DEF: Calumet, Inc. Announces 2025 Annual Meeting of Stockholders and Details Executive Compensation

Calumet, Inc. will hold its inaugural Annual Meeting of Stockholders on June 10, 2025, and the proxy statement details key proposals, director nominees, and executive compensation.

Summary

• Calumet, Inc. will hold its 2025 Annual Meeting of Stockholders virtually on June 10, 2025.
• The meeting will address the election of four Class I director nominees, an advisory vote on executive compensation, a vote on the frequency of executive compensation votes, and the ratification of Grant Thornton LLP as the independent registered public accounting firm for 2025.
• In 2024, Calumet's revenue reached approximately $4.2 billion, and its common stock price increased by approximately 23%, resulting in a Total 3-Year Cumulative Shareholder Return of approximately 67%.
• Calumet completed its conversion from a Master Limited Partnership to a C-Corporation in July 2024.
• Montana Renewables received the first tranche of funding of approximately $782 million from the U.S. Department of Energy under a Loan Guarantee Agreement, which provides for a $1.44 billion guaranteed loan facility.
• The expansion of Montana Renewables is expected to increase annual production capacity by approximately 300 million gallons of SAF and 330 million gallons of combined SAF and renewable diesel.
• Calumet closed on the sale of the assets related to the industrial portion of its Royal Purple business for approximately $105 million of cash proceeds in March 2025.
• The company achieved its lowest ever recordable incident rate and reduced operating costs by more than $1 per barrel in 2024.
• The Board recommends voting for the election of the Class I director nominees, for the approval of executive compensation, for a one-year frequency of executive compensation votes, and for the ratification of Grant Thornton LLP as the independent auditor.
• The Compensation Committee has developed a new incentive framework aligned with the company's new structure, including 2025 annual incentive opportunities earned based on Adjusted EBITDA (60% weighting) and operational priorities (40% weighting).
• In 2025, long-term equity incentives were granted in a mix of performance-based restricted stock units (PSUs) (weighted 50%) and time-based restricted stock units (RSUs) (weighted 50%).

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While there are positive aspects such as revenue growth, strategic initiatives, and cost reductions, the failure to meet Adjusted EBITDA targets and the decline in executive pay indicate challenges. The focus on future growth and alignment with shareholder interests suggests a cautiously optimistic outlook.

Positives

• Calumet completed its conversion to a C-Corporation, which may attract a broader range of investors.
• The DOE Loan for Montana Renewables provides significant funding for expansion and reduces debt servicing costs by approximately $80 million annually during construction.
• The sale of Royal Purple's industrial assets strengthens the balance sheet with approximately $105 million in cash proceeds.
• Record safety performance and cost reductions indicate improved operational efficiency.
• The new executive compensation framework aligns executive interests with shareholder value creation through performance-based incentives.

Negatives

• The company did not meet its Adjusted EBITDA goal for 2024 due to commodity margin declines.
• Despite strategic achievements, the Compensation Committee approved year-over-year declines in total pay for each named executive officer.

Risks

• Commodity margin fluctuations can significantly impact Adjusted EBITDA and, consequently, executive compensation and overall financial performance.
• Failure to achieve strategic initiatives could impact the vesting of performance-based restricted stock units (PSUs) for executives.
• The company's reliance on Adjusted EBITDA as a key performance metric may incentivize short-term gains at the expense of long-term sustainability if not properly balanced with other operational and strategic goals.

Future Outlook

Calumet is focused on driving growth in its specialty products and renewables businesses while deleveraging its balance sheet through the execution of key strategic priorities.

Management Comments

• Todd Borgmann, President & Chief Executive Officer, expressed gratitude for stockholders' continued support.
• Management believes that providing customers with a more diverse selection of products gives the company an advantage.
• Management is focused on supporting the company's long-term strategy, attracting and retaining top executive talent, and incorporating market best practices.

Industry Context

Calumet's focus on specialty products and renewable fuels aligns with the broader industry trends of increasing demand for sustainable and high-performance products. The company's investment in Montana Renewables positions it to capitalize on the growing market for Sustainable Aviation Fuel (SAF) and renewable diesel.

Comparison to Industry Standards

• The document references a compensation peer group including companies like Ashland Inc., Cabot Corporation, and Huntsman Corporation, suggesting Calumet aims to benchmark its executive compensation against similar firms in the refining, commodity chemicals, specialty chemicals, and renewables sectors.
• The document mentions the S&P 400 Chemicals index as a peer group for Total Shareholder Return (TSR) comparison, indicating an awareness of broader market performance within the chemicals industry.
• The document does not provide specific details on how Calumet's financial performance compares to its peers, but the inclusion of Adjusted EBITDA as a key performance metric is common in the industry for assessing profitability and cash flow generation.

Related Party Transactions

• The company made ordinary course sales of certain specialty products to Monument Chemical, LLC, a specialty chemical company owned in part by The Heritage Group, one of the holders of more than 5% of our common stock, and Jennifer G. Straumins, one of our directors.
• Since January 1, 2024, the company has made $0.1 million in purchases from Monument Chemical in 2024.
• The total sales made by the company to Monument Chemical since January 1, 2024 are approximately $7.3 million.
• The company made ordinary course sales of certain fuel products to Asphalt Materials, a company in the asphalt formulation and manufacturing business owned in part by The Heritage Group.
• Since January 1, 2024, the total sales made by the company to Asphalt Materials are approximately $0.5 million.
• Since January 1, 2024, Calumet Branded has paid The Heritage Group a total of $0.9 million, in royalties under the IPRA.

Stakeholder Impact

• Shareholders will have the opportunity to vote on key proposals and provide input on executive compensation.
• Employees may be impacted by changes in executive compensation and the company's overall financial performance.
• Customers will benefit from the company's focus on providing a diverse selection of specialty and renewable products.
• Suppliers and creditors may be affected by the company's efforts to deleverage its balance sheet.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The Board and Compensation Committee will consider the outcome of the advisory votes when making future decisions.
• The company will continue to execute its strategic priorities, including expanding Montana Renewables and deleveraging its balance sheet.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Executive Compensation, Director Nominees, Montana Renewables, C-Corporation, Adjusted EBITDA, SAF, Royal Purple, DOE Loan, Calumet