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.   )

Filed by the Registrant   ☒Filed by a Party other than the Registrant   ☐

THE CHEMOURS COMPANY

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

1007 Market Street
Wilmington, Delaware 19801

March 13, 2020

To our Shareholders:

We are pleased to invite you to attend the annual meeting of shareholders of The Chemours Company to be held on April 28, 2020 in the Caesar Rodney Ballroom at The Westin Hotel, located at 818 Shipyard Drive, Wilmington, DE 19801. The meeting will begin at 10:00 a.m. (Eastern time).

The following pages contain our notice of annual meeting and proxy statement. Please review this material for information concerning the business to be conducted at the annual meeting, including the nominees for election as directors.

We are furnishing proxy materials to our shareholders primarily over the Internet, which expedites shareholders’ receipt of proxy materials and reduces the environmental impact of our annual meeting.

Whether or not you plan to attend the annual meeting in person, please submit a proxy promptly to ensure that your shares are represented and voted at the meeting.

Sincerely,

Notice of Annual Meeting
of Shareholders

Date: April 28, 2020

Time: 10:00 a.m. Eastern time
Place: Caesar Rodney Ballroom at The Westin Hotel, located at 818 Shipyard Drive, Wilmington, DE 19801

Record date: March 2, 2020

Notice is hereby given that a meeting of the shareholders of The Chemours Company (the “Company”) will be held in the Caesar Rodney Ballroom at The Westin Hotel, located at 818 Shipyard Drive, Wilmington, DE 19801, on April 28, 2020 at 10:00 a.m. Eastern time (including any adjournments or postponements thereof, the “Annual Meeting”) for the following purposes:

1.

To elect the nine director nominees named in the accompanying Proxy Statement to serve one-year terms expiring at the Annual Meeting of Shareholders in 2021;

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2.

To hold a non-binding advisory vote to approve the compensation of the Company’s named executive officers;

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3.

To ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2020;

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4.

To vote on a shareholder proposal on a Board Advisory Position if properly presented at the Annual Meeting; and

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5.

To transact such other business that may properly come before the Annual Meeting or any adjournments or postponements thereof.

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Only shareholders of record at the close of business on March 2, 2020 are entitled to notice of, and to vote at, the Annual Meeting, and any adjournments or postponements of the Annual Meeting.

By Order of the Board of Directors.

David C. Shelton
Senior Vice President, General Counsel &
Corporate Secretary

March 13, 2020

Your vote is important. Even if you plan to attend the Annual Meeting, Chemours still encourages you to submit your proxy by Internet, telephone or mail prior to the meeting. If you later choose to revoke your proxy or change your vote, you may do so by following the procedures described under “Can I revoke a proxy?” and “Can I change my vote after I have delivered my proxy?” in the “Questions and Answers” section of the attached Proxy Statement.

IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 28, 2020:
The Notice of Internet Availability of Proxy Materials, Notice of Annual Meeting of Shareholders,
Proxy Statement and Annual Report are available at
www.allianceproxy.com/chemours/2020

Table of Contents

PROXY STATEMENT

ANNUAL MEETING OVERVIEW

Set forth below is summary information regarding the annual meeting of shareholders (including any adjournments and postponements thereof, the “Annual Meeting”) of The Chemours Company (“Chemours” or the “Company”), including the location of the meeting and the proposals its shareholders will vote upon at the meeting. Please see the more detailed information set forth in this Proxy Statement about the Annual Meeting and the proposals.

PROPOSAL 1  —  ELECTION OF DIRECTORS

Director Qualification Standards

1

2

Director Nominees

The following information describes certain information regarding our director nominees.

Director Nominee Composition

Skills, Experience, and Background

3

Skills Matrix

We maintain a skills matrix that identifies expertise and professional background in areas we think are essential for Chemours. The table below lists the areas of expertise for our director nominees.

4

Director Nominees

5

6

7

8

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF ITS NINE
DIRECTOR NOMINEES.

9

CORPORATE GOVERNANCE

Corporate Governance Highlights

Corporate Governance Practices

10

Corporate Responsibility Commitment Highlights

Our 2030 Corporate Responsibility Commitment Goals

11

Board Oversight of Corporate Responsibility

Board Leadership Structure

Director Independence

12

Independent Directors

Independent Committees

Oversight of Risk Management

13

Succession Planning

Director Education

Code of Conduct

14

Shareholder Engagement

Policy on Hedging Transactions

15

BOARD STRUCTURE AND COMMITTEE COMPOSITION

The Board has nine Directors and three standing Committees: the Audit Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate Governance Committee.

The table below reflects the current membership of each Committee and the number of meetings held by each Committee during fiscal year 2019. Richard H. Brown, as Chairman of the Board, and Mark P. Vergnano, as President and Chief Executive Officer, are not members of any Committee.

The Board met 9 times during fiscal year 2019. Each of the directors attended over 75% of the Board meetings and meetings of the Committees on which they served. The Company’s Corporate Governance Guidelines provide that directors are expected to attend meetings of the Board, its Committees on which they serve, and the Annual Meeting of Shareholders.

Each Committee operates under a written charter. The Charters are available on the Company’s corporate website, www.chemours.com, under the heading “Investor Relations” and subheading “Corporate Governance.” The principal functions of each Committee are summarized below.

Audit Committee

16

Compensation and Leadership Development Committee

Compensation Committee Interlocks and Insider Participation

17

Nominating and Corporate Governance Committee

18

DIRECTOR COMPENSATION

Overview

Non-employee directors receive compensation for Board service, which is designed to fairly compensate them for their Board responsibilities and align their interests with the long-term interests of shareholders. The Nominating and Corporate Governance Committee, which consists solely of independent directors, has the primary responsibility to review and consider any revisions to directors’ compensation.

During fiscal year 2019, non-employee directors were entitled to the following annual retainers:

(1)

Amounts payable in cash may be deferred pursuant to The Chemours Company Stock Accumulation and Deferred Compensation Plan for Directors (the “Directors Deferred Compensation Plan”), which is described further below.

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(2)

Equity awards are valued as of the grant date and rounded up to the nearest whole share. For 2019, equity awards were in the form of shares of common stock or deferred stock units (DSUs) that convert into shares of common stock when a director leaves the Board. Before DSUs are converted into shares, directors are not entitled to dividends on the DSUs, but they receive dividend equivalents (credited in the form of additional DSUs) that likewise are converted into shares (with any fractional share paid in cash) upon termination of service.

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The above fees assume service for a full year. Directors who serve for less than the full year are entitled to receive a pro-rated portion of the applicable payment. Each “year,” for purposes of non-employee director compensation, begins on the date of the Company’s annual meeting of shareholders. The Company does not pay meeting fees, but does pay for or reimburse directors for reasonable travel expenses related to attending Board, Committee, educational and Company business meetings.

For 2019, the Nominating and Corporate Governance Committee recommended after consultation with the independent compensation consultant Willis Towers Watson, and the Board approved, changes to the annual amount of the non-employee director equity compensation. Effective May 1, 2019, non-employee directors received a $145,000 equity award. The Board believes the compensation program is in the best interest of the Company and designed to fairly compensate directors for their Board responsibilities and align their interests with the long-term interests of shareholders.

The Board has adopted share ownership guidelines applicable to non-employee director equity awards. The share ownership guidelines, contained in the Corporate Governance Guidelines, require non-employee directors to hold at least six (6) times the cash portion of their annual retainer worth of Chemours common stock, restricted stock units (RSUs) and/or DSUs while serving as a director. Non-employee directors will have five (5) years to attain this ownership threshold from the time of their election to the Board.

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The Chemours Company Stock Accumulation and Deferred Compensation Plan for Directors

Under the Stock Accumulation and Deferred Compensation Plan for Directors, a director is eligible to defer all or part of his or her Board retainer and Committee Chair fees in cash or stock units until a future year or years, payable in a lump sum or equal annual installments. Interest will accrue on deferred cash payments, and dividend equivalents will accrue on deferred stock units. This deferred compensation is an unsecured obligation of the Company.

2019 Director Compensation Table

The following table shows information concerning the compensation paid in fiscal year 2019 to non-employee directors:

(1)

During fiscal year 2019, Mr. Vergnano was an employee of the Company and, as such, did not receive separate or additional compensation for his service as a director. See “Executive Compensation” in this Proxy Statement for information relating to the compensation paid to Mr. Vergnano during fiscal year 2019.

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(2)

Column reflects all cash compensation earned during fiscal year 2019, whether or not payment was deferred pursuant to the Directors Deferred Compensation Plan.

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(3)

This column represents the dollar amount recognized for financial statement reporting purposes with respect to fiscal year 2019 in accordance with FASB ASC 718 as the grant date fair value of compensation earned by directors in the form of DSUs of Chemours common stock or shares of common stock. This value is determined by dividing the annual equity award amount by the closing share price on the date of grant and rounding up to the next whole share, then multiplying by the closing share price on the grant date.

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(4)

Ms. Kane was appointed to the Board in June 2019.

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The aggregate number of RSUs and DSUs held by each non-employee director at fiscal year-end is as follows:

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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Directors and Management

The following table sets forth information with respect to the beneficial ownership of Chemours’ common stock as of March 2, 2020 by each of the Company’s directors and nominees, named executive officers, and all directors and executive officers as a group.

Amount and nature of beneficial ownership:

*

Indicates ownership of less than 1% of the outstanding shares of Chemours common stock. Each of the Company’s executive officers and directors may be contacted at 1007 Market Street, Wilmington, DE 19801.

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(1)

Shares held individually or jointly with others, or in the name of a bank, broker or nominee for the individual’s account.

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(2)

Shares over which directors, nominees and executive officers may be deemed to have or share voting or investment power, including shares owned by trusts and certain relatives.

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(3)

Shares which directors and executive officers had a right to acquire beneficial ownership of within 60 days from March 2, 2020, through the exercise of stock options or through the conversion of stock units held under the Company’s equity-based compensation plans.

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21

Security Ownership of 5% Beneficial Owners

Based solely on the information filed on Schedule 13G for the fiscal year ended December 31, 2019, the following table sets forth those shareholders who beneficially own more than five percent of Chemours common stock.

(1)

Based solely on a Schedule 13G/A regarding holdings in Chemours common stock filed with the SEC on February 7, 2020, FMR LLC reported that it had sole voting power with respect to 740,795 shares and sole dispositive power with respect to 23,771,750 shares as of December 31, 2019.

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(2)

Based solely on a Schedule 13G/A regarding holdings in Chemours common stock filed with the SEC on February 12, 2020, The Vanguard Group reported that it had sole voting power with respect to 84,138 shares, shared voting power with respect to 30,231 shares, sole dispositive power with respect to 15,084,043 shares, and shared dispositive power with respect to 91,907 shares as of December 31, 2019.

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(3)

Based solely on a Schedule 13G/A regarding holdings in Chemours common stock filed with the SEC on February 5, 2020, BlackRock, Inc. reported that it had sole voting power with respect to 13,790,209 shares and sole dispositive power with respect to 14,471,999 shares as of December 31, 2019.

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(4)

Ownership percentages based on 163,574,243 shares outstanding as of December 31, 2019.

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22

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

(1)

Mr. Newman served as Senior Vice President and Chief Financial Officer until June 3, 2019

​

(2)

Mr. Kirsch served as the President, Fluoroproducts until his separation on October 31, 2019

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This Compensation, Discussion and Analysis is organized into five sections:

•

Executive Summary

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•

Executive Compensation Philosophy and Pay-for-Performance

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•

Executive Compensation Decision Making

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•

2019 Executive Compensation

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•

Company Sponsored Employee Benefits

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Executive Summary

2019 Business Highlights

Net sales were $5.5 billion for the year ended December 31, 2019 compared with $6.6 billion for the same period in 2018, reflecting lower prices and volumes across the three segments. In the Fluoroproducts segment, lower volumes and prices were driven by illegal imports of legacy HFC refrigerants into the EU, in violation of the EU’s F-gas regulations; lower volumes were also driven by lower demand for our legacy base refrigerants and polymers, which was driven by softness in global markets, primarily the automotive and electronics markets. In the Titanium Technologies segment, lower TiPure™ volume sales were due to supply chain destocking and share loss in the first half of the year as we implemented our Ti-Pure™ Value Stabilization strategy. In the Chemical Solutions segment, lower prices were mainly driven by raw material cost pass-throughs as stipulated in certain contracts. GAAP Net Income was $(52) million, inclusive of two significant charges in the fourth quarter. These charges were comprised of a $380 million charge related to the transfer of a significant portion of the Netherlands Pension Plan obligations to a third-party asset management firm and a $132 million charge for on-site remediation at our Fayetteville site. Adjusted Net Income was $419 million. Adjusted earnings before interest, income taxes, depreciation, and amortization (“Adjusted EBITDA”) decreased from $1.74 billion in 2018 to $1.02 billion. The decline was primarily attributable to the aforementioned reduced volumes of TiO2 sales and lower fixed cost absorption as we reduced production rates in the Titanium Technologies segment, the aforementioned lower sales volumes and prices and lower F-gas quota authorization sales in the Fluoroproducts segment, and operating issues experienced in the year. These were partially offset by record results in the Chemical Solutions segment.

2019 Results include:

•

Net Sales of  $5.5 billion

​

•

GAAP Net Income of  $(52) million

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•

Adjusted Net Income of  $419 million

​

•

Adjusted EBITDA of  $1.02 billion

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23

Adjusted EBITDA and Adjusted Net Income are non-GAAP financial measures. Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures” starting on page 57 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for a reconciliation of Adjusted EBITDA and Adjusted Net Income to the most directly comparable GAAP measure.

2019 Executive Compensation Highlights

Chemours’ executive pay programs are highly performance-based, with payouts under both the short-term and long-term programs dependent on meeting financial and operational objectives over various performance periods. For 2019, the Compensation and Leadership Development Committee approved certain changes to the programs to better incentivize executives to drive Chemours’ financial performance and long-term stock performance.

Named Executive Officer (“NEO”) Compensation

•

In early 2019, certain NEOs received adjustments to their base salaries and short / long-term incentive opportunities. The Compensation and Leadership Development Committee believed these changes were appropriate after a careful review of 2018 performance, internal equity, job responsibilities and competitive market data.

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•

During 2019, a number of role changes occurred for NEOs with commensurate changes to compensation. The Compensation and Leadership Development Committee believed these changes were appropriate after a careful review of job responsibilities, internal equity and competitive market data.​

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◦

Effective June 3, 2019 Mark Newman was promoted from Senior Vice President and Chief Financial Officer to Senior Vice President and Chief Operating Officer. Sameer Ralhan was promoted to Senior Vice President, Chief Financial Officer and Treasurer.

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◦

Effective October 4, 2019 Edwin Sparks was promoted to President, Chemical Solutions and Fluoroproducts.

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◦

The employment relationship with Paul Kirsch, former President, Fluoroproducts ended October 31, 2019.

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Annual Incentive Plan (“AIP”)

•

The Compensation and Leadership Development Committee modified the AIP to focus the Business Unit measures on the key performance targets for the year. The weighting of Business Unit Free Cash Flow was increased for all business units. For Fluoroproducts and Chemical Solutions, the metric of Business Adjusted EBITDA was replaced by Business Revenue. For Titanium Technologies, Business Adjusted EBITDA was replaced by a key strategic measure linked to the TiPureTM Value Stabilization project. For Chemours as a whole, the measures remained as Free Cash Flow and Adjusted EBITDA as the Compensation and Leadership Development Committee believes these measures reinforce the importance of earnings and cash generation to the achievement of Chemours’ objectives, as well as their importance to shareholders.

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•

Performance against AIP targets was mixed in 2019. The 2019 financial measures and targets under the AIP, along with results for the year, are listed below. AIP results are reflective of the changing circumstances of the business and macroeconomic challenges. As a result, AIP payouts to NEOs varied based on the performance of Chemours and the individual Business Units. Specifically, Chemours’ and Fluoroproducts’ performances fell below threshold levels and no AIP was paid. Titanium Technologies achieved target performance for the business strategic measure but fell below threshold level for Free Cash Flow. Chemical Solutions exceeded target for Free Cash Flow but fell below threshold level for BU Revenue.

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24

Long-Term Incentives

•

In the Performance Share Unit (“PSU”) Plan, the Compensation and Leadership Development Committee approved Adjusted Net Income as a replacement for Adjusted EPS and Free Cash Flow Conversion as a replacement for Pre-Tax Return on Invested Capital. The new measures are considered more straightforward, more transparent, and provide important indicators of success in delivering long-term shareholder value with a focus on the quality of earnings.

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•

The Compensation and Leadership Development Committee introduced more gradation to the Relative Total Shareholder Return Modifier (“TSR”) and expanded the overall modifier range from 0.75 – 1.25 to 0.5 – 1.5. Aligned to potential lower payouts at the lowered modifier of 0.5, the Compensation and Leadership Development Committee increased the maximum overall payout to 250% should Relative TSR exceed the 75th percentile versus the selected Peer Group.

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•

For the 2019 PSU award, the Compensation and Leadership Development Committee removed the annual performance periods. Reflecting the long-term nature of the plan, the 2019 PSU award is based solely on a three-year performance measurement period. This is a change from previous PSU awards that were based on annual performance periods and an average three-year performance period.

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•

The overall performance result for the 2017 PSU Award was 118%. The payout for this award was based on pre-established annual and three-year targets for Adjusted EBITDA and Pre-Tax Return on Invested Capital (“ROIC”). Under the 2017 PSU Award, performance results were subject to adjustment by Relative TSR over the three-year performance period for performance above the 75th percentile or below the 25th percentile. Over the three-year period ending December 31, 2019, Chemours delivered Relative TSR at the 7th percentile for the peer group described in the section titled “2017 PSU Award Results”. The level of Relative TSR performance resulted in a 0.75 modifier being applied to the 2017 PSU Award payout.​

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25

Executive Compensation Governance and Best Practices

Chemours’ executive compensation policies and practices demonstrate a commitment to strong governance standards and include features designed to mitigate compensation-related risks. The table below highlights the key features of Chemours’ executive compensation programs and those features that Chemours does not employ:​

2019 “Say on Pay” Vote Result

At Chemours’ 2019 Annual Meeting, shareholders approved the Company’s “Say-on-Pay” proposal with 95% of the votes cast in support of the executive compensation program. The Compensation and Leadership Development Committee is committed to regularly reviewing the program in the context of Chemours’ compensation philosophy and will continue to consider shareholder input in evaluating executive compensation program design and decisions.

Executive Compensation Philosophy and Pay-for-Performance

Executive Compensation Philosophy

The objectives of Chemours’ executive compensation philosophy are rooted in:

•

Promoting a performance-based culture that strongly links executive rewards to shareholder interests and to the Company’s strategic and financial goals

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•

Providing a competitive total compensation opportunity designed to attract, retain and motivate high-performing executive talent

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26

These objectives are achieved through fixed and variable compensation elements. The Compensation and Leadership Development Committee determines the appropriate balance between these elements in setting the total compensation opportunity for executives:

Pay Mix at Target

The Committee believes that aligning executive incentive payouts with Chemours’ performance outcomes is critical for shareholders. Accordingly, the targets under the annual and long-term incentive programs represent rigorous performance expectations that are aligned to short and long-term financial and strategic goals.

To reinforce Chemours’ pay-for-performance philosophy, the total compensation program for executives emphasizes at-risk incentive pay and, therefore, fluctuates with financial results and stock price. This approach aligns the pay outcomes of executives with Company performance and shareholder interests. The charts that follow illustrate the percentage of target pay at-risk for the CEO and other NEOs on average.

87% of CEO target total pay in 2019 was at risk while target total pay for our other NEOs was on average 72% at risk.

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CEO Pay for Performance

The chart below demonstrates the relationship between Mr. Vergnano’s pay and Chemours’ TSR in 2016, 2017, 2018 and 2019. Target Pay ($6 million in 2016, $7.8 million in 2017, $7.9 million in 2018 and $8 million in 2019) refers to the target pay program approved by the Compensation and Leadership Development Committee regarding base salary, annual incentive, and equity awards. Realizable Pay ($18.8 million in 2016, $10.6 million in 2017, $4.0 million in 2018 and $2.6 million in 2019) is defined as actual W-2 base salary pay, actual annual incentive payment for performance in that year (paid in following year), and the value of equity awards at the end of the period. Stock options are valued based on the in-the-money value of options granted during that year (the spread between end-of-year stock price and grant price). Performance Share Units (“PSUs”) are valued based on the number of PSUs awarded during that year (i.e. target # of PSUs), valued at the stock price at the end of the year.

The value of Mr. Vergnano’s equity awards varied at the end of each fiscal year based on changes in the stock price from the date of grant. This, combined with variable annual incentive payouts, contributes to different levels of Realizable Pay value. The Compensation and Leadership Development Committee believes the pay outcomes for the CEO are aligned with shareholder interests over the time periods reported.

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Executive Compensation Decision Making

The Chemours Compensation and Leadership Development Committee applies the following factors to guide executive compensation decisions:

•

Company performance and strategic objectives

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•

Independent external market data

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•

Economic environment for the chemicals industry

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The table below summarizes oversight responsibilities and participation in executive compensation decisions:

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Independent Compensation Consultant

The Compensation and Leadership Development Committee has engaged Willis Towers Watson as its independent compensation consultant since April 2017. Willis Towers Watson is engaged by and reports directly to the Compensation and Leadership Development Committee, which may replace the firm or hire additional consultants at any time.

The Compensation and Leadership Development Committee and the other independent directors of Chemours’ Board are the sole decision makers for compensation of executive officers.

The Committee has assessed the independence of Willis Towers Watson based on NYSE Listing Standards and SEC rules and concluded that its work does not raise any conflict of interest.

Peer Group Selection and Competitive Positioning

In making compensation decisions, the Compensation and Leadership Development Committee considers competitive market data from a compensation peer group of companies as one of several reference points. Compensation peer group data is supplemented with broader chemical industry and general industry data. The selection of the compensation peer group is composed of publicly-traded U.S. based companies with similar scale (generally 0.25x to 4x on market capitalization), revenue (generally 0.5x to 2x), industry, and business characteristics reflecting Chemours’ current state as well as its business direction.

For compensation decisions made in early 2019, the compensation peer group consisted of the following companies:

Chemours generally targets the market median for target total direct compensation and each of base salary, target total cash compensation, and target total long-term incentives for senior officers and NEOs. Ultimately, the Compensation and Leadership Development Committee has the flexibility to pay above or below the market median based on a variety of factors including an executive’s scope of responsibility, experience level, the critical need for retention, sustained performance over time, potential for advancement as part of key succession planning processes, and other unique factors.

The Compensation and Leadership Development Committee reviews the composition of the compensation peer group regularly to ensure that it remains suitable and appropriate. With the assistance of its independent compensation consultant, the Compensation and Leadership Development Committee conducted a review of the peer group in July 2019. The following changes were made and will be used as a reference point for making 2020 compensation decisions:

•

Added: Cabot Corporation due to general alignment from a business, financial and stock price correlation perspective.

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•

Removed: Air Products & Chemicals, Inc. as too high on a market capitalization comparison, W.R. Grace and Company and Element Solutions as both companies were low on a revenue comparison and had reduced business correlation.

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2019 Executive Compensation

2019 CEO Compensation Highlights

Early in 2019, the Compensation and Leadership Development Committee considered many factors in recommending Mr. Vergnano’s 2019 target total direct compensation opportunity, including the following:

•

Strong Company performance in 2018, with net sales increasing and GAAP net income up versus 2017

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•

Mr. Vergnano’s individual performance

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•

External market competitiveness

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The Compensation and Leadership Development Committee recommended keeping Mr. Vergnano’s base salary and target annual incentive opportunity at the same levels as 2018 and increasing Mr. Vergnano’s long term incentive opportunity by $100,000. Mr. Vergnano’s target total compensation was approved by the Board of Directors in February 2019:

Mr. Vergnano’s actual 2019 AIP award was $0, which is reflective of the company performance outcomes noted previously. In 2019, 60% of Mr. Vergnano’s total long-term incentive opportunity was delivered in Performance Share Units (“PSUs”), with vesting and performance results based on the achievement of Adjusted Net Income and Free Cash Flow Conversion financial goals, as well as Relative TSR over a three-year period. The remaining 40% of Mr. Vergnano’s long-term incentive opportunity was delivered in non-qualified stock options, which vest annually in three equal installments from the date of grant.

2019 Base Salaries of the Other NEOs

Base salaries for the NEOs are intended to be competitive with the market in order to attract and retain the executive talent needed to successfully manage daily business operations. The Compensation and Leadership Development Committee reviews base salaries for NEOs annually. NEOs’ base salaries reflect the scope of responsibilities, experience, achievement of individual strategic objectives, and external market competitiveness. Base salaries represent a small portion of a NEO’s overall compensation.

In early 2019, after considering external market pay data, internal equity and performance, the Compensation and Leadership Development Committee approved a base salary increase for Mr. Shelton of 5.26%, increasing his base salary to $500,000.

Effective June 3, 2019, in recognition of their new positions and after considering external market pay data, the Compensation and Leadership Development Committee approved base salary increases for Mr. Newman and Mr. Ralhan. Effective October 4, 2019, in recognition of his new position and after considering external market pay data, the Compensation and Leadership Development Committee approved a base salary increase for Mr. Sparks.

Annual Incentive Plan (AIP)

Chemours’ annual incentive plan is designed to reward executives for achieving and exceeding annual financial performance goals. Under the AIP, each NEO has a target annual incentive opportunity, expressed as a percentage of base salary. Incentive targets are determined based on the Compensation and Leadership Development Committee’s review of peer group practices, chemical industry data from proprietary third-party surveys, and the position and scope of responsibilities of each NEO. Incentive targets are reviewed annually. NEO AIP target opportunity (as a percentage of salary) remained unchanged for Mr. Kirsch, Mr. Snell and Mr. Shelton.

Effective June 3, 2019 and reflective of their new positions and considering external market data, the Compensation and Leadership Development Committee approved increases to the AIP target opportunities for Mr. Newman and Mr. Ralhan. Effective October 4, 2019 and reflective of his new position and considering external market data, the Compensation and Leadership Development Committee approved an increase to the AIP target opportunity for Mr. Sparks.

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The following table summarizes 2019 AIP targets.

After careful review, the Compensation and Leadership Development Committee made changes to the annual incentive plan design in 2019 to better align AIP payouts for Business Unit Presidents to the results of their respective businesses.

Incentive Formula

Actual cash annual incentive awards for NEOs in 2019 were determined using the formulas shown below. The calculation of award payments for each NEO is determined based on Chemours’ financial performance or a combination of Chemours and Business Unit performance. There is no individual performance component for NEOs. The Compensation and Leadership Development Committee may use discretion to reduce payout.

AIP awards for Messrs. Vergnano, Newman, Ralhan and Shelton are determined as follows:

AIP awards for Messrs. Snell, Sparks and Kirsch are determined as follows:

Performance Measures

For 2019, the Compensation and Leadership Development Committee determined Adjusted EBITDA and Free Cash Flow remained the appropriate measures for the Chemours Corporate Performance, as they directly reflect Chemours’ goals of promoting earnings improvement and emphasizing cash generation. Adjusted EBITDA and Free Cash Flow were weighted equally in determining the Corporate Performance Factor.

For the Business Unit Performance measures, the Compensation and Leadership Development Committee increased the weighting for Business Unit Free Cash Flow and replaced Business Unit Adjusted EBITDA with Business Revenue for Fluoroproducts and Chemical Solutions and with TiPureTM Value Stabilization Strategic Objectives for Titanium Technologies.

For the Fluoroproducts and Chemical Solutions Business Unit Performance Factors, Business Unit Free Cash Flow was weighted 75% and Business Unit Revenue was weighted 25%. The Compensation and Leadership Development Committee believed this generated the appropriate balance of focus on earnings, cash generation and top-line growth.

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For the Titanium Technologies Business Unit Performance Factor, Business Unit Free Cash Flow was weighted 67% and TiPureTM Value Stabilization strategic objectives were weighted 33%. The Compensation and Leadership Development Committee believed the TiPureTM Value Stabilization strategic objectives provided focus on the critical business transformation strategy.

Adjusted EBITDA is defined as income (loss) before interest, income taxes, depreciation and amortization excluding the following items: non-operating pension and other postretirement employee benefit costs (income), exchange gains (losses), restructuring and asset-related charges (benefits), gains (losses) on sale of business or assets, significant legal settlements, impacts of changes to U.S. GAAP accounting or other items not considered indicative of ongoing operations during the Performance Period.

Free Cash Flow is defined as Cash Flows from Operations less purchases of property, plant and equipment as disclosed on the Company’s Cash Flow statement. Business Unit Free Cash Flow is defined as Adjusted EBITDA plus the delta Working Capital minus CapEx. Working Capital equals Accounts Receivable plus Inventory minus Accounts Payable. Unknown impacts of changes to U.S. GAAP accounting and tax policy changes, or other items not considered indicative of ongoing operations during the performance period will be excluded from this calculation during the Performance Period.

Business Revenue is defined as Sales to external customers as defined by ASC 606, Revenue from Contracts with Customers.

The TiPureTM Value Stabilization Strategic Objectives were qualitative measures based on type of sales contracts, the implementation of a commercial portal, plus operational and manufacturing improvements. The Compensation and Leadership Development Committee had sole discretion in assessing the performance versus objectives and defining results for the AIP.

The chart below shows the 2019 AIP performance targets, ranges and results approved by the Compensation and Leadership Development Committee. Performance targets were set in early 2019 and were consistent with the Company’s budget for 2019, which incorporated considerations of potential opportunities and risks associated with external business and market conditions. Targets for each of the performance measures are set at levels considered challenging, motivational, and competitive. The performance range is determined using external guidance, historical performance and expectations as guardrails. Threshold is considered the level of performance that warrants the minimum payout level and the maximum defines what level of performance is exceptional.

Based on 2019 financial results, the Chemours 2019 Corporate AIP payout was zero, the Fluoroproducts AIP payout was zero, the Titanium Technologies payout was 25% of target and the Chemical Solutions payout was 90% of target.

Dollars are in millions.

Corporate AIP

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Titanium Technologies AIP

Fluoroproducts AIP

Chemical Solutions AIP

(1)

Represents the minimum level of performance required to earn any incentive for this component of the 2019 AIP. Performance below this level would not result in a payout for the performance measure.

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(2)

Represents the highest level of performance at which maximum payout under the 2019 AIP is earned. Achievement of performance above this level would not result in a greater payout for the performance measure.

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Based on the actual performance achieved, the following AIP awards for each NEO were approved:

(1)

2019 AIP cash targets pro-rated based on targets before and after compensation changes effective June 3, 2019.

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(2)

Mr. Sparks held the role of President, Chemical Solutions until October 2019 when he became President, Chemical Solutions and Fluoroproducts. The Compensation and Leadership Development Committee decided to measure his 2019 AIP based solely on the role of President, Chemical Solutions.

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(3)

2019 AIP cash target pro-rated based on targets before and after compensation change effective October 4, 2019.

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(4)

Under the standard severance terms, at the time of his separation from Chemours Mr. Kirsch received a pro-rated payment at target value in lieu of forfeited participation in the 2019 AIP.

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Long-Term Incentive (LTI) Program

Chemours provides long-term incentive compensation to directly tie NEO interests to the interests of shareholders. The Compensation and Leadership Development Committee views long-term incentives as a critical element of our executive compensation program. Long-term incentive targets are reviewed annually and determined based on the Compensation and Leadership Development Committee’s review of the following:

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NEO position, scope of responsibilities and performance

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•

Internal pay equity considerations

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•

Peer group practices

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•

Current market compensation data for the chemical industry and general industry from proprietary third-party surveys

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In early 2019, the Compensation and Leadership Development Committee increased the long-term incentive target opportunities for both Mr. Shelton and Mr. Kirsch by $100,000 and recommended to the Board of Directors an increase of  $100,000 for Mr. Vergnano (which was subsequently approved in February 2019). The increases in long-term incentive targets were to better align compensation to market and to align executive incentive payouts with Chemours’ performance outcomes and shareholder interests.

Effective June 3, 2019 and reflective of their new positions and considering external market data, the Compensation and Leadership Development Committee approved increases to the long-term incentive target opportunities for Mr. Newman and Mr. Ralhan. Effective October 4, 2019 and reflective of his new position and considering external market data, the Compensation and Leadership Development Committee approved an increase to the long-term incentive target opportunity for Mr. Sparks.

As in prior years, target LTI award values were delivered through a mix of PSUs and Non-Qualified Stock Options (“stock options”). LTI awards delivered in the form of PSUs and stock options focus on shareholder value creation and long-term decision-making consistent with Chemours’ strategic objectives. Details of each award type are summarized below.

Stock Options (40% of LTI Target Award)

The use of stock options provides clear and direct alignment with shareholder interests as they have value only if the price of Chemours’ stock at the time of exercise exceeds the stock price on the date of grant. As a result, stock option grants encourage executives to focus on behaviors and initiatives that support sustained long-term stock price appreciation, which benefits all shareholders. The stock options are designed to vest in equal annual installments over three years from the grant date and have a ten-year term.

PSU Awards (60% of LTI Target Award)

Sixty percent of an NEO’s LTI award is delivered through PSUs. The PSUs are earned and vest based on the achievement of Adjusted Net Income and Free Cash Flow Conversion objectives, which are determined at the time of grant. The 2019 – 2021 PSU plan is measured over a three-year cumulative period.

Performance goals are considered challenging to obtain and are aligned with delivering shareholder value. In setting these objectives, the Compensation and Leadership Development Committee considers how the achievement of goals may be affected by competitive and/or economic conditions over the three-year period. Final awards are subject to potential modification based on TSR results relative to Chemours’ peer group over the cumulative three-year performance period.

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The initial payout range of the PSUs is 0% to 200% depending on Chemours’ achievement versus the Adjusted Net Income and Free Cash Flow Conversion performance goals. The payout is then subject to modification based on the Relative TSR performance compared to the Peer Group, with a maximum payout capped at 250%.

As in prior years, the PSU portion of Chemours’ LTI program consisted of overlapping cycles, with a new equity award each year. In general, each participant receives a grant at the beginning of each three-year cycle.

Financial / Operating Measures

The use of Adjusted Net Income in the long-term program is an important indicator of success in delivering long-term shareholder value. Free Cash Flow Conversion is critical to Chemours’ ability to invest and manage assets that deliver the greatest return. The Compensation and Leadership Development Committee believes these performance measures are appropriate to motivate executives to achieve and sustain outstanding long-term results.

The 2019 PSU Award performance period, January 1, 2019 through December 31, 2021, consists of one, cumulative three-year measurement period.

Adjusted Net Income is defined as Net Income, as reported externally, adjusted in a manner consistent with Adjusted EBITDA, where appropriate to exclude non-operating pension and other postretirement employee benefit costs (income), windfall tax benefit (expense) related to stock based compensation, exchange gains (losses), restructuring and asset-related charges (benefits), gains (losses) on sale of business or assets, significant legal settlements, impacts of changes to U.S. GAAP accounting, or other items not considered indicative of ongoing operations during the Performance Period.

Free Cash Flow Conversion is defined as Free Cash Flow, defined as Cash Flows from Operations less purchases of property, plant and equipment as disclosed on the Company’s Cash Flow statement divided by Adjusted EBITDA defined as income (loss) before interest, income taxes, depreciation and amortization excluding the following items: non-operating pension and other postretirement employee benefit costs (income), exchange gains (losses), restructuring and asset-related charges (benefits), gains (losses) on sale of business or assets, significant legal settlements, impacts of changes to U.S. GAAP accounting or other items not considered indicative of ongoing operations during the Performance Period.

Chemours believes disclosing specific targets while the applicable performance period is ongoing could cause competitive harm. However, such targets will be disclosed once the applicable performance periods have ended as part of our discussion and analysis on awards earned by the NEOs.

Relative TSR

Relative TSR is used as a modifier to promote alignment with shareholder interests. Relative TSR for the 2019 PSU Award will be measured at the end of the three-year period against the 2019 peer group discussed previously. Chemours’ TSR relative to these peers will be used as a modifier to increase or reduce the number of units earned.

Relative TSR is defined as the change in the Company’s stock price plus dividends paid and assumed to be reinvested on the ex-dividend date during the period, divided by beginning stock price, compared on a percentile basis to the same change with respect to a peer group. For this purpose, a company’s beginning stock price will be the closing stock price averaged over the 20 trading days ending on the trading day before the start of the Performance Period and the ending stock price will be the closing stock price, inclusive of reinvested dividends, averaged over the 20 trading days ending with the last trading day within the Performance Period. For purposes of calculating the appropriate earned percentile, any companies that are in the peer group at the beginning of the Performance Period that are no longer separate publicly traded companies due to merger, acquisition, or buyout shall be disregarded. Companies that are no longer publicly traded due to insolvency or bankruptcy will be

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included at the lowest performance ranking. For purposes of calculating the earned percentile, the Company will be considered a member of the peer group.

2019 LTI Awards

Awards to the NEOs under the 2019 long-term incentive program were as follows:

Annual LTI awards are generally granted March 1 each year

(1)

The number of PSUs awarded was determined by dividing the dollar target value for each NEO by the closing price for Chemours common stock on grant date and rounding to the nearest whole share. The closing price of Chemours common stock was $38.02 on March 1, 2019 and $21.96 on June 3, 2019.

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(2)

The number of stock options awarded was determined based on the Black-Scholes value using the closing price of Chemours common stock on the grant date. The exercise price of the options was equal to the closing price of Chemours common stock on the grant date. The closing price of Chemours common stock was $38.02 on March 1, 2019 and $21.96 on June 3, 2019. The Black-Scholes value of an option was $14.35 on March 1, 2019 and $6.73 on June 3, 2019.

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(3)

Effective June 3, 2019 and reflective of their new positions and considering external market data, the Compensation and Leadership Development Committee approved one-time LTI grants for Mr. Newman and Mr. Ralhan. On the same date, considering internal equity, retention and external market data, the Compensation and Leadership Development Committee approved a one-time LTI grant to Mr. Sparks.

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(4)

Mr. Kirsch forfeited the LTI awards upon his separation from Chemours.

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2017 PSU Award Results

The three-year performance period for PSUs awarded in 2017 ended on December 31, 2019. The payout for this award was based on pre-established target levels of Adjusted EBITDA and Pre-Tax ROIC over the three-year performance period, subject to a Relative TSR modifier. The final payout determination was made in February 2020 after a review of Chemours’ performance. Based on performance results throughout the period and Relative TSR, the 2017 PSU Award payout was 118% of target. Chemours’ Relative TSR ranking at the 7th percentile for the FY2017 – FY2019 performance period resulted in a modifier factor at 0.75. The tables below detail performance against each measure:

Dollars are in millions

Adjusted EBITDA

Pre-Tax ROIC

Relative TSR

The Relative TSR ranking was based on the performance peer group set by the Compensation and Leadership Development Committee in 2017 for the 2017 PSU Award:

The Chemtura Corporation was removed from the final Relative TSR calculation as they had been acquired.

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The table below shows the target number of PSUs granted in 2017 and the actual number of PSUs earned, excluding dividend equivalent units.

Company Sponsored Employee Benefits

The Company offers the NEOs health and welfare and retirement plan benefits. Additional elements specific to the executive compensation program include nonqualified retirement benefit plans, reimbursement of financial planning and income tax preparation services, and change-in-control benefits.

The Chemours Company Retirement Savings Restoration Plan

The Chemours Company Retirement Savings Restoration Plan (“RSRP”) is a nonqualified defined contribution plan that restores benefits above the Internal Revenue Code limits for tax-qualified retirement plans to be consistent with those provided to other eligible employees at Chemours.

The Chemours Company Management Deferred Compensation Plan

Under the Chemours Company Management Deferred Compensation Plan (“MDCP”), a nonqualified elective deferred compensation plan, participants may defer base salary, bonus, and certain incentive plan awards until a later date. Generally, earnings on deferred amounts include returns on investments that mirror the investment alternatives available to all employees under the Company’s retirement savings plan.

Change-in-Control Severance Benefits

To ensure that executives remain focused on Chemours’ business during a period of uncertainty, Chemours maintains a change-in-control severance plan for its executives, including the NEOs. For any benefits to be earned, a change in control must occur and the executive’s employment must be terminated within two years following the change in control, either by Chemours without cause or the executive for good reason (often called a “double trigger”). The plan does not provide tax gross-ups. For additional information, see “Executive Compensation — Potential Payments upon Termination or Change-in-Control.”

Benefits provided under the change-in-control severance plan include:

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A lump sum cash payment of two times (three times for the CEO) the sum of the executive’s base salary and target annual incentive;

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A lump sum cash payment equal to the pro-rated portion of the executive’s target annual incentive for the year of termination; and

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•

Continued health and dental benefits, financial counseling and tax preparation, and outplacement services for up to two years (three years for the CEO) following the date of termination.

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The change-in-control severance plan also includes 12-month (18-month for the CEO) non-competition and non-solicitation covenants, non-disparagement, and confidentiality provisions.

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Compensation and Risk

In 2019, Chemours management reviewed its executive and non-executive compensation programs and in concurrence with the Compensation and Leadership Development Committee’s independent compensation consultant, determined that none of its compensation programs encourages or creates excessive risk-taking, and none are reasonably likely to have a material adverse effect on the Company.

In conducting this assessment, the components and design features of executive and non-executive plans and programs were analyzed. A summary of the findings of the assessment was provided to the Compensation and Leadership Development Committee. Overall, the Compensation and Leadership Development Committee concluded that (1) the Company’s executive compensation programs provide a mix of awards with performance criteria and design features that mitigate potential excessive risk taking and (2) non-executive employee compensation programs are appropriately balanced between fixed and variable compensation and do not encourage excessive risk taking. The Compensation and Leadership Development Committee also considered its payout caps or limits, stock ownership guidelines, and claw back policy as risk mitigating features of its executive compensation program.

Payout Limitations or Caps

Earned awards from the annual incentive plan are capped at 200% of target and PSU awards are capped at 250% of target to protect against excessive payouts.

Stock Ownership Guidelines

To further support our goal of achieving a strong link between shareholder and executive interests, Chemours maintains stock ownership guidelines to require executive share ownership of a value equal to a specified multiple of base pay. Executives have five (5) years from the date they become subject to the guidelines to reach their respective ownership requirements. Until the ownership requirement is satisfied, 100% of the net shares realized from exercise or vesting of stock-based awards must be retained. Share ownership guidelines are as follows:

All applicable NEOs have satisfied or are on track to satisfy these guidelines.

Restrictions on Certain Types of Transactions

The Company has a policy that prohibits executive officers and directors from engaging in the following types of transactions with respect to Chemours’ stock: hedging transactions, pledging securities, short sales, derivative transactions, margin accounts, and short-term trading.

Deductibility of Performance-Based Compensation

In setting the NEO’s 2019 compensation packages, the Compensation and Leadership Development Committee considered Section 162(m) of the Internal Revenue Code, which provides that compensation in excess of $1 million paid to certain executive officers is generally not deductible. The Compensation and Leadership Development Committee also considered the Tax Cuts and Jobs Act’s elimination of the performance-based compensation exception under Section 162(m). While the Compensation and Leadership Development Committee will continue to consider the tax deductibility of compensation, the Compensation and Leadership Development Committee did not change the structure of 2019 compensation packages due to the elimination of the performance-based compensation exception under Section 162(m).

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CEO Pay Ratio

As there were no significant changes to the global employee population nor significant changes to employee compensation arrangements, Chemours used the same median employee for the 2019 CEO pay ratio calculation as used in 2017 and 2018. The CEO pay ratio figures below are a reasonable estimate calculated in a manner consistent with SEC rules.

When first running the CEO pay ratio calculation, Chemours determined that as of October 31, 2017, the total number of employees was 6,954. To determine median employee pay, Chemours chose base pay as the consistently applied compensation measure. Chemours then calculated an annual base pay for each employee, annualizing pay for those employees who commenced work during 2017 and any employees who were on leave for a portion of 2017. Chemours used a valid statistical sampling methodology to identify a population of employees whose base pay was within a 5% range of the median. Using this methodology, Chemours identified the median employee from that group. The total number of employees on December 31, 2018 was 7,048 and on December 31, 2019 was 6,984.

It was determined that the total compensation for the selected median employee in 2019 was $95,254. The ratio of CEO pay to the median worker pay is 81:1.