years in response to the annual evaluation process include:

The Board has not established a policy enforcing a retirement age or term limit because it believes that, on balance, such a policy would sacrifice the contribution of directors who have been able to develop, over a period of time, increasing insight into the Company and its operations. The Board annually evaluates each director’s contributions during the Board and committee evaluation process.

Our Board meets on a regularly scheduled basis during the year to review significant developments affecting our Company and to act on matters requiring Board approval. The Board may hold special meetings between scheduled Board meetings when appropriate.

The Board met eight times during fiscal year 2021. All directors attended 75% or more of the aggregate of (i) the number of meetings of the Board held during the period he or she was a director and (ii) the number of meetings of all committees of the Board held during the period he or she was a member of the respective committee. All directors attended the 2021 Annual Meeting of Stockholders.

Our Guidelines require that the non-management members of our Board meet in executive session without management present at each regularly scheduled Board meeting. Likewise, our committees generally meet in executive session without management present at each regularly scheduled committee meeting.

The Board, acting as a full Board and through its committees, oversees risk management on behalf of the Company. Our Board believes it has in place effective processes to identify and oversee the material risks facing the Company. The Company’s enterprise risk management processes help management and the Board identify, prioritize, and manage risks that have the potential to present the most significant obstacles to achieving the Company’s business objectives or that otherwise present significant risk to the Company. The Company’s risk management processes are regularly refreshed, including priorities and planned remediations. Management reports regularly to the Board on this process.

Set forth below are key areas of risk overseen by the Board, directly or through its committees:

One of our Board’s most critical functions is executive succession planning, which is reviewed at least once annually and more often as needed. The LD&C Committee has the primary responsibility for overseeing the development of succession plans for all of our executive officers and regularly discusses succession in collaboration with our CEO and leaders of the Company’s human resources organization, and reports on the discussions to the Board.

Under its charter, the Governance and Sustainability Committee has responsibility for overseeing and reviewing the Company’s integration of economic, environmental, and social principles into its business strategy and decision making; reviewing and monitoring procedures, policies, and practices with respect to corporate responsibility and sustainability programs; reviewing the Company’s annual Sustainability Report; and making recommendations to the Board regarding corporate responsibility and sustainability as the Governance and Sustainability Committee deems appropriate. In addition to Governance and Sustainability Committee reviews, the Company’s management also presents on ESG matters to the full Board at least once annually.

Our latest Sustainability Report and other information regarding our ESG initiatives and progress are available on our website at https://www.ingevity.com/about/sustainability/.

Under its charter, the LD&C Committee has responsibility for overseeing and reviewing the Company’s inclusion and diversity policies and programs, and employee engagement initiatives. The LD&C Committee receives periodic (at least once annually) updates from management on, and discusses, the Company’s DEI vision and mission and learning and development strategy.

In 2021, the Company hired its first Chief DEI Officer, developed a DEI Vision and Mission, DEI Strategic Plan, and DEI Learning and Development Strategy. The Company’s current DEI strategic priorities are captured below:

 

Additional information regarding DEI and human capital matters are available on our website at

https://www.ingevity.com/diversity-equity-inclusion/.

Each director receives educational information about the Company and expectations of their role before joining the Board. Further, the Governance and Sustainability Committee annually reviews the Board education program and recommends changes that it deems appropriate. The Company’s current director education program incorporates site visits, management presentations, presentations by the Company’s independent auditors, investment banks and internal and external legal counsel, and the distribution of analyst reports and pertinent articles on the Company’s business and industry.

The Guidelines provide that the Company’s independent directors may not serve on more than five public company boards (including the Company’s Board). However, directors who are actively employed as a CEO of a public company may not serve on more than three public company boards (including the Company’s Board), and directors who serve as an officer (other than CEO) at another public company may not serve on more than four public company boards (including the Company’s Board).

We value and are committed to regular, meaningful engagement with our stockholders and other stakeholders, including customers, suppliers, employees, and our communities. In 2021, we hosted 120 calls with stockholders and discussed a variety of topics including strategy, executive compensation, sustainability, and governance matters. Senior leadership participated in roughly half of the stockholder calls.

In 2021, we also attended 12 conferences/virtual roadshows hosted by analysts. We held four webinars in 2021 that focused on the following topics of interest to our stockholders:

Interested parties, including stockholders, may communicate with all or selected members of the Board as follows:

Correspondence should be addressed to the Board or any individual director(s) or group or committee of directors either by name or title (for example, “Chair of the Board,” “Chair of the Nominating, Governance, and Sustainability Committee” or “All Non-Management/Independent Directors”).

Communications delivered to the Company for forwarding to the Board, a Board committee, a particular group of directors or specified Board members will be forwarded in accordance with the stockholder’s instruction, except that we reserve the right not to forward any soliciting or advertising materials or any abusive, threatening, or otherwise inappropriate materials.

The Company maintains three codes of business conduct and ethics (collectively, the “Codes of Ethics”) to focus the Board and management on areas of ethical risk, provide guidance to personnel to help them recognize and deal with ethical issues, provide mechanisms to report unethical conduct, and help to foster a culture of honesty and accountability. The Codes of Ethics include:

Each of the Codes of Ethics is available for review on our website at http://ir.ingevity.com/governance/codes-of-conduct. All executives and our non-employee directors are required annually to review and affirm in writing their acceptance of the Code of Ethics.

Any waiver for directors or executive officers from the provisions of the Codes of Ethics must be made by the Board at the recommendation of the Governance and Sustainability Committee, and will be disclosed within four business days of the waiver (or an implicit waiver) on our website at http://ir.ingevity.com/governance/codes-of-conduct, and will remain posted for a period of at least 12 months. In addition, this website is also where we will disclose the nature of any amendment to the Codes of Ethics (other than technical, administrative, or other non-substantive amendments) for which disclosure is required pursuant to Item 5.05 of Form 8-K under the Exchange Act.

In support of the Codes of Ethics, we have provided employees with a number of avenues for the reporting of ethics violations or similar concerns, including an anonymous telephone hotline.

The Board evaluates related party transactions consistent with Item 404 of Regulation S-K. Under its charter, the Governance and Sustainability Committee is charged with reviewing all potential related party transactions and making recommendations to the Board for review and approval of any such transactions.

The Company solicited information from directors regarding potential related party transactions in the Annual Questionnaires distributed to directors (described further under “Director Nominees and Selection – Director Independence,” above). Based on a review of the reported affiliations and results from searches ran against the Company’s books and records to determine whether any financial transactions existed with the affiliations, the Governance and Sustainability Committee has advised the Board that it has not identified any related party transactions since the beginning of the fiscal year ended December 31, 2021, and none are currently proposed.

We maintain several governance documents on our website, which are described further below:

https://ir.ingevity.com/corporate-governance/codes-of-conduct/default.aspx:

These materials are also available in print at no charge to any stockholder who requests a copy by writing to Corporate Secretary, Ingevity Corporation, 4920 O’Hear Ave, Suite 400, N. Charleston, SC 29405, or by email to: corporatesecretary@ingevity.com.

The Company’s Board annually approves non-employee director compensation at the recommendation of the LD&C Committee. Generally, the LD&C Committee reviews non-employee director compensation in December of each year. This review involves a survey of director compensation at peer companies and other similarly situated companies and a discussion with our independent compensation consultant, Pearl Meyer, regarding director compensation practices.

The 2021 non-employee director compensation program consisted of the following:

After a peer and market review and discussion with our independent compensation consultant, Pearl Meyer, the Board approved an increase of the annual Restricted Stock Unit Award for non-employee directors from $105,000 to $118,000, effective for the 2022-2023 term.

Cash retainers are paid to the non-employee directors quarterly in advance. Non-employee directors may elect to receive their annual cash retainer (both standard and leadership retainers) in the form of deferred stock units (“DSUs”) in lieu of cash under the 2016 Omnibus Incentive Plan, as amended (the “Omnibus Plan”) and Non-Employee Director Deferred Compensation Plan (“Director DCP”). In the event a director makes such an election, the cash retainer is converted into an amount of DSUs using the closing stock price of the Company’s Common Stock on the business day that the cash retainer would have otherwise been paid to the director. DSUs representing cash retainers are fully vested upon grant but settle upon termination of service with the Board. DSUs in lieu of cash retainers do not confer voting rights but do confer dividend-equivalents; dividend equivalents accrue from the grant date and are delivered upon settlement.

Each non-employee director receives an annual award grant of Ingevity restricted stock units (“DRSUs”) under the Omnibus Plan equivalent to approximately $105,000 at the time of grant (with an increase to $118,000 effective with the 2022-2023 term). The grant date for the DRSUs is the business day after the annual stockholders meeting. The DRSUs vest on the first anniversary of the grant date and shares of Common Stock underlying DRSUs are delivered to the directors as soon as practicable after the vesting date. DRSUs do not confer voting rights but do confer dividend-equivalents; dividend equivalents accrue from the grant date and are delivered upon settlement. If the DRSUs are forfeited, the dividend-equivalents are also forfeited.

If a director with DRSUs ceases to be a director before their vesting date other than due to death or termination for cause, the director will vest and settle in a pro rata number of the DRSUs (rounded up to the nearest whole number). If a director with DRSUs ceases to be a director due to death or disability, all DRSUs will vest. If a director with DRSUs ceases to be a director due to a termination for cause, all unvested and unsettled DRSUs will be forfeited.

Non-employee directors may elect to receive their annual DRSU award in the form of DSUs. DRSUs converted into DSUs with respect to the annual stock award are subject to the same vesting terms and dividend-equivalents as DRSUs; however, DSUs are not settled until the director’s terminates service with the Board.

Directors are entitled to reimbursement for out-of-pocket expenses incurred in connection with their Board service. The Company does not provide perquisite allowances to non-employee directors.

Under our stock ownership guidelines, each non-employee director is expected to hold an amount of Common Stock equal to five times the annual base cash retainer. For 2021, the holding amount is $450,000. Each non-employee director has five years from the date they join the Board to meet the requirement.

Common Stock owned outright by the director, or his or her immediate family members residing in the same household, in family trusts and Common Stock held in retirement plan accounts are deemed to be owned for purposes of these guidelines, as well as vested and unvested DRSUs and DSUs.

Until a non-employee director meets these guidelines, he or she must hold 50% of his or her vested DSUs and DRSUs. If a non-employee director does not meet these guidelines within five years, he or she must hold 100% of his or her vested DSUs or DRSUs.

As of December 31, 2021, each non-employee director has attained the minimum stock ownership levels based on holdings except for Mses. Gulyas and Narwold who are, respectively, on track for compliance (having joined the Board in February 2019, Mses. Gulyas and Narwold have until February 2024 to meet their ownership levels).

Our directors are not permitted to engage in hedging activities with respect to our stock. See “Compensation Discussion and Analysis – Other Compensation Policies and Practices – Anti-Hedging” for more information about the Company’s anti-hedging policy.

The following table includes information concerning compensation for service as a director paid to or earned by our directors during the fiscal year ended December 31, 2021 (note that Mr. Fortson’s compensation is set forth in the “Summary Compensation Table” and not included below).

The Audit Committee is directly responsible for appointing, retaining, fixing the compensation of, and overseeing the work of our independent registered public accounting firm. PricewaterhouseCoopers LLC (“PwC”) acted as our independent registered public accounting firm for the fiscal year ended December 31, 2021 and the Audit Committee has retained PwC to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2022.

Although it is not legally required to do so, the Board has elected to seek stockholder ratification of the appointment of PwC as a matter of good corporate governance. If stockholders do not ratify the appointment of PwC, the Audit Committee will reconsider the appointment. Regardless of the outcome of this proposal, the Audit Committee may, in its discretion, select a new independent registered public accounting firm at any time during the year if it believes such a change would be in the Company’s best interest.

Representatives of PwC will be present at the Annual Meeting. They will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions from stockholders.

An affirmative vote of the majority of the shares of Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal is required for the ratification of the appointment of PwC as our independent registered public accounting firm for fiscal 2022. Abstentions will have the same effect as voting against this proposal because they are considered present and entitled to vote on this proposal. No broker non-votes are expected for this proposal since, due to its routine nature, brokers may vote in their discretion.

The Board recommends a vote “FOR” the ratification of the appointment of PwC as the independent registered public accounting firm of the Company.

The following table shows the fees paid by the Company to PwC for audit and other services provided for the fiscal years 2021 and 2020.

Audit Fees. Amount includes fees for professional services performed for the integrated audit of the Company’s annual consolidated financial statements included in the Company’s Form 10-K filing and review of financial statements included in the Company’s Form 10-Q filings. Amount also includes other services that are normally provided by PwC in connection with statutory and regulatory filings or engagements.

Audit-Related Fees. Amount includes fees paid for services that are reasonably related to the performance of the audit or review of the Company’s financial statements. For 2020, amount includes services provided in connection with debt financing transactions. For 2021, amount includes services provided in connection with system upgrade reviews.

Tax Fees. Amount includes fees and expenses for U.S. federal, state, and international tax planning and tax compliance services.

All Other Fees. Amount includes fees for services in connection with attestations by PwC that are required by statute or regulation.

The Audit Committee’s pre-approval policy requires that all services to be performed by the Company’s independent registered public accounting firm be pre-approved either on a case-by-case basis by the Audit Committee or its delegate or on a categorical basis based on the Audit Committee’s prior approval of a specific category of service and the expected cost thereof. Any request for services involving less than $150,000 may be approved by the Chair of the Audit Committee, provided that any such approval is presented to the full Audit Committee at its next regularly scheduled meeting.

The Audit Committee pre-approved all of the audit fees, audit-related fees, tax fees, and all other fees paid to PwC in fiscal 2021.

The Audit Committee has reviewed and discussed the audited consolidated financial statements for the year ended December 31, 2021, including management’s annual assessment of and report on the Company’s internal control over financial reporting, with management and with PwC, the Company’s independent auditor. The Audit Committee has discussed with PwC the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee also received from PwC the written disclosures and letter required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence and has discussed with PwC the issue of their independence from the Company.

Based on the foregoing, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, to be filed with the SEC.

THE AUDIT COMMITTEE

Daniel F. Sansone, Chair

Luis Fernandez-Moreno

J. Michael Fitzpatrick

Frederick J. Lynch

Karen G. Narwold

In accordance with the requirements of Section 14A of the Exchange Act, we are asking stockholders to approve, on an advisory basis, the following resolution concerning the compensation of our named executive officers (“NEOs”):

In considering this proposal, we encourage you to review the Compensation Discussion and Analysis (“CD&A”) beginning on the following page and the tabular compensation disclosures and accompanying narrative discussion following the CD&A. The CD&A describes our executive compensation philosophy, programs, and objectives, while the tabular compensation disclosures and accompanying narrative discussion provide detailed information on the compensation of our NEOs.

We believe that our compensation policies and procedures are competitive, focused on pay-for-performance principles, and strongly aligned with the long-term interests of our stockholders. Our executive compensation philosophy is based on the belief that the compensation of our employees should be set at levels that allow us to attract and retain employees who are committed to achieving high performance and who demonstrate the ability to do so. We seek to provide an executive compensation package that is driven by our overall financial performance, increased stockholder value, the success of areas of our business directly impacted by the executive’s performance, and the performance of the individual executive. We view our compensation program as a strategic tool that supports the successful execution of our business strategy and reinforces a performance-based culture. The Company’s executive compensation program emphasizes long-term compensation over short-term compensation, with a significant portion weighted toward equity awards. This approach strongly aligns our executives’ compensation with the interest of our stockholders.

Because your vote is advisory, it will not be binding upon the Board. However, the Board and LD&C Committee value the opinion of the Company’s stockholders as expressed through their votes on this proposal and will carefully consider the outcome of this proposal in connection with their ongoing evaluation of the Company’s executive compensation program.

An affirmative vote of the majority of the shares of Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal is required to approve, on an advisory basis, the compensation paid to Ingevity’s NEOs. Abstentions will have the same effect as voting against this proposal because they are considered present and entitled to vote on this proposal. Broker non-votes will have no effect on the outcome of this proposal.

The Board recommends that the stockholders vote “FOR” the adoption of this resolution and approve, on an advisory basis, the Company’s executive compensation as described in this Proxy Statement.

The Compensation Discussion and Analysis (“CD&A”) outlines the Company’s executive compensation programs and practices for our Named Executive Officers listed below.

Ingevity’s executive compensation program reflects the Company’s “pay-for-performance” philosophy. Compensation is directly linked to business plans and individual performance, with short- and long-term incentive programs based on the achievement of key financial metrics and individual performance. We are focused on achieving long-term, sustainable stockholder value.

We designed our executive compensation program to attract, motivate, and retain highly-talented executives. In setting compensation, the LD&C Committee considers both our peer group and national survey data (“Comparative Compensation Data”). We also consider other factors including the executive's role and level of responsibilities, the importance of the executive's contributions toward meeting the Company's goals and objectives, individual performance and experience, internal pay equity, and the economic and business environment in which the Company operates.

The Company's executive compensation program is meant to:

For information on Company performance in 2021, see “Proxy Summary,” above.

The major elements of our executive compensation program are reflected below.

Additional elements of NEO compensation are described under “Other Compensation and Benefits.”

The mix of compensation elements awarded in 2021 to our CEO (Mr. Fortson) and Ms. Hall, Ms. Cozad, Mr. Smith, and Mr. Woodcock (the “Other NEOs”) is illustrated below. The chart reflects base salary and target STIP and LTIP, and does not include “All Other Compensation” under the “Summary Compensation Table” or one-time, service-based RSU grants for Mses. Hall and Cozad and Mr. Woodcock, nor does it include the one-time cash payment paid to Ms. Cozad when she joined the Company.

 

The LD&C Committee values the input received from our stockholders on the Company’s executive compensation practices. At the 2021 annual stockholders’ meeting, our stockholders cast an advisory vote on the compensation of our named executive officers in 2021, with 94.45% of the Common Stock voting to approve the compensation (percentage shown incorporates votes for, votes against, and abstentions; broker-non-votes have no effect on the percentage).

Although the vote was non-binding, the LD&C Committee reviewed the results of the vote and considered the approval rate as an indication that the stockholders support the Company’s executive compensation philosophy and decisions. The Company is again soliciting a non-binding advisory vote at the Annual Meeting.

LD&C Committee and Interaction with Executive Officers. The LD&C Committee is responsible for assisting the Board in fulfilling its responsibilities with respect to compensation of the Company’s CEO and other senior executives, including the Other NEOs. The LD&C Committee’s role includes oversight and risk management relating to the Company’s equity compensation and employee benefit plans. Additionally, the LD&C Committee has oversight of matters relating to the attraction, development, and retention of the Company’s leadership.

Compensation Consultant. The LD&C Committee has retained Pearl Meyer as its independent Compensation Consultant. The LD&C Committee has the sole discretion and is directly responsible for the appointment, termination, compensation, and oversight of the work of the Compensation Consultant. Although the LD&C Committee retained the Compensation Consultant directly, in carrying out assignments, the Compensation Consultant also interacts with the Company’s management when appropriate.

Specifically, the Compensation Consultant interacts with leaders in the Company’s human resources organization and other members of management with respect to compensation and benefits data, best practices, peer group developments, and executive compensation trends. In addition, the Compensation Consultant may also seek input and feedback from members of management regarding its consulting work product prior to presentation to the LD&C Committee to confirm alignment with Ingevity’s business strategy, determine what additional data may need to be gathered, or identify other issues. The LD&C Committee regularly meets with the Compensation Consultant in executive session independent of management. Further, the LD&C Committee Chair also speaks on occasion with the Compensation Consultant on executive compensation matters independently of management. The LD&C Committee also meets in executive session after each regularly scheduled committee meeting.

The Compensation Consultant does not provide any services to Ingevity other than its consulting services to the LD&C Committee related to executive and director compensation. The LD&C Committee determined that, in fiscal 2021, the work performed for the LD&C Committee by the Compensation Consultant did not raise any conflict of interest. In making its determination, the LD&C Committee considered the independence of the Compensation Consultant in light of SEC rules and regulations and NYSE listing standards.

Consistent with Ingevity’s goal to provide compensation that remains competitive, the LD&C Committee considers among other things, the executive compensation practices of companies in a peer group selected by the LD&C Committee based on recommendation of the Compensation Consultant.

In selecting the peer group, the LD&C Committee considered such factors as:

The LD&C Committee generally targets compensation commensurate with the market median based on our Comparative Compensation Data. Compensation decisions also take into account other relevant factors including an executive’s role and responsibilities, performance, the importance of an executive’s contributions towards meeting the Company’s goals and objectives, experience and tenure, internal pay equity, special hiring situations, retention, and other relevant factors.

The peer group is reviewed periodically for appropriateness and comparability. The LD&C Committee most recently reviewed peer group composition in July 2021 with the Compensation Consultant and discussed the peer group companies’ businesses, revenues, and relative performance. After its discussion, the LD&C Committee approved the following peer group with respect to the 2021 executive compensation program, which is unchanged compared to 2020:

Proposed Changes for 2022. W.R. Grace was acquired in September 2021 and Ferro and Kraton announced that they would be acquired in 2022. They will be removed as peer companies for 2022.

When taken as a whole, along with other elements of our executive compensation program, the pay elements described below are intended to provide a level of compensation sufficient to attract and retain an effective management team, while being generally targeted to the market median based on our Comparative Compensation Data. Additional elements of NEO compensation are described under “Other Compensation and Benefits.”

Our compensation program is designed to discourage excessive risk taking by using several forms of LTIP equity instruments, multiple performance metrics, short- and long-term programs, and active LD&C Committee oversight. The Compensation Consultant also advises the LD&C Committee as to the appropriateness of the compensation program relative to discouraging excessive risk.

Base salaries are intended to provide a level of compensation sufficient to attract and retain an effective management team when considered in combination with the long-term and short-term incentive awards and other elements of our executive compensation program. The relative levels of base salary for executive officers are designed to reflect each executive officer’s scope of responsibility, experience and performance, competitive pay levels, market trends in salary adjustments, accountability within Ingevity, economic factors, and other relevant factors.

Base salaries are reviewed annually to determine if they are equitably aligned within Ingevity and are at sufficiently competitive levels to attract and retain top talent. In addition, consideration is given to Comparative Compensation Data and such other considerations as the LD&C Committee considers appropriate. The LD&C Committee also reviews base salary compensation with the Compensation Consultant.

None of the NEOs received base salary increases in 2021. The full-year base salaries for our NEOs in 2021 were as follows:

* Each of Mses. Hall and Cozad received a pro rata amount of their full-year base salaries based on their start dates in 2021.

Ingevity’s STIP consists of an annual cash incentive that is designed to motivate participants to, and reward participants for, achieving Ingevity’s annual financial performance targets and personal performance goals. The incentive award range that a NEO may earn is determined at the beginning of the year as a percentage of the NEO’s base salary. The terms of the STIP permit the LD&C Committee to make certain discretionary adjustments to exclude the effect of certain non-recurring items of gain or loss, or other adjustments reflecting substantial out of the ordinary matters.

For each NEO, STIP payout is subject to a 200% cap and payout is based on the following:

* Definitions and reconciliations of these non-GAAP financial measures can be found in Appendix A.

The STIP will be funded for any given year only if the Company meets pre-established financial performance targets, as determined by the LD&C Committee. If earned, funding runs between 25% (threshold) to 200% (maximum) of the STIP target incentive. Linear interpolation is used to determine awards for performance between the identified points. No payout is earned if Ingevity’s results are below threshold.

For 2021, the LD&C Committee established the following threshold, target, and maximum STIP incentive opportunities for the NEOs:

Company Performance Metrics. The LD&C Committee selected the following metrics as the basis for 2021 STIP Company performance, believing them to be important and effective measures of short-term performance: