DEF 14A: Perimeter Solutions, SA Announces Details for 2024 Annual Shareholder Meeting

Perimeter Solutions, SA has released its proxy statement detailing the agenda for its 2024 Annual Meeting of Shareholders, including the election of directors, executive compensation, and auditor appointments.

Summary

• Perimeter Solutions, SA will hold its 2024 Annual Meeting of Shareholders on May 23, 2024, in Luxembourg.
• Shareholders as of March 25, 2024, are eligible to vote on several key proposals.
• The proposals include the election of eight directors, an advisory vote on executive compensation (Say on Pay), and the appointment of KPMG LLP as the independent registered public accounting firm for the year ending December 31, 2024.
• Additionally, shareholders will vote on the approval of the company's annual accounts, consolidated financial statements, and a share repurchase program.
• The Board of Directors recommends voting FOR all director nominees and FOR proposals 2 through 9.
• Full year net sales decreased 11% to $322.1 million, compared to $360.5 million in the prior year.
• Fire Safety sales decreased less than 0.5% to $225.6 million, as compared to $226.6 million in the prior year.
• Specialty Products sales decreased 28% to $96.6 million, as compared to $133.9 million in the prior year.
• Full year net income was $67.5 million, or $0.41 per diluted share, a decrease of $24.3 million from $91.8 million, or $0.52 per diluted share in the prior year.
• Full year Adjusted EBITDA decreased 23% to $96.8 million, as compared to $125.4 million in the prior year.
• Fire Safety Adjusted EBITDA decreased 1% to $76.2 million, as compared to $77.4 million in the prior year.
• Specialty Products Adjusted EBITDA decreased 57% to $20.6 million, as compared to $48.0 million in the prior year.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there are positives such as the company's commitment to corporate governance and the share repurchase program, the financial results for 2023 show declines in net sales, net income, and Adjusted EBITDA, particularly in the Specialty Products segment.

Positives

• The company is committed to principles of effective corporate governance and high ethical standards.
• The Audit, Compensation, and Nominating and Corporate Governance Committees are comprised of all Independent Directors.
• The offices of the Chief Executive Officer and Co-Chairmen of the Board are separated.
• The company has adopted a written Code of Business Conduct and Ethics.
• The company has a clawback policy for executive officers.
• The company repurchased approximately 12.2 million shares in 2023, at the average price of $5.24.

Negatives

• Full year net sales decreased 11% to $322.1 million, compared to $360.5 million in the prior year.
• Specialty Products sales decreased 28% to $96.6 million, as compared to $133.9 million in the prior year.
• Full year net income was $67.5 million, or $0.41 per diluted share, a decrease of $24.3 million from $91.8 million, or $0.52 per diluted share in the prior year.
• Full year Adjusted EBITDA decreased 23% to $96.8 million, as compared to $125.4 million in the prior year.
• Specialty Products Adjusted EBITDA decreased 57% to $20.6 million, as compared to $48.0 million in the prior year.

Risks

• The company's performance-based stock options are subject to specific performance criteria, and no portion of the options granted to NEOs have vested to date as the achievement of annual operating performance per diluted share was not achieved for 2023.
• The 2023 North American fire season was very mild, with U.S. acres burned ex-Alaska at 2.3 million acres, which represented an almost 50% decrease compared to 2022 and almost 60% below the 10-year US average.

Future Outlook

The document does not contain a specific future outlook, but it does outline strategic initiatives and operational value drivers the company is focused on.

Industry Context

The document notes that the 2023 North American fire season was mild, impacting the Fire Safety segment. The Specialty Products segment experienced a weak demand environment due to inventory destocking activity in the specialty chemicals supply chain.

Comparison to Industry Standards

• The peer group identified by FW Cook, the company's compensation consultant, consisted of 16 publicly traded chemical companies: AgroFresh Solutions, Inc.(AGFS), Chase Corporation(CCF), Ingevity Corporation(NGVT), LSB Industries, Inc. (LXU), American Vanguard Corporation (AVD), CVR Partners LP (UAN), Innospec Inc. (IOSP), Rayonier Advanced Materials Inc.(RYAM), Amyris, Inc. (AMRS), Ecovyst, Inc. (ECVT), Intrepid Potash, Inc. (IPI), Trecora Resources (TREC), Balchem Corporation (BCPC), Hawkins, Inc. (HWKN), Livent Corporation (LTHM), Tredegar Corporation (TG).
• The peer group was selected by evaluating size, analogous industries, annual revenues, statistical reliability, and market capitalization as well as those companies that are perceived competitors for talent.
• Overall, the company's cash compensation levels are generally below a competitive range of the market median, while the total direct compensation is above market which reflects the risk premium associated with the performance-based options.

Management Changes

Related Party Transactions

• The EverArc Founder Entity, owned by William N. Thorndike, Jr., W. Nicholas Howley, Haitham Khouri, Tracy Britt Cool and Vivek Raj, provides services to the Company, including strategic and capital allocation advice.
• For 2023, the EverArc Founder Entity received a fixed annual advisory amount of 2,357,061 Ordinary Shares or a value of approximately $10.6 million.
• The Company paid $0.4 million to lease real property from the sellers of First Response Fire Rescue, LLC, River City Fabrication, LLC, and H&S Transport, LLC during the year ended December 31, 2023.
• Shannon Horn, who serves as our Business Director, North America Retardant and Services, was one of the sellers of Ironman and owns 49% of SLCK Commercial Properties, LLC, the landlord to the leased real property.

Stakeholder Impact

• Shareholders will be impacted by the decisions made at the Annual Meeting, including the election of directors, executive compensation, and the share repurchase program.
• Employees are impacted by the executive compensation program and the company's commitment to equal employment opportunities.
• Customers and suppliers are impacted by the company's commitment to sustainability and ethical business practices.

Next Steps

• Shareholders to vote on proposals at the Annual Meeting on May 23, 2024.
• Board to consider the results of the advisory vote on executive compensation.
• Company to continue implementing strategic initiatives and operational value drivers.

Key Dates

Keywords

Annual Meeting, Shareholders, Proxy Statement, Board of Directors, Executive Compensation, KPMG, Share Repurchase, Financial Statements, Director Election, Corporate Governance