Costa, according to the Kingsport-based company’s 2018 proxy statement, met financial and business performance in making progress in the company’s transformation to a more specialty product earnings mix and managing the impact of the coal gasification facility explosion; exceeded growth and innovation commitments; met productivity commitments; exceeded organizational capabilities enhancement, including management development and talent development; and partially met employee safety and wellness goals.
Costa’s compensation included $1.1 million in base salary, $9.1 million in stock awards, $1.9 million in option awards, about $449,000 in change in pension value and non-qualified deferred compensation and approximately $348,000 in all other compensation. The company also spent more than $200,000 for non-business travel on corporate aircraft by Costa and his family during the year, according to the proxy statement.
Costa took over as CEO in 2014, succeeding Jim Rogers.
For 2017, the variable portion of cash compensation paid to about 900 management level employees, including the executive team, was determined under Eastman’s Unit Performance Plan (UPP).
The 2017 UPP payout pool was determined based 75 percent on the company’s adjusted earnings from operations and 25 percent on free cash flow. The targeted adjusted earnings from operations was $1.635 billion, while the actual amount was $1.631 billion. The free cash flow target was $1 billion, while the actual amount was $1.008 billion.
The proxy statement stressed the importance of pay for corporate and individual performance in meeting strategic and business goals for growth, innovative value creation and financial strength and flexibility, while maintaining flexibility to meet changing employee, business and market conditions. A goal is to motivate executives with an appropriate mix of compensation elements.
Eastman’s Compensation Committee compared total annual cash compensation against more than 20 companies, including Dow Chemical, Air Products and Chemicals, Monsanto and PPG Industries Inc.
Eastman is a global advanced materials and specialty additives company that produces a broad range of products found in items people use every day.
Eastman had 2017 revenues of $9.5 billion, compared to 2016 revenues of $9 billion.