Proxy Statement (definitive) (def 14a)
17 March 2020 - 7:25AM
Edgar (US Regulatory)
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Table of Contents
CD&A TABLE OF CONTENTS
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant ý
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Filed by a Party other than the Registrant o
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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BALL CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Table of Contents
Table of Contents
We
are pleased to present our 2019 achievements and initiatives.
Table of Contents
March 16,
2020
Dear
Ball Corporation Shareholders,
On
behalf of Ball Corporation's Board of Directors, we are pleased to highlight a few of the company's accomplishments and prospects outlined in detail in the attached 2020 Proxy Statement. As a
Board, we truly believe that Ball is in a transformative period of growth, which we will leverage to build an even stronger platform for future success.
This
year's Proxy Statement is substantially revised and reformatted to facilitate your review of key areas of significance for Ball Corporation, including our 2019 financial performance;
Environmental, Social and Governance accomplishments; and recent awards and recognitions. As we enter our 140th year as a company and our tenth year of Drive for 10, we are proud to highlight
our leadership in the packaging and aerospace industries, as well as in key initiatives such as sustainability, diversity and inclusion, and company engagement. Please also note that over the past six
years, we have used the retirements of several Board members to reconstitute our Board of Directors with members representing race, gender, age, nationality and experiential diversity, so that our
board more closely resembles the world and business environment in which we operate.
For
over 25 years, Ball Corporation's compensation programs have been strongly aligned with the execution of our business strategy and the interests of our shareholders. In particular, we have
continued to tie a significant part of our executive compensation to our EVA® discipline. As you review the compensation discussion and analysis included in the Proxy Statement, you will
also note that our Named Executive Officer compensation is strongly linked to our pay-for-performance philosophy, with 74% of the NEO target compensation at risk in 2019.
In
summary, while we will always remain true to our core values of integrity, behaving like owners, attention to detail and innovation, we have also brought great focus to repositioning Ball
Corporation and each of its businesses for long-term success, as detailed in our 2020 Annual Report which is distributed to you concurrently. We look forward to delivering diluted earnings per share
growth of 10 to 15 percent per year over time, increasing EVA® dollars generated on a growing capital base, becoming the sustainability leader in all our businesses, and
successfully executing on our disciplined capital allocation strategy.
Thank
you for your investment in Ball Corporation and for this opportunity to reflect on our recent accomplishments, our exciting future, and why we are so proud to be members of the Ball Corporation
team.
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John A. Hayes
Chairman, President and CEO
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Stuart A. Taylor
Lead Independent Director
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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WHEN
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WHERE
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RECORD DATE
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Wednesday April 29, 2020
7:30 a.m., local time
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Omni Interlocken Hotel
500 Interlocken Blvd.
Broomfield, Colorado 80021
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You can vote if you are a shareholder of record on March 5, 2020
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The
Annual Meeting of Shareholders of Ball Corporation will be held at the Omni Interlocken Hotel in Broomfield, Colorado for the following purposes:
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Item
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Board's Voting
Recommendation
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► See
page
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1
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To elect four Class II director nominees to serve for a three-year term expiring at the annual meeting in 2023
■ John A.
Hayes ■ Cathy D. Ross ■ Betty
Sapp ■ Stuart A. Taylor II
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FOR each nominee
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76
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To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Corporation for 2020
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FOR
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To approve, by non-binding advisory vote, the compensation of the named executive officers ("NEOs") as disclosed in the following Proxy Statement
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FOR
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To consider any other business as may properly come before the meeting, although it is anticipated that no business will be conducted other than the matters listed above
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Shareholders
of record at the close of business on March 5, 2020, are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. This Proxy Statement contains important
information about the meeting and the matters being voted upon.
Your vote is important. You are encouraged to read the accompanying proxy materials carefully. To ensure your shares are represented at the Annual Meeting, we urge
you to vote your shares by completing and returning the proxy card as promptly as possible. You may also vote by telephone or over the Internet, or if you request a paper copy of the materials by
mail. You may revoke your proxy at any time before the final vote at the Annual Meeting.
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By Order of the Board of Directors,
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Charles E. Baker
Corporate Secretary
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March 16, 2020
Broomfield, Colorado
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PLEASE NOTE:
The 2020 Annual Meeting of Shareholders will be held to tabulate the votes cast and to report the results of voting on the items described above. No
management presentations or other business matters are planned for the meeting.
Table of Contents
BALL CORPORATION 2020 PROXY STATEMENT | i
Table of Contents
The
following summary highlights certain key disclosures in this Proxy Statement. This is only a summary, and it may not contain all the information that is important to you. For more complete
information, please review the entire Proxy Statement as well as our 2019 Annual Report on Form 10-K.
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BALL CORPORATION 2020 ANNUAL MEETING OF SHAREHOLDERS
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WHEN
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WHERE
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RECORD DATE
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Wednesday April 29, 2020
7:30 a.m., local time
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Omni Interlocken Hotel
500 Interlocken Blvd.
Broomfield, Colorado 80021
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March 5, 2020
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The
Notice of Annual Meeting, Proxy Statement, and proxy card were first furnished and made available to the Company's shareholders on or about March 16, 2020, to solicit proxies for the Annual
Meeting.
Please
submit your proxy as soon as possible. All properly completed proxies submitted by telephone or the Internet, and all properly executed written proxies returned by shareholders will be voted at
the meeting. Voting will be in accordance with the directions given in the proxy, unless the proxy is revoked prior to completion of voting at the meeting. You must be a shareholder of record as of
the close of business on March 5, 2020, to attend and vote at the Annual Meeting of Shareholders and any adjournment thereof.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
SHAREHOLDER MEETING
The Proxy Statement, Form 10-K and Annual Report are available at http://materials.proxyvote.com.
BALL CORPORATION 2020 PROXY STATEMENT | 1
Table of Contents
HOW TO VOTE
Shareholders
of record as of March 5, 2020, desiring to submit a proxy by telephone or via the Internet will be required to enter the unique voter control number imprinted on the proxy card.
You should have the proxy card available for reference when initiating this process.
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The deadline to vote is 11:59 p.m. EDT on April 28, 2020, unless you attend the annual meeting
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Registered holders
(shares are registered in your own name)
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Beneficial owners
(shares are held "in street name" in a stock brokerage account or by a bank, nominee or other holder of record)
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BY MOBILE DEVICE
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Scan the QR code
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Scan the QR code
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BY INTERNET
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Vote your shares online 24/7 at
www.proxyvote.com
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Vote your shares online 24/7 at
www.proxyvote.com
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BY TELEPHONE
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Call toll-free, 24/7: 1-800-690-6903
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Call toll-free 24/7: 1-800-690-6903
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BY MAIL
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If you requested printed copies of the proxy materials, please complete, date, sign and return your proxy card in the postage-paid envelope
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Complete, date, sign and return your voting information form in the postage-paid envelope
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IN PERSON
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Attend the Annual Meeting and vote by ballot
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You will need to present a valid photo ID
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There will be no formal presentation at the Annual Meeting
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Attend the Annual Meeting and vote by ballot
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You will need to present a valid photo ID
and proof of your stock ownership, such as a bank or brokerage account statement or letter from your broker
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There will be no formal presentation at the Annual
Meeting
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Voluntary E-delivery of Proxy Materials
Help the environment by consenting to receive electronic
delivery. Sign up at www.proxyvote.com.
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2 | WWW.BALL.COM/INVESTORS
Table of Contents
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CORPORATE GOVERNANCE HIGHLIGHTS
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9 of 11 directors are independent
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Only independent directors serve on Audit, Human Resources and Nominating and Corporate Governance Committees
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All committees have independent director chair
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Lead Independent Director has defined role that follows NYSE director independence standards
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4 of 11 directors are women
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4 of 11 directors are ethnically diverse
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Balanced director tenure
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Board composition represents diversity in gender, ethnicity, age, skills and experiences
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Director Retirement Policy mandates retirement age at 72
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Other Governance Best Practices
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All corporate governance documents are available on our website www.ball.com/investors under "Corporate Governance"
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Oversight of CEO and management performance
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Board and management succession planning
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Business Ethics Code of Conduct and Executive Officers and Directors Business Ethics Statement
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Rigorous compensation governance practices as discussed in the Executive Compensation Discussion and Analysis
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Comprehensive Enterprise Risk Management process
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Annual Board and Committee evaluations
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One-on-one meetings between the chair and each individual director
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Engagement of outside compensation consultant
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Regular executive sessions with nonmanagement and independent directors
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Orientation training for all new directors and ongoing continuous education programs
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Commitment to corporate social responsibility, environmental sustainability, and diversity and inclusion initiatives
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Stock ownership guidelines for directors and executive officers
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Each Board Committee has its own charter
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"Listening Tour" engagement with largest shareholders and the CEO and Lead Independent Director
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BALL CORPORATION 2020 PROXY STATEMENT | 3
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COMPANY SUSTAINABILITY, DIVERSITY & INCLUSION AND COMPANY ENGAGEMENT
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OUR COMMITMENT TO CORPORATE SOCIAL RESPONSIBLITY AND ENVIRONMENTAL SUSTAINABILITY
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At
Ball Corporation, we believe in our people, our culture and our ability to deliver value to our stakeholders. Like uncompromising integrity and customer focus, sustainability is part of our Drive
for 10 vision and has been a part of who we are since our founding in 1880.
Our
triple bottom-line approach to sustainabilityenvironmental, economic and socialhas evolved over the years and is the lens through which we conduct business at every level
of our organization today. Sustainability is a key part of our business strategy, and influences how we manage and operate our businesses, serve our customers, care for the environment and our
communities, secure profits and drive long-term prosperity.
We
focus our sustainability efforts on a variety of initiatives including product stewardship, operational excellence, human capital management EVA® generation and community engagement. In
our manufacturing operations around the world, we work on continuous improvement of employee safety and engagement, energy and water efficiency, reducing air emissions, and waste reduction and
recycling. And our commitment extends outside of our walls.
Today's
consumers are acutely aware of the plastic pollution crisis, and they are choosing brands based on sustainability. Customers understand this growing concern for the environment and their
unique position in impacting the environment, for better or worse, especially through the packaging materials they use. Infinitely recyclable and economically valuable, aluminum unlocks the full
potential of packaging to help customers convey values and purpose to consumers.
Aluminum
cans, bottles and now cups are an increasingly attractive option for sustainability-conscious brands and consumers who want to do the right thing for the environment. Unlike plastic, glass,
cartons or compostable containers, aluminum can be recycled again and again without losing quality, and is in high demand across industries and applications, pushing its collection, sorting and
recycling rates to the highest of any material. That's why 75% of all aluminum ever produced is still in use today.
In
2017, Resource Recycling Systems recognized aluminum beverage cans as the most recycled beverage package in the world, with a global average recycling rate of 69%. In comparison, only 43% of PET
and 46% of glass bottles were collected, although not necessarily recycled. These findings solidify aluminum beverage packaging as the leader in real recycling, where the package is collected and then
transformed into an item of equal value (product-to-product or material-to-material recycling). In the case of aluminum beverage packaging, which is monomaterial, a can, bottle or cup can be recycled
and made back into the same product in as little as 60 days. Plastic beverage containers, on the other hand, are typically down cycled into lower-value products such as carpet, railroad ties,
plastic lumber, etc., which will eventually end up in a landfill.
Because
recycling aluminum saves resources and uses significantly less energy than primary aluminum production, we are innovating and collaborating with our customers, supply chain, and other public
and private partners to establish and financially support initiatives to increase recycling rates. As two examples, we work together to create effective collection and recycling
systems and educate consumers about the sustainability benefits of aluminum packaging.
Our
aerospace business plays a role in sustainability as well. More and more, our systems are measuring key elements of the physical environment and supporting environmental monitoring and operational
weather forecasting programs, as well as providing environmental intelligence on weather, the Earth's climate system, precipitation, drought, air pollution, vegetation and biodiversity measurements.
The
data captured through Ball-built instruments and satellites enable an enhanced understanding of the Earth's ecosystem and the stratospheric ozone layer and severe storm tracking, and better
enabling effective management of natural resources, including helping experts to make routine drought assessments and fire prevention plans.
4 | WWW.BALL.COM/INVESTORS
Table of Contents
At
Ball, our sustained long-term success depends not only on our products and our operations, but on an engaged and sustainable workforce. We continue to invest in talent recruitment
and development to ensure we have the right people with the right skills in the right roles, and providing our employees with opportunities to advance their careers. We also are committed to embracing
diversity and providing an inclusive environment where employees can thrive. A focus on diversity among individuals and teams helps to unleash ideas and fuel innovation, which drives growth and
economic value throughout our global organization.
A
healthy and sustainable business also depends on thriving communities. Ball's commitment to the
communities
where we live and operate is an integral part of our corporate culture, as we continue to support organizations, programs and civic initiatives that advance sustainable
livelihoods. Community engagement is how our company and our employees enrich the places where we live and work beyond providing jobs, benefits and paying local taxes. Through the Ball Foundation,
corporate giving, employee giving and volunteerism, we invest in the future of the communities that sustain us. In 2018, Ball and its employees donated nearly $5.5 million and logged more than
42,000 hours of volunteer service to non-profit organizations centered on building sustainable communities through recycling, STEM education, and disaster preparedness and relief initiatives.
BALL CORPORATION 2020 PROXY STATEMENT | 5
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OVERVIEW OF DIRECTOR NOMINEES AND CONTINUING DIRECTORS
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COMMITTEES
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Director and
Principal Occupation
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Age
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Director Since
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Independent
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Audit
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Finance
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Human
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Nominating and
Corporate
Governance
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Other Current Public
Company Boards
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CLASS ICONTINUING DIRECTORS (FOR TERMS EXPIRING IN 2022)
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Daniel J. Heinrich
Former Executive VP and Chief Financial Officer, The Clorox Company
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2016
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Yes
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ARAMARK
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Edgewell Personal Care Company
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Georgia R. Nelson
Former President and Chief Executive Officer, PTI Resources, LLC
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2006
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Yes
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Cummins Inc.
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TransAlta Corporation
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Sims Metal Management Ltd.
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Cynthia A. Niekamp
Former Senior VP, Automotive Coatings,
PPG Industries, Inc.
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2016
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Yes
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Magna International Inc.
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Todd A. Penegor
President and Chief Executive Officer, The Wendy's Company
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2019
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Yes
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The Wendy's Company
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CLASS IIDIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2023)
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John A. Hayes
Chairman, President and Chief Executive Officer, Ball Corporation
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2010
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None
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Cathy D. Ross
Former Chief Financial Officer and Executive VP, FedEx Express
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2017
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Yes
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Steelcase, Inc.
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Betty Sapp
Former Director, U.S. National Reconnaissance Office
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2019
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Yes
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None
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Stuart A. Taylor II
Chief Executive Officer, The Taylor Group LLC
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1999
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Yes
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Hillenbrand, Inc.
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Wabash National
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CLASS IIICONTINUING DIRECTORS (FOR TERMS EXPIRING IN 2021)
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John A. Bryant
Former Chief Executive Officer, Kellogg Company
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54
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2018
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Yes
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Macy's Inc.
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Compass PLC
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Michael J. Cave
Former Senior VP, The Boeing Company; Former President, Boeing Capital Corp.
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59
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2014
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Yes
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§
Harley-Davidson, Inc.
§
Aircastle Limited
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Pedro Henrique Mariani
Member of the Board, Banco Bocom BBM
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66
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2017
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§
None
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Number of Meetings in 2019:
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Board: 6
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5
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4
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5
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4
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Total: 24
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Committee Chair
Committee Member
Lead Independent
Director
Audit Committee financial expert
6 | WWW.BALL.COM/INVESTORS
Table of Contents
BOARD COMPOSITION AND ATTRIBUTES
In
considering candidates for Board positions, our Nominating and Corporate Governance Committee consistently applies the principles of diversity and inclusion to its recruitment process. In addition
to seeking characteristics such as business and professional experience, education and skills, the Committee utilizes a robust review process that considers a variety of other factors including race,
gender and national origin. In addition, differing viewpoints, experience, and skillsets have contributed to a diverse group of talented and capable Board members.
BALL CORPORATION 2020 PROXY STATEMENT | 7
Table of Contents
8 | WWW.BALL.COM/INVESTORS
Table of Contents
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EXECUTIVE COMPENSATION HIGHLIGHTS
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Positive
momentum in our aluminum beverage packaging and aerospace businesses continued during 2019. With increased global customer and consumer demand for sustainable aluminum packaging solutions and
aerospace services and technologies for the U.S. Government, we stayed the course with critical investments in operations, systems and talent. Our focus on long-term earnings and cash flow allowed us
to return approximately $1.1 billion to shareholders and generate $217 million of EVA® dollars.
2019 Our Financial Highlights
-
*
-
Certain
of these financial measures are on a non-U.S. GAAP basis and should be considered in connection with the Consolidated Financial Statements contained
within Item 8 of the 2019 Annual Report on Form 10-K (the "Annual Report"). Non-U.S. GAAP measures should not be considered in isolation and should not be considered superior to,
or a substitute for, financial measures calculated in accordance with U.S. GAAP. A reconciliation of non-GAAP measures to U.S. GAAP is available in Items 6 and 7 of the Annual
Report.
Compensation Policies and Practices
Our
compensation philosophy is to pay executive management for performance over the long-term, as well as on an annual basis. Our performance considerations include solely financial
measuresincluding the manner in which results are achievedfor the Company, each line of business, and the individual. These considerations reinforce and promote responsible
growth and maintain alignment with our risk framework. Our executive compensation program provides a mix of salary, incentives, and benefits paid over time to align executive officer and shareholder
interests, and sound practices and policies advance the continuous improvement and accountability of our executive compensation program:
BALL CORPORATION 2020 PROXY STATEMENT | 9
Table of Contents
-
§
-
Our Human Resources (HR) Committee, composed entirely of independent directors, meets
regularly with executives and senior management;
-
§
-
an independent compensation consultant is engaged and reports directly to the HR
Committee;
-
§
-
total compensation is reviewed via tally sheets;
-
§
-
we externally benchmark compensation levels and incentive design practices;
-
§
-
dividend equivalents for stock awards which accrue during the vesting and/or
performance periods are paid only if vesting terms and/or performance measures are achieved;
-
§
-
nominal perquisites are not grossed-up for taxes;
-
§
-
ongoing assessment of the relationship between risk and compensation programs;
-
§
-
executive stock ownership guidelines for executives and directors;
-
§
-
anti-hedging and anti-pledging policies for our executives and directors;
-
§
-
a shareholder-approved "clawback" provision for cash incentive and stock compensation,
which in the case of fraud or intentional misconduct by any executive at a level of vice president or above may result in full reimbursement of any incentive compensation or cancellation of any
outstanding awards to the executive; and
-
§
-
change-in-control agreements with multiples that do not exceed two times pay and
require a termination of employment following a change in control ("double trigger") before severance benefits are due; for change-in-control agreements entered into after January 1, 2010,
excise tax gross-ups were eliminated.
2019 Target Total Compensation Mix
Consistent
with our pay-for-performance and our management-as-owners philosophy, the majority of the target total compensation for our executives is variable and strictly based on performance, which
constitutes pay at risk. Our CEO is eligible to participate in the same executive programs as other NEOs; however, a larger portion of the CEO target total compensation is at risk. The emphasis on
longer term compensation, through performance-based long-term cash and stock awards, ensures a strong continued alignment between our executives and shareholder interests.
2019 CEO TARGET COMPENSATION MIX
2019 AVERAGE OTHER NEO TARGET COMPENSATION
10 | WWW.BALL.COM/INVESTORS
Table of Contents
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PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
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Proposal
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Board's Voting
Recommendation
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► See
page
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1
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To elect four Class II director nominees to serve for a three-year term expiring at the annual meeting in 2023
■ John A. Hayes ■ Cathy D.
Ross ■ Betty Sapp ■ Stuart A. Taylor II
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FOR each nominee
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76
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2
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To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Corporation for 2020
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FOR
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77
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3
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To approve, by non-binding advisory vote, the compensation of the named executive officers ("NEOs") as disclosed in the following Proxy Statement
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FOR
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78
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To consider any other business as may properly come before the meeting, although it is anticipated that no business will be conducted other than the matters listed above
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BALL CORPORATION 2020 PROXY STATEMENT | 11
Table of Contents
BOARD AND CORPORATE GOVERNANCE
|
At
Ball Corporation, we believe key qualities of a board member include, vison, leadership, stewardship, knowledge, diligence, collegiality and discretion. Our directors exhibit these qualities as
evidenced by their deep interest and understanding in the mission of the organization, the ability to see the big picture and the courage to set direction to achieve the organization's goals, and the
integrity to serve the interests and pursue the objectives of the organization, as well as the interests of our shareholders.
BOARD COMPOSITION
Tenure
The Corporation has a mandatory retirement age of 72 for all Board members in part to ensure the board benefits from a balanced mix of
perspectives. The Board is well balanced with a mix of long-standing directors and new directors who have joined the Board in the last six years.
12 | WWW.BALL.COM/INVESTORS
Table of Contents
BOARD AND CORPORATE GOVERNANCE
|
Experience
The Board is composed of members with diverse qualifications and experience that support the Corporation's business strategy and future
business needs.
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Director Skills, Experiences and Attributes
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# of 11 Directors
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Corporate governance
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n
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n
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n
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n
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n
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n
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n
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n
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n
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9
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Executive leadership
|
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n
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n
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n
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n
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n
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n
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n
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n
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n
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n
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n
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11
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Finance and accounting
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n
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n
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n
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n
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n
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n
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n
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n
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n
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n
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n
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11
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Global business
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n
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n
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n
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n
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n
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n
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n
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n
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n
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9
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Aerospace and defense
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n
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n
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n
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3
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Operations and business strategy
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n
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n
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n
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n
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n
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n
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n
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n
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8
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Public company board experience
|
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n
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n
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n
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n
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n
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n
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n
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n
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8
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Relevant industry experience
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n
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n
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n
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n
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n
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n
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n
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n
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8
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|
BALL CORPORATION 2020 PROXY STATEMENT | 13
Table of Contents
BOARD AND CORPORATE GOVERNANCE
|
DIRECTOR NOMINEES
Class II Directors (Terms Expiring in 2023)
|
|
|
|
|
|
|
|
|
|
|
JOHN A. HAYES
|
|
|
|
|
|
CATHY D. ROSS
|
Director since 2016
Chairman since 2013
§
Age 54
COMMITTEES
§
None
CAREER HIGHLIGHTS
Mr. Hayes has been Chairman, Ball
Corporation since April 2013; President and Chief Executive Officer, Ball Corporation, since January 2011. He was President and Chief Operating Officer, January 2010 to January 2011; Executive Vice President and Chief Operating Officer, 2008 to 2010;
President, Ball Packaging Europe and Senior Vice President, Ball Corporation, 2006 to 2008; Executive Vice President, Ball Packaging Europe and Vice President, Ball Corporation, 2005 to 2006; Vice President, Corporate Strategy, Marketing and
Development, 2003 to 2005; Vice President, Corporate Planning and Development, 2000 to 2003; Senior Director, Corporate Planning and Development, 1999.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
Prior to joining Ball Corporation in 1999, Mr. Hayes was a Vice
President at Lehman Brothers Inc. and part of an investment banking team which focused on mergers and acquisitions and financing advice to several major companies, including Ball Corporation. At Ball, Mr. Hayes initially headed the
corporate development and planning activities as Senior Director and then Vice President, Corporate Planning and Development, taking on the added responsibilities of marketing and new product development from 2003 to mid-2005. He then served as
President of Ball Packaging Europe, which under his leadership generated excellent financial results and strong revenue growth. During 2008 and 2009, Mr. Hayes served as Ball's Executive Vice President and Chief Operating Officer, successfully
leading our key operating divisions through the economic and financial crisis. In January 2010, he was named our President and Chief Operating Officer and joined the Ball Board. In January 2011, he became our President and Chief Executive Officer,
and in April 2013 he also became our Chairman. Mr. Hayes' extensive investment banking and leadership expertise, and his tenure at Ball, including as CEO for the past nine years, make him well qualified to serve as a director.
|
|
|
|
§
Independent Director since 2017
§
Age 62
COMMITTEES
§
Audit
§
Nominating and Corporate Governance
CAREER HIGHLIGHTS
Ms. Ross was chief financial officer and executive vice president, FedEx Express from 2010 until her
retirement in July 2014. Prior to that, Ms. Ross was senior vice president and chief financial officer of FedEx Express from 2004 until 2010; and Vice President, Express Financial Planning from 1998 to 2004. In the past five years, she has also
served on the board of Avon Products, Rye, New York.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
As an executive of Federal Express, Ms. Ross was responsible for the company's worldwide financial affairs, including financial planning, reporting and analysis,
accounting and controls, as well as long-range strategic planning. Ms. Ross' 30-year career with Federal Express began in 1984 as a senior financial analyst, and she held numerous other leadership roles of increasing responsibility during her
tenure at Federal Express. Prior to joining Federal Express, Ms. Ross worked for Kimberly-Clark Corporation as a cost analyst and a cost analyst supervisor from 1982 until 1984. She also worked for a subsidiary of Procter and Gamble.
Ms. Ross holds a master's degree in business administration from the University of Memphis and a bachelor's degree from Christian Brothers University in Memphis. Ms. Ross' leadership roles, financial expertise and experience, as well as
service on other global public company boards make her well qualified to serve as a director.
|
OTHER CURRENT PUBLIC COMPANY BOARDS
§
None
|
|
|
|
OTHER CURRENT PUBLIC COMPANY BOARDS
§
Steelcase, Inc.
|
14 | WWW.BALL.COM/INVESTORS
Table of Contents
BOARD AND CORPORATE GOVERNANCE
|
|
|
|
|
|
|
|
|
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|
|
BETTY SAPP
|
|
|
|
|
|
STUART A TAYLOR II
|
|
|
|
|
|
|
§
Independent Director since 1999
|
§
Independent Director since 2019
§
Age 64
COMMITTEES
§
Finance
§
Human Resources
CAREER HIGHLIGHTS
Ms. Sapp joined the National Reconnaissance Office (NRO), a joint Department of DefenseIntelligence Community organization, in 1997 and was named the first woman to
serve as director of the NRO in 2012. After serving as the 18th director of the NRO, Ms. Sapp retired in June 2019. Prior to working at the NRO, Ms. Sapp was Deputy Under Secretary of Defense for Portfolio, Programs and Resources in
the Office of the Under Secretary of Defense for Intelligence. She also spent several years at the Central Intelligence Agency after spending the earlier part of her career as an officer of the United States Air Force.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
Ms. Sapp served in a variety of strategic leadership roles at the NRO and within the U.S. government. In 2009, Ms. Sapp was appointed the Principal Deputy Director of the NRO. She was then appointed Director of the NRO in 2012.
Ms. Sapp also served in the United States Air Force for 17 years in various acquisition and financial management positions on space and satellite programs.
Ms. Sapp holds a bachelor's degree in biological sciences, magna cum laude, from the University of Missouri and a master's degree in business administration from the University of Missouri-Columbia. Ms. Sapp is Level III certified in
government acquisition and was certified as a defense financial manager. Ms. Sapp's leadership experience and extensive government and defense expertise make her well qualified to serve as a director.
|
|
|
|
§
Lead Independent Director since 2019
§
Age 59
COMMITTEES
§
Human Resources
§ Nominating and Corporate Governance
CAREER HIGHLIGHTS
Mr. Taylor has been the
Chief Executive Officer, The Taylor Group LLC, Chicago, Illinois, since June 2001; he was Senior Managing Director, Bear, Stearns & Co. Inc., Chicago, Illinois, 1999 to 2001. In the past five years, he also served on the board
of Essendant, Inc., Deerfield, Illinois.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
Prior to starting his own private equity firm, Mr. Taylor spent 19 years in investment banking. The majority of that time was spent at Morgan Stanley in its Corporate
Finance Department. In that capacity he executed a number of mergers and acquisitions and financings, including working with Ball in 1993 on the acquisition of Heekin Can Company. He also spent time at several other firms including Bear Stearns where
he was a Senior Managing Director and Head of the Chicago office. In 2001, Mr. Taylor established The Taylor Group LLC, of which he is Chief Executive Officer, a successful investment company that primarily invests in small to mid-market
businesses. Mr. Taylor has served on the board of directors of Ball since 1999, acted as our Presiding Director from 2004 to 2008 and was elected Lead Independent Director in 2019. Mr. Taylor's extensive experience as an investment banker,
entrepreneurial investor and Board member make him well qualified to serve as a director.
|
|
|
|
|
|
OTHER CURRENT PUBLIC COMPANY BOARDS
§
None
|
|
|
|
OTHER CURRENT PUBLIC COMPANY BOARDS
§
Hillenbrand Inc.
§
Wabash National
|
BALL CORPORATION 2020 PROXY STATEMENT | 15
Table of Contents
BOARD AND CORPORATE GOVERNANCE
|
DIRECTORS CONTINUING IN OFFICE
Class I Directors
(Terms Expiring in 2022)
|
|
|
|
|
|
|
|
|
|
|
DANIEL J. HEINRICH
|
|
|
|
|
|
GEORGIA R. NELSON
|
§
Independent Director since 2016
§
Age 63
COMMITTEES
§ Audit
§
Human Resources
CAREER HIGHLIGHTS
Mr. Heinrich was executive vice president and chief financial officer of The Clorox Company from 2003 to 2011. Previous corporate roles include senior vice president and
treasurer at Transamerica Finance Corporation; senior vice president, treasurer and controller at Granite Management Company; and senior vice president, chief accounting officer and controller at First Nationwide Bank.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
Mr. Heinrich joined The Clorox Company in 2001 as vice president and controller and served as its executive vice president and chief financial officer from 2003 until 2011. As CFO for Clorox, Mr. Heinrich served as a member of its executive
and employee benefits committees, secretary to the audit and finance committees of the board, and board member for most of the company's subsidiaries. He had senior management responsibility for the financial aspects of a large, global organization
including its global business services, mergers and acquisitions, accounting, tax and information technology activities. Mr. Heinrich's extensive management and board experience make him well qualified to serve as a director.
|
|
|
|
§
Independent Director since 2006
§
Age 70
COMMITTEES
§ Human Resources
§
Nominating and Corporate Governance
CAREER
HIGHLIGHTS
Ms. Nelson was President and Chief Executive Officer, PTI Resources, LLC, Chicago, Illinois, from 2005 to 2019; was President,
Midwest Generation EME, LLC, Chicago, Illinois, April 1999 to June 2005; and was General Manager, Edison Mission Energy Americas, Irvine, California, January 2002 to June 2005.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
Ms. Nelson has enjoyed a successful
career in the energy industry, serving as a senior executive for several U.S. and international energy companies, including as President of Midwest Generation EME, LLC from April 1999 to June 2005 and General Manager of Edison Mission Energy
Americas from January 2002 to June 2005. She has extensive international experience as well as environmental and policy experience on four continents. Ms. Nelson lectures on business and corporate governance matters including at Northwestern
University's Kellogg Graduate School of Management, and serves on the advisory committee of the Center for Executive Women at Northwestern. Ms. Nelson is a National Association of Corporate Directors ("NACD") Board Leadership Fellow.
Ms. Nelson's leadership roles in global businesses, as well as her service on other company boards, make her well qualified to serve as a director.
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OTHER CURRENT PUBLIC COMPANY BOARDS
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ARAMARK
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Edgewell Personal Care Company
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OTHER CURRENT PUBLIC COMPANY BOARDS
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Cummins Inc.
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Sims Metal
Management Ltd.
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TransAlta Corporation
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BOARD AND CORPORATE GOVERNANCE
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CYNTHIA A. NIEKAMP
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TODD A. PENEGOR
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Independent Director since 2016
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Age 60
COMMITTEES
§
Finance
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Human Resources
CAREER HIGHLIGHTS
Ms. Niekamp is a former senior executive of PPG Industries, Inc., having served from 2009 to 2016 as senior vice president of automotive coatings. Prior to that, she was
president and general manager of TorqTransfer Systems at BorgWarner Inc.; senior vice president and chief financial officer at MeadWestvaco Corporation (now WestRock Company); and held various leadership roles at TRW, Inc. and General
Motors Company.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
Ms. Niekamp joined PPG in 2009 as vice president of automotive coatings and was promoted to senior vice president in 2010. She had responsibility for a multi-billion revenue business with
operations across 15 countries and more than 6,000 employees. She also served as a member of the PPG operating committee until her retirement in 2016. While at PPG, Ms. Niekamp charted and implemented a strategy to improve the financial
performance of the business unit and to double its revenues. She also accelerated growth into emerging countries, diversified the customer base and pursued strategic acquisitions. Previously, Ms. Niekamp served as president and general manager
of BorgWarner's TorqTransfer Systems division, a supplier of four-wheel drive systems to major automakers. In addition, Ms. Niekamp served in various executive roles for MeadWestvaco Corporation, including vice president, corporate strategy and
specialty operations and chief financial officer, and has previously served on four other publicly traded company boards. She is also a NACD Board Leadership Fellow. Ms. Niekamp's extensive management and board experience make her well qualified
to serve as a director.
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Independent Director since 2019
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Age 54
COMMITTEES
§ Audit
§
Nominating and Corporate Governance
CAREER
HIGHLIGHTS
Mr. Penegor joined The Wendy's Company as senior vice president and chief financial officer in 2013. He was named president and Chief
Executive officer in 2016. Prior to joining Wendy's, Mr. Penegor held a series of key leadership roles at Kellogg Company and Ford Motor Company.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
Mr. Penegor has extensive experience as an executive in the food
products and consumer goods industries. He joined The Wendy's Company in 2013 as Senior Vice President and Chief Financial Officer. He was promoted to Executive Vice President, Chief Financial Officer and International in 2014 and then became
President and Chief Financial Officer in 2016. Later that year, he was promoted to President and Chief Executive Officer. Prior to joining The Wendy's Company, Mr. Penegor worked at Kellogg Company, a global leader in food products, from 2000 to
2013 where he held several key leadership positions. Mr. Penegor also worked for 12 years at Ford Motor Company in various positions, including in strategy, mergers and acquisitions, the controller's office and treasury. In addition to his
role on the board at Ball, Mr. Penegor also serves as a board member on Michigan State University's Eli Broad College of Business Advisory Board. He also serves on the board of trustees of the Dave Thomas Foundation for adoption.
Mr. Penegor holds a Bachelor of Science degree in accounting and a Master of Business Administration in finance from Michigan State University. Mr. Penegor's extensive experience as a senior executive at leading U.S. based public companies,
including as the current Chief Executive Officer of The Wendy's Company, make him well qualified to serve as a director.
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OTHER CURRENT PUBLIC COMPANY BOARDS
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Magna International Inc.
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OTHER CURRENT PUBLIC COMPANY BOARDS
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The Wendy's Company
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Table of Contents
BOARD AND CORPORATE GOVERNANCE
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Class III Directors (Terms Expiring in 2021)
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JOHN A. BRYANT
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MICHAEL J. CAVE
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Independent Director since 2018
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Age 54
COMMITTEES
§ Audit
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Nominating and Corporate Governance
CAREER HIGHLIGHTS
Mr. Bryant was an executive
at Kellogg Company for 20 years and was its Chief Executive Officer from January 2011 to September 2017.
SPECIFIC QUALIFICATIONS,
ATTRIBUTES, SKILLS AND EXPERIENCE
Mr. Bryant joined Kellogg Company in 1998 and held a variety of roles including Chief Financial Officer; President,
North America; President, International; and Chief Operating Officer before becoming Chief Executive Officer in January 2011. He retired as Chairman of the Board in March 2018 and Chief Executive Officer in September 2017. In addition to his role on
Ball's board, Bryant serves as a board member of Macy's Inc., and Compass PLC. He has also served as a trustee of the W.K. Kellogg Foundation Trust, and on the Boards of Directors of Catalyst and The Consumer Goods Forum. Mr. Bryant
has extensive knowledge and expertise in accounting and financial matters, branded consumer products and consumer dynamics, crisis management, international markets, people management, manufacturing and strategy, and strategic planning.
Mr. Bryant's extensive experience as a senior executive at a leading U.S. based public company, including as its Chief Executive Officer for seven years, make him well qualified to serve as a director.
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Independent Director since 2014
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Age 59
COMMITTEES
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Audit
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Finance
CAREER HIGHLIGHTS
Mr. Cave was Senior Vice President,
The Boeing Company, and President of Boeing Capital Corp. from 2010 to 2014, and served for many years in senior management positions at Boeing. In the past five years, he has also served on the board of Esterline Technologies, Bellevue, Washington.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
Mr. Cave served for 31 years in various managerial capacities for The Boeing Company. Most recently, Mr. Cave served as Senior Vice President and President of Boeing Capital Corp.,
a subsidiary of The Boeing Company, from 2010 to 2014. Prior to that, he served as Senior Vice President of Business Development and Strategy at The Boeing Company, as well as Vice President of Business Strategy & Marketing of Boeing
Commercial Airplanes from 2006 until late 2009. Mr. Cave also served as Vice President & General Manager of Boeing's Airplane Programs division and focused on the strategy, product development and business results associated with those
products. From 2003 to 2006, Mr. Cave served as the Chief Financial Officer of Boeing's Commercial Airplanes division and held various other senior positions prior to 2003. In addition to his accounting and financial expertise, Mr. Cave has
broad experience in marketing and informational systems. He also serves on the Boards of Directors of Harley Davidson, Inc. (and as its presiding director) and Aircastle Limited. In 2004, Mr. Cave was honored with the Award for Executive
Excellence by the Hispanic Engineer National Achievement Awards Corporation. His extensive board and management experience and qualifications make him well qualified to serve as a director.
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OTHER CURRENT PUBLIC COMPANY BOARDS
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Macy's Inc.
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Compass PLC
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OTHER CURRENT PUBLIC COMPANY BOARDS
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Harley-Davidson, Inc.
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Aircastle Limited
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BOARD AND CORPORATE GOVERNANCE
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PEDRO HENRIQUE MARIANI
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Director since 2017
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Age 66
COMMITTEES
§ Finance
CAREER HIGHLIGHTS
Mr. Mariani joined BBM Group in 1981 and was elected to the executive committee of Banco BBM in 1983. He was appointed its Chief Executive Officer in 1991. Currently, he is the Chief Executive Officer and Chairman of the Board of Directors at
Banco Bocom BBM. Mr. Mariani was President of ANBID (Brazilian Association of Investment Banks) between 1996 and 2000, and was a member of the Brazilian Financial System Council from 1988 to 1996. From 1995 to 2015, Mr. Mariani was an ex
officio member of the Board of Directors of Latapack Ball Embalagens Limitada, which was a joint venture between Ball Corporation and its Brazilian partners that owned and operated a successful beverage can business in Brazil with annual revenues in
excess of $590 million in 2015, the year in which Ball acquired the equity interests of its partners. Mr. Mariani and his family have also held interests in packaging and other businesses in Brazil for many years.
SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE
Mr. Mariani holds a bachelor's degree in economics from Pontifícia Universidade Católica do Rio de JaneiroPUC/RJ, Brazil, with specialization in Econometrics and
Operational Research. Mr. Mariani's professional background, packaging industry expertise, banking experience, as well as his financial acumen and knowledge of South America make him well qualified to serve as a director.
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OTHER CURRENT PUBLIC COMPANY BOARDS
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None
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Table of Contents
BOARD AND CORPORATE GOVERNANCE
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BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT
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We
believe our current Board of Directors benefits from a blend of recently added directors with fresh perspectives and longer-serving directors with extensive experience and a deep
understanding of our business. Over the past several years, a number of directors have retired bringing opportunities to enhance the composition of our Board. The Board has worked diligently to
develop a succession plan that has and will continue to serve our management, employees and shareholders. As part of this transformational journey, our Board purposefully planned for the known
director retirements by carefully designing and executing searches to replace departing directors with directors who possessed comparable and value added skill sets. The composition of the Board has
been refreshed with an eye towards critical financial, organizational and industry expertise, diversity, balance of tenure, and other important factors. Key highlights of our Board refresh journey
include:
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8 of 11 directors have joined the Board since 2014
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our current Board reflects increased diversity with strong experience
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the Board elected Mr. Stuart Taylor as lead independent director in April 2019
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the average age of our directors is 60 years
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the average tenure of our directors is 6 years
The
Board transformation has coincided with a number of significant changes in our business including the Rexam beverage packaging acquisition in 2016, the growth of our aerospace business and the
divestitures of our steel food, and aerosol and Chinese beverage packaging businesses. The Board is also focused on onboarding of new directors, Board education, and team building to preserve the
Board's cohesive, professional and collaborative environment. An off-site retreat with the full Board, key management team members and external experts in areas including cybersecurity and
sustainability was conducted in the fall of 2019 to review the evolving needs of the organization, as well as to reinforce collaboration among Board members.
In
2013, John A. Hayes was named Chairman of the Board, having been elected a director in 2010. In 2011, prior to his election as Chairman, Mr. Hayes was named President and Chief Executive
Officer ("CEO"). Mr. Hayes assumed the position of Chairman after more than 14 years with Ball, most recently serving as President and CEO and a member of the Board.
Our
Board of Directors is currently composed of Mr. Hayes, as well as 10 other directors, all of whom are independent directors, except for Mr. Hayes and Mr. Mariani. The Board
has four standing committeesAudit, Nominating and Corporate Governance, Human Resources and Finance. Each of the committees, except for Finance, is composed solely of independent
directors (the Finance Committee is primarily composed of independent directors), with each of the four committees having an independent director serving as chair.
Board
leadership structure is a critical issue for many shareholders. The Board believes that ensuring independent and strong leadership is key to building long-term shareholder value, and we are
confident our shareholders are well served by the traditional board leadership structure that combines the roles of Chairman and Chief Executive, and is supported by a strong Lead Independent Director
in Mr. Taylor. While the Board assesses maintaining the combined role from time to time, the Board believes that Mr. Hayes is best situated to serve as Chairman as he is the director
most familiar with our business and industry both domestically and internationally and is therefore best able to identify the strategic and operational priorities to be discussed by the Board. The
Board also believes that combining the role of Chairman and CEO facilitates information flow between management and the Board and fosters strategic development and execution.
As
Lead Independent Director, Mr. Taylor's responsibilities include:
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§
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coordinating the activities of the independent directors, including calling meetings
of the independent directors
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coordinating with the CEO and corporate secretary to set the agenda for Board meetings
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chairing executive sessions of the independent directors
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providing feedback and perspective to the CEO about discussions among the independent
directors
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helping facilitate communication between the CEO and the independent directors
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presiding at Board meetings where the Chair is not present
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performing other duties assigned from time to time by the Board
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BOARD AND CORPORATE GOVERNANCE
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In
addition, the Board maintains effective independent oversight through a number of governance practices, including open and direct communication with management, input on meeting agendas, annual
performance evaluations and regular executive sessions.
Pursuant
to SEC and New York Stock Exchange ("NYSE") rules, regularly scheduled executive sessions of nonmanagement directors are held. Nonmanagement Board members meet as a separate
group at each regularly scheduled Board meeting, and executive sessions of independent directors are also held at least annually. Such meetings, chaired by the Lead Independent Director, promote open
discussion by nonmanagement and independent directors enabling them to serve as a check on management.
In
accordance with NYSE requirements, our Board of Directors is responsible for overseeing the risk management function. While the Audit Committee has primary responsibility for overseeing key aspects
of financial and legal risk management, the entire Board is involved in overseeing enterprise risk management. Additionally, each Board committee considers the specific risks within its area of
responsibility. Our Internal Audit Department has, for many years, analyzed various areas of risk to our business and has provided risk assessment and analysis to our Audit Committee. In 2007, we
established a comprehensive Enterprise Risk Management
process
to ensure ongoing attention to various potential risk areas, and which is now supervised by our Senior Vice President and Chief Financial Officer. Key corporate and divisional risks are
systematically identified and assessed on a regular basis. The results of this ongoing risk assessment are reported to our Audit Committee and to our Board at least annually, and were extensively
reviewed by the directors at the October 2019 Board meeting.
One
of the responsibilities of our Board of Directors is to evaluate the effectiveness of the Board and make recommendations involving its organization and operation. The Board annually conducts a
robust self-evaluation process that is reviewed each year. One-on-one meetings with each Director are conducted by the Chair to discuss the evaluations and any
other matters raised by the Directors. We recognize different board leadership structures may be appropriate for different companies and at different times. We believe our current leadership structure
provides the most effective form of leadership for our organization at this time. We believe that our directors provide effective oversight of risk management through the Board's regular dialogue with
management members, the Enterprise Risk Management process, annual Board and Committee self-evaluation, and assessment of specific risks within each Board committee area of responsibility.
BOARD DIVERSITY
Our
Nominating and Corporate Governance Committee works with a globally-recognized consulting firm to identify potential Board candidates. Working with a set of specifically designed
guidelines and a matrix of characteristics including characteristics of diversity, the firm is able to comprehensively assess Board candidates. After a thorough review process by our consultant
against the criteria that have been provided, the pool of qualified candidates is presented to the Committee. Selected candidates are further assessed and interviewed by the Committee, and by other
Board members, considering the values and needs of the organization.
Our
Board embodies the principle of diversity. Over the past six years, we have added eight new directors to the Board, each of whom has significantly enhanced the diversity of the Board of Directors,
creating a Board that reflects the diversity and inclusion of the organization. The Committee will continue to identify opportunities to improve the skills, qualifications, independence, diversity,
tenure and refreshment of our Board when considering candidates in the future.
DIRECTOR TRAINING
All
new directors receive orientation training soon after being elected to the Board. Continuing education programs are made available to directors including internal presentations,
third-party presentations and externally offered programs. Three directors attended external director training programs in 2019.
BALL CORPORATION 2020 PROXY STATEMENT | 21
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BOARD AND CORPORATE GOVERNANCE
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CONTACTING OUR BOARD
Shareholders
or others can send communications to the Board. Persons interested in communicating with the Board, its individual directors or its committees may send communications in writing to the
Corporate Secretary or the Chairman of the Board. The communication should be sent in care of the Corporate Secretary:
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Ball Corporation
Attention: Corporate Secretary
P.O. Box 5000
Broomfield, Colorado 80038-5000
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Fax 303-460-2691
Attention: Corporate Secretary
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In
accordance with the NYSE and SEC requirements, the Corporation has established additional means for interested parties to send communications to the Board and selected committees,
which are described on our website at www.ball.com/investors under "Corporate Governance."
Shareholder
proposals for inclusion in the Corporation's proxy materials must be communicated as disclosed in this Proxy Statement under "Shareholder Proposals for 2020 Annual Meeting."
MEETINGS OF NONMANAGEMENT AND INDEPENDENT DIRECTORS
The
Board meets regularly and not less than four times per year. Nonmanagement directors meet as a separate group at each regularly scheduled Board of Directors meeting. Independent directors meet at
least annually. Mr. Taylor serves as Lead Independent Director.
DIRECTOR INDEPENDENCE STANDARDS
Pursuant
to the NYSE Listing Standards, the Board has adopted a policy adhering to the director independence requirements of the NYSE in determining the independence of directors. These standards are
described on our website at www.ball.com/investors under "Corporate Governance." The Board has determined that a majority of the Board is independent. Based upon
the NYSE director independence standards, during 2019 each of the members of the Board was and currently is independent with the exception of Messrs. Hayes and Mariani.
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BOARD AND CORPORATE GOVERNANCE
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BOARD AND COMMITTEE MEMBERSHIP
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BOARD MEETINGS AND ANNUAL MEETING
The
members of the Board are expected to attend all meetings of the Board, relevant committee meetings and the Annual Meeting of Shareholders. The Board held six meetings during 2019. Every
legacy director attended 80% or more of the aggregate of the total number of meetings of the Board and the total number of meetings held by all committees of the Board on which the director served.
All directors at the time attended the 2019 Annual Meeting. Mr. Penegor and Ms. Sapp attended all Board and applicable committee meetings since their respective appointments.
BOARD COMMITTEES
The Board has an Audit Committee, Finance Committee, Human Resources Committee and Nominating and Corporate Governance Committee.
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COMMITTEES
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Director
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Independent
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Audit
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Finance
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Human Resources
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Nominating and
Corporate Governance
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CLASS ICONTINUING DIRECTORS (FOR TERMS EXPIRING IN 2022)
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Daniel J. Heinrich
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Yes
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Georgia R. Nelson
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Yes
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Cynthia A. Niekamp
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Yes
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Todd A. Penegor
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Yes
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CLASS IIDIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2023)
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John A. Hayes
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Cathy D. Ross
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Yes
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Betty Sapp
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Yes
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Stuart A. Taylor II
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Yes
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CLASS IIICONTINUING DIRECTORS (FOR TERMS EXPIRING IN 2021)
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John A. Bryant
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Yes
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Michael J. Cave
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Yes
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Pedro Henrique Mariani
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Meetings in 2019
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Board: 6
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5
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4
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5
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4
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BALL CORPORATION 2020 PROXY STATEMENT | 23
Table of Contents
BOARD AND CORPORATE GOVERNANCE
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AUDIT COMMITTEE
MEMBERS
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§
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Cathy D. Ross
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§
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John A. Bryant
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Michael J. Cave
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Daniel J. Heinrich
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Todd A. Penegor
MEETINGS IN FISCAL 2019
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The Board has determined that each member of the Audit Committee is independent and financially literate, has accounting or financial management expertise and is an Audit Committee financial expert under the NYSE Listing
Standards and the SEC regulations.
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AUDIT COMMITTEE CHARTER AND REPORT
Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the NYSE listing. A copy of the charter of our audit committee is available on
the Corporate Governance section of our website at www.ball.com/investors.
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►
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The Report of the Audit Committee appears on page 75 of this Proxy
Statement.
The
Committee has considered the non-audit services provided during 2019 and 2018 by the independent auditor as disclosed below and determined the services were compatible with
maintaining the auditor's independence. The Committee believes the fees paid to the independent auditor in respect of the services were appropriate, necessary and cost-efficient in the management of
the business of the Corporation and are compatible with maintaining the auditor's independence.
PRIMARY RESPONSBILITIES
The
primary purpose of the Audit Committee is:
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§
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to assist the Board in fulfilling its responsibilities to oversee management's conduct
and the integrity of the Corporation's public financial reporting process, including the oversight of:
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(1)
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accounting
policies;
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(2)
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the
system of internal accounting controls over financial reporting;
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(3)
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disclosure
controls and procedures;
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(4)
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the
performance of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Corporation (the "independent auditor");
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(5)
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the
Internal Audit Department; and
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(6)
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the
Legal and Regulatory compliance.
The
Audit Committee is also responsible for:
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engaging and evaluating the Corporation's independent auditor and its lead engagement
partner, including the qualifications and independence of both;
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resolving any differences between management and the independent auditor regarding
financial reporting;
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reviewing and preapproving all audit and non-audit fees and services provided by the
independent auditor; and
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establishing procedures for the receipt, retention and treatment of complaints
regarding accounting, internal accounting controls or auditing matters.
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BOARD AND CORPORATE GOVERNANCE
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FINANCE COMMITTEE
MEMBERS
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Michael J. Cave
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Cynthia A. Niekamp
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Pedro Henrique Mariani
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Betty Sapp
MEETINGS IN FISCAL 2019
FINANCE COMMITTEE CHARTER
A copy of the charter of our finance committee is available on the Corporate Governance section of our website at www.ball.com/investors.
PRIMARY RESPONSBILITIES
The
primary purposes of the Finance Committee are:
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to assist the Board in fulfilling its responsibility to oversee:
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(1)
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management
in the financing and related risk management of the Corporation;
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(2)
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the
status of the Corporation's retirement plans and insurance policies;
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(3)
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the
Corporation's policies relating to interest rates, commodity hedging and currency hedging;
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(4)
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the
hiring of experts, as deemed appropriate to advise the Committee in the performance of its duties; and
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(5)
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to
report to the Board concerning the financing of the Corporation and the performance of the Committee.
HUMAN RESOURCES COMMITTEE
MEMBERS
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Georgia R. Nelson
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Daniel J. Heinrich
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Cynthia A. Niekamp
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Betty Sapp
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Stuart A. Taylor II
MEETINGS IN FISCAL 2019
The
Board has determined that the members of the Committee are independent under the NYSE Listing Standards.
HUMAN RESOURCES COMMITTEE CHARTER AND REPORT
A copy of the charter of our human resources committee is available on the Corporate Governance section of our website at www.ball.com/investors.
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►
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The Report of the Human Resources Committee appears on page 53 of this
Proxy Statement.
PRIMARY RESPONSBILITIES
The
primary purpose of the Human Resources Committee is:
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§
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to assist the Board with input from executive management in fulfilling its
responsibilities related to:
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(1)
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the
evaluation and compensation of the CEO and overseeing and approving the compensation of the other executive officers of the Corporation;
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(2)
-
approving
the Corporation's stock and cash incentive compensation programs including awards to executive officers and the number of shares to be optioned and/or
granted from time to time to employees of the Corporation;
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(3)
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approving
and receiving reports on major benefit plans, plan changes and determinations and discontinuations of benefit plans;
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(4)
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discussing
the performance evaluation system and succession planning system of the Corporation, including discussions with the CEO about the succession plan for the
CEO;
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(5)
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hiring
experts, including executive compensation consultants, as deemed appropriate to advise the Committee;
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(6)
-
assessment
of compensation-related risks; and
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(7)
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authorizing
the administration of compensation programs and the filing of required reports with federal, state and local governmental agencies.
BALL CORPORATION 2020 PROXY STATEMENT | 25
Table of Contents
BOARD AND CORPORATE GOVERNANCE
|
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
MEMBERS
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§
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Stuart A. Taylor
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§
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John A. Bryant
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§
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Georgia R. Nelson
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§
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Todd A. Penegor
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§
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Cathy D. Ross
MEETINGS IN FISCAL 2019
The
Board has determined that the members of the Committee are independent under the NYSE Listing Standards.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER
A copy of the charter of our nominating and corporate governance committee is available on the Corporate Governance section of our website at www.ball.com/investors.
PRIMARY RESPONSBILITIES
The
primary purpose of the Nominating and Corporate Governance Committee is
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§
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to assist the Board in fulfilling its responsibility to:
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(1)
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identify
qualified individuals to become Board members;
-
(2)
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recommend
to the Board the selection of Board nominees for the next Annual Meeting of Shareholders;
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(3)
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address
the independence and effectiveness of the Board by advising and making recommendations on matters involving the organization and operation of the Board,
Corporate Governance Guidelines and directorship practices;
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(4)
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oversee
the evaluation of the Board and its committees; and
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(5)
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review
and assess the Corporation's sustainability activities and performance.
26 | WWW.BALL.COM/INVESTORS
Table of Contents
BOARD AND CORPORATE GOVERNANCE
|
Director Nominee Process and Evaluation
The
Board has established a process whereby nominees to the Board may be submitted by members of the Board, the CEO, shareholders and any other persons. The Committee considers these recommended
candidates in light of criteria set forth below.
The
Committee will seek candidates who meet at a minimum the following criteria:
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§
-
have sufficient time to attend or otherwise be present at Board, relevant Board
committee and Shareholders' meetings;
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§
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will subscribe to Ball Corporation's Corporate Governance Guidelines and the Executive
Officers and Directors Ethics Statement;
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§
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demonstrate credentials and experience in a broad range of corporate matters;
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§
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have experience, qualifications, attributes and skills that would qualify them to
serve as a director;
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§
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will subscribe to the finalized strategic and operating plans of the Corporation as
approved by the Board from time to time;
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§
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are not affiliated with special interest groups that represent major causes or
constituents; and
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§
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meet the criteria, if any, for being a director of the Corporation as set forth in the
Indiana Business Corporation Law, the Articles of Incorporation and the Bylaws of the Corporation.
As
further described in the Board Diversity section on page 21, the Committee will apply the principles of diversity in consideration of candidates. The Committee utilizes third-party
consultants to identify and screen candidates on a confidential basis for service on the Board. The Committee will also determine candidates' qualifications according to the standards set by the
Committee and by evaluating the qualifications of all candidates. This well-defined practice produces the most qualified nominees suited to serve as a director while attempting to ensure that a
majority of the Board is independent. Also, and where needed, our recruiting practices ensure that candidates meet the NYSE and SEC requirements for financial literacy, accounting or financial
management expertise or audit committee financial expert status.
The
Nominating and Corporate Governance Committee will consider candidates recommended by shareholders no later than November 16, 2020 in accordance with our Bylaws. Any such recommendation
should be in writing and addressed to:
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The Chair, Nominating and Corporate Governance Committee
Ball Corporation
c/o Corporate Secretary
P.O. Box 5000
Broomfield, Colorado 80038-5000
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Fax 303-460-2691
Attention: Corporate Secretary
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The
Nominating and Corporate Governance Committee received no recommendations for candidates as nominees for the Board from a security holder or group of security holders that beneficially owned more
than 5% of the Corporation's voting common stock for at least one year as of the date of the recommendation.
BALL CORPORATION 2020 PROXY STATEMENT | 27
Table of Contents
BOARD AND CORPORATE GOVERNANCE
|
The
table set forth below summarizes the 2019 compensation paid to each of our nonmanagement directors. The elements of the nonmanagement director compensation program are evaluated and determined by
the Nominating and Corporate Governance Committee, which takes into account market data provided by our external consultant. Effective January 1, 2019, the director compensation program
consisted of:
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Annual Compensation
($)
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Fixed cash retainer
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85,000
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Target incentive cash retainer (may range from $0 to $30,000)*
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15,000
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RSU award
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145,000
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Audit Committee Chair
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20,000
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Human Resources Committee Chair
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20,000
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Finance Committee Chair
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15,000
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Nominating and Corporate Governance Committee Chair
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15,000
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Lead Independent Director fixed cash retainer
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25,000
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*
-
The
annual incentive retainer is subject to our performance under the same performance measures as the Annual Consolidated EVA® Incentive Compensation
Plan, which is based on EVA® principles. The actual amount paid may range from $0 to $30,000.
Newly
elected directors are each awarded a one-time grant of RSUs valued at $150,000 upon joining the Board. The elements of deferral for nonmanagement directors are detailed in the "Non-Qualified
Deferred Compensation" section.
28 | WWW.BALL.COM/INVESTORS
Table of Contents
BOARD AND CORPORATE GOVERNANCE
|
The
Director Compensation Table sets out the compensation earned for 2019, with any other compensation payments noted.
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Name
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Fees
Earned
or Paid in
Cash
($)(1)
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Stock
Awards
($)(2)
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Option
Awards
($)
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Non-Equity
Incentive
Plan
Compensation
($)(3)
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Change in Pension Value
and
Non-Qualified
Deferred Compensation
Earnings
($)(4)
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All Other
Compensation
($)(5)
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Total
($)
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Robert W. Alspaugh
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$
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33,462
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$
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$
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$
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4,442
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$
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$
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20,000
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$
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57,904
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John A. Bryant
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$
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85,000
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$
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145,012
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$
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$
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14,100
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$
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$
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17,000
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$
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261,112
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Michael J. Cave
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$
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100,000
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$
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145,012
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$
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$
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14,100
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$
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$
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$
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259,112
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Daniel J. Heinrich
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$
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98,626
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$
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145,012
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$
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$
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14,100
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$
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$
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5,000
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$
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262,738
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Pedro H. Mariani
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$
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85,000
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$
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145,012
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$
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$
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14,100
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$
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$
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$
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244,112
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Georgia R. Nelson
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$
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98,626
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$
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145,012
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$
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$
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14,100
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$
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$
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5,000
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$
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262,738
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Cynthia A. Niekamp
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$
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85,000
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$
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145,012
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$
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$
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14,100
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$
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$
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5,000
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$
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249,112
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Todd A. Penegor
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$
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16,630
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$
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150,002
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$
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$
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2,781
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$
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$
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$
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169,414
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Cathy D. Ross
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$
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85,750
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$
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145,012
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$
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$
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14,100
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$
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$
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20,000
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$
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264,861
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Betty Sapp
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$
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43,250
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$
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150,005
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$
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$
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7,108
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$
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$
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$
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200,363
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Theodore M. Solso
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$
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39,835
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$
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$
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$
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4,442
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$
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$
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40,000
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$
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84,278
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Stuart A. Taylor II
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$
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118,626
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$
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145,012
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$
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$
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14,100
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$
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13,985
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$
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$
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291,723
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-
(1)
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Values
represent fees for annual fixed retainer, committee chair retainer and Lead Independent Director retainer paid under the nonmanagement director compensation
program. The values for Ms. Ross and Ms. Sapp include $750 related to special assignments in 2019. Messrs. Alspaugh, and Solso, and Ms. Ross deferred payment of their cash
fees to the 2017 Deferred Compensation Company Stock Plan for Directors.
-
(2)
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Reflects
the fair value of RSU awards granted to nonmanagement directors in 2019, calculated in accordance with Topic 718. All continuing nonmanagement directors
received an annual award of 2,462 RSUs, using the closing price of the Corporation's common stock April 29, 2019, at $58.90 per unit, resulting in a total award value of $145,012 for each
director, excluding Ms. Sapp, who received a grant upon joining the Board of 2,135 RSUs on July 1, 2019, at $70.26 per unit, resulting in a total award value of $150,005 and Mr. Penegor,
who received a grant upon joining the Board of 2,075 RSUs on October 21, 2019, at $72.29 per unit, resulting in a total award value of $150,002.
-
(3)
-
Values
represent the annual incentive retainer achieved for 2019, which was paid in February 2020, based on a performance factor of 94% applied to the $15,000 target
for all nonmanagement directors. Messrs. Alspaugh, Bryant and Solso, and Ms. Ross deferred payment of their 2019 annual incentive retainer to the 2017 Deferred Compensation Company Stock
Plan for Directors.
-
(4)
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Represents
the amount of above-market interest earned under the Corporation's Deferred Compensation Plans, described in the "Non-Qualified Deferred Compensation"
section.
-
(5)
-
Values
represent the 20% Company match, up to a maximum of $20,000, available under the 2005 Deferred Compensation Company Stock Plan, and 2017 Deferred Compensation
Company Stock Plan for Directors as described in the "Non-Qualified Deferred Compensation" section. Specific deferrals may result in Company match to both plans, up to the $20,000 annual maximum, per
plan. Values also represent Company matching charitable donations under the Matching Gifts Program for Directors.
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Name
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Aggregate Number of
Outstanding Stock Awards
as of December 31, 2019
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John A. Bryant
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6,038
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Michael J. Cave
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28,922
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Daniel J. Heinrich
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21,926
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Pedro H. Mariani
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56,610
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Georgia R. Nelson
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89,282
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Cynthia A. Niekamp
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21,926
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Todd A. Penegor
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2,075
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Cathy D. Ross
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9,563
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Betty Sapp
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2,135
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Stuart A. Taylor II
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174,638
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BALL CORPORATION 2020 PROXY STATEMENT | 29
Table of Contents
BOARD AND CORPORATE GOVERNANCE
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NON-EMPLOYEE DIRECTOR STOCK OWNERSHIP GUIDELINES
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We
have established a stock ownership guideline for each nonmanagement director equal to five times their annual cash retainer amount. All directors currently meet this guideline, with the exception
of Mr. Bryant, who joined the Board in September 2018 and Ms. Sapp and Mr. Penegor, who joined the Board in July 2019 and October 2019, respectively, and are in the process
of attaining shares within the required period.
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Nonmanagement Directors
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5x Annual Fixed Retainer
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Chief Executive Officer
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6x Base Pay
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CORPORATE GOVERNANCE GUIDELINES
The
Board has established Corporate Governance Guidelines to comply with the relevant provisions of Section 303A of the NYSE Listed Company Manual (the "NYSE Listing
Standards"). The Corporate Governance Guidelines are set forth on our website at www.ball.com/investors under "Corporate Governance." A copy of the guidelines may
also be obtained upon request from the Corporation's Corporate Secretary.
POLICIES ON BUSINESS ETHICS AND CONDUCT
Chaired
by a designated Compliance Officer, we established a Corporate Compliance Committee in 1993 which now consists of a focal point for each operating division. The Committee provides quarterly
reports to management and to the Audit Committee. The Committee also publishes the Business Ethics Code of Conduct, which is regularly reviewed and updated. The Board has adopted a separate business
ethics statement referred to as the Ball Corporation Executive Officers and Directors Business Ethics Statement ("Executive Officers and Directors Ethics Statement") designed to establish principles
requiring the highest level of ethical behavior toward achieving business success within the requirements of the law and our policies and ethical standards. The Business Ethics Code of Conduct and the
Executive Officers and Directors Ethics Statement are set forth on our website at www.ball.com/investors under "Corporate Governance" Copies may also be obtained
upon request from the Corporation's Corporate Secretary.
30 | WWW.BALL.COM/INVESTORS
Table of Contents
BOARD AND CORPORATE GOVERNANCE
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TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN
CONTROL PERSONS
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We
have adopted a policy with respect to transactions with related persons requiring our executive officers and directors to comply with all SEC and NYSE requirements concerning transactions between
us and "related persons," as defined in the applicable SEC and NYSE rules. One of our named executive officers, Daniel W. Fisher, shares a household with our vice president, Global Business Services,
whose 2019 compensation was in excess of $120,000. To facilitate compliance with the related persons policy, the Board adopted procedures for the review, approval or ratification of any transaction
required to be reported under the applicable rules. The policy provides that each executive officer and director will promptly report to the Chairman of the Board any transaction with the Corporation
undertaken or contemplated by such officer or director, by any beneficial
owner
of 5% or more of the Corporation's voting securities or by any immediate family member. The Chairman of the Board will refer any transaction to the General Counsel for review and recommendation.
Upon
receipt of such review and recommendation, the matter will be brought before the Nominating and Corporate Governance Committee to consider whether the transaction in question should be approved,
ratified, suspended, revoked or terminated. This policy for transactions with related persons is stated in writing and is part of the Ball Corporation Executive Officers and Directors Ethics
Statement. The written form of the policy can be found on our website, as indicated in the section "Policies on Business Ethics and Conduct" on page 30 herein.
BALL CORPORATION 2020 PROXY STATEMENT | 31
Table of Contents
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EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
|
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CD&A TABLE OF CONTENTS
This
Compensation Discussion and Analysis ("CD&A") portion of the Proxy Statement describes Ball Corporation's business strategy, the alignment between our business strategy, shareholder interests and
our pay-for-performance executive compensation programs. The CD&A also provides the required compensation disclosure for 2019 for the Corporation's named executive officers.
32 | WWW.BALL.COM/INVESTORS
Table of Contents
EXECUTIVE SUMMARY
We
strive to increase shareholder value by utilizing our long-standing EVA® mindset to lead our business strategy, prudently allocating growth capital and effectively managing our balance
sheet. Our focus in on ensuring aluminum beverage and aerosol cans are the most sustainable packages in our customers' growing product portfolios and that our aerospace and defense technologies and
services meet the growing demand for the climate monitoring, weather prediction and intelligence, reconnaissance and surveillance needs of the U.S. government.
During
2019, strong global growth for aluminum beverage packaging products, high demand for Ball's aerospace capabilities and our growing earnings and cash flow allowed us to return approximately $1.1
billion to shareholders and generate $217 million of EVA® dollars.
We
continued to positively focus on our culture and employee engagement to enable our business strategy and to differentiate us in the market for talent. The dedication, clear focus and hard work of
our employees, combined with the importance of knowing who we are, where we are going and what is important, has positioned Ball Corporation to drive long-term value for all stakeholders in 2020 and
beyond.
Ball Is Committed to Shareholder-Oriented Corporate Governance
Our governance process ensures that the executive compensation program is appropriately maintained and updated to always meet a standard of
excellence in pay-for-performance alignment. Specifically, a number of practices and policies are in place to promote the continuous improvement and accountability of our executive compensation
program:
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COMPENSATION AND GOVERNANCE BEST PRACTICES
|
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§
|
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A Human Resources Committee of the Board of Directors (the "Committee") composed entirely of directors who meet the NYSE independence standards;
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§
|
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An independent executive compensation consultant, engaged by and reporting directly to the Committee;
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§
|
|
A review of total compensation via tally sheets;
|
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|
§
|
|
External benchmarking of compensation levels and incentive design practices;
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§
|
|
Dividend equivalents for stock awards which accrue during the vesting and/or performance periods and are paid only if vesting terms and/or performance measures are achieved;
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§
|
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Nominal perquisites that are not grossed-up for taxes;
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§
|
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Ongoing assessment of the relationship between risk and compensation programs;
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§
|
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Executive stock ownership guidelines for executives and directors;
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§
|
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Anti-hedging and anti-pledging policies for our executives and directors;
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§
|
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A shareholder-approved recoupment or "clawback" provision for cash incentive and stock compensation, which in the case of fraud or intentional misconduct by any executive at a level of vice president or above, may result
in full reimbursement to Ball of any incentive compensation or cancellation of any outstanding awards to the executive; and
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§
|
|
Change-in-control agreements with multiples that do not exceed two times pay and that require a termination of employment following a change in control ("double trigger") before severance benefits are due. Excise tax
gross-ups have been eliminated for any new change-in-control agreements entered into after January 1, 2010.
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The Committee is confident that our executive compensation program, our management-as-owners culture, and our pay-for-performance philosophy have directly
contributed to the successful performance of the business and resulted in an executive team closely aligned with shareholders.
BALL CORPORATION 2020 PROXY STATEMENT | 33
Table of Contents
Ball's EVA®-Focused Business Strategy Delivers Results in 2019
Our
vision for the future relies upon our long-held EVA® discipline. All lines of business and strategic initiatives are consistently measured through an EVA® lens.
EVA® by simple definition is sales less operating costs ("NOPAT" or net operating profit after-tax) less a cost of capital charge. We have, for more than 25 years, sought to
increase total EVA® generated year-on-year resulting in sustainable shareholder value creation. Requiring each business to earn returns higher than its cost of capital drives managers to
make the best long-term decisions for our stakeholders, by intelligently cutting costs through lean initiatives, implementing process
efficiencies, undertaking focused outsourcing efforts, investing in innovation, technology and infrastructure capital to drive profitable growth, and turning working capital faster and/or reducing
working capital and assets within marginal or underperforming businesses.
Some
of the actions taken in 2019 to enhance long-term EVA® and perpetuate the social, economic and environmental sustainability of our company
included:
-
§
-
announcing the construction of state-of-the art specialty beverage manufacturing
facilities in the United States and Brazil in addition to installing and speeding up specialty beverage can lines in existing beverage manufacturing facilities in North America and Europe to serve 5%
unit volume growth across our global beverage business;
-
§
-
broadening employee engagement and training including two global Women's Summits held
in North America and Europe, initiating a new global talent management system, hosting an internal Climate Summit to ensure alignment with our customers and supply chain, sponsoring an unconscious
bias training to foster inclusivity and continuing workplace safety and skills-based training in our manufacturing operations;
-
§
-
investing to expand our aerospace infrastructure in Colorado to support over
$2.5 billion of contracted
-
-
backlog
and hiring more than 2,000 new employees in the business since 2017;
-
§
-
closing on the sale of underperforming Chinese aluminum beverage facilities for
$200 million in cash proceeds to further reduce our leverage and return value to shareholders;
-
§
-
launching our new lightweight, brandable aluminum cups business to provide additional
aluminum packaging solutions to venues transitioning away from single-use plastics;
-
§
-
setting significant greenhouse gas emission reduction goals to reduce our carbon
footprint and transitioning to 100% renewal energy in North America by 2021;
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§
-
paying down debt to an optimal leverage level;
-
§
-
returning over $1.1 billion to shareholders, and
-
§
-
deploying $350 million of growth capital expenditure to high EVA®
returning projects.
Ball's EVA®-Disciplined Performance Continues to Deliver for Shareholders
As
a result of multi-year execution of our EVA®-focused strategy:
-
§
-
Ball's stock price closed 2019 at $64.67, an increase of 40.7% over the prior year.
-
§
-
In May 2019, we increased the quarterly cash dividends 50% to 15 cents per share,
providing annual dividends of $182 million, and completed $945 million of net repurchases of our common stock. Since 2009 we have returned over $5 billion to shareholders via
share repurchases and dividends.
-
§
-
Including reinvested dividends, Ball generated 1-year, 3-year, 5-year and 10-year
total returns of 41.8%, 77.1%, 97.8% and 445.4% respectively; significantly above the 1-year, 3-year, 5-year and 10-year returns for the S&P 500 of 28.9%, 44.3%, 56.9% and 189.7% respectively.
-
§
-
Ball's 1-year, 3-year, 5-year and 10-year total returns also surpassed the Containers
and Packaging Index returns of 25.6%, 17%, 28.4% and 155% over the same periods respectively.
These
results are a continuation of the performance delivered over the past number of years and provide a firm foundation for further growth as we execute our strategy.
34 | WWW.BALL.COM/INVESTORS
Table of Contents
As
demonstrated in the charts below, Ball continues to deliver strong, long-term shareholder returns.
Ball Total Shareholder Returns vs. Key Indices
BALL CORPORATION 2020 PROXY STATEMENT | 35
Table of Contents
To
illustrate the connection between EVA® and shareholder value, the chart below summarizes a 20-year 92% historical correlation of EVA® dollar returns and
share price growth. The chart also shows Ball's demonstrated ability to generate significant EVA® returns, while significantly expanding its invested capital base, which has increased by
approximately $8 billion since 1998. Through its continued and disciplined use of EVA® as the lens for strategic decisions, Ball continues to efficiently deploy capital and generate
significant shareholder value.
SUSTAINABLE
EVA® GROWTH ABOVE WACC ACROSS INCREASING
AVERAGE INVESTED CAPITAL BASE DRIVES LONG-TERM VALUE CREATION
Stock prices adjusted for the February 22, 2002, August 23, 2004, February 15, 2011 and May 16, 2017,
two-for-one stock splits. Average invested capital base grew from approximately $2 billion in 1998 to approximately $10 billion in 2018. Chart reflects the 6-month,
partial-year increase associated with the Rexam acquisition which closed on June 30, 2016, net required divestment; therefore, 2017 reflects the full-year notable increase in
returns on the company's average invested capital base. EVA®$ historical correlation calculated over the 1999 to 2019 period.
Going
forward, our strong free cash flow and solid balance sheet provide the flexibility to continue to invest in our aluminum packaging and aerospace businesses and to commercialize the
sustainability benefits of our metal packaging businesses, including our recently launched lightweight aluminum cup. We remain committed to return a significant amount of capital to shareholders via
our long-standing, consistent share repurchase program and payment of dividends, in 2020 and beyond.
Compensation Programs Aligned with Business Strategy and Shareholder Interests
We
are committed to our pay-for-performance and management-as-owners compensation philosophy, which aligns compensation with our business strategy and shareholder value creation. This is illustrated
through use of short-term and long-term incentive programs that focus on continuous EVA® dollar growth, TSR, ROAIC and absolute stock price growth.
In
those incentive programs that have EVA® growth-based performance targets, we are committed to shareholder value creation as demonstrated through:
-
§
-
EVA® HURDLE RATE HIGHER THAN
WACC
We use a formula that applies a minimum hurdle rate of 9% after-tax when determining EVA® dollars generated, although our estimated weighted average cost of capital ("WACC") is
approximately 6%. Requiring a hurdle rate above the WACC provides a level of returns to shareholders before the incentive plans begin to reward our
36 | WWW.BALL.COM/INVESTORS
Table of Contents
employees.
Hence, shareholder value creation is realized when returns are greater than the approximately 6% WACC, whereas the basis for compensation is EVA®-generated utilizing the higher
9% hurdle rate.
-
§
-
RISK-ADJUSTED EVA® HURDLE
RATES
While 9% after tax is the standard minimum hurdle rate generally used by us in its calculation of EVA® dollars generated, we require hurdle rates higher than 9% for higher-risk regions,
emerging markets or new technologies.
-
§
-
FORMULAIC EVA® TARGET
SETTING
We follow a best practice approach to short-term incentive goal-setting by using a consistent, objective, formulaic methodology that continuously focuses on EVA® dollar growth. This
process is core to EVA® mechanics and the same formula has been used by us for more than 25 years. We find that this methodology removes the subjectivity that is sometimes found in
other goal-setting methods, avoids unnecessary internal budget negotiations, requires consistent incremental value creation, allows for transparency with employees and shareholders, and enables direct
employee engagement in achieving desired results that are aligned with shareholder interests. More information on this formulaic approach to Ball's short-term incentive goal-setting can be found in
the Annual Incentive section of this CD&A.
Beyond
our programs that are focused on EVA®, we further ensure pay-for-performance alignment with shareholder value generation
through:
-
§
-
Additional long-term incentive programs that utilize value-added financial performance
metrics other than EVA®specifically, ROAIC, TSR and absolute stock price growthcreating accountability for both the efficient deployment of capital, strong
earnings generation and stock price performance.
-
§
-
A management-as-owners culture that builds a management team with meaningful ownership
in Ball. Executives are closely aligned to shareholder interests through established ownership expectations, equity-based long-term incentives and other periodic programs that encourage individuals to
make meaningful investments in Ball Corporation common stock.
Shareholder Engagement
The
annual Proxy Statement and Say-on-Pay voting process provides an additional opportunity for us to receive comprehensive feedback from shareholders. Each year, we leverage the opportunity to engage
our institutional investors' stewardship committees to discuss the company's business performance, board composition, pay practices and sustainability (or ESG) initiatives. During these engagements,
management, our Lead Independent Director and shareholders discussed a number of topics, including Ball's pay practices, long-term use of EVA®, board composition, employee engagement,
progress on diversity and inclusion initiatives and sustainability leadership. As a result of positive shareholder feedback and our continued solid financial performance, our board of directors, based
upon the recommendation of our Human Resources Committee, unanimously recommended to retain our existing executive compensation program and its pay-for-performance linkage, and continued strong
alignment with shareholder value creation.
BALL CORPORATION 2020 PROXY STATEMENT | 37
Table of Contents
Elements of Pay-for-Performance and Management-as-Owners Philosophy
The major elements of Ball's compensation philosophy are shown in the table below, with the page number in the CD&A that details the specifics
of each of these components:
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Compensation
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Compensation
Element
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Purpose
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Basis for
Performance Measure
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Alignment with Principles
of Pay-for-Performance
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► Page
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SHORT-TERM ANNUAL CASH COMPENSATION
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Annual Base Salary
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Fixed element of pay based on an individual's primary duties and responsibilities
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Position-based pay adjusted for individual performance and contribution
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Competitive compensation element required to recruit and retain top executive talent
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48
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Economic Value Added ("EVA®") Annual Incentive Plan
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Designed to reward achievement of specified annual corporate and/or operating unit financial goals
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Absolute EVA® dollars generated (net operating profit after-tax, less a cost of capital charge)
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Incentive linked to actual economic value generated by the business, ultimately driving shareholder value
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49
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LONG-TERM INCENTIVES
(CASH)
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Long-Term Cash Incentive Plan ("LTCIP")
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Designed to promote long term creation of shareholder value in relative and absolute terms
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50% weighting of:
§
ROAIC
§
Relative TSR vs. S&P 500 subset
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Rewards for ROAIC performance above a target rate that is higher than Ball's WACC and for total shareholder returns relative to the broader investor market
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50
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LONG-TERM INCENTIVES (EQUITY)
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Stock Options
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Designed to promote stock ownership and long term performance resulting in the creation of shareholder value
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Stock price appreciation
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Ties to our management-as-owners philosophy and rewards for absolute stock price growth over time
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52
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Performance Contingent Restricted Stock Units ("PC-RSUs")
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Designed to promote stock ownership through the achievement of absolute EVA® dollar growth over a 3-year period
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Absolute EVA® dollars generated versus 0%, 4% and 8% compound annual growth rates
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Ties to our management-as-owners philosophy through building executive ownership with stock unit awards that vest contingent only upon the achievement of absolute EVA® dollar growth relative to compound growth rate
targets over a 3-year period
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52
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Compensation
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Compensation
Element
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Purpose
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Basis for
Performance Measure
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Alignment with Principles
of Pay-for-Performance
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► Page
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OTHER PERIODIC PROGRAMS
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Restricted Stock/RSUs
|
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Designed to promote stock ownership, provide a retention incentive and incentivize the creation of shareholder value
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Value based on stock price
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Granted from time-to-time and tied to our management-as-owners philosphy, generally in connection with the promotion or recruitment of individuals to facilitate ownership and retention
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53
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Deposit Share Program ("DSP")
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Designed to promote financial investment in the Corporation, promote stock ownership and incentivize the creation of shareholder value
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Value based on stock price
|
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Granted from time-to-time and tied to our management-as-owners philosophy, offering RSUs in exchange for the recipient voluntarily investing in and holding shares of Company stock
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53
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Composition of Our NEOs in 2019
This year's NEOs are shown below:
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John A. Hayes, 54
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Scott C. Morrison, 57
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Daniel W. Fisher, 47
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Lisa A. Pauley, 58
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Robert D. Strain, Jr. 63
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President and Chief Executive Officer since 2011, elected Chairman in 2013
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Senior Vice President and Chief Financial Officer since 2010
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Senior Vice President and Chief Operating Officer, Global Beverage Packaging since 2016
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Senior Vice President, Human Resources and Administration since 2011
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Senior Vice President, Ball Corporation; President, Ball Aerospace since 2013
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BALL CORPORATION 2020 PROXY STATEMENT | 39
Table of Contents
NEO Compensation Has a Strong Pay-for-Performance Linkage
Consistent with our pay-for-performance, management-as-owners philosophy described previously, the majority of the target total compensation
for our executives is variable based on performance, which constitutes pay at risk. The CEO is eligible to participate in the same executive programs as the other NEOs; however, a larger portion of
the CEO's target total compensation is at risk. The following charts represent the mix of target total compensation awarded to our CEO and other NEOs in 2019. Our emphasis on longer term compensation,
through performance-based long-term cash and stock awards, ensures a strong continued alignment between Ball's executive ownership and shareholder value creation objectives, and is consistent with
competitive market data.
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2019 CEO TARGET COMPENSATION MIX
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2019 AVERAGE OTHER NEO TARGET COMPENSATION
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NEO Target Compensation Awarded in 2019
After
our review of competitive market data based on both General Industry and Peer Group, our financial and operational performance, executive compensation consultant and CEO recommendations, tally
sheet analysis, executive individual performance, and internal pay comparisons, the Committee authorized the following target total compensation elements for the CEO and other
NEOs:
-
§
-
Base salary based on analysis of external market data and our pay philosophy;
-
§
-
Continued utilization of the short-term annual incentive EVA® plan;
-
§
-
Continued utilization of LTCIP awards. The performance measures and degree of vesting
for the 2019-2021 LTCIP awards is based on ROAIC performance above a target rate set above Ball's WACC and shareholder
BALL CORPORATION 2020 PROXY STATEMENT | 41
Table of Contents
Compensation Outcomes Driven by Business Performance
Our fiscal 2019 financial results and the resulting EVA® were directly connected to the outcome of our annual short-term incentive
plan, with performance relative to targets, as shown below:
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Compensation
|
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Compensation Element
|
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2019 Performance Achievement
|
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2019 Pay Outcome
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ANNUAL CASH COMPENSATION
|
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Economic Value Added ("EVA®") Annual Incentive Plan
|
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For Ball's Consolidated Plan, the actual EVA® generated in excess of Ball's internal 9% after-tax hurdle rate for fiscal year 2019 of $216.9 million was slightly below our $227.4 million EVA® incentive
plan target by $10.5 million. The actual EVA® generated in the Global Beverage Packaging business was also below the EVA® incentive plan target and the actual EVA® generated in Aerospace business significantly exceeded its EVA®
incentive plan target.
|
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Resulted in an award of 94% of target for all NEOs, except Mr. Fisher, whose payout was 86%, and Mr. Strain, whose payout was 261% (capped at 200% with remainder banked; see "Annual Incentive" section of
CD&A for more details). Mr. Fisher and Mr. Strain's targets were based on a combination of their respective operating units' financial and EVA® goals and the Corporation's consolidated plan.
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Our
fiscal year 2019 results reflect our continued efforts in growing the organization, the successful execution of our business strategy, and strong performance in prior years. Pay realized by our
NEOs from long-term incentive performance periods completed at 2019 year-end continues to reflect our commitment to improved financial performance and stock price growth, as shown below:
|
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Compensation
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Compensation
Element
|
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2019 Performance Achievement
|
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2019 Pay Outcome
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LONG-TERM INCENTIVES
(CASH)
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Long-Term Cash Incentive Plan ("LTCIP") 2017-2019 Period
|
|
§
Actual 3-year average ROAIC of 11.3% exceeded the target of 9.0% and exceeded the maximum of 11.0%.
§
Relative TSR versus the S&P 500 subset was at the 81st percentile, which exceeded the maximum of the 75th percentile.
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Based on the 50%/50% blended ROAIC and TSR performance relative to targets, all of our NEOs received LTCIP payout equal to 200% of target.
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LONG-TERM INCENTIVES (EQUITY)
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Performance-Contingent RSUs ("PC-RSUs") 2017-2019 Period
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Actual EVA® generated was $216.9 million compared to the target of $223.4 million, which represents EVA® dollar growth at 4% compound, annual rate over the 3-year performance period. Based on this
performance, a result of slightly below target was achieved.
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Based on the absolute EVA® dollars generated relative to target, PC-RSUs vested on January 31, 2020, for all NEOs at amounts that were 74% of target.
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OTHER PERIODIC PROGRAMS
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Special Acquisition-Related Incentive Program ("SAIP")
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Over the 42-month performance period, actual cumulative EVA® dollars generated was $821 million compared to the target of $832 million, and actual cumulative cash flow dollars generated was
$2,533 million compared to the target of $2,355 million for Ball's consolidated SAIP. Based on this performance, a result of above target was achieved. The actual cumulative EVA® and cumulative cash flow dollars generated by the Aerospace
business exceeded their maximum levels.
|
|
Based on the cumulative EVA® and cumulative cash flow dollars generated during the 42-month performance period, SAIP awards vested on January 31, 2020, for all NEOs at amounts that were 131% of target, except
Mr. Strain, whose payout was 200% of target. Mr. Strain's target was based-upon his respective business unit.
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Table of Contents
COMPENSATION OBJECTIVES AND PHILOSOPHY
Our
compensation program objectives are to provide competitive and reasonable compensation opportunities, focus on results and strategic objectives, foster a pay-for-performance and
management-as-owners culture, and attract and retain key executives. Balancing these key objectives helps ensure accountability to our shareholders. The program is mainly designed
to:
-
§
-
Attract, motivate and retain a highly capable and performance-focused executive team
-
§
-
Promote a culture of management owners whose financial interests are aligned with
those of our shareholders
-
§
-
Pay-for-performance, such that total compensation reflects the individual performance
of executives and the absolute and relative performance of the organization
-
§
-
Efficiently manage the potential stock dilution, cash flow, tax and reported earnings
implications of executive compensation, consistent with the other objectives of the program
Target
total compensation is composed of:
-
§
-
base salary,
-
§
-
annual EVA® incentive compensation and
-
§
-
long-term incentive compensation in the form of both cash and equity.
In
support of our emphasis on significant ownership by key executives, we offer long-term incentive opportunities that encourage ownership. Generally, the amount of compensation realized or
potentially realizable does not directly impact the level at which future pay opportunities are set. However, when granting equity awards, the Committee reviews and considers both individual
performance and the number of outstanding and previously granted equity awards.
In
addition to promoting share ownership, our executive compensation objectives and philosophy focus on rewarding performance. Thus, shareholder returns along with corporate performance, both
short-term and long-term, comprise the largest portion of executive pay.
ROLE OF THE HUMAN RESOURCES COMMITTEE AND EXECUTIVE COMPENSATION CONSULTANT
The Committee oversees the administration of the executive compensation program and determines the compensation of our executive officers. The
Committee is solely composed of nonmanagement directors, all of whom meet the independence requirements of the NYSE. Furthermore, the Committee has retained an independent consultant
(the "Consultant") to assist in fulfilling its responsibilities. The Consultant is employed by Pay Governance, LLC, and is engaged by and reports directly to the Committee.
Specifically,
the Consultant's role is to develop recommendations for the Committee related to all aspects of the executive compensation program and the Consultant works with management to obtain
information necessary to develop the recommendations. The Committee assessed Pay Governance's independence in 2019, as required under NYSE listing rules. Based on this review, it was determined that
no conflict of interest exists with the work performed by Pay Governance and consider them to be independent.
MARKET REFERENCE POINTS AND PEER GROUPS
When benchmarking compensation to the competitive market, we use two market reference points for our executive officers. This two-pronged
approach provides a spectrum of relevant information on executive compensation levels, practices and trends in the marketplace. The Committee does not target pay to a specific market benchmark but
rather considers the range of data presented along with tenure, company performance and individual performance when setting pay for NEOs. The market reference points provided to the Committee
typically consist of "Peer Group" and "General Industry" market data.
"Peer
Group" market data are reviewed for the CEO and CFO and are composed of companies within the containers and packaging, food, household durable and nondurable goods, and manufacturing industries.
The Committee uses the Peer Group data as a transparent reference point for assessing pay levels across similarly-situated CEOs and CFOs. In addition
BALL CORPORATION 2020 PROXY STATEMENT | 43
Table of Contents
to
pay levels, the Committee reviews tenure and performance data across the Peer Group. Data for the Peer Group are collected from publicly disclosed data contained in SEC filings.
"General
Industry" market data is presented for all NEOs and reflects the broad talent market in which we compete. The critical skills required by our management team have historically been found both
inside and outside of the containers and packaging industry. Hence, the Committee believes it is appropriate to focus on General Industry market levels as the primary market reference point for
evaluating the competitiveness of our executive compensation program. These data are size-adjusted to reflect the relative size of the orginization or the relevant business unit for the executive.
Size-adjusting the data ensures that market levels are being developed for like roles within businesses of similar size and scope. Data for the General Industry are collected from multiple proprietary
survey sources published by leading market data providers.
In
developing the Peer Group, the Consultant sourced objective, quantitative financial and industry criteria, as well as qualitative criteria regarding the nature of our business operations.
Specifically, the Consultant used the following principles and criteria in identifying the Peer Group companies:
|
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Design Principle
|
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Criteria
|
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|
Quantitative financial criteria to ensure organizations are comparable in terms of size and structure
|
|
§
Revenue between an approximate range of 0.4x to 2.5x our revenues
§
Market capitalization between 0.25x to 5.0x our market capitalization (used as a secondary reference)
§
Ratio of market capitalization to revenue generally between 0.5x and 2.0x
§
Positive operating margins generally ranging from 5% to 20%
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Qualitative criteria regarding appropriate industry, business types and organizational complexity
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§
Direct peers in the containers and packaging industry
§
Nondurable consumer product
companies with some or all of the following characteristics: containers and packaging are a critical element of the final product, there is a substantial business focus on meeting annual performance expectations, and the individual consumer
represents the ultimate purchaser of the product
§
Broader manufacturing companies within the capital goods, chemical manufacturing, paper products and metals
industries
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For
2019, our Peer Group included the companies below.
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§ Alcoa Corporation
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§ Eastman Chemical Company
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§ PPG Industries, Inc.
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§ Avery Dennison Corporation
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§ General Mills Inc.
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§ Sealed Air Corporation
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§ Berry Global Group, Inc.
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§ International Paper Company
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§ The Sherwin-Williams Company
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§ Campbell Soup Company
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§ Nucor Corporation
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§ United States Steel Corp.
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§ ConAgra Brands, Inc.
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§ Molson Coors Beverage Company
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§ WestRock Company
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§ Crown Holdings Inc.
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§ Owens-Illinois, Inc.
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Following
a review in the third quarter of 2019, the Committee made no adjustments to this Peer Group and it will be used to inform on 2020 pay decisions.
44 | WWW.BALL.COM/INVESTORS
Table of Contents
The
charts below illustrate our relative positioning compared to the 2019 Peer Group on relevant financial metrics.
BALL MARKET CAPITALIZATION, REVENUE AND NET INCOME AS COMPARED TO THE PEER GROUP
-
*
-
Market capitalization is as of December 31, 2018
-
**
-
Revenue and Net Income are as reported for full year 2018
PROCESS FOR DETERMINING EXECUTIVE COMPENSATION
The
Committee reviews and adjusts executive target total compensation levels, including long-term incentive levels in January of each year.
We
begin the annual process by reviewing each executive officer's target total compensation in relation to the 50th percentile of the market reference points, e.g., General Industry
and/or Peer Group. The data is gathered by the Consultant and presented to us together with the Compensation Committee in detailed reports providing a comparative analysis of our executive officer
compensation to the market data. The Consultant collaborates with our Executive Compensation Department when preparing the reports.
Additionally,
the Consultant creates tally sheets for each executive outlining each executive's annual target and actual pay in relation to competitive market information as well as total accumulated
pay under various corporate performance scenarios, both recent and projected. The tally sheets are used to analyze and determine executive officer pay recommendations and understand the potential
realizable compensation under various performance scenarios. The Consultant also prepares for the Committee an independent review and recommendation of the CEO's compensation. In its deliberations,
the Committee meets with the CEO and other members of senior management, as appropriate, to discuss the application of the competitive benchmarking (pay and performance) relative to the unique
structure and needs of the organization.
The
CEO's target total compensation package is set by the Committee during an executive session based on the Committee's review of the recommendation prepared by the Consultant, peer and competitive
information, including their assessment of the CEO's relative tenure and associated individual performance, the financial and operating performance of the Corporation, and appropriate business
judgment.
A
recommendation for the target total compensation of other executive officers, including the CFO and other NEOs, is made by the CEO after reviewing the executive's and the organization's business
performance. This review is made in conjunction with the executive's responsibility and experience when compared to the competitive market information prepared by the Consultant. The compensation
package for the other executive officers is established by the Committee taking into consideration the recommendation of the CEO, the executive officer's individual job responsibilities, experience
and overall performance, along with appropriate business judgment.
The
Committee may also adjust an executive's compensation level during the year as a result of a promotion. Such adjustments take into consideration competitive market data and a recommendation
provided by the Consultant, as well as the recommendation of the CEO, which takes into account the additional responsibilities and overall experience and performance of the executive.
BALL CORPORATION 2020 PROXY STATEMENT | 45
Table of Contents
SPECIFICS RELATED TO 2019 EXECUTIVE COMPENSATION
When
determining our executive target total compensation decisions in January 2019, the Committee took into account our operating and financial performance in 2018, which resulted in a total return to
shareholders of 22.7%, based on stock price appreciation plus reinvested dividends, significantly above the (6.2%) return of the S&P 500 and the (20.2%) return of the Dow Jones Containers and
Packaging Index. The Corporation also increased EVA® dollars from $240 million in 2017 to $242 million in 2018. The Committee also recognized that all NEOs contributed to the
many other successes of the Corporation, including:
-
§
-
completing the construction of state-of-the-art specialty beverage manufacturing
facilities in the United States and Spain, and installing specialty beverage can lines in Argentina, Chile, Mexico, Serbia, Switzerland and Texas,
-
§
-
investing to expand our aerospace infrastructure in Colorado to support over $2.2
billion of contracted backlog and 900 new employees,
-
§
-
selling our U.S. steel food and steel aerosol packaging businesses into a 49% owned
joint venture resulting in $600 million in cash proceeds to further reduce our leverage and return value to shareholders,
-
§
-
announcing the sale of our beverage can manufacturing assets in China to an existing
Chinese company,
-
§
-
launching our biennial sustainability report and setting an enhanced science-based
greenhouse gas emission reduction target of 27% by 2030, compared to a 2017 baseline, and
-
§
-
with the completion in 2018 of the pay down of debt incurred to acquire Rexam PLC, the
Corporation has reached its target leverage ahead of schedule.
During
2018, the Corporation was again recognized by the Dow Jones Sustainability Index for maintaining our position as the only packaging company to be listed on both the North American and World
indexes, and also received a perfect score on the Corporate Equality Index, a national benchmarking survey on corporate policies and practices related to LGBTQ workplace equality, administered by the
Human Rights Campaign Foundation.
Base Salary
Base
salary levels are set on the basis of factors such as job responsibilities, the CEO's subjective judgment of individual performance and contributions to overall business performance, tenure and
experience level, internal merit increase budgets, external market base salary movement and market competitiveness as compared to 50th percentile data. With respect to promotions, we may
initially position an individual below the 50th percentile and then adjust their base pay closer to the market median over time, in order to ensure the individual is successfully performing and
growing into their new role. The Committee reviewed base salary levels during the executive compensation review as outlined under the section entitled "Process for Determining Executive Compensation,"
which included an analysis of external market data, prepared by the Consultant and approved salary increases for all NEOs in late January 2019, with changes effective retroactively to
January 1, 2019.
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NEO
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2019
Base Salary
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Rationale
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John A. Hayes
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$
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1,332,739
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|
2019 base salary was based on the executive compensation review, including an analysis of external market data, and reflected a merit increase consistent with the Corporation's merit increase budget
|
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Scott C. Morrison
|
|
$
|
717,225
|
|
2019 base salary was based on the executive compensation review, including an analysis of external market data, and reflected a merit increase consistent with the Corporation's merit increase budget
|
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Daniel W. Fisher
|
|
$
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695,000
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|
2019 base salary was based on the executive compensation review, including an analysis of external market data. Mr. Fisher's base salary reflected an increase to recognize his performance in relation to market
practices
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Lisa A. Pauley
|
|
$
|
538,150
|
|
2019 base salary was based on the executive compensation review, including an analysis of external market data, and reflected a merit increase consistent with the Corporation's merit increase budget
|
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Robert D. Strain
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|
$
|
475,000
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|
2019 base salary was based on the executive compensation review, including an analysis of external market data. Mr. Strain's base salary reflected an increase to recognize his performance in relation to market
practices
|
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|
46 | WWW.BALL.COM/INVESTORS
Table of Contents
Annual Incentive
This
short-term annual pay-for-performance incentive is used to encourage and reward the NEOs for making decisions that improve performance as measured by EVA®. As mentioned in the
"Executive Summary," it is designed to produce sustained shareholder value by establishing a direct link between EVA® improvement and incentive compensation. EVA® was selected,
over 25 years
ago,
as the measure for our Annual Incentive Compensation Plan because it has been demonstrated to correlate management's incentive with share price growth and shareholder returns. EVA® is
calculated by subtracting a charge for the use of invested capital from net operating profit after-tax as illustrated below:
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EVA®
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=
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Net Operating
Profit After-Tax
("NOPAT")
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minus
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|
Capital Charge (the Amount of
Capital Invested by us multiplied
by our After-Tax Hurdle Rate)
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Generating
profits in excess of both operating and capital costs (debt and equity) creates EVA® dollars. If EVA® improves, shareholder value has been created.
Performance MeasuresThe plan design motivates continuous improvement in order to achieve payouts at or above target over time. Targets are
established annually for each operating unit and for the organization as a whole based on prior performance. To allow for transparency with employees and shareholders, and to avoid unnecessary
subjectivity and internal budget negotiations regarding short-term incentive annual performance targets, we follow a best practice approach to goal-setting that follows a consistent, objective,
formulaic
methodology that continuously focuses on EVA® dollar growth. This process is core to EVA® mechanics, requires consistent incremental value creation and allows for
direct employee engagement in achieving desired results that are aligned with shareholder interests.
The
Corporation's and/or operating unit's EVA® financial performance determines the amount, if any, of awards earned under the Annual Incentive Compensation Plan. Such awards are based on
actual EVA® performance relative to the established EVA® target. For any one year, the EVA® target is equal to the sum of the prior year's target EVA®
plus one-half the amount of the prior year's EVA® gain or shortfall relative to the prior year's EVA® target and is calculated as follows:
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Current Year's
EVA® Target
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=
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Prior Year's
EVA® Target
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plus 1/2
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Prior Year's
Actual EVA®
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minus
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|
Prior Year's
EVA® Target
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Improvement
in EVA® occurs when the amount of NOPAT, less a charge for capital employed in the business, increases over time. It establishes a direct link between annual incentive
compensation and continuous improvement of return on invested capital relative to an internal minimum 9% after-tax "hurdle rate." The Corporation has established a minimum 9% after-tax as the hurdle
rate when evaluating capital expenditures and strategic initiatives in most regions in which we do business, and requires hurdle rates higher than this for investments in emerging countries or new
technologies. These hurdle rates are above the Corporation's estimated weighted average cost of capital of approximately 6%, which provides built-in greater returns for shareholders.
For
a given year, a payout at 100% of target annual incentive compensation is achieved when actual EVA® is equal to the EVA® target. Actual annual incentive
payments
each year can range from 0% to 200% of the targeted incentive opportunity based on corporate performance and/or the performance of the operating unit over which the executive has
responsibility. For the Corporation's consolidated plan, a payout of 0% is realized when actual EVA® is $174 million less than targeted EVA®. A payout of 200% or greater
may be achieved if actual EVA® is $87 million or higher than target EVA®. However, any amounts over 200% of target are banked and remain at risk until paid over time in
one-third increments whenever actual performance under the Annual Incentive Plan results in a payout of less than 200% of target. When the bank balance falls below $10,000 it is paid in full. All
payments from the bank balance are made at the same time annual incentive payments are made. In 2019, the Corporation's consolidated actual EVA® performance was slightly below
BALL CORPORATION 2020 PROXY STATEMENT | 47
Table of Contents
our
EVA® target by $10.5 million and resulted in a payout of 94% of target, as shown below:
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Performance Measure
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Minimum
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Target
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Maximum
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Actual
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EVA®
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$53.4 million
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$227.4 million
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$314.4 million
|
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$216.9 million
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|
Mr. Fisher's
and Mr. Strain's EVA® targets were based on a combination of their respective operating units' financial and EVA® goals and the Corporation's
consolidated plan; however, due to the competitively sensitive nature of such financial metrics, these values have been excluded.
Target Incentive Percentages and 2019 Incentive PaidA target incentive opportunity is established each year as a percentage of an executive's
annual base salary and is targeted at approximately the 50th percentile of the competitive market with the opportunity to earn more for above-target performance or less for below-target
performance. The 2019 target incentive opportunity for Messrs. Hayes, Morrison and Ms. Pauley was dependent upon the Corporation's consolidated EVA® performance; whereas for
Mr. Fisher, 80% was dependent upon the EVA® performance of the Global Beverage Packaging operating unit and 20% dependent upon the Corporation's consolidated EVA®
performance, and for Mr. Strain, 80% was dependent upon the EVA® performance of the Aerospace operating unit and 20% dependent upon the Corporation's consolidated EVA®
performance.
The
table below summarizes for each NEO the 2019 target incentive opportunity as compared to the actual incentive paid as a result of the year's strong EVA® performance. The value paid may
include a one-third increment of a prior bank balance.
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Target Annual
Incentive
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|
Actual Annual
Incentive
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NEO
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|
|
% of Base
|
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|
$ Value
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|
% of Base
|
|
|
$ Value Paid
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John A. Hayes
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|
|
140
|
%
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$
|
1,863,909
|
|
|
132
|
%
|
$
|
1,752,075
|
|
|
|
|
|
|
|
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|
|
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|
Scott C. Morrison
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|
|
85
|
%
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$
|
609,012
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|
|
80
|
%
|
$
|
572,471
|
|
|
|
|
|
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|
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|
Daniel W. Fisher
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|
|
85
|
%
|
$
|
589,131
|
|
|
75
|
%
|
$
|
517,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
|
80
|
%
|
$
|
430,075
|
|
|
75
|
%
|
$
|
404,270
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Robert D. Strain, Jr.
|
|
|
70
|
%
|
$
|
332,034
|
|
|
159
|
%
|
$
|
753,312
|
|
|
|
|
|
|
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|
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|
Certain
U.S.-based executives, including the NEOs, may elect to defer the payment of all or a portion of their annual incentive compensation into the 2005 Deferred Compensation Plan and/or the 2005
Deferred Compensation Company Stock Plan, as described in the "Non-Qualified Deferred Compensation" section.
Long-Term Incentives
This element of compensation is designed to provide ownership and cash opportunities to promote the achievement of longer term financial
performance goals and enhanced TSR. Our long-term incentive opportunity is generally provided through a combination of equity and cash awards, which the Committee believes best matches the
compensation principles for the program.
The
2019 target award mix of long-term incentive vehicles was 20% LTCIP, 40% Stock Options and 40% PC-RSUs. The total target amount of long-term incentives, based on the grant date
expected value, is generally established in relation to the 50th percentile of the competitive market, individual roles and responsibilities, individual performance (as outlined in
the preceding "Base Salary" section) and our financial and operating performance.
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Mix of Long-Term Vehicles
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|
NEO
|
|
|
Total Target
Long-Term
Value
|
|
|
% LTCIP
|
|
|
% Stock
Options
|
|
|
% PC-RSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John A. Hayes
|
|
$
|
7,250,000
|
|
|
20
|
%
|
|
40
|
%
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Morrison
|
|
$
|
1,660,000
|
|
|
20
|
%
|
|
40
|
%
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel W. Fisher
|
|
$
|
1,600,000
|
|
|
20
|
%
|
|
40
|
%
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
$
|
985,000
|
|
|
20
|
%
|
|
40
|
%
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Strain, Jr.
|
|
$
|
730,000
|
|
|
20
|
%
|
|
40
|
%
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
long-term incentive awards provide value only if the organization achieves positive stock price and financial performance. This emphasis on long-term compensation, through performance-based
long-term cash and equity awards, ensures a strong continued alignment with our executive ownership and shareholder value.
Performance-Based Cash AwardsOur performance-based long-term cash incentive award, LTCIP, is intended to focus executives on the achievement of
multiyear performance goals that will enhance shareholder value. Our TSR and ROAIC are considered in determining the amount, if any, of awards earned under our LTCIP. Performance is measured on a
cumulative basis over a three-year performance period. Awards pursuant to the LTCIP are generally made on an annual basis such that three performance periods overlap.
Any
actual award earned is paid at the end of the three-year performance period. There were three overlapping periods in 2019:
-
§
-
2017-2019Awarded in 2017, completed at the end of 2019, vesting took
place in early 2020.
48 | WWW.BALL.COM/INVESTORS
Table of Contents
-
§
-
2018-2020Awarded in 2018, in process, will complete at the end of 2020,
payment in early 2021, if performance measures are attained.
-
§
-
2019-2021Awarded in 2019, in process, will complete at the end of 2021,
payment in early 2022, if performance measures are attained; included in the "Grants of Plan-Based Awards Table."
The
LTCIP provides executives the opportunity to earn awards based on a combination of two performance measures. One-half of the award is based on our three-year TSR as measured against the TSRs of a
subset of companies in the S&P 500, excluding companies in the S&P 500 Index that are classified as being part of the Financial or Utilities industry sectors or the Transportation
industry group. Companies added to the S&P 500 during the performance period are also excluded. TSR is measured by comparing (1) our average daily closing price and dividends in the
third year of the performance period with (2) the average daily closing price and dividends for the year prior to the start of the performance period against (3) the equivalent TSRs for
the group of companies described above over the same period. The target performance requirement for the TSR measure is the 50th percentile of the S&P 500 subset described above.
The
other one-half of the award is based on average ROAIC performance over the three-year period. ROAIC is calculated by dividing the average of organization net
operating
profit after-tax over the relevant performance period by its average invested capital over such period. The minimum performance threshold of 7% is greater than, and the target performance
requirement of 9% is measurably greater than, we estimate WACC. As such, management is not rewarded until shareholder value has been created and these performance requirements ensure management is
focused on driving such value.
In
summary, the target, minimum and maximum performance requirements are as follows:
|
|
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|
|
|
|
|
|
|
|
Performance Measure
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
|
|
|
|
|
|
|
|
TSR
|
|
|
37.5th percentile
|
|
|
50th percentile
|
|
|
75th percentile
|
|
|
|
|
|
|
|
|
|
|
|
|
ROAIC (after-tax)
|
|
|
7%
|
|
|
9%
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
For
each measure, minimum performance results in a zero payout factor, target performance results in a 100% payout factor and maximum performance results in a 200% payout factor for the respective
one-half of the award. Performance between minimum, target and maximum is extrapolated to determine the payout factor.
Each
NEO's incentive opportunity is established by considering external long-term incentive market data and the Corporation's internal pay equity. Each NEO's LTCIP opportunity is set as a fixed target
dollar amount based on the 20% target award mix of long-term incentive vehicles, which ensures that the value of our long-term incentives remain consistent with competitive market practices.
The
executive's award for any given performance period is calculated as follows:
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|
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|
|
|
|
|
|
|
|
|
LTCIP
Payment
|
|
=
|
|
Fixed Target
Dollar Amount
|
|
times
|
|
|
|
|
|
50% x
TSR
Payout
Factor
|
|
|
|
plus
|
|
|
|
50% x
ROAIC
Payout
Factor
|
|
|
|
|
For
the 2019-2021 performance period, the fixed target dollar incentive opportunities awarded in early 2019 to the NEOs, and reported in the "Grants of Plan-Based Awards Table," are as follows:
|
|
|
|
|
NEO
|
|
|
Target LTCIP Dollar Value
for the 2019-2021 Performance Period
|
|
|
|
|
|
|
John A. Hayes
|
|
$
|
1,450,000
|
|
|
|
|
|
|
Scott C. Morrison
|
|
$
|
332,000
|
|
|
|
|
|
|
Daniel W. Fisher
|
|
$
|
320,000
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
$
|
197,000
|
|
|
|
|
|
|
Robert D. Strain, Jr.
|
|
$
|
146,000
|
|
|
|
|
|
|
For
the 2017-2019 performance period, the incentive opportunities for the NEOs were as follows:
|
|
|
|
|
NEO
|
|
|
Target LTCIP Dollar Value
for the 2017-2019 Performance Period
|
|
|
|
|
|
|
John A. Hayes
|
|
$
|
1,200,000
|
|
|
|
|
|
|
Scott C. Morrison
|
|
$
|
290,000
|
|
|
|
|
|
|
Daniel W. Fisher
|
|
$
|
200,000
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
$
|
170,000
|
|
|
|
|
|
|
Robert D. Strain, Jr.
|
|
$
|
120,000
|
|
|
|
|
|
|
As
a result of our actual performance for the 2017-2019 performance period of 81st percentile TSR and 11.3% ROAIC, cash payouts (made in early 2020) to the NEOs, are 200% of the target
opportunities and reported in the "Summary Compensation Table."
BALL CORPORATION 2020 PROXY STATEMENT | 49
Table of Contents
Equity-Based AwardsOur equity awards may be provided through various forms, all of which are tied to the price of Ball Corporation common stock.
Annual equity awards associated with target total compensation are typically granted in January on the date of the quarterly meeting of the Board; however, equity awards may be granted during the year
as part of an executive's promotion, extraordinary performance or for retention purposes. In the case of newly hired executives, equity awards may be granted upon the executive joining the
Corporation. Annual equity-based awards are determined for each NEO in order to bring target total compensation to the level deemed appropriate by the Committee in relation to the external market
50th percentile and each executive's roles, responsibilities and performance.
In
January 2019, the Committee approved the award of Stock Options and PC-RSUs to the NEOs and executive officers. Each form of equity is described below. The target values of these awards were based
on the total target award mix of long-term incentive vehicles as previously described (40% Stock Options and 40% PC-RSUs). The number and/or value of the equity awarded in 2019 to the NEOs is reported
in the "Summary Compensation Table" and the "Grants of Plan-Based Awards Table." All equity awards are pursuant to the provisions of the Amended and Restated 2013 Stock and Cash Incentive Plan.
-
§
-
Stock
Options: Stock Options are granted in order to reward executives for the creation of shareholder value, and will only provide value to executives if the price
of our stock increases. Such awards generally vest at 25% per year for four years and expire in ten years. The grant value of each Stock Option is based on the Black-Scholes value of our common stock
on the date of grant.
-
§
-
Performance-Contingent
RSUs: PC-RSUs are granted in order to promote share ownership through the achievement of defined multiyear performance goals that enhance shareholder value
and align with the Corporation's Drive for 10 vision. The performance measure is a future target value of our absolute EVA® dollars generated in the third year of the performance period.
The target value is calculated by increasing the actual EVA® dollars generated, in excess of the 9% after tax hurdle rate, in the year prior to the start of the performance period, by a
compound annual growth rate of 4% over the three year period. Given the challenging nature of this measure, a minimum and maximum performance range exists and may result in an actual payout of between
0% and 200%. The minimum performance measure is EVA® dollars equal to the prior year end
achieved
absolute EVA® dollars. In this case, even though we would have continued to generate positive EVA®, the lack of growth in that figure results in a zero payout. The
maximum performance measure is only achieved if we generate absolute EVA® dollars in the third year of the performance period at, or above, a value calculated in the same manner as the
target, but using an aggressive compound annual growth rate of 8% over the three year period. Performance between minimum, target and maximum is extrapolated to determine the payout factor. Awards are
generally made on an annual basis such that three performance periods overlap. Any actual award earned is paid at the end of the three year performance period. During 2019, there were three
overlapping periods: Performance between minimum, target and maximum is extrapolated to determine the payout factor. Awards are generally made on an annual basis such that three performance periods
overlap. Any actual award earned is paid at the end of the three-year performance period. During 2019, there were three overlapping periods:
-
-
2017-2019PC-RSUs were granted in 2017,
completed at the end of 2019, and vesting took place in early 2020. The actual EVA® generated was $216.9 million compared to our compound growth rate target of $223.4 million
and 74% of all granted units for that three-year period vested for the NEOs. The PC-RSUs vested in January 2020 and the value realized on vesting will be reported in the "Option Exercises and Stock
Vested Table" in 2021.
-
-
2018-2020PC-RSUs were granted in 2018. This
is in process and will complete at the end of 2020 and vesting will occur in early 2021, if the performance measure is attained. The target, minimum and maximum performance requirements for the
2018-2020 award are as follows:
|
|
|
|
|
|
|
|
|
|
|
Performance Measure
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Absolute EVA® Dollars
|
|
$
|
240.4 million
|
|
$
|
270.4 million
|
|
$
|
302.8 million
|
|
|
|
|
|
|
|
|
|
|
|
|
-
-
2019-2021PC-RSUs were granted in 2019. This
is in process and will complete at the end of 2021 and vesting will occur in early 2022, if the performance measure is attained. The target, minimum and maximum performance requirements for the
2019-2021 award are as follows:
|
|
|
|
|
|
|
|
|
|
|
Performance Measure
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Absolute EVA® Dollars
|
|
$
|
241.5 million
|
|
$
|
271.7 million
|
|
$
|
304.2 million
|
|
|
|
|
|
|
|
|
|
|
|
|
50 | WWW.BALL.COM/INVESTORS
Table of Contents
-
§
-
Restricted Stock or
RSUs: The Committee or CEO may also grant restricted stock or RSUs generally in connection with the promotion or recruitment of individuals to facilitate
ownership and retention. Pursuant to the provisions of the Amended and Restated 2013 Stock and Cash Incentive Plan, the Committee delegated to the CEO the authority to grant up to a maximum of 10,000
restricted shares or RSUs to any one individual in a calendar year, except the CEO may not make such grants to officers of the Corporation. Any such grant is ratified by the Committee at the first
Committee meeting following such grant. Grants made are generally effective at the closing stock price on the day of the grant or may be effective at the closing stock price on a specific day in the
future as defined by the Committee or the CEO. As an example, the future grant of a restricted stock or RSU award may be approved pending the effective date of a promotion, employment or other date.
These awards generally vest in either 20% or 25% increments on each annual anniversary of the grant date. These grants serve as a long-term incentive element, promote share ownership and may provide
an executive retention incentive. No new restricted stock or RSUs were awarded to the NEOs in 2019.
-
§
-
Deposit Share Program
("DSP"): Introduced in 2001, we may, from time-to-time, grant restricted stock or RSUs pursuant to the DSP. This program is used with the intent to further
drive an ownership culture, especially among new leaders that may have little-to-no Ball stock ownership, and to further align our leadership focus with shareholder interests. Under this program, a
participant receives one matching RSU for every acquired common stock share newly attained and held by the participant (either in the open market, through the exercise of stock options or deferral, if
eligible, of annual incentive compensation to the Deferred Compensation Company Stock Plan) during a specified acquisition period, up to a maximum number of shares preestablished by the Committee.
Essentially, we provide an incentive only if a participant should choose to newly invest in the Company. As long as a participant continues to hold their newly acquired shares, the RSUs will cliff
vest four years from the date of grant; or, if stock ownership guidelines are met, 30% of the units vest at the end of the second year and again at the end of the third year, and 40% will
Retirement Benefits
We strive for overall benefits to be competitive with the market. All NEOs participate in the same benefit plans and on the same terms as
provided to all U.S. salaried employees, with the exception of the differences noted below.
Included
in these benefits for the U.S. salaried employees are the annual pension accruals under the qualified pension plan ("Salaried Pension Plan") and contributions to the qualified 401(k) savings
plan. We sponsor two qualified salaried defined benefit pension plans in the U.S., one covering our Aerospace subsidiary's employees and the other covering all other U.S. salaried employees. Prior to
January 1, 2007, the benefits were determined by final average salary, covered compensation and years of service. Beginning in 2007, the benefit in both plans is an accumulated annual credit
based on base salary, the Social Security Wage Base ("SSWB") and a multiplier that is based on service.
The
401(k) savings plan is a tax-qualified defined contribution plan that allows U.S. salaried employees, including the NEOs, to contribute to the plan 1% to 55% of their base salary up to
IRS-determined limits on a before-tax basis. Prior to January 1, 2007, the Corporation matched 50% of the first 6% of base salary contributed to the plan. Beginning in 2007, the Corporation
matches 100% of the first 3% of base salary contributed, and 50% of the next 2% of base salary contributed, up to a maximum match of 4% of base salary contributed.
Certain
executives, including the NEOs, also receive benefits under the non-qualified SERP which replaces benefits otherwise available in the qualified pension plan except for limits on covered
compensation in the qualified plan set by the Internal Revenue Code of 1986, as amended (the "Code"). The SERP is designed to provide retirement benefits that are calculated on base salary that
exceeds the maximum amount of pay that can be included in the pension calculation under a pension plan that is tax qualified under the Code. Further information regarding the Salaried Pension Plan and
the SERP are provided in the "Pension Benefits" section.
BALL CORPORATION 2020 PROXY STATEMENT | 51
Table of Contents
Our
U.S. pension plans and SERP provide pension benefits based on base salary only and do not include incentive compensation as part of the pension calculation.
Additionally,
we provide a deferred compensation benefit to certain U.S. employees, including the NEOs. Under the terms of the deferred compensation program, participants are eligible to defer current
annual incentive
compensation
to be paid and/or RSUs to be issued in the future. When amounts are deferred, the participant becomes a general unsecured creditor of the Corporation and deferred amounts become subject
to claims on the same basis as other general unsecured creditors. The deferred compensation plans provide a means for participants to accumulate funds for retirement or other purposes.
OTHER EXECUTIVE COMPENSATION POLICIES AND GUIDELINES
Plan Terms and Procedures
Annual and long-term incentives awarded in 2019 were established and paid to the NEOs pursuant to the terms of the Ball Corporation Amended
and Restated 2013 Stock and Cash Incentive Plan and the Ball Corporation Annual EVA® Incentive Compensation Plan, which are administered by the Committee. The Ball Corporation Amended and
Restated 2013 Stock and Cash Incentive Plan permit grants of cash awards and stock awards in an equivalent manner.
Risk Assessment
The Committee continually reviews the relationship between risk and reward in our compensation programs; both through recurring in-depth
reviews and ongoing review of any program changes as they occur. At this time, the Committee does not believe that these compensation programs encourage excessive or inappropriate risk. Our internal
assessment of risk confirms that our compensation arrangements do not foster undue risk taking. They are performance driven and have strong governance and control mechanisms.
The
Committee's executive compensation Consultant conducted a thorough risk assessment of our executive compensation programs in 2019, and reported on this to the Committee. The Consultant reviews a
number of criteria regarding compensation design and governance and whether financial risks, operational risks or reputational risks may be generated through any of our programs, policies or
practices. The Consultant concluded that they did not identify any elements within Ball's compensation programs and processes that pose material risk to the Corporation. The basis for the Consultant's
conclusion is that the Corporation's incentive plans and processes are well designed, diversified and appropriately structured to mitigate risk without diluting incentives for high performance.
Stock Ownership Guidelines
Consistent with its stock ownership philosophy, we have established guidelines for senior management. The 2019
stock
ownership guidelines (minimum requirements) are as follows:
|
|
|
Executive
|
|
Ownership Multiple
(of Base Salary)
|
|
|
|
CEO
|
|
6x
|
|
|
|
CFO and SVPs
|
|
3x
|
|
|
|
Other Executives
|
|
1 to 2x
|
|
|
|
As
of December 31, 2019, all executive officers including the NEOs have met their ownership guidelines.
Anti-Hedging and Anti-Pledging Policy
Ball employees, officers, and directors may not engage in any transaction in Ball securities, including purchases, sales, pledges, hedges,
loans and gifts, while possessing material nonpublic information. Additionally, insider employees, including Section 16 Insiders and their immediate family members and entities they control, may not
engage in hedging transactions such as equity swaps and forward sale contracts, which would neutralize the economic risk associated with holding Ball Corporation common stock. However, executives and
directors are permitted to use contracts to purchase or sell Ball Corporation common stock including pursuant to SEC Rule 10b5-1, subject to preapproval and applicable rules. Put and call
options, pledging, and short selling transactions are not permitted. Directors and officers are also prohibited from holding Ball Corporation securities in margin accounts and from pledging Ball
Corporation securities as collateral for a loan.
Severance and Change in Control Benefits
The NEOs are covered by arrangements that specify payments in the event the executive's employment is terminated. The type and amount of
payments vary by executive level and whether the termination is following a change in control. These severance benefits, which are competitive with General Industry practices, are payable only if the
executive's employment is terminated as specified in each of the agreements. Further discussion is provided in the "Other Potential Post-Termination Employment Benefits" section.
52 | WWW.BALL.COM/INVESTORS
Table of Contents
Accounting and Tax Considerations
When establishing pay elements or associated programs, the Committee reviews projections of the estimated pro forma expense and tax impact of
all material elements of the executive compensation program. Generally, an accounting expense is accrued over the requisite service period of the particular pay element, which in many cases is equal
to the performance period, and we may realize a tax deduction upon payment to and/or realization by the executive.
The
U.S. Tax Cuts and Jobs Act ("TCJA") passed in late 2017 significantly amended Code Section 162(m), effective for tax years beginning in 2018. Prior to 2018, Code Section 162(m)
generally provided that publicly-held corporations may not deduct in any one taxable year certain compensation in excess of $1 million paid to the CEO or any other executive officer (other than
the CFO) whose total compensation is required to be disclosed in the "Summary Compensation Table" by reason of being the next three most highly-compensated executive officers, or former executive
officers, as may be required ("covered employees"), other than certain performance-based compensation which was exempt from the
$1 million
limit. Among the various changes of the TCJA, it amended Code Section 162(m) by repealing the exemption of qualifying performance-based pay, including the CFO as a covered
employee and providing that an individual who is a covered employee for any taxable year beginning after December 31, 2016 will continue to be a covered employee for all subsequent taxable
years in which the individual receives compensation. We intend to take advantage of existing transition rules which may allow payments to be deductible based on the application of the
Section 162(m) rules in effect prior to the TCJA changes, based on the belief that certain compensation arrangements were made pursuant to written binding contracts that were in effect on
November 2, 2017, and have not been materially modified. The organization and the Committee may make prospective changes to compensation to NEOs and related policies to comply with this
legislation and maximize the potential deductibility of such compensation by the Corporation.
Code
Section 280G considerations related to tax reimbursements made to executives for taxes on amounts paid in the event of termination following a change in control are discussed in the
narrative to the "Other Potential Post-Termination Employment Benefits" section.
|
|
|
REPORT OF THE HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS
|
|
|
The
Committee has reviewed the above CD&A and discussed its contents with members of our management team. Based on this review and discussion, the Committee has recommended that this CD&A be
incorporated by reference in our Annual Report on Form 10-K and as set out in this Proxy Statement.
Georgia
R. Nelson
Daniel J. Heinrich
Cynthia A. Niekamp
Betty Sapp
Stuart A. Taylor II
BALL CORPORATION 2020 PROXY STATEMENT | 53
Table of Contents
|
|
|
COMPENSATION TABLES AND NARRATIVE
|
|
|
Set
forth on the following pages are tables showing, for the CEO and the three other highest paid executive officers of the Corporation, the following:
-
(1)
-
fiscal
year 2019 elements of compensation in summary form;
-
(2)
-
equity
and non-equity incentives awarded in 2019;
-
(3)
-
outstanding
stock options and stock awards held as of December 31, 2019;
-
(4)
-
the
value realized on stock options or SARs exercised and stock awards that vested during 2019;
-
(5)
-
information
regarding non-qualified deferred compensation;
-
(6)
-
projected
pension benefit values; and projections for other potential post-employment benefits.
The
"Director Compensation Table" summarizes the fiscal year 2019 elements of compensation for our nonmanagement directors. Accompanying each table are narratives and/or footnotes intended to further
the understanding of the information disclosed in the tables. The tables should be read in conjunction with the CD&A beginning on page 32, which explains our compensation objectives and
philosophy, our process for determining executive compensation and a description of the elements of compensation.
SUMMARY COMPENSATION TABLE
The
"Summary Compensation Table" represents all fiscal year 2019 elements of compensation for the Corporation's NEOs including:
-
§
-
Base salary earned
-
§
-
Awards earned under the Annual EVA® Incentive Compensation Plan for 2019
performance
-
§
-
Awards earned under the LTCIP for the three-year performance period ended in 2019
-
§
-
Fair value of PC-RSU and/or other RSU awards granted in 2019, calculated in accordance
with Topic 718
-
§
-
Fair value of Stock Options awards granted in 2019, calculated in accordance with
Topic 718
The
2019 payout factors used to determine the amounts earned for the Annual EVA® Incentive Compensation Plan and LTCIP for the NEOs are provided in the "2019 Performance Outcome" column
under "Elements of Ball's Executive Compensation Program and 2019 Performance."
In
addition to these elements of compensation, the table also presents the change in 2019 in the value of pensions payable at age 65 for the NEOs as well as above-market earnings associated with
non-qualified deferred compensation. Certain of our predecessor deferred compensation plans provide for an interest rate that is equal to the Moody's Seasoned Corporate Bond Index
("Moody's")
and in some plans, an interest rate that is 5 percentage points higher than Moody's, and in others, a fixed interest rate equal to 9%. No additional deferrals are permitted into
these plans. Any earnings credited to accounts within plans that provide the Moody's rate plus 5 percentage points and/or the 9% fixed interest that is in excess of above-market earnings that
would have been credited at a rate that is 120% of the applicable federal long-term rate have been classified as above-market earnings on deferred compensation.
The
"All Other Compensation" column represents the sum of the values of:
-
§
-
Perquisites and other personal benefits
-
§
-
Corporation contributions to defined contribution plans or deferred compensation plans
-
§
-
Corporation-paid insurance premiums
-
§
-
Company match of securities purchases pursuant to the Corporation's broad-based
Employee Stock Purchase Plan ("ESPP")
The
individual values are disclosed in the "All Other Compensation Table" that follows the "Summary Compensation Table." Details regarding post-employment compensation are discussed in the section
entitled "Other Potential Post-Employment Benefits."
54 | WWW.BALL.COM/INVESTORS
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name & Principal Position
|
|
|
Year
|
|
|
Salary
($)
|
|
|
Stock
Awards
($)(1)
|
|
|
Option
Awards
($)(2)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)(3)
|
|
|
Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings
($)(4)
|
|
|
All Other
Compensation
($)(5)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John A. Hayes
|
|
|
2019
|
|
$
|
1,331,364
|
|
$
|
2,899,995
|
|
$
|
2,900,001
|
|
$
|
4,152,075
|
|
$
|
511,332
|
|
$
|
61,154
|
|
$
|
11,855,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman, President and CEO
|
|
|
2018
|
|
$
|
1,299,013
|
|
$
|
2,800,014
|
|
$
|
2,800,000
|
|
$
|
3,902,076
|
|
$
|
73,183
|
|
$
|
67,359
|
|
$
|
10,941,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
$
|
1,267,423
|
|
$
|
4,335,590
|
|
$
|
2,399,996
|
|
$
|
4,584,654
|
|
$
|
282,496
|
|
$
|
62,495
|
|
$
|
12,932,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Morrison
|
|
|
2019
|
|
$
|
716,485
|
|
$
|
663,999
|
|
$
|
663,994
|
|
$
|
1,152,471
|
|
$
|
266,248
|
|
$
|
43,532
|
|
$
|
3,506,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVP, CFO
|
|
|
2018
|
|
$
|
699,072
|
|
$
|
640,006
|
|
$
|
639,997
|
|
$
|
1,132,758
|
|
$
|
49,726
|
|
$
|
45,423
|
|
$
|
3,206,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
$
|
682,071
|
|
$
|
1,621,688
|
|
$
|
580,003
|
|
$
|
1,351,212
|
|
$
|
157,742
|
|
$
|
46,258
|
|
$
|
4,438,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel W. Fisher
|
|
|
2019
|
|
$
|
693,096
|
|
$
|
639,980
|
|
$
|
639,997
|
|
$
|
917,973
|
|
$
|
148,542
|
|
$
|
32,383
|
|
$
|
3,071,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVP, COO Global
|
|
|
2018
|
|
$
|
645,769
|
|
$
|
1,197,449
|
|
$
|
599,999
|
|
$
|
807,647
|
|
$
|
23,636
|
|
$
|
32,021
|
|
$
|
3,306,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beverage Packaging
|
|
|
2017
|
|
$
|
543,063
|
|
$
|
2,138,897
|
|
$
|
399,997
|
|
$
|
867,420
|
|
$
|
68,121
|
|
$
|
28,821
|
|
$
|
4,046,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
|
2019
|
|
$
|
537,594
|
|
$
|
394,002
|
|
$
|
393,997
|
|
$
|
744,270
|
|
$
|
281,486
|
|
$
|
43,332
|
|
$
|
2,394,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVP, Human Resources
|
|
|
2018
|
|
$
|
523,098
|
|
$
|
380,011
|
|
$
|
379,997
|
|
$
|
720,092
|
|
$
|
23,081
|
|
$
|
42,295
|
|
$
|
2,068,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Administration
|
|
|
2017
|
|
$
|
475,131
|
|
$
|
1,065,614
|
|
$
|
339,994
|
|
$
|
781,637
|
|
$
|
151,901
|
|
$
|
41,814
|
|
$
|
2,856,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Strain, Jr.
SVP, President, Ball Aerospace
|
|
|
2019
|
|
$
|
474,335
|
|
$
|
291,985
|
|
$
|
291,995
|
|
$
|
993,312
|
|
$
|
117,803
|
|
$
|
34,557
|
|
$
|
2,203,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Reflects
the fair value of PC-RSU awards granted for each reported year, calculated in accordance with Topic 718 assuming the probable outcome. The
assumptions used in the calculation of these amounts are included in the Corporation's Annual Report on Form 10-K in Notes 1 and 19 to the Consolidated Financial Statements for fiscal
year ended December 31, 2019. At the maximum number, the values for 2019 PC-RSUs are: Mr. Hayes $5,799,990; Mr. Morrison $1,327,999; Mr. Fisher $1,279,961;
Ms. Pauley $788,004; and Mr. Strain $583,970 and values for 2018 PC-RSUs are: Mr. Hayes $5,600,029; Mr. Morrison $1,280,011; Mr. Fisher $1,200,001; Ms. Pauley
$760,021; and Mr. Strain $559,995.
-
(2)
-
Reflects
the fair value of Stock Option or SAR equity awards granted for each reported year, calculated in accordance with Topic 718. The
assumptions used in the calculation of these amounts are included in the Corporation's Annual Report on Form 10-K in Notes 1 and 19 to the Consolidated Financial Statements for fiscal
year ended December 31, 2019.
-
(3)
-
Includes
payouts from the Annual Incentive Compensation Plan and LTCIP, which were earned in 2019 and paid or deferred in 2020. The detail for each
NEO is as follows:
-
-
Mr. HayesAnnual
Incentive Compensation Plan $1,752,075; LTCIP $2,400,000; no portion of the annual incentive was deferred in February 2020.
-
-
Mr. MorrisonAnnual
Incentive Compensation Plan $572,471; LTCIP $580,000; and $100,000 of the annual incentive was deferred in February 2020.
-
-
Mr. FisherAnnual
Incentive Compensation Plan $517,973; LTCIP $400,000; no portion of the annual incentive was deferred in February 2020.
-
-
Ms. PauleyAnnual
Incentive Compensation Plan $404,270; LTCIP $340,000; no portion of the annual incentive was deferred in February 2020.
-
-
Mr. StrainAnnual
Incentive Compensation Plan $753,312; LTCIP $240,000; and $100,000 of the annual incentive was deferred in February 2020.
-
(4)
-
The
aggregate change in pension value and above-market earnings, on deferred compensation for each NEO, is as follows:
-
-
Mr. Hayes$502,693
aggregate change in pension value and $8,639 above-market earnings on deferred compensation.
-
-
Mr. Morrison$266,248
aggregate change in pension value.
-
-
Mr. Fisher
$148,542 aggregate change in pension value.
-
-
Ms. Pauley$280,164
aggregate change in pension value and $1,322 above-market earnings on deferred compensation.
-
-
Mr. Strain$117,803
aggregate change in pension value.
-
-
The
change in pension value includes benefit accruals during 2019 and the impact of changes in assumptions from December 31, 2018, to
December 31, 2019. The discount rate for this time period decreased from 4.19% to 2.93%, which increased the present value of the pension benefits.
-
(5)
-
May
include the value of financial planning services, the incremental cost for the personal use of the corporate aircraft, the value of executive physical
examinations, employer contributions to 401(k), employer contributions to the 2005 Deferred Compensation Company Stock Plan, employer paid disability insurance premiums and the value of the
Corporation's match for the ESPP. Additional information for all is included in the "All Other Compensation Table" below.
BALL CORPORATION 2020 PROXY STATEMENT | 55
Table of Contents
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
|
Perquisites
and Other
Personal
Benefits(1)(2)
|
|
|
Payments/
Accruals on
Termination
Plans
|
|
|
Registrant
Contributions
to Defined
Contribution
Plans
|
|
|
Insurance
Premiums
|
|
|
Discounted
Securities
Purchases
|
|
|
Registrant
Contributions
to Deferred
Compensation
Plans
|
|
|
Tax
Reimbursements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John A. Hayes
|
|
$
|
27,527
|
|
$
|
|
|
$
|
11,200
|
|
$
|
1,226
|
|
$
|
1,200
|
|
$
|
20,000
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Morrison
|
|
$
|
10,000
|
|
$
|
|
|
$
|
11,200
|
|
$
|
1,133
|
|
$
|
1,200
|
|
$
|
20,000
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel W. Fisher
|
|
$
|
|
|
$
|
|
|
$
|
11,200
|
|
$
|
1,183
|
|
$
|
|
|
$
|
20,000
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
$
|
11,000
|
|
$
|
|
|
$
|
11,200
|
|
$
|
1,132
|
|
$
|
|
|
$
|
20,000
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Strain, Jr.
|
|
$
|
|
|
$
|
|
|
$
|
11,200
|
|
$
|
2,161
|
|
$
|
1,196
|
|
$
|
20,000
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Represents
the incremental costs for the personal use of the corporate aircraft for Mr. Hayes.
-
(2)
-
The
incremental costs of the personal use of our corporate aircraft are determined based on the variable operating costs to the Corporation, including aircraft
operating costs, supplies, jet fuel and ancillary costs. Because virtually all aircraft usage is for business travel, this methodology excludes fixed costs that do not change based on usage.
GRANTS OF PLAN-BASED AWARDS TABLE
The
"Grants of Plan-Based Awards Table" summarizes the plan-based awards granted by us to the NEOs during 2019, which includes the following:
-
§
-
Annual cash incentives pursuant to the Annual Incentive Compensation
Plan for the 2019 performance period
-
§
-
Cash-based long-term incentives under the LTCIP for the 2019-2021
three-year performance period
-
§
-
Fair value of PC-RSUs for the 2019-2021 three-year performance
period and/or other RSUs, calculated in accordance with Topic 718
-
§
-
Fair value of Stock Options, calculated in accordance with Topic 718
Awards
made under the Annual EVA® Incentive Compensation Plan are determined based on EVA® performance. For the NEOs, awards can range from 0% to 200% of
target. Amounts earned in excess of 200% are banked and may be paid over time in one-third increments based on corporate and/or operating unit performance.
Awards
under the LTCIP are granted on an annual basis and are determined based on the Corporation's TSR relative to the subset of S&P 500 companies described in the CD&A as well as the
Corporation's ROAIC. The award made in 2019 is for the three-year performance period beginning January 1, 2019, and ending December 31, 2021.
PC-RSUs
were granted to the NEOs in 2019. The awards will cliff vest after the performance period if the Corporation's performance measure and basis for the degree of vesting of the units, which is
based on a future target value of absolute EVA® dollars generated in excess of Ball's 9% after-tax hurdle rate as the capital charge, relative to compound growth rate targets is achieved
over a three-year period. PC-RSUs awarded in 2019 have a potential outcome to the executive from 0% to 200%. Stock Options were granted to the NEOs in 2019. The awards vest annually in 25% increments
starting on the first anniversary of the date of grant. Upon exercise, each NEO can either purchase shares of the Corporation's stock at the grant price or, if the price of the Corporation's stock
increases, receive the value of the appreciation over the original grant price in cash.
Dividends
or dividend equivalents, for RSUs granted prior to April 26, 2017, are paid quarterly on the number of unvested restricted shares or RSUs accounted for on the record date used for
determining dividends payable to shareholders and at the same dividend rate as paid to shareholders. Dividend equivalents related to PC-RSUs granted pursuant to the 2013 Stock and Cash Incentive Plan
will be accrued and paid only if the performance condition is achieved and the restrictions on the units lapse. Additionally, dividend equivalents related to all RSUs granted pursuant to the Amended
and Restated 2013 Stock and Cash Incentive Plan, effective April 26, 2017, are accrued and paid only if the vesting condition is achieved and the restrictions on the units lapse.
The
vesting of plan-based awards may be accelerated as described in the narrative to the "Other Potential Post-Employment Benefits Table."
56 | WWW.BALL.COM/INVESTORS
Table of Contents
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
|
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
|
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
|
|
|
Grant Date
per Share
Fair Value
|
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
|
|
|
Exercise or
Base Price of
Equity
Incentive Plan
Awards or
|
|
|
Grant Date
Fair Value of
Equity
Incentive Plan
Awards and
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
|
Grant Date
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
Units
(#)
|
|
|
of All Other
Stock Awards
|
|
|
Options
(#)
|
|
|
Option Awards
($ per Share)
|
|
|
and Option
Awards(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John A. Hayes
|
|
|
1/1/19
|
(2)
|
$
|
0
|
|
$
|
1,450,000
|
|
$
|
2,900,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/19
|
(3)
|
$
|
0
|
|
$
|
1,863,909
|
|
$
|
3,727,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
(4)
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
57,109
|
|
|
114,218
|
|
|
|
|
|
|
|
|
|
|
$
|
50.780
|
|
$
|
2,899,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239,274
|
|
$
|
50.780
|
|
$
|
2,900,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Morrison
|
|
|
1/1/19
|
(2)
|
$
|
0
|
|
$
|
332,000
|
|
$
|
664,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/19
|
(3)
|
$
|
0
|
|
$
|
609,012
|
|
$
|
1,218,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
(4)
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
13,076
|
|
|
26,152
|
|
|
|
|
|
|
|
|
|
|
$
|
50.780
|
|
$
|
663,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,785
|
|
$
|
50.780
|
|
$
|
663,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel W. Fisher
|
|
|
1/1/19
|
(2)
|
$
|
0
|
|
$
|
320,000
|
|
$
|
640,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/19
|
(3)
|
$
|
0
|
|
$
|
589,131
|
|
$
|
1,178,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
(4)
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
12,603
|
|
|
25,206
|
|
|
|
|
|
|
|
|
|
|
$
|
50.780
|
|
$
|
639,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52,805
|
|
$
|
50.780
|
|
$
|
639,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
|
1/1/19
|
(2)
|
$
|
0
|
|
$
|
197,000
|
|
$
|
394,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/19
|
(3)
|
$
|
0
|
|
$
|
430,075
|
|
$
|
860,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
(4)
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
7,759
|
|
|
15,518
|
|
|
|
|
|
|
|
|
|
|
$
|
50.780
|
|
$
|
394,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,508
|
|
$
|
50.780
|
|
$
|
393,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Strain, Jr.
|
|
|
1/1/19
|
(2)
|
$
|
0
|
|
$
|
146,000
|
|
$
|
292,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/19
|
(3)
|
$
|
0
|
|
$
|
332,034
|
|
$
|
664,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
(4)
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
5,750
|
|
|
11,500
|
|
|
|
|
|
|
|
|
|
|
$
|
50.780
|
|
$
|
291,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/23/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,092
|
|
$
|
50.780
|
|
$
|
291,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
grant date fair value of equity incentive plan awards, based on the probable outcome of the performance condition, and stock and option awards
all calculated in accordance with Topic 718, and as referenced in the Corporation's Annual Report on Form 10-K in Notes 1 and 19 to the Consolidated Financial Statements for the fiscal
year ended December 31, 2019.
-
(2)
-
Represents
grants made under the LTCIP.
-
(3)
-
Represents
grants made under the Annual EVA® Incentive Compensation Plan.
-
(4)
-
Represents
PC-RSUs granted January 23, 2019, at a value of $50.78 per unit, with an assumption of probable outcome at target if the
performance measurements are met.
BALL CORPORATION 2020 PROXY STATEMENT | 57
Table of Contents
OUTSTANDING EQUITY AWARDS TABLE
The
following table outlines the outstanding option awards and stock awards held by the NEOs as of December 31, 2019. The outstanding option awards and stock awards represented in the table
were granted to the NEOs over a period of several years, including 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1)
|
|
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
|
|
Option
Exercise
Price ($)
|
|
|
Option
Expiration
Date
|
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested (#)(2)
|
|
|
Market Value
of Shares or
Units of
Stock That
Have Not
Vested ($)(3)
|
|
|
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)(4)
|
|
|
Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested ($)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John A. Hayes
|
|
|
229,278
|
(5)
|
|
|
|
|
|
|
$
|
17.9180
|
|
|
1/26/2021
|
|
|
9,600
|
|
$
|
620,832
|
|
|
243,144
|
|
$
|
15,724,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
418,400
|
(5)
|
|
|
|
|
|
|
$
|
18.8500
|
|
|
1/25/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
364,800
|
(5)
|
|
|
|
|
|
|
$
|
22.9650
|
|
|
1/30/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
356,000
|
(5)
|
|
|
|
|
|
|
$
|
24.5350
|
|
|
1/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
309,860
|
(5)
|
|
|
|
|
|
|
$
|
33.0750
|
|
|
2/4/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
186,512
|
(5)
|
|
62,170
|
(5)
|
|
|
|
$
|
33.0500
|
|
|
1/27/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140,516
|
(5)
|
|
140,514
|
(5)
|
|
|
|
$
|
38.3750
|
|
|
1/25/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,178
|
|
|
231,532
|
|
|
|
|
$
|
38.8400
|
|
|
1/24/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239,274
|
|
|
|
|
$
|
50.7800
|
|
|
1/23/2029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Morrison
|
|
|
41,200
|
(5)
|
|
|
|
|
|
|
$
|
17.9180
|
|
|
1/26/2021
|
|
|
8,000
|
|
$
|
517,360
|
|
|
72,332
|
|
$
|
4,677,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
800
|
|
|
|
|
|
|
|
$
|
18.8500
|
|
|
1/25/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,800
|
(5)
|
|
|
|
|
|
|
$
|
18.8500
|
|
|
1/25/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,400
|
(5)
|
|
|
|
|
|
|
$
|
22.9650
|
|
|
1/30/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,400
|
(5)
|
|
|
|
|
|
|
$
|
24.5350
|
|
|
1/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,422
|
(5)
|
|
|
|
|
|
|
$
|
33.0750
|
|
|
2/4/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,276
|
(5)
|
|
14,426
|
(5)
|
|
|
|
$
|
33.0500
|
|
|
1/27/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,958
|
(5)
|
|
33,958
|
(5)
|
|
|
|
$
|
38.3750
|
|
|
1/25/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,641
|
|
|
52,921
|
|
|
|
|
$
|
38.8400
|
|
|
1/24/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,785
|
|
|
|
|
$
|
50.7800
|
|
|
1/23/2029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel W. Fisher
|
|
|
22,536
|
(5)
|
|
|
|
|
|
|
$
|
33.0750
|
|
|
2/4/2025
|
|
|
26,301
|
|
$
|
1,700,886
|
|
|
62,151
|
|
$
|
4,019,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,534
|
(5)
|
|
4,844
|
(5)
|
|
|
|
$
|
33.0500
|
|
|
1/27/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,420
|
(5)
|
|
23,418
|
(5)
|
|
|
|
$
|
38.3750
|
|
|
1/25/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,614
|
|
|
|
|
$
|
38.8400
|
|
|
1/24/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52,805
|
|
|
|
|
$
|
50.7800
|
|
|
1/23/2029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
|
27,400
|
(5)
|
|
|
|
|
|
|
$
|
17.9180
|
|
|
1/26/2021
|
|
|
8,000
|
|
$
|
517,360
|
|
|
45,673
|
|
$
|
2,953,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,400
|
(5)
|
|
|
|
|
|
|
$
|
18.8500
|
|
|
1/25/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,000
|
(5)
|
|
|
|
|
|
|
$
|
22.9650
|
|
|
1/30/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,200
|
(5)
|
|
|
|
|
|
|
$
|
24.5350
|
|
|
1/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,930
|
(5)
|
|
|
|
|
|
|
$
|
33.0750
|
|
|
2/4/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,830
|
(5)
|
|
6,944
|
(5)
|
|
|
|
$
|
33.0500
|
|
|
1/27/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,906
|
(5)
|
|
19,906
|
(5)
|
|
|
|
$
|
38.3750
|
|
|
1/25/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,474
|
|
|
31,422
|
|
|
|
|
$
|
38.8400
|
|
|
1/24/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,508
|
|
|
|
|
$
|
50.7800
|
|
|
1/23/2029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Strain, Jr.
|
|
|
18,570
|
(5)
|
|
6,190
|
(5)
|
|
|
|
$
|
33.0500
|
|
|
1/27/2026
|
|
|
4,800
|
|
$
|
310,416
|
|
|
30,839
|
|
$
|
1,994,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,052
|
(5)
|
|
14,052
|
(5)
|
|
|
|
$
|
38.3750
|
|
|
1/25/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,718
|
|
|
23,153
|
|
|
|
|
$
|
38.8400
|
|
|
1/24/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,092
|
|
|
|
|
$
|
50.7800
|
|
|
1/23/2029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
unexercisable stock options and SARs become exercisable in 25% annual increments on the anniversary of the grant date, beginning on the first anniversary.
-
(2)
-
The
vesting schedule for units not yet vested for each NEO is as follows:
-
-
Mr. Hayes9,600 on September 15, 2020.
-
-
Mr. Morrison8,000 on September 15, 2020.
-
-
Mr. Fisher5,000 on January 13, 2020; 686 on
March 15, 2020; 4,410 on June 15, 2020; 5,000 on January 13, 2021; 914 on March 15, 2021; 4,411 on June 15, 2021 and 5,880 on June 15, 2022.
-
-
Ms. Pauley8,000 on September 15, 2020.
-
-
Mr. Strain4,800 on September 15, 2020.
58 | WWW.BALL.COM/INVESTORS
Table of Contents
-
(3)
-
The
market value of shares is based on $64.67, the closing price of Ball Corporation common stock on December 31, 2019.
-
(4)
-
The
vesting dates for the units attributable to PC-RSUs not yet vested for each NEO for years 2020, 2021 and 2022 contingent on meeting the performance goal of the
period ending December 31 in years 2019, 2020 and 2021, respectively, and upon certification of the performance measures by Board, and the vesting dates for the units attributable to SAIP RSUs
not yet vested for each NEO, contingent on meeting the performance goals of the period ending December 31, 2019, and upon certification of the performance measures by Board, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
~January 31, 2020
|
|
|
~January 31, 2021
|
|
|
~January 31, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Hayes
|
|
|
113,944
|
|
|
72,091
|
|
|
57,109
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Morrison
|
|
|
42,778
|
|
|
16,478
|
|
|
13,076
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Fisher
|
|
|
34,100
|
|
|
15,448
|
|
|
12,603
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Pauley
|
|
|
28,130
|
|
|
9,784
|
|
|
7,759
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Strain
|
|
|
17,800
|
|
|
7,209
|
|
|
5,750
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(5)
-
Represents
a grant of stock-settled SARs.
OPTION EXERCISES AND STOCK VESTED TABLE
The following table summarizes for each NEO the options exercised and the stock awards vested during 2019. The options that were exercised by each NEO were
granted in prior years and became exercisable pursuant to a prescribed vesting schedule. The value realized on exercise reflects the appreciation in the stock price from the option base price on grant
date to the exercise date and is reported on a before-tax basis. The shares acquired upon vesting for each NEO were for RSUs granted in prior years that vested pursuant to a prescribed vesting
schedule. The value realized reflects the closing stock price on the vesting date and is also reported on a before-tax basis. NEOs can defer the
receipt of units of certain awards into the Ball Corporation 2005 Deferred Compensation Company Stock Plan, pursuant to which distributions may take place no
earlier than the participant's separation from service. Information regarding the 2005 Deferred Compensation Company Stock Plan is provided in the "Non-Qualified Deferred Compensation" section that
follows. Footnotes are provided to detail circumstances when amounts realized upon vesting were deferred. The value realized on vesting also includes the vested value of dividend equivalents paid
during 2019 on outstanding RSUs or payment on accrued dividend equivalent earned for the 2016-2018 PC-RSU period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
|
Number of
Shares Acquired
on Exercise
|
|
|
Value
Realized on
Exercise ($)
|
|
|
Number of
Shares Acquired
on Vesting(2)
|
|
|
Value
Realized on
Vesting ($)(1)(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John A. Hayes
|
|
|
232,548
|
|
$
|
25,385,721
|
|
|
146,988
|
|
$
|
8,028,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Morrison
|
|
|
56,486
|
|
$
|
6,109,906
|
|
|
41,772
|
|
$
|
2,366,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel W. Fisher
|
|
|
4,745
|
|
$
|
674,585
|
|
|
17,378
|
|
$
|
910,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
|
20,708
|
|
$
|
1,982,276
|
|
|
21,612
|
|
$
|
1,280,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Strain, Jr.
|
|
|
30,018
|
|
$
|
3,733,550
|
|
|
17,520
|
|
$
|
1,012,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Value
realized on vesting is based on the closing stock price on the day the RSUs vested.
-
(2)
-
Amounts
deferred to the 2005 Deferred Compensation Company Stock Plan upon vesting of stock awards for each NEO were:
-
-
Mr. HayesDeferred 146,988 vested RSUs valued at
$7,831,773
-
-
Ms. PauleyDeferred 21,612 vested RSUs valued at
$1,252,575
-
-
Mr. StrainDeferred 6,960 vested RSUs valued at
$363,869
-
(3)
-
Value
realized on vesting also includes the value of dividend equivalents vested and paid during 2019 on outstanding RSU balances eligible for dividend equivalents
on the record date at a dividend rate equal to that paid to the Corporation's common shareholders. Dividend equivalents related to PC-RSUs granted pursuant to the Amended and Restated 2013 Stock and
Cash Incentive Plan are accrued and paid only if the performance condition is achieved and the restrictions on the units vest. Dividend equivalents paid during 2019 for each NEO
were:
-
-
Mr. Hayes$196,873
-
-
Mr. Morrison$50,589
-
-
Mr. Fisher$21,152
-
-
Ms. Pauley$27,876
-
-
Mr. Strain$22,872
BALL CORPORATION 2020 PROXY STATEMENT | 59
Table of Contents
NON-QUALIFIED DEFERRED COMPENSATION PLANS TABLE
We
have four active deferred compensation plans to which eligible participants may make contributions: the 2017 Deferred Compensation Company Stock Plan for Directors, the 2005 Ball Corporation
Deferred Compensation Plan, the 2005 Ball Corporation Deferred Compensation Company Stock Plan and the 2005 Ball Corporation Deferred Compensation Plan for Directors.
-
§
-
2017 Deferred Compensation Company Stock
Plan for DirectorsEligible nonmanagement members of the Corporation's Board may defer payment of a portion or all of their annual fixed cash
retainer (inclusive of any committee chair and/or Lead Independent Director fees), annual incentive cash retainer and their eligible RSU awards. Elections to defer this compensation are made annually.
Amounts are deferred or credited to a participant account as stock units with each unit having the value equivalent to one share of Ball Corporation common stock, and participants also receive a 20%
Corporation match, up to an annual maximum match of $20,000 per year. Dividend equivalents, applicable to any balance denominated in units, are credited to each participant's accounts as of each
dividend payment date for the Corporation's common stock. Distributions follow the payment schedule elected by the participant and may commence at a defined point no sooner than six months following
separation of service, in the form of a lump sum and/or annual installments ranging between two and 15 years.
-
§
-
2005 Deferred Compensation Plan and 2005
Deferred Compensation Plan for DirectorsEligible employee participants may defer payment of a portion or all of their annual incentive
compensation, and nonmanagement members of the Corporation's Board may defer a portion or all of their annual cash director fees. Amounts deferred or credited are notionally invested among various
investment funds where the return on the participant's balance is determined as if the amounts were invested in those funds. The menu of investment funds consists of 24 mutual fund-like investments.
The one-year annual rate of return of the funds ranged from 2.0% to 38.1%, and the three-year average annual rate of return of the funds ranged from 1.4% to 19.5%. Distributions are based on the
payment schedule elected by the participant, and may occur in service or commence at a defined point no sooner than six months following separation of service, in the form of either a
-
-
lump
sum and/or annual installments ranging between two and 15 years.
-
§
-
2005 Deferred Compensation Company Stock
PlanEligible employee participants may defer payment of a portion or all of their annual incentive compensation. Elections to defer annual
incentive compensation are made annually. Participants may also elect to defer certain RSU awards. Amounts are deferred or credited to a participant account as stock units with each unit having the
value equivalent to one share of Ball Corporation common stock, and participants also receive a 20% Corporation match, up to an annual maximum match of $20,000 per year. Pursuant to specified timing
rules, participants may reallocate a prescribed percentage of units to other mutual fund-like investments (the same investments in the 2005 Deferred Compensation Plan and 2005 Deferred Compensation
Plan for Directors, above); however, at least 50% of the balance will remain in stock units until retirement. Dividend equivalents, applicable to any balance denominated in units, are credited to each
participant's accounts as of each dividend payment date for the Corporation's common stock. Distributions follow the payment schedule elected by the participant and may commence at a defined point no
sooner than six months following separation of service, in the form of a lump sum and/or annual installments ranging between two and 15 years. Beginning in 2018, nonmanagement members of the
Corporation's Board may not elect to defer to this plan, as it was replaced with the 2017 Deferred Compensation Company Stock Plan for Directors. Some previous deferral elections exist for certain
nonmanagement members of the Corporation's Board which are required to occur under this plan. These limited situations may result in a participant receiving match contributions to the 2005 Deferred
Compensation Company Stock Plan and the 2017 Deferred Compensation Company Stock Plan for Directors in the same year.
The
basis for investment earnings on prior, frozen plans varies as follows:
-
§
-
2001 Deferred Compensation Plan and 2002
Deferred Compensation Plan for DirectorsBalance is notionally invested in mutual fund-like investments (the same investments in the 2005 Deferred
Compensation Plan and 2005 Deferred Compensation Plan for Directors, above).
60 | WWW.BALL.COM/INVESTORS
Table of Contents
-
§
-
2000 Deferred Compensation Company Stock
PlanBalance is represented in the form of stock units, with each unit having a value equivalent to one share of Ball Corporation common stock.
Dividend equivalents are credited to the account as of each dividend payment date for the Corporation's common stock.
-
§
-
1989 Deferred Compensation
PlanProvides for an annual return equal to the average composite yield on Moody's for the 12 months ending October 31.
-
§
-
1986 Deferred Compensation Plan for
Directors and 1988 Deferred Compensation PlanProvides