DEFA14A: Minerals Technologies Inc. Defends Executive Pay in Response to Glass Lewis Recommendation

Minerals Technologies Inc. (MTI) directly addresses concerns raised by Glass Lewis regarding executive compensation, arguing that their analysis is flawed and that MTI's performance justifies its pay structure.

Summary

• Minerals Technologies Inc. (MTI) has issued a response to Glass Lewis's recommendation against the advisory vote on executive compensation (say-on-pay) at MTI's 2025 Annual Meeting of Shareholders.
• MTI argues that Glass Lewis's analysis of the disconnect between pay and performance is flawed, highlighting MTI's strong performance relative to its peer group.
• According to MTI, the company outperformed its peer group in four of the five metrics used by Glass Lewis, with TSR growth more than double and EPS growth approximately four times that of its peers.
• MTI also contends that CEO compensation is well-aligned with TSR performance, with CEO Compensation Actually Paid below the 50th percentile of peers while TSR performance was in the 56th, 44th, and 69th percentiles over the prior 1, 3, and 5 years, respectively.
• MTI emphasizes its extensive engagement with shareholders, stating that no shareholder identified specific changes they would like to see in the executive compensation program.
• The company notes that it contacted shareholders holding approximately 87% of outstanding shares and engaged with shareholders holding approximately 67%, including those who voted against the say-on-pay proposal last year.
• MTI highlights that Glass Lewis corrected its initial proxy paper to address concerns regarding director Frank Feder's status and the company's focus on short-term performance.
• For 2024, 71% of the CEO's compensation was long-term, and 59% of other named executive officers' compensation was long-term.

Sentiment

Score: 7

Explanation: The document presents a strong defense of the company's executive compensation practices and highlights positive financial performance. While it acknowledges the negative recommendation from Glass Lewis, it actively counters their arguments with data and explanations, resulting in a moderately positive sentiment.

Positives

• MTI believes its executive compensation program is aligned with performance and investor interests.
• The company had record operating income and earnings per share in 2024, excluding special items, and expanded margins.
• MTI delivered strong free cash flow, improved its balance sheet, and increased the quarterly dividend while initiating a new share repurchase program.
• Shareholders provided positive feedback regarding the executive compensation program during engagement.
• Glass Lewis corrected errors in its initial proxy paper after engagement with MTI.

Negatives

• Glass Lewis recommends voting against the advisory vote on executive compensation.
• Glass Lewis initially identified a disconnect between pay and performance.
• Glass Lewis initially raised concerns about an excessive focus on short-term performance, which they later corrected.

Risks

• Negative recommendations from proxy advisory firms like Glass Lewis could influence shareholder votes.
• Shareholder disapproval of executive compensation could lead to reputational damage and difficulty in retaining key executives.
• Flawed analysis by proxy advisory firms could lead to incorrect conclusions about a company's performance and compensation practices.

Future Outlook

MTI looks forward to continuing engagement with Glass Lewis in the coming year to further understand its concerns and invites shareholders to review the Proxy Statement and welcomes engagement with shareholders at any time.

Management Comments

• We disagree with Glass Lewis' recommendation for the reasons outlined below and believe that the information in this letter, along with our definitive proxy statement filed with the US Securities and Exchange Commission on April 2, 2025 (the Proxy Statement), will be helpful to you as you cast your vote.
• MTI remains committed to compensation that drives performance and aligns with investors' interests.
• We believe that the metrics and targets at the core of the MTI compensation program have successfully correlated with the company's nearand long-term financial and operating success.

Industry Context

Proxy advisory firms like Glass Lewis and ISS play a significant role in influencing shareholder votes on executive compensation and corporate governance matters. Companies often engage with these firms to address concerns and ensure their recommendations are based on accurate information.

Comparison to Industry Standards

• The document compares MTI's TSR and EPS growth to its peer group, as defined by Glass Lewis.
• It also benchmarks CEO compensation against the 50th percentile of MTI's peers and TSR performance against various percentiles over different time horizons.
• Specific comparable companies are not named in the document, but the analysis focuses on relative performance within the peer group used by Glass Lewis.

Stakeholder Impact

• Shareholders are urged to consider MTI's arguments when voting on executive compensation.
• The outcome of the say-on-pay vote could impact executive morale and retention.
• The company's engagement with proxy advisory firms and shareholders could influence its reputation and investor relations.

Next Steps

• Shareholders are encouraged to review the Proxy Statement and vote on the advisory vote to approve executive compensation.
• MTI will continue to engage with Glass Lewis to address their concerns.
• MTI will continue to engage with shareholders regarding compensation and corporate governance practices.

Key Dates

Keywords

executive compensation, proxy statement, Glass Lewis, shareholder engagement, TSR, EPS, performance, Minerals Technologies Inc., MTI, say-on-pay