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

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

Check the appropriate box:

INNOPHOS HOLDINGS, INC.

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

Notice of Annual Meeting

and

Proxy Statement

2019

INNOPHOS HOLDINGS, INC.

INNOPHOS HOLDINGS, INC.

259 Prospect Plains Road, Building A, Cranbury, NJ 08512

April 8, 2019

Dear Fellow Stockholder:

You are cordially invited to attend the 2019 Annual Meeting of Stockholders (“Meeting”) of Innophos Holdings, Inc. The Meeting is scheduled to be held at 9:00 AM EDT on May 14, 2019 at the Crowne Plaza Hotel located at 900 Scudders Mill Road, Plainsboro Township, NJ 08536.

The accompanying Notice of Annual Meeting of Stockholders and Proxy Statement describe the items to be considered and acted upon by the stockholders at the Meeting.

Please note we are requiring identification as a stockholder to attend the Meeting. For more information on this matter, kindly refer to the accompanying Notice of Annual Meeting of Stockholders.

If you own shares of record, you will find enclosed a proxy card or cards and an envelope in which to return the card(s). Whether or not you plan to attend the Meeting, please sign, date and return your enclosed proxy card(s), or vote over the telephone or internet in accordance with the instructions on the proxy card, as soon as possible so that your shares can be represented and voted at the Meeting according to your instructions. If your shares are registered in the name of a broker/bank/trustee/nominee, your broker/bank/trustee/nominee will provide you with materials and instructions for voting your shares. You can revoke your proxy any time before the Meeting and issue a new proxy as you deem appropriate. You will find the procedures to follow if you wish to revoke your proxy under the “Frequently Asked Questions” section in the Proxy Statement.

Your vote is extremely important. Whether or not you intend to attend the Meeting, please vote your shares.

I look forward to seeing you at the Meeting.

INNOPHOS HOLDINGS, INC.

259 Prospect Plains Road, Building A, Cranbury, NJ 08512

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Please take notice that the 2019 Annual Meeting of Stockholders (the “Meeting”) of Innophos Holdings, Inc., a Delaware corporation (“Innophos”), will take place as follows:

2019 ANNUAL MEETING OF STOCKHOLDERS

OF

INNOPHOS HOLDINGS, INC.

PROXY STATEMENT

TABLE OF CONTENTS

PROXY STATEMENT

2019 ANNUAL MEETING OF STOCKHOLDERS

OF

INNOPHOS HOLDINGS, INC.

This Proxy Statement, the accompanying proxy card and Annual Report to Stockholders (“Annual Report”) of Innophos Holdings, Inc., a Delaware corporation (the “Company” or “Innophos”), are being mailed on or about April 10, 2019 to the Company’s stockholders of record on March 19, 2019. The Board of Directors of the Company (the “Board”) is soliciting your proxy to vote your shares of Company common stock at the Company’s 2019 Annual Meeting of Stockholders (the “Meeting”) scheduled to be held on May 14, 2019.

The Board is soliciting your proxy to give all stockholders the opportunity to vote on matters that will be presented at the Meeting, regardless of whether they can be present in person. This Proxy Statement provides you with information on these matters to assist you in voting your shares.

Frequently Asked Questions

What is a proxy?

A proxy is your legal designation of another person as your agent (the person is sometimes referred to as a “proxy”) to vote on your behalf. By completing and returning the enclosed proxy card, you are giving each member of the Proxy Committee the authority to vote your shares in the manner you indicate on your card.

Who constitutes the Proxy Committee?

The Proxy Committee consists of three Company employees, Messrs. Mark Feuerbach, Joshua Horenstein and Michael Lestino, each appointed by the Board and named on the proxy card to vote shares at the Meeting as instructed by stockholders.

Why did I receive more than one proxy card?

You will receive multiple proxy cards if you hold your shares in different ways (for example, in joint tenancy, trusts, custodial accounts) or in multiple accounts. If your shares are held by a broker, trust, bank or other nominee (that is, in “street name”), you will receive, together with this Proxy Statement and Annual Report (or a notice how to access such materials), your voting information, such as a request for instructions, from your broker, trust, bank or other nominee, and you will return your voting instructions as directed by your broker, trust, bank or other nominee. If you hold shares in more than one form, you must vote separately for each notice, proxy card and/or voting instruction card you receive that has a unique control number to ensure that all shares you own are voted. It is not necessary to send more than one proxy card or voting instruction card for the same shares, no matter how they are held.

Who is qualified to vote?

You are qualified to receive notice of and to vote at the Meeting if you own shares of common stock of the Company at the close of business on our record date of March 19, 2019.

How many shares of common stock may vote at the Meeting?

As of March 19, 2019, there were 19,612,163 shares of common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote on each matter presented. The Company’s one class of common stock is the only security allowed to vote at the Meeting.

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What is the difference between a “stockholder of record” and a “street name” holder?

These terms describe how your shares are held. If your shares are registered directly in your name with EQ Shareowner Services, our transfer agent for our common stock, you are a “stockholder of record.”

If your shares are held in the name of a broker, bank, trust or other nominee as a custodian, the broker, bank, trust or other nominee is the stockholder of record and you are a “street name” holder.

How do I vote my shares?

If you are a stockholder of record, you have several choices to vote your shares. You can vote your shares:

To vote by telephone or over the internet, please refer to the specific instructions set forth on the enclosed proxy card. For security reasons, our electronic voting system has been designed to authenticate your identity as a stockholder.

If you hold your shares in street name, your broker/bank/trustee/nominee will provide you with materials and instructions for voting your shares; please follow those instructions to vote your shares held in street name.

Can I vote my shares in person at the Meeting?

Yes. But, if you hold your shares in street name, you must obtain a proxy from your broker, banker, trustee or nominee giving you the right to vote the shares at the Meeting.

What will stockholders be voting on at the Meeting?

1. To elect our directors for terms extending until the 2020 annual meeting;

2. To ratify the selection of PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for 2019;

3. To approve, on a non-binding advisory basis, the compensation of our Named Executives (as described in this Proxy Statement under “Executive Compensation”); and

4. To transact such other business as may properly come before the Meeting and any adjournment or postponement thereof.

Why are you being asked to ratify the selection of PricewaterhouseCoopers LLP?

Although stockholder approval of our Audit Committee’s selection of PwC as our independent registered public accounting firm is not required, we believe that it is advisable to give stockholders an opportunity to ratify this selection. If this proposal is not approved at the Annual Meeting, the Audit Committee has agreed to reconsider its selection of PwC, but will not be required to take any action. We expect representatives of PwC to be present at the Meeting with an opportunity to make a statement if they desire to do so and to be available to respond to appropriate questions.

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What are the Board’s recommendations on how I should vote my shares?

The Board recommends that you vote your shares as follows:

What are my choices when voting?

How will my shares be voted if I do not specify how they should be voted?

If you properly sign and return your proxy card without indicating how you want your shares to be voted, the Proxy Committee will cause your shares to be voted as follows:

If any other matters are properly presented at the Meeting, the persons named as proxies in the enclosed proxy card intend to vote or otherwise act in accordance with their judgment on the matter.

Can I change my vote after I have mailed in my proxy card?

Yes, you may revoke your proxy by doing one of the following:

If you hold your shares in street name, you should follow the instructions provided by your broker/bank/trustee/nominee to change your vote.

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What vote is required to approve each proposal?

What constitutes a quorum?

Under our by-laws, a quorum is a majority of the voting power of the outstanding shares of stock entitled to vote. The presence of a quorum, either present or represented by proxy, is necessary to transact business at the Meeting.

How are abstentions and broker non-votes treated?

Brokers, banks or other nominees that are member firms of the New York Stock Exchange and who hold shares in “street name” for customers have the discretion to vote those shares with respect to certain matters if they have not received instructions from the beneficial owners. Brokers, banks or other nominees will have this discretionary authority with respect to routine matters such as the ratification of the appointment of PwC as our independent registered public accounting firm for 2019; however, they will not have this discretionary authority with respect to non-routine matters, including the election of directors and the approval of the compensation of the Named Executives. With respect to non-routine matters, if street name holders do not provide voting instructions, these are called “broker non-votes.” Both broker non-votes and abstentions are counted as present for the purpose of determining the presence of a quorum. Broker non-votes will have no effect on calculating the requisite approval levels in Proposals 1 or 3 (because they are not entitled to vote on these matters). Abstentions will have no effect on Proposal 1, as only votes cast “for” or “against” a nominee will affect the outcome of the election of a director in an uncontested election such as is taking place at the Meeting. Abstentions will have the same effect as a vote against Proposals 2 and 3 (because an abstention represents a share entitled to vote). We encourage you to provide voting instructions to the organization that holds your shares.

Who will count the votes?

The votes will be counted by inspectors of election, persons required by Delaware law to oversee voting at a stockholders’ meeting. The inspectors will be present at the Meeting and will report the voting results. We expect that one or more representatives from EQ Shareowner Services, our transfer agent, will serve as inspectors of election.

Who pays the cost of this proxy solicitation?

The Company pays all costs of soliciting proxies. Upon request, the Company will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners of shares of the Company’s common stock. In addition, the Company has retained MacKenzie Partners, Inc., or MacKenzie, to aid in the solicitation of proxies by mail, telephone, facsimile, e-mail and personal solicitation and will request brokerage houses and other nominees, fiduciaries and custodians to forward soliciting materials to beneficial owners of the Company’s common stock. For these services, the Company has agreed to pay MacKenzie a fee of $7,500, plus expenses.

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Is mailing this Proxy Statement the only way that proxies are being solicited?

No. As stated above, the Company has retained MacKenzie, a professional soliciting firm, to aid in the solicitation of proxy materials. In addition to mailing these proxy materials and the services of our proxy soliciting firm, directors, officers or employees of the Company may solicit proxies by telephone, facsimile, e-mail or personal contact; those persons will not be specifically compensated for doing so.

How will voting be conducted on other matters raised at the Meeting?

If any matters are presented at the meeting other than the proposals on the proxy card, the Proxy Committee will vote on them using their best judgment. Your signed proxy card gives them the authority to do this. Under our by-laws, notice of any matter to be presented by a stockholder for a vote at the Meeting must have been received by our Corporate Secretary no sooner than February 14, 2019 and no later than March 16, 2019, and it must have been accompanied by certain information about the stockholder presenting it. We have not received notice of any matter to be presented other than those proposals noted on the enclosed proxy card.

When must stockholder proposals be submitted for the 2020 annual meeting?

Stockholder proposals submitted for inclusion in our 2020 proxy statement must be received in writing by our Corporate Secretary no later than 5:00 p.m. Eastern Time on December 12, 2019. Our by-laws describe the procedures that must be used in order for proposals to be brought before an annual meeting by stockholders. Stockholder proposals that are not intended to be included in the proxy statement must be received not less than 60 days nor more than 90 days from the anniversary date of this year’s meeting, unless we announce the meeting date less than 70 days before the meeting, in which case proposals must be received not later than 10 days after we announce the meeting date. In each case, proposals must be accompanied by information required by our by-laws.

What is the deadline to nominate an individual for election as a director at the 2020 annual meeting?

Our by-laws describe the procedures that must be used in order for someone nominated by a stockholder of record to be eligible for election as a director. To nominate an individual for election as a director at the 2020 annual meeting, a stockholder must send a notice of intention to nominate to the Corporate Secretary, which must be received no sooner than February 14, 2020 and no later than March 15, 2020. If the meeting date is changed by more than 30 days from the anniversary date of this year’s meeting, the notice may be given not later than 10 days after the earlier of the announcement of the meeting or the date on which notice of the meeting is mailed. The notice must contain specified information about the nominee as specified in our bylaws, including his or her age, address, occupation and share ownership, as well as the name, address and share ownership of the stockholder giving the notice.

Where can you find the voting results?

Voting results will be reported in a Current Report on Form 8-K, which we will file with the United States Securities and Exchange Commission (the “SEC”) within four business days following the Meeting.

What is “householding” and how does it affect me?

Some brokers, banks and other nominee record holders may participate in the practice of “householding” proxy statements, annual reports and notices of availability of proxy materials. This means that only one copy of this Proxy Statement and our Annual Report may have been sent to multiple shareholders in your household. We will promptly deliver a separate copy of any such documents to you if call MacKenzie Partners, Inc. at 1-800-322-2885 or our Investor Relations Department at 1-609-366-1299.

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If you want to receive separate copies of our Proxy Statement and Annual Report in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact call MacKenzie Partners, Inc. at 1-800-322-2885 or our Investor Relations Department at 1-609-366-1299.

If you have any further questions about voting your shares or attending the Meeting, please call MacKenzie Partners, Inc. at 1-800-322-2885 or our Investor Relations Department at 1-609-366-1299.

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The Proposals

Proposal 1—Election of Directors

The Company’s certificate of incorporation and by-laws provide for the size of the Board to be determined by Board action taken from time to time. Our Board currently consists of eight directors whose terms will expire at the Meeting. Our current directors are: Kim Ann Mink; Gary Cappeline; Jane Hilk; Linda Myrick; Karen Osar; John Steitz; Peter Thomas; and Robert Zatta. Each of the current members of our Board will stand for re-election at the Meeting. Biographical information concerning each nominee for election as director is set forth in the section of this Proxy Statement entitled “Directors and Corporate Governance.”

As this election is an uncontested director election, director nominees are elected by a majority vote of the shares cast, meaning that each director nominee must receive a greater number of shares voted “for” such director than shares voted “against” such director. If an incumbent director does not receive a greater number of shares voted “for” such director than shares voted “against” such director, then such director must tender his or her resignation to the Board.

Our Board unanimously recommends a vote “FOR” each of the Board’s eight director nominees presented in Proposal 1.

Proposal 2—Approval of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm

PwC has served as the independent auditor (now referred to as the independent registered public accounting firm) of the Company since its creation in 2004. We believe that their knowledge of Innophos’ business and its organization gained through their prior service is valuable. Partners and employees of PwC assigned to the Innophos engagement are periodically rotated, thus giving us the benefit of new thinking and approaches in the audit area. We expect representatives of PwC to be present at the Meeting with an opportunity to make a statement if they desire to do so and to be available to respond to appropriate questions.

For the years 2018 and 2017, PwC performed professional services for Innophos and its subsidiaries in connection with audits of the financial statements and tax services. PwC has also reviewed quarterly reports and other filings with the SEC. For additional information regarding the Company’s relationship with PwC, please refer to “Information Regarding the Independence of the Independent Registered Public Accounting Firm” and “Audit Committee Report” appearing elsewhere in this Proxy Statement.

Based on their review of the performance of PwC and discussions with that firm and as set forth in its report under “Audit Committee Report” appearing elsewhere in this Proxy Statement, the Audit Committee selected PwC to serve as the Company’s independent registered public accounting firm for 2019. The stockholders are being asked to approve that selection.

Our Board unanimously recommends a vote “FOR” the approval of the selection of PwC as our independent registered public accounting firm for 2019.

Proposal 3—Advisory Vote on Executive Compensation

We are providing stockholders the opportunity to cast an advisory, non-binding vote, popularly known as a “say on pay,” regarding the compensation of our Named Executives, as disclosed in this Proxy Statement in accordance SEC rules. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Dodd-Frank Act, which amended the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires a “say on pay” vote and another periodic advisory vote on the “frequency of say on pay.” At our 2017 annual meeting, a majority of votes cast on the frequency issue favored holding advisory votes regarding “say on pay” annually, a practice which has been adopted by the Board.

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This proposal consists of the following non-binding resolution to be presented to the Meeting:

RESOLVED, that the stockholders of Innophos Holdings, Inc. (the “Company”) hereby approve the compensation paid to the Company’s Named Executives, as disclosed pursuant to SEC rules under “Executive Compensation,” including the Compensation Discussion and Analysis and any related material disclosed in the Company’s Proxy Statement for the 2019 Annual Meeting.

Although this vote is not binding on the Company or the Board and will not change their fiduciary duties, it will provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices that the Compensation Committee intends to consider when determining executive compensation for the future. You should read the Compensation Discussion and Analysis, which discusses how our executive compensation policies and programs implement our compensation philosophy, and the compensation tables in the Executive Compensation section in this Proxy Statement. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executives and the philosophy, policies and practices described in this Proxy Statement that set compensation.

Our Board unanimously recommends a vote “FOR” the advisory vote approving the compensation of the Named Executives.

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Directors and Corporate Governance

The Board of Directors and its Committees

Under our by-laws and the laws of Delaware, our state of incorporation, the business and affairs of the Company are managed under the direction of the Board. It is the duty of the Board to serve as a prudent fiduciary for stockholders and to oversee the management of the Company’s business.

Board Composition and Meetings

All of our current directors are serving terms that will expire at the Meeting. The following table presents biographical information regarding each of our current directors, each of whom has been nominated for re-election at the Meeting and has agreed to serve if re-elected.

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Certain of our directors are also officers and/or directors of certain subsidiaries of Innophos Holdings, Inc. There are no family relationships among any of our directors or executive officers.

Among the factors considered by the Nominating & Corporate Governance Committee in recommending, and the Board in nominating, the above candidates for re-election at the Meeting were the following:

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Each of our directors, other than Kim Ann Mink, is independent under NASDAQ Stock Market Rules and SEC rules with respect to their service on our Board and the respective committees on which they serve.

During 2018, the Board had a total of seven meetings, the Audit Committee had a total of six meetings, the Compensation Committee had a total of five meetings and the Nominating & Corporate Governance Committee had a total of four meetings. Each director is expected to devote sufficient time, energy and attention to ensure diligent performance of his or her duties. This responsibility includes not only attending Board and committee meetings, but stockholders’ meetings as well. All current directors who were directors at the time attended the 2018 annual meeting of stockholders.

Board Leadership Structure

The Board is dedicated to the principle that independent directors must play a determinative role in the overall governance of the Company, including an active role in the leadership structure of the Board and its committees.

Since February 2017, Dr. Mink has served as the Chairman of the Board. Other than Dr. Mink, all directors now serving on the Board are independent directors. To follow sound governance practices consistent with its principles and provide leadership and coordination among the independent majority of directors, in 2007, the Board created the office of “Lead Independent Director,” or LID, and formalized that determination in the corporate structure by amending the Company’s by-laws. Under the Company’s by-laws, whenever the Board elects a chairman who is not also an independent director under the regulatory standards then applicable to the Company, it must also elect from among the independent directors a LID. Apart from being a distinct corporate office recognized under the by-laws, the LID position is separately compensated from other directors in recognition of its importance and additional responsibilities.

The LID is to preside at all meetings of the stockholders and the Board in the absence of the chairman, to act as chair for meetings of the independent directors, and to have the duties prescribed by the by-laws and the Board. The Board has specified major roles for the LID that centrally involve that director in coordinating the independent director activities of the Board.

Peter Thomas, an independent director, has served as the LID since April 2018. Mr. Thomas currently serves on the Audit Committee and the Nominating & Corporate Governance Committee.

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Since the creation of the office of the LID, the Board has reviewed from time to time the governance issues and principles relating to the combination or separation of the offices of chief executive and chairman. The Board has concluded that the interests of the Company and its stockholders are currently best served by combining the offices of chief executive officer and chairman and maintaining the office of the LID and electing a qualified candidate to that office. Among factors that support that conclusion are the following: (i) the Board believes the existing combined structure and incumbent personnel involved would continue to work well for the benefit of the Company; (ii) there is no convincing evidence that the Company’s financial performance or other aspects of its business would be improved by splitting the roles; (iii) there is a concern that dividing the roles could weaken its ability to develop and implement critical strategies; (iv) as a matter of good governance, the Company already implements alternative measures to strengthen Board independence and oversight (for example, Board expansions, other than the addition of our current Chief Executive Officer, have been solely with independent directors, Board committees are all being chaired by independent directors, and at Board and committee meetings, time is allocated for independent directors to meet in executive session without management personnel present); and (v) potential benefits of splitting the roles can be achieved in other meaningful ways such as by using the LID function concentrated in one independent director who could work in tandem with a non-independent chairman.

The Board retains the right at any time to review the issues of separation or combination of the Board leadership and management leadership and the discretion and power to make changes in that regard should it conclude circumstances warrant them.

Board Effectiveness Review

As the Company continues its transformation pursuant to its Vision 2022 growth plan, in 2017-2018, the Board engaged outside consultants, led by the Nominating and Corporate Governance Committee, and conducted a board effectiveness review as outlined below.

As a result of the effectiveness review, the Board implemented several changes in March—April 2018, including:

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The Company undertakes a self-assessment effectiveness review each year and intends to do so in 2019.

The Board’s Role in Risk Oversight

The Company is exposed to a wide variety of risks in its business activities, including strategic risks, operational risks, financial risks, risks relating to general economic conditions and their effect on its industry, geo-political risks and risks relating to regulatory and legal compliance. The Company regularly discloses in its public filings material risks to its business and the steps it takes to identify and attempt to prevent or mitigate them.

One of the responsibilities of the Board is oversight of the Company’s risk management activities. In meeting that responsibility, the Board ensures that processes are in place to identify and evaluate the major risks faced by the Company and oversees and monitors the design and implementation of guidelines and programs to manage the Company’s response to those risks. The Board discharges its oversight function through a combination of its own efforts, those of its standing committees and the senior management structure of the Company. Senior executives manage material risks on a day-to-day basis and assist in managing risk in liaison with the Board and Board committees. The Company has an Enterprise Risk Management Policy, or ERMP, providing an overall methodology for dealing with various types of risk.

According to the ERMP, the accountabilities for risk management at the Company are as follows:

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Risk Analysis of Performance-Based Compensation Plans

The Compensation Committee has discussed and analyzed elsewhere in this Proxy Statement the various elements of compensation provided to those persons identified as our Named Executives in the “Executive Compensation” section of this Proxy Statement. The committee believes that, although the larger part of compensation value provided to our Named Executives and key employees could be regarded as performance-based, our compensation programs do not create risks that are reasonably likely to have a material adverse effect on the Company.

Our compensation programs encourage participants to remain focused on both short and long-term financial and other measures and to remain in Company service for extended periods of time. The bases for compensation under our programs have been broad, traditional measurements indicative of sound performance measured both internally and externally. For example, our performance share awards (under our long term incentive programs) are issued only at the end of three-year performance cycles, award levels for each cycle are currently based on free cash flow and contribution margin as a percentage of sales, and such awards can be modified based on total stockholder return. The fact that these awards are stock-based, together with the nature of stock option and restricted stock awards made separately under our programs (also with installment vesting), generally encourages participants to focus on sustained stock price appreciation over the long term.

Under our short term programs, awards paid in cash have been based on both Company financial achievement and fulfillment of individual goals (with Company financial achievement constituting 70% of the award for executive officers). The financial goals are based on broadly accepted measurements, such as adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and AWC (Average Working Capital as a percentage of sales), in each case measured against targets related to annual budgets. Participants’ personal goals are harmonized with overall Company goals and depend to a significant degree on non-financial measurements that may extend to risk reduction areas like health, safety, environment, quality and customer service. The harmonization to broader goals discourages excessive risk taking by individuals. Moreover, awards are not paid out to executives on individual goals if, at a minimum, Company goals are not met. The Company also has stock ownership guidelines that require long-term equity ownership by senior executives, a structure that keeps their interests aligned with stockholders for the long-term and discourages excessive risk taking harmful to all investors.

For a more detailed discussion of these compensation programs, please see “Executive Compensation—Compensation Discussion and Analysis” included elsewhere in this Proxy Statement.

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Board Committees Overview

The Board currently has three standing committees: the Audit Committee, the Compensation Committee and the Nominating & Corporate Governance Committee, each of which currently has the membership shown in the table below.

A complete copy of the Company’s corporate governance documents and charters are available, free of charge, on the Company’s website (www.innophos.com) under the tab “Investor Relations”, and then by selecting “Corporate Governance”, followed by “Documents and Charters”. The following are posted on the website:

Under our by-laws and Delaware law, the Board has the power to form additional standing or special committees as it sees fit. Committee members are appointed by the Board and hold their offices until their successors are appointed and qualified, or until their earlier resignation or removal. All vacancies on committees are filled by the Board. The Board designates a member of each of the standing committees as Chair, and each committee keeps a separate book of minutes of its proceedings and actions.

The principal duties and responsibilities of our standing committees are discussed below.

Audit Committee

The Board has adopted a written charter that defines the duties and responsibilities of the Audit Committee. The principal purpose and responsibilities of the Audit Committee is to provide assistance to the Board in fulfilling its oversight responsibility to:

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The committee is required to consist of at least three members. Currently, there are four directors serving on the committee. The Board has determined that Robert Zatta, chair of the Committee, as well as Karen Osar and Peter Thomas, meet the SEC’s definition of “audit committee financial expert.” All committee members are “independent,” as that term is defined by the NASDAQ Stock Market rules and SEC rules, with respect to their service on the Audit Committee.

Nominating & Corporate Governance Committee

The Nominating & Corporate Governance Committee serves as the Company’s nominating committee. The Board has adopted a written charter that defines the duties and responsibilities of the Nominating & Corporate Governance Committee. The principal purpose and responsibility of the committee under its charter adopted by the Board is to:

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The Nominating & Corporate Governance Committee is required to consist of at least three members. The committee currently consists of four members, all of whom are independent under NASDAQ Stock Market rules.

The Company’s Corporate Governance Guidelines provide that the committee will also evaluate candidates for the Board recommended by stockholders. The committee gives the same consideration to candidates recommended by stockholders as those candidates recommended by members of our Board. Stockholders wishing to recommend a candidate may submit a timely recommendation in writing to the Secretary of the Company. That submission should include the information specified in our bylaws, including: (i) the candidate’s name, age, address, occupation and share ownership; (ii) other biographical information that will enable the committee to evaluate the candidate in light of the criteria; and (iii) information concerning any relationship between the candidate and the stockholder making the recommendation. No distinction is made by the committee in considering candidates properly nominated by stockholders from those who may be nominated by directors, management or other sources.

The committee is interested in recommending candidates (as needed subject to the size of the Board as determined by that body) who will make the strongest contributions toward the Board’s fulfillment of its overall responsibilities to manage the Company’s business in the best interests of the stockholders. Although we do not have a formal diversity “policy,” the committee recommends candidates based upon many factors, including the diversity of their business or professional experience, the diversity of their background and their array of talents and perspectives. We believe that the committee’s existing nominations process is designed to identify the best possible nominees for the Board, regardless of the nominee’s gender, racial background, religion or ethnicity.

Each year, the committee conducts an evaluation process covering the Board, each committee and each Board member.

The Board approved, under the guidance of the committee, the inclusion of each of the eight director nominees in Proposal I of this Proxy Statement for nomination for re-election at the Meeting.

Compensation Committee

The Board has adopted a written charter that defines the duties and responsibilities of the Compensation Committee. The committee’s primary purpose and responsibilities are to:

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The committee is to consist of at least three members. The committee currently consists of four members, all of whom are independent under NASDAQ Stock Market rules with respect to their service on the committee. The committee may form one or more subcommittees consisting exclusively of one or more independent directors and each of which may take such actions as may be delegated by the committee.

The committee regularly consults with external, independent consultants and may consult with outside legal advisors that advise it on compensation issues. The committee has the final authority to retain and terminate compensation consultants and determines the terms and conditions of those relationships, including compensation. In their engagements, compensation consultants receive directions from, and consult with, the committee, as well as senior management. In the course of its duties, the committee discusses with the consultants executive compensation matters it deems appropriate outside the presence of management. Although the committee seeks and considers the information and advice provided by its consultants, decisions by the committee are ultimately the committee’s responsibility.

During 2018, the Compensation Committee engaged Willis Towers Watson, or Towers, to provide compensation related services and advice relating to executives. Towers reported directly to the Compensation Committee, and the nature and scope of the principal executive compensation services rendered for 2018 by it to the Compensation Committee and on its behalf can be summarized as follows: (i) guidance with respect to executive compensation, taking into account the Company’s business strategies, pay philosophy, stockholders’ interests, prevailing market practices, and relevant legal and regulatory mandates; (ii) assistance with the assessment and implementation of short-term and long-term incentive compensation programs; and (iii) advice with respect to best practices related to executive compensation and Compensation Committee activities.

For 2018, the Company incurred $170,935 of fees and expenses in respect of executive compensation services performed by Towers, all of which were in support of the Committee’s functions.

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The Compensation Committee assessed the independence of Towers and all other outside advisors retained to advise it on compensation matters in 2018 and determined that there were no conflicts of interest. In compliance with its charter and in reaching these conclusions, the Committee considered Rule 10C-1(b)(4) of the Exchange Act, and the corresponding independence factors in Rule 5605(d)(3) of the NASDAQ Stock Market regarding compensation advisor independence and believes that its advisors were able to independently advise the Compensation Committee.

Compensation Committee Interlocks and Insider Participation

There are no relationships required to be disclosed under this section.

Policy on Communications from Security Holders and Interested Parties

Stockholders and other interested parties wishing to contact our Board, any director, any of the committee chairs or the independent directors as a group, may write to c/o Corporate Secretary, 259 Prospect Plains Road, Building A, Cranbury, New Jersey 08512. The Corporate Secretary will collect, organize and forward all communications, in that officer’s judgment, which are appropriate for consideration by the directors. Examples of communications that would not be considered appropriate for consideration by the directors include personal employment matters, solicitations for products or services and matters not relevant to the functioning of the Board, stockholder interests or the affairs of the Company. Communications addressed to directors may, at the direction of the directors, be shared with Innophos’ management.

In addition, any interested parties who have concerns that they wish to make known to the Company’s non-management directors may send any such communication directly to the Chair of the Nominating & Corporate Governance Committee in care of the Company’s executive offices at 259 Prospect Plains Road, Building A, Cranbury, New Jersey 08512. All such stockholder communication will be reviewed by the Chairman of the Nominating & Corporate Governance Committee and discussed with the committee, which will determine an appropriate response or course of action.

Employees may also report misconduct, raise issues or simply ask questions, including with respect to any questionable accounting, internal control or auditing matters concerning the Company, without fear of dismissal or retaliation of any kind. Reports may be made confidentially and/or anonymously through our whistleblower hotline, 1-800-461-9330/1-720-514-4400, or by completing and submitting a web form available at www.convercent.com/report.

Innophos’ Commitment to Environmental, Sustainability, Health and Safety Issues

Innophos is fully committed to continuous improvement in environmental, sustainability, health and safety matters.

In 2018, we adopted an Environmental Sustainability and Safety Policy, consistent with our commitment to protecting the natural environment and the communities in which we operate. This policy documents our commitment to, among other things:

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In 2018, we also adopted a Human Rights Policy & Statement, consistent with our commitment to respecting the rights of all individuals. This policy documents our commitment to the following principles:

We continue to evaluate further practices and policies consistent with these newly adopted policies.

We also continue to evaluate opportunities to reduce our impact on the environment and to improve our existing environmental management system. To that end, we are currently pursuing ISO 14001 certification, an international standard that specifies requirements for an effective environmental management system. This standard is voluntary and we are seeking certification consistent with our commitment to environmental sustainability. It is a proactive approach to ensure our environmental management system fulfills compliance obligations and addresses risks as effectively as possible. In addition, consistent with our commitment to climate change, we recently enrolled in a program to reduce greenhouse gas emissions at our Canadian plant.

Nothing is more important to Innophos than the safety of its employees. In 2018, we adopted a series of initiatives as part of our LiveSafe program. These initiatives include training, guidance and reporting initiatives designed to encourage and promote safe habits by our employees both at work and in their personal lives. We have a company-wide safety steering committee, as well as a safety team at each of our plants. We continue to evaluate the safety policies and procedures at our plants, consistent with our commitment to employee safety. In addition, we continue to evaluate equipment at our plants to ensure optimal safety for our employees. We believe these initiatives have substantially increased the safety of our employees. In 2018, we achieved one of the lowest injury rates in our history.

Consistent with the foregoing commitment to continuous improvement in environmental, sustainability, health and safety matters, a portion of each employee’s individual performance component of our short-term (annual) incentive compensation program depends on achievement of certain environmental, health and safety goals.

We have additional environmental, health and safety initiatives planned for 2019 and beyond.

Codes of Business Conduct and Ethics and Website

The Board sets high standards for the Company’s employees, officers and directors. Implicit in sound corporate governance is a philosophy of lawful conduct and ethical behavior toward the various interests affecting or forming part of the corporate landscape. To fulfill its responsibilities and to discharge its duties, our Board follows the procedures and standards that are set forth in guidelines, codes and charters adopted by the Board. These governing principles are subject to modification from time to time as our Board deems appropriate in the best interests of the Company or as required by applicable laws and regulations.

We have adopted a General Code of Business Conduct and Ethics that applies to all of our employees, officers and Board members. We have also adopted a supplemental Code of Ethics for Executive Officers and Principal Accounting Personnel that applies to our senior financial officers. We expect that any amendments to these codes, or any waivers of their requirements, will be disclosed on our website. We also adopt from time to time additional guidelines and policies designed to foster sound governance practices and compliance with applicable laws and regulations.

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Our General Code of Business Conduct and Ethics, Code of Ethics for Executive Officers and Principal Accounting Personnel, Environmental Sustainability and Safety Policy and Human Rights Safety Policy & Statement, as well as our annual, quarterly and other reports filed with the SEC and proxy statements are available on our website, www.innophos.com, and are also available in print to any stockholder who requests them.

By referring to these documents, we do not intend to incorporate the contents of the website into this Proxy Statement.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires directors, officers and persons who own beneficially more than 10% of our common stock to file initial reports and reports of changes in ownership of our common stock with the SEC within prescribed time periods. The Company’s directors, officers and stockholders first became subject to Section 16(a) in November 2006. As a practical matter, we try to assist our officers and directors in the reporting process by monitoring transactions and providing support for their filings. Based upon a review of filings with the SEC and written representations to us, we believe that during 2018 all of our directors and executive officers complied with the reporting requirements of Section 16(a).

Compensation of Directors

Our by-laws allow directors to be paid compensation, including allowances and attendance fees, as the Board may from time to time determine. Only non-employee directors are currently eligible for such compensation, and directors who are employees of the Company receive no additional compensation for their service on the Board.

The objective of our director compensation programs is to enable the Company to attract and retain as directors individuals of substantial accomplishment with demonstrated leadership capabilities. From time to time, our Compensation Committee reviews the levels, types and mix of compensation paid to directors, considers market conditions and prevailing practices with its consultants and makes recommendations to the Board for its consideration concerning director compensation. Our director compensation program is benchmarked to competitive levels. Consistent with those objectives and procedures, the compensation paid to our non-employee directors in 2018 was structured as follows:

The annual cash retainer is paid quarterly. In order to better align the interests of directors with those of the stockholders, we utilize an annual stock retainer referred to in the table above and reflected in the table below, pursuant to which our non-employee directors receive a portion of their annual fee (currently the equivalent of

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$90,000 in fair market value at time of issue) in fully vested actual shares of Company common stock following their successful election or re-election at annual meetings. The value per share of common stock used to determine the number of shares to grant is based on the thirty day average closing price of our common stock. Non-employee directors are subject to the Company’s Executive and Director Stock Ownership Policy, under which each such director is afforded until five years after first election to achieve and maintain a level of ownership of common stock equal in value to five times the amount of their annual cash retainer (currently $80,000). At the current level of cash retainer and an illustrative price per share of common stock of $30, compliance with the policy would require each director to own a minimum of 13,334 shares. As of December 31, 2018, based on the computational rules under our policy, all of our non-employee directors were in compliance with the requirements. Messrs. Zatta and Thomas, who joined the Company in 2016, and Ms. Hilk, who joined the Company in 2018, have five years from the date they joined the Company to satisfy these requirements.

In 2019, our director compensation program has been updated as follows: the annual cash retainer is increased to $85,000; the annual stock retainer is increased to $100,000; the annual Lead Independent Director fee is increased to $25,000; the annual membership fee for serving as the chair of the Audit Committee, Compensation Committee and Nominating & Corporate Governance Committee were increased to $20,000, $15,000 and $15,000, respectively; and directors will no longer receive additional fees based on attendance at Board or committee meetings.

Director Compensation Table

For services rendered as directors in all Board and committee capacities in 2018, we provided our non-employee directors the following compensation:

Dr. Mink will not receive any additional compensation for serving on our Board. For a discussion of her compensation arrangement, see “Executive Compensation” appearing elsewhere in this Proxy Statement.

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Related Party Transactions and Policy With Respect To Related Person Transactions

Policies and Procedures for Related Party Transactions

The Board has a written policy that requires certain transactions with “related persons” to be approved or ratified by its Audit Committee. For purposes of this policy, related persons include (i) any person who is, or at any time since the beginning of the Company’s last fiscal year was, a director or executive officer of the Company or a nominee to become a director of the Company, (ii) any person who is the beneficial owner of more than 5 percent of any class of the Company’s voting securities; and (iii) any “immediate family member or affiliate” of any person described in (i) or (ii). The types of transactions that are subject to this policy are transactions, arrangements or relationships (or any series of similar transactions, arrangements or relationships) in which the Company, or any of its subsidiaries, was, is or will be a participant and in which any related person had, has or will have a direct or indirect material interest and the aggregate amount involved will or may be expected to exceed $100,000. Under the policy, certain transactions are deemed to be automatically pre-approved and do not need to be brought to the applicable committee for individual approval. The standards applied by the applicable committee when reviewing transactions with related persons would be expected to include (a) the benefits to the Company of the transaction; (b) the terms and conditions of the transaction and whether such terms and conditions are comparable to the terms available to an unrelated third party or to employees generally, and (c) the potential for the transaction to affect the independence or judgment of a director or executive officer of the Company.

Related Party Transactions

Except as set forth below, since January 1, 2018, there have been no transactions to which we have been a party, in which the amount involved exceeds $120,000, and in which any of our directors, executive officers or holders of more than 5% of our share capital, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest.

Director and Executive Officer Compensation and Related Agreements

See “Directors and Corporate Governance—Director Compensation” and “Executive Compensation” appearing elsewhere in this Proxy Statement for information regarding the compensation, including severance payments, that we have paid to our directors and Named Executives and the terms of the employment agreements and related agreements with our Named Executives.

Indemnification Agreements and Directors’ and Officers’ Liability Insurance

We have entered into an indemnification agreement or an employment agreement that provides indemnification rights with each of our directors and certain of our executive officers. Under those agreements, we have agreed generally to indemnify the executive officers and directors against liabilities, including advancing litigation expenses, incurred in connection with their service for our Company, its subsidiaries or other entities at our request. Our corporate charter also provides indemnification rights to our officers and directors. We also maintain directors’ and officers’ liability insurance for our directors and officers.

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Information Regarding the Independence of the Independent Registered Public Accounting Firm

Auditor Fees

The following table shows the fees paid to PwC for professional services for 2018 and 2017:

Pre-Approval Policy

The Audit Committee has the sole authority to pre-approve all audit engagement fees and terms as well as all non-audit engagements with PwC. In 2018 and 2017, all the above services were pre-approved by the Committee in accordance with a pre-approval policy.

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Audit Committee Report

The Audit Committee has reviewed and discussed Innophos’ audited financial statements for the year ended December 31, 2018 with Company management. The Audit Committee discussed with the independent registered public accounting firm, PwC, the matters required to be discussed by the Public Company Accounting Oversight Board (the “PCAOB”) in accordance with Auditing Standard No. 16, “Communications with Audit Committee”.

The Audit Committee also discussed with Company management management’s assessment of Innophos’ disclosure controls and procedures as of December 31, 2018. The Audit Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB, and the Audit Committee has discussed with PwC its independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements for the Company be included in its Annual Report on Form 10-K for the year ended December 31, 2018 for filing with the Securities and Exchange Commission.

The Audit Committee

Robert Zatta (Chair)

Karen Osar

John Steitz

Peter Thomas

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Executive Compensation

Compensation Discussion and Analysis

In this section, we discuss our compensation policies and objectives, and the programs we have established to achieve these objectives. This discussion primarily focuses on our named executive officers, as defined under SEC rules and identified below under “Named Executives.” We refer to these officers as our “Named Executives.”

Named Executives

The table below identifies our Named Executives for 2018.

Historical compensation data for the Named Executives can be found below in the “Summary Compensation Table” and supporting tables in this Proxy Statement following this discussion. References to the “Committee” in this discussion mean the Board’s Compensation Committee. The Committee has primary responsibility for establishing, implementing and continually monitoring adheres to the Company’s compensation philosophy as it applies to our Named Executives along with the other duties provided in the Committee’s charter.

Vision 2022 Growth Plan

In April 2017, we unveiled our five-year Vision 2022 growth plan. The purpose of our Vision 2022 growth plan is to transform the growth profile of our Company, increase our presence in attractive Food, Health and Nutrition ingredient end-markets and develop innovative solutions that better serve our customers, all of which is expected to increase stockholder returns. Specifically, our Vision 2022 growth plan focuses on the following strategic, commercial and operational excellence goals:

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Vision 2022 Achievements in 2018

In 2018, we made substantial achievements in connection with our Vision 2022 growth plan:

Executive Summary of Compensation Policies and Practices – Alignment of Pay and Performance

Our compensation policies and practices seek to tie executive compensation to performance and to align the interests of our executives with our stockholders:

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We continue to tie compensation to performance. 2018 remained a challenging, transition year for the Company as we make progress towards fully executing on the Vision 2022 growth plan. This was reflected in outcomes under our incentive plans which focus on in-year and three-year performance. In spite of positive performance during the year, other areas fell short of the stretching targets we set and our stockholders expect. Accordingly, the Company-performance component of the short-term incentive compensation program was only earned at 70% of target.

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CEO Compensation Overview

A substantial portion of targeted pay for our Named Executives, including our Chief Executive Officer, is based on performance. Approximately 75% of Dr. Mink’s 2018 target compensation is performance based:

The below table presents a summary of Dr. Mink’s base salary, short-term cash bonus and long-term equity compensation with respect to 2018 and 2017:

Dr. Mink’s 2018 compensation was set at a level equal to approximately the 25th percentile of the peer group discussed below under “—Setting Compensation,” which is consistent with the Company’s targeted level at the 25th percentile of the peer group. In connection with our stockholder engagements described below under “—Impact of Prior “Say-on-Pay” Vote and Extensive Stockholder Outreach,” no stockholder expressed concerns regarding Dr. Mink’s compensation.

Among the factors that our Board of Directors considered in setting the 2018 individual performance factor component of our short-term cash incentive program for Dr. Mink (as described below, she received a score of 1.0) was her overall leadership in advancing the Company’s Vision 2022 growth plan, including delivering bottom-line benefits through Operational Excellence initiatives, advancing efforts to be viewed as a partner-of-choice with the focus on Commercial Excellence, and advancing the multi-faceted strategic value chain repositioning initiative. As noted below under “—Overview of Executive Compensation Program—Short-Term Annual Incentive Compensation,” the Board and the Committee reduced the P Factor for each Named Executive based on the Company’s 2018 company-wide performance.

Please see “—Summary Compensation Table” below for a description of Dr. Mink’s 2018 compensation.

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Impact of Prior “Say-on-Pay” Votes and Stockholder Outreach

Say-on-Pay Vote

In accordance with the Dodd-Frank Act, we provide our stockholders with an annual vote on “say on pay”. The Board continues to believe that an annual vote remains appropriate as it provides a timely opportunity for our stockholders to evaluate and provide feedback on the Company’s compensation policies and programs. While the vote is non-binding in nature, the voting outcome, in combination with feedback from our direct stockholder engagement activities described below, provides the Committee annual feedback to inform the design and implementation of our compensation policies and programs.

In 2018, over 92% of our stockholders voted in favor of say-on-pay, confirming widespread approval of the compensation practices of the Company. This was a notable increase on 2017, which we believe indirectly indicates our stockholders’ agreement with the changes approved by the Committee in 2017.

Our Commitment to Stockholders

As detailed below, the Committee has assessed, and will continue to assess, and, as needed, make changes and adjustments to programs from year to year based on its perception of business needs and the need to ensure that the programs continue to be effective in incentivizing performance and attracting and retaining talent under changing business conditions.

2016 Stockholder Feedback

The primary concerns expressed by stockholders during our engagements in 2016 were (i) excess severance paid to our former chief executive officer in 2015 and (ii) lack of a performance-based component in our 2016 long-term incentive grants.

Innophos Response to Address 2016 Stockholder Feedback

To specifically address the foregoing concerns expressed by stockholders, we adopted the following changes to our compensation policies and practices:

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Additional Changes to Compensation Policies and Procedures and Corporate Governance Updates

In addition to the foregoing changes, we have adopted the following changes to our compensation policies and practices and corporate governance profile to further align such policies, procedures and profile with our stockholders’ interests and stockholders’ feedback:

Innophos 2017-2018 Stockholder Outreach

To address the concerns expressed by stockholders in 2016, as well as to ensure that our stockholders continue to have meaningful opportunities to provide ongoing feedback with respect to our executive compensation policies and practices, we maintained our extensive stockholder outreach program through 2017 and 2018.

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In 2017:

In addition to the foregoing, we hosted an investor day on April 5, 2017. The purpose of the investor day was to ensure that we were addressing concerns previously expressed by stockholders, as well as to roll out our Vision 2022 growth plan. We invited each of our stockholders to attend our investor day, and we engaged over 20 stockholders at our investor day.

In our 2017 stockholder engagements, stockholders provided positive feedback to the changes to our compensation policies and practices outlined above, including the re-introduction of performance shares as the third component of the 2017 long-term incentive grant coupled with the feature of an additional modifier based on TSR.

In 2018, as in prior years, we continued to be proactive in our stockholder outreach efforts. In 2018:

As a result of this extensive stockholder outreach and related compensation-related changes, we achieved over 92% stockholder approval in our 2018 “say on pay” vote.

Continued Stockholder Engagement

We continue to solicit feedback from stockholders during our ongoing stockholder engagements with respect to our compensation policies and practices. We have received positive feedback with respect to the above-noted updates to our compensation policies and practices, particularly the inclusion of the performance-based component in our 2017 and 2018 long-term incentive grants, as well as the inclusion of the TSR modifier in both grants. Based on the positive feedback we received from stockholders during our stockholder engagements in 2016, 2017 and 2018, as well as our 2019 year to date stockholder engagements, we are not aware of any additional compensation policies or practices that our stockholders are currently seeking beyond the above-noted updates that we previously implemented to align our compensation policies and practices with our stockholders’ interests and feedback.

Overview of Executive Compensation Program

The goal of our executive compensation program is to provide compensation and incentives that attract and retain top level executives and motivate them to increase stockholder value for the intermediate and long-term. In achieving our goal, we seek to be fair, reasonable and competitive to all constituencies involved. Our fundamental premise is that increased value for our stockholders means increased value for our executives.

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Compensation Philosophy and Objectives

Philosophy. Our Committee follows an executive compensation strategy that embodies our compensation philosophy and whose elements we use to design and implement our compensation programs. This strategy is outlined in the table below:

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KEY PAY AND GOVERNANCE PRACTICES AND POLICIES.

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Setting Compensation

Compensation programs are determined on an annual basis, but the Committee may revise, initiate or discontinue programs at any time. The Committee has also regularly engaged outside consultants to assist in making compensation related decisions. See “The Board of Directors and Corporate Governance—Committees of the Board—Compensation Committee” in this Proxy Statement.

The Committee’s consultant for 2018, Towers, completed a study to evaluate competitive levels of executive base pay, short-term bonus, long-term incentives and perquisites for the Company’s senior executives, including all Named Executives. Towers reviewed two sources for compensation data: the proxy statements of an industry peer group, which we refer to as the peer group; and published survey data.

The peer group is comprised of companies primarily in the specialty chemical and ingredients industry with financial indicators being reasonably comparable to Innophos (see below for list of companies in the peer group). Data from the peer group were used in comparing the compensation provided to Innophos’ Chief Executive Officer and Chief Financial Officer to the market. In 2018, the Committee reviewed recommendations from Towers to update our peer group, as several companies in the previous peer group were no longer relevant to the Company due to either size, business operations or M&A activity. A summary of additions and removals is as follows:

The Committee approved the proposed peer group, which is indicated in the table below. As Innophos’ revenues were in the bottom quartile relative to the revenues of peer group companies, reflecting the limited pool of relevant listed companies for which data can be sourced, the 25th percentile was used in making comparisons.

For all Named Executives, Towers also reviewed published survey data of comparable roles collected from similar sized companies in similar industries. The 50th percentiles of survey compensation data were used in making comparisons and setting compensation when the Committee deemed the proxy statement data insufficient or not appropriate.

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The table below presents the financial indicators of the companies in the peer group:

Overview of Executive Compensation Components

Our current compensation programs are designed and operated with reference to competitive labor markets and current talent needs, as well as the goals targeted in our Vision 2022 growth plan. The Committee continues to assess and, as needed, make changes and adjustments to programs from year to year based on its perception of business needs and the need to ensure that the programs continue to be effective in incentivizing performance and attracting and retaining talent under changing business conditions.

For 2018, the components of compensation for Named Executives were:

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A substantial portion of targeted total pay for each of our Named Executives is based on performance of the Company, including the trading price of the Company’s common stock.

Base Salary

The Company provides the Named Executives with base salary to compensate them for services rendered during the fiscal year. Base salary ranges are determined for each executive according to his or her position and responsibility, as well as the current market-competitive level for similar positions (based on a review of the peer group companies and published market survey data). Base salary ranges are designed so that salary opportunities for a given position will be approximately around the 25^th percentile of the peer group (for our Chairman & Chief Executive Officer and Chief Financial Officer) or the median of market survey data (for all other Named Executives). Base salaries are also periodically reviewed to determine if they require “market” adjustments.

Salary levels are typically considered annually as part of the Company’s performance review process as well as upon a promotion or other change in job responsibility. Increases to salaries of Named Executives made at that time may be “merit” based, depending on the Committee’s assessment of the individual’s performance taking into consideration the market competitive level of such increases.

The below table shows the respective 2018 base salaries of our Named Executives.

Short-Term (Annual) Incentive Compensation

Certain short term incentive, or STI, awards granted through December 31, 2018 were provided as part of the 2018 Management Incentive Plan with targets established in a program for 2018, which we refer to as the 2018 STIP. The Named Executives participated in the 2018 STIP along with other Company employees worldwide and except as provided in individual employment agreements, participants must be employed by the Company to receive payment of an award (typically in March of the following fiscal year).

Under the 2018 STIP, the Named Executives were eligible to receive individual, market-competitive bonuses measured as a percentage of base pay that would be earned if the executives and the Company achieved requisite performance goals. The following table shows the 2018 target bonus percentages for each Named Executive:

In determining the level of payout earned under the STIP, performance was assessed based on a combination of company-wide and personal performance. For the Named Executives, the company-wide

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performance, or C Factor, was weighted at 70%, and personal performance, or P Factor, was weighted at 30%. Threshold, target and maximum payout levels were set for goals under both the C and P Factors, as well as the overall 2018 STIP calculation formula and are summarized below.

STIP Bonus Formula:

Base Salary x Target Bonus Percentage x Performance Factor

Performance Factor: [(70% x C Factor results) + (30% x P Factor results)]

The purpose for having both a P Factor and a C Factor is to reward both individual accomplishments, as well as accomplishments that are instrumental to the overall success of the Company.

C Factor Targets, Thresholds and Results for 2018

The C Factor for Named Executives was split between separate goals for adjusted earnings before interest, taxes, amortization and depreciation, or Adjusted EBITDA, and average working capital as a percentage of sales, or AWC. We used these metrics because we determined these metrics would best align our short-term cash incentive compensation with stockholder interest in cash generation.                

The 2018 C Factor goals and results are summarized below (the Adjusted EBITDA numbers are in millions):

Based on the Company’s financial performance for 2018, in respect of these two components, the overall C Factor score applied to all Named Executives was 0.70, or 70% of target.

The 2018 STIP Company performance calculations included adjustments for exclusion of certain unusual expenses or revenues (including value chain transition costs and Mexico natural gas supply imbalance charges), severance-related costs, non-cash stock compensation, merger and acquisition-related expenses, and currency translation effects.

P Factor Criteria for 2018

The P Factor for the Named Executives was based upon achieving individual performance objectives that typically include one or more of these five categories: (1) safety, quality, governance and compliance; (2) strategic actions; (3) revenue, business and/or margin growth; (4) cost reduction; and (5) other. As noted, target performance results on the P Factor will equal 100% payout and the maximum payout is capped at a 200% payout level, but in practice, P Factor scores above 150% have a very low probability of attainment.

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Based on the scoring process pertaining to their personal objectives for 2018, Dr. Mink, Mr. Horenstein, Mr. Santangelo and Ms. Duff achieved 2018 P Factor scores of 1.0, 0.8, 1.0 and 0.8, respectively. In 2018, when issuing P Factor results for each Named Executive, the Board and the Committee adjusted the overall assessment based on the Company’s C Factor in 2018 being below target. As such, the P Factor scores reflect this adjustment based on Company results, rather than actual personal performance. The current Named Executives’ P Factor determinations for 2018 reflected the following individual achievements:

Overall 2018 STIP Results

Taking into account the achievement of the applicable C Factors and P Factors, awards for the current Named Executives under the 2018 STIP were as follows:

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Effective March 15, 2019, Mr. Kieftenbeld’s employment with the Company was terminated. In connection with his overall performance, Mr. Kieftenbeld received a STI bonus for 2018 at 49% of his target STI bonus amount.

Long-Term Incentive Compensation

Prior to the adoption of our 2018 Long-Term Incentive Plan discussed below, our principal tool for supporting a long-term incentive, or LTI, program was our 2009 Long Term Incentive Plan, which we refer to as the 2009 Plan. The 2009 Plan allows for grants of performance shares, restricted shares and stock options, and we regularly grant these forms of LTI awards to align the interests of executives with those of stockholders. These elements are generally summarized below.

		•   Authorized (but as of yet unissued) shares of the Company’s common stock which are issued if pre-established measures of Company performance are met for a multi-year performance cycle   •   Paid at the end of the multi-year cycle and generally cannot be earned unless (i) the participant is still employed with the Company and (ii) the minimum goals for the cycle are met   •   May also be awarded with dividend equivalents which are paid only on the distribution of performance shares, if earned
		•   Shares of common stock issued at the time of award, which have a three year ratable vesting schedule   •   Do not depend on performance and participants may vote and receive dividends in the interim on these shares

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The Committee’s considerations regarding long-term incentives resulted in a grant to our Named Executives in April 2018, which we refer to as the 2018 LTI Grant, under the 2009 Plan. The 2018 LTI Grants were awarded to these Named Executives at levels which the Committee considered to be market-competitive, reflecting a diversified LTI portfolio, and consistent with our established LTI guidelines. The 2018 LTI Grants were in the form of performance shares (30% of value), restricted stock shares (40% of value) and stock options (30% of value). This mix balances the Committee’s objectives of aligning pay with sustainable long-term performance and stockholders’ interests, as well as retaining the talent needed to deliver against Vision 2022 and beyond.

The following table shows the value of 2018 LTI Awards as a percentage of the base salary for our Named Executives: