Form: DEF 14A

Definitive proxy statements

April 25, 2023

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
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:
Preliminary Proxy Statement.
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)).
Definitive Proxy Statement.
Definitive Additional Materials.
Soliciting Material Pursuant to §240.14a-12.
AXALTA COATING SYSTEMS LTD.
(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 all boxes that apply):
No fee required
Fee paid previously with preliminary materials
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

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Notice of 2023 Annual General Meeting
of Members and Proxy Statement
Axalta Coating Systems Ltd.
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Wednesday, June 7, 2023 at 10:00 a.m., eastern time
IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING OF MEMBERS TO BE HELD ON JUNE 7, 2023:

The Notice of Internet Availability of Proxy Materials, Notice of Annual General Meeting of Members, Proxy Statement and Annual Report are available at www.proxyvote.com

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Axalta Coating Systems Ltd.
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50 Applied Bank Blvd, Suite 300
Glen Mills, PA 19342

April 25, 2023
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Dear Fellow Axalta Shareholders:

As we drive to improve Axalta's performance and profitability, our team members around the world should be proud for what was accomplished during 2022. We ended this past year with momentum and have a solid foundation in place. Our legacy is built on more than 150 years of leadership and impact in the coatings industry, but it’s not just about where we came from. It’s about what’s next. We are focused on continuing to deliver innovative products to our customers that differentiate us and help improve and protect everything we see and touch. We are unified with our shared values and purpose - to innovate smarter surface solutions for better living and a sustainable future.

It is our pleasure to invite you to attend Axalta's 2023 Annual General Meeting of Members, which will be held in person on June 7, 2023 at 10:00 a.m. eastern time at our Global Innovation Center located in Philadelphia, Pennsylvania.

You will find information regarding the matters to be voted upon in the attached Notice of the 2023 Annual General Meeting and Proxy Statement. We are sending our shareholders, referred to as “members” under Bermuda law, a notice regarding the availability of this Proxy Statement, our 2022 Annual Report to Members and other proxy materials via the Internet. This electronic process gives you fast, convenient access to the materials and reduces the impact on the environment and our printing and mailing costs. You may request a paper copy of these materials using one of the methods described in the Notice of the 2023 Annual General Meeting and Proxy Statement.

Whether or not you are able to join the meeting, it is important that your common shares be represented and voted at the Annual General Meeting. Please follow the voting instructions provided in the Notice of Internet Availability of Proxy Materials. If you requested printed versions by mail, these printed proxy materials also include the proxy card or voting instruction form for the Annual General Meeting.

Thank you for being a shareholder and for your support of our company.
Sincerely,
 
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Rakesh Sachdev
Non-Executive Board Chair
Chris Villavarayan
Chief Executive Officer and President

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AXALTA COATING SYSTEMS LTD.
50 Applied Bank Blvd, Suite 300
Glen Mills, PA 19342
Notice of 2023 Annual General Meeting
Time and Date:
Place*:
10:00 a.m., eastern time, on Wednesday, June 7, 2023
Axalta Global Innovation Center, 1050 Constitution Avenue, Philadelphia, PA 19112
Who Can Vote:
Only holders of our common shares at the close of business on April 13, 2023, the record date, will be entitled to receive notice of, and to vote at, the Annual General Meeting.
Annual Report:
Our 2022 Annual Report to Members accompanies but is not part of this Proxy Statement.
Proxy Voting:
Your Vote is Important. Please vote your shares at your earliest convenience. This will ensure the presence of a quorum at the Annual General Meeting. Promptly voting your shares via the Internet, by telephone or by signing, dating and returning your proxy card or voting instruction form will save the Company the expense and extra effort of additional solicitation. If you wish to vote by mail, for those receiving printed copies of the proxy materials we have enclosed an envelope, postage prepaid if mailed in the United States. Submitting your proxy now will not prevent you from voting your shares at the meeting, as your proxy is revocable at your option. You may revoke your proxy at any time before it is voted by delivering to the Company a subsequently executed proxy or a written notice of revocation or by voting at the Annual General Meeting.
Items of Business:

Election of nine directors to serve until the 2024 Annual General Meeting of Members;

Appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm and auditor until the conclusion of the 2024 Annual General Meeting of Members and delegation of authority to the Board of Directors of the Company, acting through the Audit Committee, to set the terms and remuneration thereof;

Approval of the amendment and restatement of our Amended and Restated 2014 Incentive Award Plan that, among other things, increases the number of shares authorized for issuance by 5,600,000 shares;

Non-binding advisory vote to approve the compensation of our named executive officers; and

To transact any other business that may properly come before the Annual General Meeting.
Date of Mailing:
A Notice of Internet Availability of Proxy Materials or this Proxy Statement is first being mailed to shareholders on or about April 25, 2023.
BY ORDER OF THE BOARD OF DIRECTORS,
Sincerely,
 
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Brian A. Berube
 
Senior Vice President, General Counsel &
Corporate Secretary
 
April 25, 2023
 
*
Our top priority is to protect the health and well-being of our shareholders, employees and the general public. In the event we determine it is necessary or appropriate to convert the in-person meeting to a virtual-only or hybrid meeting at a later date, we will publicly announce that decision in a press release and post additional information to the "Investors" section of our website. Please check our website in advance of the 2023 Annual General Meeting of Members if you plan to attend in person.

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PROPOSAL NO. 1: ELECTION OF NINE DIRECTORS TO SERVE UNTIL THE 2024 ANNUAL GENERAL MEETING OF MEMBERS
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2023 PROXY STATEMENT
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PROXY SUMMARY
This proxy statement (the “Proxy Statement”) and accompanying proxy materials are being furnished to the members (referred to herein as “shareholders” or “members”) of Axalta Coating Systems Ltd., a Bermuda exempted company (the “Company,” “our” or “Axalta”), in connection with the solicitation of proxies by the board of directors of the Company (the “Board” or the “Board of Directors”) for use at the 2023 Annual General Meeting of Members, and at any adjournment or postponement thereof (the “Annual Meeting”), for the purposes set forth in the accompanying Notice of 2023 Annual General Meeting. This summary highlights information contained elsewhere in this Proxy Statement and in the Company’s 2022 Annual Report (which includes the Company’s Form 10-K for the year ended December 31, 2022). For more complete information about these topics, please review the Company’s complete Proxy Statement and 2022 Annual Report. Please also see the Questions and Answers section beginning on page 94 for important information about proxy materials, voting, Company documents and communications.
2023 Annual General Meeting
Date:
Wednesday, June 7, 2023
Place:
Axalta Global Innovation Center,
1050 Constitution Avenue, Philadelphia,
PA 19112
Time:
10:00 a.m., eastern time
 
 
Record Date:
April 13, 2023
Note Regarding Forward-Looking Statements
Many statements made in this Proxy Statement are not statements of historical fact, including statements about our beliefs and expectations, and are “forward-looking statements” within the meaning of federal securities laws and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan, strategies and capital structure, as well as our 2030 ESG goals and related initiatives. These statements often include words such as “anticipate,” “expected,” “believe,” “intend,” “goal,” “estimates,” “targets,” “projections,” “can,” “committed,” “should,” “could,” “would,” “may,” “will,” “strategy,” “forecast” and the negative of these words or other comparable or similar terminology. We base these forward-looking statements or projections on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances and at such time. As you read and consider this Proxy Statement you should understand that these statements are not guarantees of performance or results. The forward-looking statements and projections are subject to and involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, including the effects of COVID-19, that may cause our business, industry, strategy, financing activities or actual results to differ materially. More information on potential factors that could affect our financial results is available in the “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and in other documents that we have filed with, or furnished to, the Securities and Exchange Commission (“SEC”), and you should not place undue reliance on these forward-looking statements or projections. Although we believe that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors, including, but not limited to, those described in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements and projections. These forward-looking statements should not be construed by you to be exhaustive and are made only as of the date of this Proxy Statement. We undertake no obligation to update or revise any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise.
Public Dissemination of Certain Information
We intend to use our investor relations page at ir.axalta.com as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the U.S. Securities and Exchange Commission’s Regulation Fair Disclosure (or Reg. FD). Investors should routinely monitor that site, in addition to our press releases, U.S. Securities and Exchange Commission filings and public conference calls and webcasts, as information posted on that page could be deemed to be material information.
2023 PROXY STATEMENT
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PROXY SUMMARY
Proposals
Board
Recommendation
1
Election of nine directors to serve until the 2024 Annual General Meeting of Members
FOR
The director nominees have a diverse set of backgrounds, characteristics and skills relevant to the leadership of the Board and oversight of the Company
All of our non-employee directors are independent
See pages 10-19 for more information
2
Appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm and auditor until the conclusion of the 2024 Annual General Meeting of Members and delegation of authority to the Board, acting through the Audit Committee, to set the terms and remuneration thereof
FOR
Independent firm
Significant industry, global audit and financial reporting expertise
See pages 40-41 for more information
3
Approval of the amendment and restatement of our Amended and Restated 2014 Incentive Award Plan
FOR
Increases the number of authorized shares
Updates certain provisions for changes in law
Modernizes certain provisions
See pages 44-53 for more information
4
Non-binding advisory vote to approve the compensation of our named executive officers
FOR
Strong alignment of executive pay with Company performance
Oversight of compensation program by our fully independent Compensation Committee with assistance of its independent compensation consultant
See page 54 for more information
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PROXY SUMMARY
Our Company
Axalta is a leading global manufacturer, marketer and distributor of high performance coatings systems with more than 150 years of experience. Axalta operates in over 140 countries and serves more than 100,000 customers within our four end-markets of Refinish, Industrial, Light Vehicle and Commercial Vehicle.
During 2022, in coordination with our Board of Directors, global leadership team and stakeholders throughout the Company, we adopted a new, unified purpose statement and set of values for our global team:
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Together, our purpose and values support our commitments to all of our stakeholders, including our employees, customers and shareholders.
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PROXY SUMMARY
Our Board of Directors
Name
Age
Occupation
Standing Committees and
Leadership Roles
Other
Public
Company
Boards
Director Nominees
Rakesh Sachdev
67
Former chief executive officer
Non-Executive Board Chair
3
Jan A. Bertsch
66
Former financial executive
Audit
2
Steven M. Chapman
69
Former business executive
Audit
1
 
 
Environment, Health, Safety & Sustainability
 
William M. Cook
69
Former chief executive officer
Audit
1
 
 
Compensation (Chair)
 
Tyrone M. Jordan
61
Former business executive
Environment, Health, Safety & Sustainability
3*
 
 
Nominating & Corporate Governance
 
Deborah J. Kissire
65
Former accounting firm partner
Compensation
3
 
 
Nominating & Corporate Governance (Chair)
 
Robert M. McLaughlin
66
Former financial executive
Audit (Chair)
1
 
 
Compensation
 
Samuel L. Smolik
70
Former operations executive
Environment, Health, Safety & Sustainability (Chair)
0
 
 
Nominating & Corporate Governance
 
Chris Villavarayan
52
Chief Executive Officer and President of Axalta
 
 
1
*
Mr. Jordan is not standing for re-election to Trinity Industry, Inc.'s Board of Directors and will cease to be a member of Trinity’s Board of Directors and Audit Committee at Trinity’s 2023 Annual Meeting of Stockholders, currently scheduled for May 8, 2023
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PROXY SUMMARY
Balanced Mix of Skills, Experiences and Other Characteristics
Our Board consists of a diverse group of individuals that we believe provide dedicated and effective oversight of the Company. The following matrix summarizes the skills that the Board considers to be of primary importance to the effective oversight of the Company at this time and illustrates how the current Board members represent such skills. Each director is asked to self-identify such director’s skills based on having senior/executive management responsibility for the performance, or direct oversight of, the applicable skill. For example, oversight of a functional area, such as technology/R&D, may serve as the basis for a director to self-identify with a corresponding skill. The skills identified are not an exhaustive list of all skills that are required for the Board’s effective oversight of the Company, nor an exhaustive list of all skills that each director offers. Aligned with our strong focus on advancing environmental, social and governance (“ESG”) matters at the Company, ESG-related skills are included in our director skills matrix exercise. Each Board member has significant experience in, or overseeing, one or more ESG areas, including with respect to corporate governance, sustainability and environmental matters and human capital management matters, which we believe is important for our Board to oversee ESG holistically. The Nominating & Corporate Governance Committee frequently reviews the individual and collective skills and other characteristics of our Board, including, among others, the skills and characteristics shown below, to ensure that the Board has an appropriate mix of skills and perspectives to oversee the advancement of the Company’s business objectives. We believe that our directors have the skills, experience, expertise, diversity, tenure and independence needed to oversee the Company’s long-term strategic growth.
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PROXY SUMMARY
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PROXY SUMMARY
2022 Financial and Operating Highlights
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Despite facing significant headwinds across our business, we exhibited solid financial performance for full year 2022, particularly in the second half of the year. Here are some of our notable financial and non-financial results and achievements for 2022:
Net sales were $4,884.4 million, up 10.6% versus 2021, driven primarily by 10.1% higher average price-mix, 3.7% better volumes and 2.2% contribution from acquisitions, partially offset by a 4.9% foreign exchange headwind.
Income from operations decreased to $423.2 million for 2022 from $462.4 million in 2021, an 8.5% decrease, and Adjusted EBIT(1) was $565.3 million, down from $623.2 million in 2021, a 9.3% decline, in each case, as robust sales growth, including significant pricing gains and volume improvement, were offset by continued cost inflation, foreign currency headwinds, COVID-19-related lockdowns in China and the impacts from the Russia-Ukraine conflict.
Cash provided by operating activities of $293.8 million and free cash flow(1) of $162.8 million each decreased in 2022 over 2021, as cost inflation and working capital represented significant headwinds in 2022.
Our Performance Coatings segment’s net sales increased 7.4% over 2021, driven by net sales growth in both the Refinish and Industrial end-markets of 9.4% and 4.8%, respectively.
Our Mobility Coatings segment’s net sales increased 18.0% over 2021, supported by a recovery in global auto production from the severe supply constraints in the prior year.
We returned approximately $200 million to shareholders through share repurchases during the year under our Board-approved share repurchase plan.
We successfully refinanced our $2.021 billion term loan due June 2024 with a new $2.0 billion term loan due December 2029.
We achieved an Occupational Safety and Health Administration (OSHA) total recordable incident rate (TRIR) of 0.59, which compares favorably to the 3.5 OSHA TRIR for the Paint and Coating Manufacturing Industry (according to 2021 U.S. Bureau of Labor Statistics data). We also continued to make progress on operational optimization initiatives.
We introduced 50 new product platform innovations, hundreds of product customizations and thousands of new color developments.
(1)
Adjusted EBIT and free cash flow are not financial measures presented in accordance with generally accepted accounting principles in the United States (“GAAP”). Please see Appendix A for more information on these non-GAAP financial measures.
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PROXY SUMMARY
Environmental, Social and Governance Highlights
We recognize that ESG matters are important to long-term shareholder value and we are committed to strong ESG practices, including the following highlights:
Board Independence – eight of our nine directors are non-employee directors and are independent under New York Stock Exchange (“NYSE”) listing standards. Our current Chief Executive Officer (“CEO”) is the only non-independent member of our Board. In addition, the non-executive Chair of the Board (“Board Chair”) and all members of each of the Board’s standing committees are independent directors.
Board Diversity – our directors are committed to bringing a diverse set of perspectives and experiences to the Board and five of our nine directors are diverse. We have two female directors serving on the Board, including the chair of the Nominating & Corporate Governance Committee, and three of our directors are racially/ethnically diverse.
ESG Goals – our ESG Steering Committee, a management committee of the Company, oversaw the development of new ESG goals, which were publicly released in January 2022. These 2030 ESG goals, certain of which are discussed in greater detail below, comprise ten commitments linked to three pillars: Planet Solutions; Business Solutions; and People Solutions. Our 2030 ESG goals are aligned with a targeted selection of the United Nations Sustainable Development Goals (“UN SDGs”). Axalta has also set a goal for the Company’s operations to be carbon neutral by 2040.
Human Capital and Diversity – our Board and the Compensation Committee spent a significant amount of time in 2022 discussing management's efforts to build upon our human capital plans, including the Company’s diversity and inclusion strategy and progress. The Board and management are committed to driving the continued evolution of our human capital practices. We have invested in organization-wide learning and leadership development programs, and we are committed to increasing the diversity of our leadership, as reflected by two of our 2030 ESG goals – to have 30% of management positions globally filled by women and to have, in the U.S., 30% of our management positions filled by individuals from underrepresented racial and ethnic groups. To enable progress towards these goals, we launched a 3-year diversity and inclusion strategy that focuses on actions such as the establishment of an Inclusion Index (as measured by our engagement survey), which measures employees’ feelings of belonging in the organization and helps Axalta foster an inclusive workplace, expansion of employee resource groups, targeted training efforts and enhanced talent acquisition processes.
Succession Planning – the Company actively engages in developing a pipeline of internal talent with differing backgrounds and experience to assume key leadership positions. We recently refreshed our succession planning processes for our Executive Committee, global leadership team and other key positions in the organization. The Board has also reviewed an emergency management succession plan in the event that one of our key executives becomes unable or unwilling to serve. Similarly, the Nominating & Corporate Governance Committee regularly discusses Board composition and succession matters, including emergency succession planning for the Board should one of our directors in a leadership role be unable or unwilling to serve.
Strong Environment, Health and Safety Performance – Axalta is committed to protecting the environment and the health and safety of our workers. Our global Responsible Care® Management System (RC14001) is certified, which demonstrates that all elements of the Responsible Care® Management System are successfully implemented globally, including with respect to environment, health, safety, process safety, product safety, security and sustainability. The Board maintains a standing committee, the Environment, Health, Safety & Sustainability (“EHS&S”) Committee, that is responsible for oversight of the Company’s policies, performance, strategy and compliance matters related to environment, health, safety, human rights and sustainability.
Code of Business Conduct and Ethics – the Company maintains a Code of Business Conduct and Ethics, which is provided in seven languages, that applies to all of our directors and employees, including our executive officers and senior financial and accounting officers. Our entire global team receives annual training on and certifies that they have read and understand the Code of Business Conduct and Ethics.
Continued Efforts to Combat the Effects of COVID-19 – Axalta continues to monitor and enforce global, regional and local guidance on health and safety measures related to COVID-19. We continue to take a measured and thoughtful approach to allow us to operate safely while delivering on our commitments to our customers.
Please see the Environmental, Social and Governance Matters section beginning on page 34 for additional information about our ESG practices.
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PROXY SUMMARY
Executive Compensation Highlights
We maintain several guiding principles with respect to the Company’s executive compensation programs, and review our compensation programs on an ongoing basis to ensure that market and regulatory best practices, as well as input from our shareholders, are considered and addressed, including:
Performance-Based Compensation – a significant amount of our executive officers’ compensation is performance-based, including awards of performance-based stock in 2022 tied to our profitability and return on invested capital, with total shareholder return relative to the S&P 400 Materials Index as a modifying component. The 2022 performance-based stock awards comprise approximately 60% of the grant date fair value of the 2022 long-term equity awards granted to executive officers.
Significant At-Risk Pay – we believe that a significant portion of our named executive officers’ (“NEOs”) compensation should be earned based on the Company’s performance. As set forth in more detail in “Compensation Discussion and Analysis – Pay For Performance” below, 85% of our Chief Executive Officer’s target pay and, on average, 73% of our other NEOs’ target pay was at risk in 2022 (i.e., annual performance-based compensation and long-term equity incentive awards).
Incentive Compensation Recoupment Policy – the Company’s “clawback” policy provides that the
Compensation Committee may require reimbursement of incentive compensation awarded to certain members of our senior leadership team, including all of our executive officers, if the Company is required to restate its financial results, and permits the Compensation Committee to recoup incentive compensation, which includes time-based restricted stock units, in certain other instances, including as a result of a covered person’s material breach of certain Company policies, such as the Code of Business Conduct and Ethics. We intend to timely update the policy to reflect any clawback requirements under NYSE’s listing standards.
Hedging and Pledging Prohibited – the Company’s insider trading policy prohibits our officers, directors and employees from pledging their common shares as collateral or engaging in hedging or short sale transactions in our common shares.
Equity Plan Design Features – our equity plan includes minimum 12-month vesting periods (subject to certain exceptions) and prohibitions on liberal share recycling, option repricing and payment of dividends until the related award vests.
Double Trigger Vesting Provisions – our equity plan also provides double trigger vesting provisions for long-term equity awards in the event of a Change-in-Control.
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Proposal
1
Election of nine directors to serve until the 2024 Annual General Meeting of Members
The Board recommends a vote FOR each of the director nominees.
 
• The director nominees have a diverse set of backgrounds, characteristics and skills relevant to the leadership of the Board and oversight of the Company.
 
• All of our non-employee directors are independent.
 
Our Board of Directors currently consists of nine directors, each of whom are proposed for election as directors at the Annual Meeting to serve until the Annual General Meeting of Members in 2024, or until the earliest of each such director’s death, resignation or removal. In addition to the information provided in the matrix on page 6, information regarding our directors’ professional experience, education, skills, ages and other relevant information is set forth below.
The nominees are presently serving as directors of the Company, and they have agreed to stand for reelection. However, if for any reason any nominee shall not be a candidate for election as a director at the Annual Meeting, it is intended that shares represented by the accompanying proxy will be voted for the election of a substitute nominee designated by our Board of Directors, or, alternatively, the Board may determine to leave the vacancy temporarily unfilled.
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PROPOSAL NO. 1: ELECTION OF NINE DIRECTORS
Nominees for Election as Directors to Serve Until the 2024 Annual General Meeting of Members
graphic

Rakesh Sachdev
Age: 67
Axalta Board Service
• Tenure: 2 years (August 2020)
• Non-Executive Board Chair
Independent
Professional Experience
Served as interim CEO and President of Axalta from August 2022 through December 2022
Former Chief Executive Officer of Platform Specialty Products Corporation, now renamed Element Solutions Inc., a leading global specialty chemicals company
Former President and Chief Executive Officer of Sigma-Aldrich Corporation, a leading global life sciences and technology company, prior to its acquisition by Merck KGaA
Education
Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Delhi
M.S. in Mechanical Engineering from the University of Illinois at Urbana-Champaign
MBA from Indiana University
Relevant Skills
Extensive experience in the management of public and private chemical, industrial and life sciences businesses
Significant expertise in finance, strategy and international business transactions
Other
Chairman of the Board of Directors of Regal Rexnord Corporation (NYSE: RRX), a global manufacturer of motors, bearings, gearing, conveyor technologies, blowers, electric components and couplings
Member of the Board of Directors of Edgewell Personal Care Company (NYSE: EPC), a leading consumer products manufacturer
Member of the Board of Directors of Herc Holdings Inc. (NYSE: HRI), a leading equipment rental company
Senior Advisor to New Mountain Capital, a private equity company
2023 PROXY STATEMENT
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PROPOSAL NO. 1: ELECTION OF NINE DIRECTORS
graphic

Jan A. Bertsch
Age: 66
Axalta Board Service
• Tenure: <1 year (September 2022)
• Audit Committee
Independent
Professional Experience
Former Senior Vice President and Chief Financial Officer of Owens-Illinois, Inc. (now O-I Glass), a manufacturer of container glass and packaging products
Former Executive Vice President and Chief Financial Officer of Sigma-Aldrich Corporation, a leading global life sciences and technology company, prior to its acquisition by Merck KGaA
Previously held positions of increasing authority at BorgWarner, Chrysler, Visteon Corp. and Ford Motor Company
Education
Bachelor’s degree in Finance from Wayne State University
MBA from Eastern Michigan University
Relevant Skills
Substantial experience in all aspects of financial management and strategic planning in a public company environment
Significant expertise in information technology
Significant experience in the automotive industry
Other
Chair of the Board of Directors of BWX Technologies, Inc. (NYSE: BWXT), a manufacturing and engineering innovator that provides safe and effective nuclear solutions for global security, clean energy, environmental remediation, nuclear medicine and space exploration
Member of the Board of Directors of Regal Rexnord Corporation (NYSE: RRX), a global manufacturer of motors, bearings, gearing, conveyor technologies, blowers, electric components and couplings
Formerly an independent member of the Board of Directors of Meritor, Inc., a global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers and the aftermarket for the commercial vehicle, transportation and industrial sectors, prior to its acquisition by Cummins Inc. in August 2022
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Steven M. Chapman
Age: 69
Axalta Board Service
• Tenure: 2 years (July 2020)
• Audit Committee
• Environment, Health, Safety & Sustainability Committee
Independent
Professional Experience
Former Group Vice President, China and Russia, for Cummins Inc., a global manufacturer of diesel engines and related components and power systems
Previously held other senior positions at Cummins Inc., including President - International Distributor Business and Vice President - International
Education
Bachelor’s degree in Asian Studies from St. Olaf College
Master of Public Policy and Management from the Yale University School of Management
Relevant Skills
More than three decades of experience working in a global industrial manufacturing business
Substantial international background, having lived and managed businesses in China and emerging markets
Extensive experience in joint ventures, adapting products and operations for emerging markets, distribution and organizational development outside of North America
Other
Chairman of the Board of Directors of Cummins India Limited (BSE: CUMMINSIND), the Indian operations of Cummins Inc.
Senior Advisor to the China-U.S. Industrial Cooperation Partnership, a private equity fund managed by Goldman Sachs
Member of the Board of Trustees of the Yale Greater China Board of Advisors
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William M. Cook
Age: 69
Axalta Board Service
 
• Tenure: 3 years (May 2019)
• Audit Committee
• Compensation Committee (Chair)
Independent
Professional Experience
Former Executive Chairman, President, Chief Executive Officer and Chief Financial Officer of Donaldson Company, Inc. (NYSE: DCI), an international manufacturer of filtration systems and replacement parts
Began career at Ford Motor Company as a financial analyst
Education
Bachelor’s degree in business management and MBA from Virginia Polytechnic Institute and State University
Relevant Skills
Significant business, financial and organizational leadership skills, with deep familiarity in international industrial business gained while serving in senior executive roles for Donaldson Company, Inc. over a 35-year career
Extensive experience serving as a public company board member
Substantial board experience relevant to the coatings industry
Other
Member of the Board of Directors of Mativ Holdings, Inc. (NYSE: MATV) (formerly Neenah, Inc.), an international manufacturer of paper and packaging
Director of Virginia Tech Corps of Cadets Advisory Board
Former director of IDEX Corporation, a leading manufacturer of fluidic systems and specialty engineered products
Former director of The Valspar Corporation, a global leader in the paints and coatings industry until its 2017 acquisition by The Sherwin-Williams Company
Former Director of Donaldson Company, Inc.
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Tyrone M. Jordan
Age: 61
Axalta Board Service
• Tenure: 1 year (June 2021)
• Environment, Health, Safety & Sustainability Committee
• Nominating & Corporate Governance Committee
Independent
Professional Experience
Former President and Chief Operating Officer of DURA Automotive Systems, a leading supplier of electric/hybrid systems, advanced-driver assistance systems, mechatronics, lightweight structural systems and luxury trim systems for all premier automotive brands
Former Executive Vice President, Global Operations and Customer Experience of General Motors
Former Senior Vice President, Global Operations and Supply Chain of United Technologies Corporation
Education
Bachelor’s degree in Pre-Law from Eastern Michigan University
Bachelor of applied science degree in Industrial Engineering Technology from Purdue University
Executive Aerospace & Defense Master of Business Administration (ADMBA) in Operations, Strategy & Finance from the University of Tennessee
Relevant Skills
Significant operational, financial and technology experience
Deep experience in the automotive industry
Broad experience serving as a public company board member
Other
Member of the Board of Directors of Oshkosh Corporation (NYSE: OSK), a leading industrial company that designs and builds specialty trucks, military vehicles, truck bodies, airport fire apparatus and access equipment
Member of the Board of Directors of Trinity Industries, Inc. (NYSE: TRN), a premier provider of railcar products and services; Mr. Jordan is not standing for re-election to Trinity’s Board of Directors and will cease to be a member of Trinity’s Board of Directors and Audit Committee at Trinity’s 2023 Annual Meeting of Stockholders, currently scheduled for May 8, 2023
Member of the Board of Directors of TPI Composites, Inc. (NASDAQ: TPIC), a leading manufacturer of composite wind blades and related precision molding and assembly systems
Dean’s Advisory Board of the College of Business of Eastern Michigan University
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PROPOSAL NO. 1: ELECTION OF NINE DIRECTORS
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Deborah J. Kissire
Age: 65
Axalta Board Service
• Tenure: 6 years (December 2016)
• Compensation Committee
• Nominating & Corporate Governance Committee (Chair)
Independent
Professional Experience
Former Vice Chair and Regional Managing Partner at Ernst & Young LLP (EY), and member of the Americas Executive Board and Global Practice Group
Previously held other senior positions at EY, including Vice Chair and Regional Managing Partner for the East Central and Mid-Atlantic Regions and U.S. Vice Chair of Sales and Business Development
Education
Bachelor’s degree in Accounting from Texas State University
Relevant Skills
Extensive experience in the financial oversight of public companies
Experience launching new business and practice areas and leading acquisitions, business unit consolidations and successful integrations
Expertise in financial reporting, audit process, U.S. taxation, governance, mergers and acquisitions, transaction integration and human capital management
Other
Member of the Board of Directors of Cable One, Inc. (NYSE: CABO), a leading American cable and Internet service provider
Member of the Board of Directors of Celanese Corporation (NYSE: CE), a global technology and specialty materials company
Member of the Board of Directors of Omnicom Group Inc. (NYSE: OMC), a global marketing and corporate communications holding company based in the U.S.
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Robert M. McLaughlin
Age: 66
Axalta Board Service
• Tenure: 9 years (April 2014)
• Audit Committee (Chair)
• Compensation Committee
Independent
Professional Experience
Former Senior Vice President and Chief Financial Officer of, and other senior positions with, Airgas, Inc., a leading U.S. supplier of industrial, medical and specialty gases and hard goods, such as personal protective equipment, welding equipment and other related products
Former Vice President of Finance for Asbury Automotive Group
Former Vice President of Finance and other senior financial positions at Unisource Worldwide, Inc.
Began career at Ernst & Young LLP
Certified Public Accountant
Education
Bachelor’s degree in Accounting from University of Dayton
Relevant Skills
Significant and diverse business experience
Substantial experience in all aspects of financial management and strategic planning in a public company environment
Other
Member of the Board of Directors of Beacon Roofing Supply, Inc. (NASDAQ: BECN), the largest publicly traded distributor of residential and non-residential roofing materials in the U.S.
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Samuel L. Smolik
Age: 70
Axalta Board Service
• Tenure: 6 years (September 2016)
• Environment, Health, Safety & Sustainability Committee (Chair)
• Nominating & Corporate Governance Committee
Independent
Professional Experience
Former Senior Vice President – Americas Manufacturing and other senior positions at LyondellBasell Industries, one of the world’s largest plastics, chemical and refining companies
Former Vice President – Global Downstream Health, Safety, Security and Environment at Shell
Former Vice President, Global Environment, Health, Safety and Security and other positions of increasing responsibility at The Dow Chemical Company
Education
Bachelor’s degree in Chemical Engineering from The University of Texas at Austin
Relevant Skills
Extensive experience in global operations and environmental, health and safety matters in the oil and petrochemicals industry
Leadership experience from working internationally in numerous countries and cultures
Significant experience working with government agencies and non-governmental organizations
Considerable experience in sustainable development and corporate social responsibility
Other
Member of the Board of Directors of Evergreen North America Industrial Services, a leading provider of environmental and industrial cleaning solutions
Previously active with American Fuel & Petrochemical Manufacturers Association and American Chemistry Council
Involved with a number of community, education and other nonprofit organizations including The University of Texas at Austin Engineering Advisory Board, the Antwerp International School Foundation where he is Chairman of the Board of Directors, and Ducks Unlimited, the leading wetlands conservation organization in North America, where he serves on the Board of Directors of Ducks Unlimited, Inc. and Ducks Unlimited de Mexico
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Chris Villavarayan
Age: 52
Axalta Board Service
• Tenure: <1 year (January 2023)
Professional Experience
CEO and President of Axalta
Former Chief Executive Officer and President of Meritor, Inc., a global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers and the aftermarket for the commercial vehicle, transportation and industrial sectors, until October 2022. Meritor was acquired by Cummins Inc. in August 2022
Previously held other senior positions at Meritor, including Executive Vice President and Chief Operating Officer, overseeing Meritor’s global operations for both its business units, Global Truck and Aftermarket & Industrial; board lead with executive oversight of Meritor’s four largest joint ventures; Senior Vice President and President - Global Truck, with responsibility for leading P&L across Meritor’s global truck business; and President - Americas, managing multiple businesses across portfolios as leader of Meritor’s North and South America businesses
Education
Bachelor’s degree in civil engineering from McMaster University
Completed the Wharton Executive Education Advanced Finance Program at the University of Pennsylvania
Relevant Skills
Significant operational and management experience with complex global organizations within the industrial sector and the automotive industry
Expertise in product development and manufacturing
Other
Member of the Board of Directors of Franklin Electric Co., Inc. (NASDAQ: FELE), a leading global provider of systems and components for moving water and fuel
Member of the Board of Directors of Focus: HOPE, a Detroit-based, non-profit organization
Formerly a member of the Board of Directors of Meritor, Inc.
The Board of Directors recommends a vote “FOR” the election of each of the director nominees to serve until the 2024 Annual General Meeting. Election of each director nominee to our Board of Directors requires the affirmative vote of a plurality of votes cast at the Annual Meeting. Withhold votes, abstentions and broker non-votes will have no effect on the outcome of the vote.
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CORPORATE GOVERNANCE MATTERS AND COMMITTEES OF THE BOARD OF DIRECTORS
Policies on Corporate Governance
Our Board believes that strong corporate governance is important to ensure that our business is managed for the long-term benefit of our shareholders. We have adopted a Code of Business Conduct and Ethics that applies to all of our directors and employees, including our executive officers and senior financial and accounting officers, which is available at www.axalta.com/corporate/en_US/about-axalta/values. In the event that the Company amends or waives any of the provisions of the Code of Business Conduct and Ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller that relates to any element of the definition of ‘code of ethics’ enumerated in Item 406(b) of Regulation S-K under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), the Company intends to disclose these actions on the Company’s website identified in the preceding sentence. The Board has also adopted Corporate Governance Guidelines, which cover topics including, among other things, director qualification criteria, continuing director education and succession planning. Copies of the current versions of the Code of Business Conduct and Ethics and the Corporate Governance Guidelines are available on our website and will also be provided upon request to any person without charge. Requests should be made in writing to our Corporate Secretary at Axalta Coating Systems Ltd., 50 Applied Bank Blvd, Suite 300, Glen Mills, PA 19342, or by telephone at (855) 547-1461.
Board Leadership Structure
The Board of Directors does not have a set policy with respect to the separation of the offices of the Board Chair and the CEO, as the Board believes it is in the best interests of the Company and our shareholders to make that determination based on the particular circumstances affecting the Company, as well as the membership of the Board.
The Board regularly evaluates whether the roles of Board Chair and CEO should be separate. The Board believes it is important to retain flexibility on this issue and that it should be considered as part of the Board’s broader oversight and succession planning process. At this time, the Board believes that the separation of the Board Chair and CEO positions is in the best interests of the Company and its shareholders and other stakeholders. The Board has formalized its expectations for the Board Chair, including the following:
Provides leadership and direction on Board operations
Coordinates the activities of the independent directors
Chairs Board meetings and executive sessions of the directors both with and without the CEO
Enables independent directors to raise suggestions, issues and concerns, including with respect to meeting topics/agendas
Acts as a spokesperson for the Board in appropriate circumstances, including engagements with shareholders, proxy advisors and other relevant stakeholders
Facilitates discussion in between Board meetings as needed
Serves as the principal liaison between the independent directors and management
Briefs and provides feedback to the CEO on relevant issues from the Board, including those arising in executive sessions
Provides regular counsel to the CEO and as needed to other members of management
In connection with the appointment of Mr. Villavarayan as President and CEO, effective January 1, 2023, Mr. Sachdev ceased his service as interim CEO and President effective immediately prior to such appointment. In connection with such transition, the Board, after discussion and on the recommendation of the Nominating & Corporate Governance Committee, elected Mr. Sachdev to succeed Mr. Cook as non-executive Board Chair, effective January 1, 2023. We believe that our board leadership structure, with Mr. Villavarayan serving as CEO and Mr. Sachdev as non-executive Board Chair, allows Mr. Villavarayan to focus primarily on our vision, business strategy and operations, while leveraging Mr. Sachdev’s experience and perspectives to lead our Board, particularly as Mr. Villavarayan integrates into Axalta and outlines his value creation priorities.
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CORPORATE GOVERNANCE MATTERS AND COMMITTEES OF THE BOARD OF DIRECTORS
Board Role in Strategy Oversight
The Board is responsible for overseeing the Company’s strategy, operations and results in order to drive long-term value for our shareholders. The Board conducts an in-depth review of the Company’s near- and long-term strategic plan on an annual basis and receives regular updates on the strategic plan, as well as various operating matters, throughout the course of the year. During the in-depth review, which may be held over several days, the Board discusses with senior management the Company’s strategic plan, both with respect to the entire enterprise and each of the Company’s end-markets and covering the
Company’s near- and longer-term priorities and goals. The Board also discusses our strategy, operations and results in executive sessions, with and without our CEO in attendance. In addition, each of the Board’s standing committees regularly reviews and discusses with management topics that are critical to the success of our strategic plan. We believe that the Board’s oversight of our strategy is comprehensive and effectively holds management accountable to develop a strategic plan that positions the Company to deliver long-term shareholder value.
Board Role in Risk Oversight
graphic
In addition to its strategic oversight, the Board provides overall risk oversight focusing on the most significant risks facing our Company. Our finance function, which reports to our CEO through the Chief Financial Officer, has day-to-day management responsibility for our enterprise risk
management (“ERM”) processes. Such processes include an annual survey that is intended to identify potential key risks facing our business, including the likelihood and severity of such risks on a standalone basis and after any mitigating actions we may employ. The survey is also
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intended to assess the potential severity of risks, and how quickly such risks might impact our business. In addition, our risk management team, within our finance function, together with a cross-functional management committee, facilitates projects that are designed to mitigate our key risks, each of which is managed by business and/or functional leaders. The ERM processes are reviewed annually by both the Audit Committee and our full Board. The Board and the Audit Committee discuss with management the Company’s overall risk profile as well as the key risks that are identified from the Company’s ERM processes, including risks related to operations, supply chain, cybersecurity and human capital management, as well as macroeconomic risks. In addition, the Board, together with its standing committees, oversees the risk management processes that are implemented by our executives to determine whether these processes are functioning effectively and are consistent with our strategy as well as best practices. The Board’s role in risk oversight has not had a significant effect on its leadership structure, although we believe our current leadership structure, with Mr. Sachdev serving as non-executive Board Chair and Mr. Villavarayan serving as CEO, enhances the Board’s effectiveness in risk oversight by allowing Mr. Villavarayan to manage risks while collaborating with Mr. Sachdev and the Board to oversee the risks facing the Company.
The Audit Committee is tasked with overseeing our financial risks and risk management policies. The Audit Committee is also specifically tasked with reviewing our compliance with legal and regulatory requirements and any related compliance policies and programs with management, our independent auditors and our legal counsel, as appropriate. Members of our management who have responsibility for designing and implementing our risk management processes regularly meet with the Audit Committee, and the Audit Committee is updated on a regular basis on relevant and significant risk areas. In addition, the Audit Committee oversees cybersecurity risks facing the Company, which are also regularly reviewed by
the full Board. As part of this oversight, the Audit Committee receives regular updates throughout the year on the status of various cybersecurity matters, including ongoing information security training for our employees globally and other efforts to enhance the Company’s cybersecurity defenses and preparedness. We maintain cybersecurity insurance with coverage for security incident response expenses, certain losses due to network security failures, investigation expenses, privacy liability and certain third-party liability. The EHS&S Committee is tasked with overseeing management’s monitoring and enforcement of the Company’s policies to protect the health and safety of employees, contractors, customers, the public and the environment, as well as overseeing other sustainability matters, including human rights, and quality matters. The Compensation Committee oversees risks associated with executive and employee compensation and human capital management matters, and the Nominating & Corporate Governance Committee oversees risks associated with corporate governance matters.
In addition to the Board’s oversight of ERM processes discussed above, the full Board considers specific risk topics, including risks related to CEO and management succession planning, risks associated with our business plan, strategies and capital structure and other significant risks that merit review and discussion by the Board. In addition, the Board receives reports from the committee chairs on risks overseen by their respective committees and discusses with members of our management the risks involved with their respective areas of responsibility. The Board is also informed by management throughout the year, as appropriate, of trends, developments and other matters that could adversely affect our risk profile or other aspects of our business. As provided in our Corporate Governance Guidelines, all directors have access to management and the Company’s employees, including in connection with the exercise of their risk oversight.
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CORPORATE GOVERNANCE MATTERS AND COMMITTEES OF THE BOARD OF DIRECTORS
Board Role in ESG Oversight
The Board oversees ESG matters generally as part of its oversight of our business strategy and risk management, and the Board’s standing committees each oversee specific ESG matters, risks and goals that fall within their respective areas of responsibility. For example: the Audit Committee has oversight responsibility for compliance matters; the Compensation Committee has oversight responsibility for human capital management matters, including diversity and inclusion; the EHS&S Committee has oversight responsibility for environmental, health, safety and sustainability matters, including with respect to climate-related risks and opportunities; and the Nominating & Corporate Governance Committee has responsibility for ensuring that Axalta maintains strong governance practices. As part of this effort, the Nominating & Corporate Governance Committee also regularly discusses the Company’s ESG practices, goals and disclosures, in terms of both the current ESG landscape and potential developments, in order to ensure that all relevant ESG matters are overseen by the Board and its standing committees and communicated to our shareholders and
other stakeholders. The Board and its standing committees regularly discuss with management a variety of ESG topics that are significant to our business and stakeholders. As noted above, each Board member has relevant experience in, or overseeing, one or more ESG areas, including with respect to corporate governance, sustainability and environmental matters and human capital management matters, which we believe allows the Board to effectively oversee the discrete ESG issues, both individually and collectively, that are relevant to our business.
Execution of the Company’s ESG strategy is overseen and carried out by the Company’s senior management team. In 2021, we created an ESG Steering Committee, which includes cross-functional members of our senior executive team, to better coordinate ESG efforts within our business. The ESG Steering Committee is responsible for setting direction and driving accountability as we address significant ESG issues, engaging with key stakeholders, developing ESG goals and measuring and reporting our progress on the same.
Director Independence
Our Corporate Governance Guidelines require that the Board be composed of a majority of directors who are “independent” under applicable NYSE rules and state the Board’s belief that a substantial majority of directors should be independent. Our Board has affirmatively determined that each of our directors, other than Mr. Villavarayan, has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company) and therefore qualifies as “independent” under the applicable NYSE listing standards. Our Board had previously determined that Elizabeth Cahill Lempres, who stepped down from the Board in September 2022, was independent under the applicable NYSE listing standards.
In reaching this determination, the Board considers all known relevant facts and circumstances about any
relationship bearing on the independence of a director (or nominee, if applicable). The Board also considers transactions and arrangements entered into in the ordinary course, including the purchase or sale of products and services and the making of charitable donations, between the Company and its subsidiaries and any other organization where a director (or nominee, if applicable) or an immediate family member may have relationships pertinent to the independence determination. With respect to Mr. Sachdev, the Board considered his service as the Company’s interim CEO and President, from August 31, 2022 through December 31, 2022, including the compensation paid to Mr. Sachdev for such service, and determined that he qualified as independent.
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Director Identification, Recruitment and Nominations
When the Board or the Nominating & Corporate Governance Committee has identified the need to add a new Board member, whether as result of a vacancy on our Board or otherwise, the Nominating & Corporate Governance Committee will initiate a search. The Nominating & Corporate Governance Committee chair leads the search and will seek input from relevant stakeholders, including other directors and management, in order to identify the best possible candidates given the current and future needs of the Board and the Company. The Nominating & Corporate Governance Committee may also, from time to time, engage a search firm to identify director candidates, and the committee has sole authority to retain and terminate any such firm. Members of the Nominating & Corporate Governance Committee and other members of the Board, including the Board Chair, will interview and evaluate each potential director candidate based on the qualifications discussed below, and, ultimately, the Nominating & Corporate Governance Committee will recommend to the Board the appointment of any suitable director candidates. A third-party search firm identified Ms. Bertsch as a suitable director candidate for the Company and Mr. Villavarayan as a suitable CEO and director candidate for the Company.
The Nominating & Corporate Governance Committee also considers director nominees recommended by our shareholders. A shareholder who wishes to recommend a director candidate for consideration by the Nominating & Corporate Governance Committee should send the recommendation to our Corporate Secretary at Axalta Coating Systems Ltd., 50 Applied Bank Blvd, Suite 300, Glen Mills, PA 19342, who will then forward it to the Nominating & Corporate Governance Committee. The recommendation must include a description of the candidate’s qualifications for board service, including all of the information that would be required to be disclosed pursuant to Item 404 of Regulation S-K (as amended from time to time) promulgated by the SEC, the candidate’s written consent to be considered for nomination and to serve if nominated and elected, and addresses and telephone numbers for contacting the shareholder and the candidate for more information. A shareholder who wishes to nominate an individual as a candidate for election, rather than recommend the individual to the Nominating & Corporate Governance Committee as a nominee, must comply with the notice procedures set forth in our Bye-laws and applicable SEC requirements. See “Shareholder Proposals for the Company’s 2024 Annual General Meeting of Members” for more information on these procedures.
The Nominating & Corporate Governance Committee will consider and evaluate persons recommended by the shareholders in the same manner as it considers and evaluates other potential directors, including incumbent directors.
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Director Qualifications
The Board believes that its membership should consist of persons with sufficiently diverse and independent backgrounds and with the relevant expertise required to serve as a director of the Company. The Nominating & Corporate Governance Committee is tasked with ensuring that the Board meets this objective and is responsible for reviewing the qualifications of potential director candidates and recommending to the Board candidates to be nominated for election to the Board of Directors. Our Corporate Governance Guidelines, which are available on our website as described above, set forth criteria that the Nominating & Corporate Governance Committee will consider when evaluating a director candidate for membership on the Board of Directors. These criteria are as follows: professional experience; education; skills; diversity; differences of viewpoint; other individual qualities and attributes that will positively contribute to the Board, including integrity and high ethical standards; experience with business administration processes and principles; ability to express opinions, ask difficult questions and make informed, independent judgments; significant experience in at least one specialty area; and the ability to devote sufficient time to prepare for and attend Board meetings. The Nominating & Corporate Governance Committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for any prospective nominee.
Our Nominating & Corporate Governance Committee also considers the mix of backgrounds (including diversity characteristics) and qualifications of the directors and the challenges and needs of the Company to ensure that the
Board of Directors has the necessary experience, knowledge, abilities and makeup to effectively perform its responsibilities. The Board asks its current members, as well as prospective director candidates in connection with any search, to self-identify their individual skill sets and diversity characteristics, including, but not limited to, gender, racial or ethnic background, sexual orientation or identity, disabilities and military service. While the Board does not have a specific written diversity policy, it believes that overall diversity of directors is important to the Board’s overall functioning and considers diversity when evaluating director candidates and in director searches.
The average tenure of our directors is approximately four years, none of our directors has a tenure longer than approximately nine years, and five of our nine directors were appointed in the last three years. The Nominating & Corporate Governance Committee considers Board tenure and refreshment as additional relevant criteria in its identification, consideration and recommendation of director candidates.
When considering whether our directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, the Board focused primarily on each person’s background and experience as reflected in the matrix on page 6 and the information discussed in each of the directors’ individual biographies set forth in “Proposal No. 1: Election of Nine Directors to Serve Until the 2024 Annual General Meeting of Members.”
Limitations on Other Board and Audit Committee Service
To ensure all directors are able to devote sufficient time to perform their duties, our Corporate Governance Guidelines provide for certain limitations on the service of our directors:
Additional Public Company Boards or Audit Committees – directors may not serve on more than five public company boards of directors or more than three audit committees (in each case including the Company).
Age Limit – no director will be nominated for reelection to the Board after reaching the age of 75 unless an affirmative request is made by the Board for that director to continue service.
In addition, directors must notify the Board Chair when their principal occupation changes, and the Nominating & Corporate Governance Committee will review the circumstances regarding the change to determine whether continued Board membership is appropriate.
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CORPORATE GOVERNANCE MATTERS AND COMMITTEES OF THE BOARD OF DIRECTORS
Board Composition
Our Board currently consists of nine directors who are elected annually, with Mr. Sachdev serving as non-executive Board Chair. The number of directors on our Board may be modified from time to time by our Board of Directors in accordance with our Bye-laws. Any directors appointed by the Board to fill vacancies, whether as a result of the increase in the size of the Board or otherwise, would serve only until the next election at an Annual General Meeting or until a director’s earlier death, resignation or removal.
The Nominating & Corporate Governance Committee regularly reviews the composition of the Board and its committees, including periodically reviewing the directors’ self-identified skill sets and characteristics, in connection with its ongoing assessment of current and future needs of the Board.
Director Orientation and Continuing Education
We have a process for onboarding and orienting new directors and for providing continuing education to our Board members. As part of our director orientation program, new directors participate in one-on-one introductory meetings with Axalta’s business and functional leaders and are briefed on the Company’s strategic plans, financial statements and processes and key issues, as well as the Company’s governance and compliance policies and procedures. We encourage and
pay for our directors to attend continuing education programs on ESG matters, compliance and other critical issues associated with a director’s service on a public company board, as well as site visits to our facilities around the world. Our Board and committees also receive educational programming through guest speakers and presentations on substantive issues during Board and committee meetings and other Board events.
Board Meetings, Attendance and Executive Sessions
Directors are expected to spend the time needed and to meet as frequently as necessary to properly fulfill their responsibilities. The Board and its committees meet on a regularly scheduled basis during the year to review our strategy, financial and operational performance, risks, ESG matters and other significant developments affecting us and to act on matters requiring Board approval. The Board and its committees also hold special meetings when an important matter between scheduled meetings requires Board and/or committee review or action. Members of senior management regularly attend meetings of the Board and its committees to report on and discuss their areas of responsibility. Directors are expected to attend Board meetings and meetings of committees on which they serve. In addition, all directors are expected to attend our Annual General Meeting of Members. All nine of the then-current directors attended the 2022 Annual General Meeting.
In general, the independent directors meet in executive session, without the presence of management, in conjunction with regular meetings of the Board and its committees. The Board Chair presides over Board executive sessions with the committee chairs presiding over the sessions of their respective committees. The Board Chair and committee chairs provide feedback from such executive sessions to the CEO and management as appropriate.
During 2022, the Board held 8 formal meetings, and all directors attended 75% or more of the meetings of the Board and committees on which they served that were held during their tenure. In addition to these meetings, the Board held numerous informal discussions during 2022, in particular to discuss matters relating to the departure of Mr. Bryant and the appointment of Mr. Villavarayan as our new CEO.
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Board Evaluation Process
Our Board believes that a comprehensive evaluation of our Board and its committees enhances their effectiveness. Each of the Board’s standing committees conducts an annual self-evaluation to determine whether it has complied with its responsibilities under our Bye-laws, its committee charter and applicable laws and regulations. The Nominating & Corporate Governance Committee oversees an annual evaluation of the Board and each of its standing committees to assess effectiveness and areas for improvement.
Each year, the Nominating & Corporate Governance Committee discusses and approves the process for the annual Board and committee evaluation to ensure the evaluation effectively assesses the performance of the Board and its committees at that time. The Nominating & Corporate Governance Committee may vary the evaluation process based on the Company’s strategy, the needs of the Board and other relevant factors. For 2022, and historically, the Board and committee evaluation was led by the Company’s General Counsel, under the direction of the Nominating & Corporate Governance Committee.
The 2022 self-evaluation, which is summarized by the accompanying graphic, solicited director feedback on, among other things, the following topics:
Board and committee composition, including skills, background, diversity and experience, among other items;
The Board’s oversight of strategy, ESG matters, including with respect to human capital, the Company’s enterprise risk management processes and succession planning;
The quality of Board and committee participation, processes and meeting agendas/materials;
Whether and how well each committee has performed the responsibilities in its charter;
Areas where the Board and committees should increase their focus;
Satisfaction with time allocated for topics and encouragement of open discussion and communication;
The current committee structure and whether any new committees should be established; and
Access to management, experts and internal and external resources.
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The 2022 self-evaluation culminated in an anonymized, aggregated report prepared by the General Counsel that was provided to, and discussed with, the Board. As in prior years, certain changes were made to the Board and committee practices based on the 2022 self-evaluation. Examples of such changes over the years include: increased and more structured time for executive sessions; streamlined meeting presentations to focus on key issues to allow more time for, and to foster deeper, discussion; and the addition of directors with certain expertise that is significant to the Company’s business and operations.
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Board Committees
Our Board of Directors oversees the management of our business and affairs as provided by Bermuda law and conducts its business through its meetings and its four standing committees: Audit Committee, Compensation Committee, Nominating & Corporate Governance Committee and EHS&S Committee. In addition, from time to time, other committees may be established under the Board’s direction when necessary or advisable to address specific issues.
Each of the standing committees operates under a charter that was approved by our Board of Directors, copies of which are available on our website at www.axalta.com.
Set forth below is the current membership and descriptions of each of the standing committees, with the number of meetings held during the year ended December 31, 2022 in parentheses:
Audit
Committee
(9)

Robert McLaughlin (Chair)
Jan Bertsch
Steven Chapman
William Cook
Responsible for assisting the Board of Directors in overseeing our accounting and financial reporting processes and other internal control processes, the audits and integrity of our financial statements, our compliance with legal and regulatory requirements, the qualifications and independence of our independent registered public accounting firm, our Code of Business Conduct and Ethics and the performance of our internal audit function.
Oversees financial risks, cybersecurity risks and the Company’s risk management policies.
Appoints and oversees our independent registered public accounting firm, including pre-approval of non-audit services.
Mr. McLaughlin was appointed as the chair of the Audit Committee in April 2014.
The Board of Directors has determined that Messrs. McLaughlin and Cook and Ms. Bertsch are each an “audit committee financial expert” as such term is defined under the applicable regulations of the SEC and have the requisite accounting or related financial management expertise and financial sophistication under the applicable rules and regulations of the NYSE.
The Board of Directors has also determined that each committee member is independent under Rule 10A-3 under the Exchange Act and the NYSE listing standards, for purposes of the Audit Committee.
Mr. McLaughlin joined the Audit Committee in April 2014, Mr. Cook in May 2019, Mr. Chapman in July 2020 and Ms. Bertsch in September 2022.
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Compensation
Committee
(10)

William Cook (Chair)
Deborah Kissire
Robert McLaughlin
Responsible for reviewing and approving the compensation philosophy and practices for the Company, reviewing and approving all forms of compensation and benefits to be provided to our Chief Executive Officer, our other executive officers and the Board of Directors, and reviewing and overseeing the administration of our equity incentive plans.
Responsible for the oversight of the Company’s human capital management matters, including the Company’s diversity and inclusion efforts.
Our executive compensation processes and the role of the Compensation Committee, our executive officers, and management in the compensation process are each described under the heading “Compensation Discussion and Analysis — Compensation Governance: Oversight and Administration of the Executive Compensation Program” in this Proxy Statement.
Mr. Cook was appointed as the chair of the Compensation Committee in January 2023.
The Board of Directors has determined that each committee member is independent under the NYSE listing standards for purposes of the Compensation Committee.
Ms. Kissire joined the Compensation Committee in December 2016, Mr. McLaughlin in January 2017 and Mr. Cook in September 2022.
Nominating &
Corporate
Governance
Committee
(8)

Deborah Kissire (Chair)
Tyrone Jordan
Samuel Smolik
Responsible for identifying and recommending director candidates for election to our Board of Directors, reviewing the Board’s committee structure and recommending membership of the committees.
Reviews and recommends the Company’s Corporate Governance Guidelines and makes recommendations to the Board regarding governance and ESG oversight matters, including the Company’s Memorandum of Association, Bye-laws and committee charters.
Oversees succession planning for the Board and its committees, including assessing the directors’ skillsets in light of the Company’s strategy and priorities.
Oversees the annual evaluation of the Board and committees.
Ms. Kissire was appointed as the chair of the Nominating & Corporate Governance Committee in December 2016.
The Board of Directors has determined that each committee member is independent under the NYSE listing standards for purposes of the Nominating & Corporate Governance Committee.
Ms. Kissire joined the Nominating & Corporate Governance Committee in December 2016, Mr. Smolik in August 2018 and Mr. Jordan in June 2021.
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Environment,
Health, Safety &
Sustainability
Committee
(5)

Samuel Smolik
(Chair)
Steven Chapman
Tyrone Jordan
Responsible for the oversight and review of the Company’s policies, performance and strategy related to environment, health, safety, human rights and sustainability, including with respect to climate-related risks and opportunities, as well as quality matters.
Reviews compliance issues and material proceedings regarding environmental, health, safety and sustainability matters.
Mr. Smolik was appointed as the chair of the EHS&S Committee in February 2017.
Mr. Smolik joined the EHS&S Committee in February 2017, Mr. Chapman in July 2020 and Mr. Jordan in June 2021.
In addition to our standing committees, in July 2022, in connection with the departure of Robert Bryant as the Company’s CEO and President, the Board appointed the CEO Search Committee, a special, non-standing committee
comprised of Ms. Kissire and Messrs. Cook and Sachdev, to oversee the Board’s search for a new CEO and President. The committee was dissolved upon the appointment of Mr. Villavarayan as the Company’s new CEO and President.
Compensation Committee Interlocks and Insider Participation
Each of William Cook, Deborah Kissire, Elizabeth Lempres, Robert McLaughlin and Rakesh Sachdev served on the Compensation Committee during 2022. Except for Mr. Sachdev, who served as a member of the Compensation Committee until July 2022 when he entered into an agreement to serve as the Company’s interim CEO and President effective August 2022, none of the members of the Compensation Committee during 2022 was an officer or employee of the Company. None of the members
of the Compensation Committee during 2022 was formerly an officer of the Company or had any relationship requiring disclosure by the Company under Item 404 of Regulation S-K. During 2022, no executive officer of the Company served on the compensation committee or board of another entity, one of whose executive officers served on the Compensation Committee or the Board of the Company.
Our Board’s Commitment to Shareholder Engagement
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Why We Engage
Our Board and management team appreciate the benefits of regular engagement with our shareholders in order to maintain awareness of their perspectives on Axalta and matters affecting the Company.
Our shareholder engagement efforts allow the Board to:
consider the viewpoints of our shareholders in connection with its oversight of management and the Company;
discuss key developments in our business including our strategy and performance; and
assess issues that may impact our business, corporate activities and governance practices, including ESG matters.
How We Engage
We provide institutional investors and equity analysts with opportunities to engage with, and provide feedback to, the Company.
Our management participates in industry conferences, one-on-one investor meetings and non-deal roadshows.
Between March 2022 and March 2023, we engaged with investors representing approximately 62% of our shareholder base and approximately 78% of actively-managed fund shareholders. These engagements focused primarily on our business and performance and shareholders did not raise any material governance, compensation or other ESG issues.
In December 2022, Axalta hosted a Refinish Investor Day at Axalta’s Customer Experience Center in Concord, North Carolina, with over 35 investors participating in person. The event provided investors with a deep dive into Axalta’s industry-leading Refinish business and the underlying collision repair industry, including a hands-on experience with certain of Axalta’s key Refinish products and technologies, as highlighted in the accompanying photos. The highly-successful event received IR Magazine’s award for Best Investor Event, which recognizes investor events hosted by small- and mid-cap companies across all sectors.
Our investor relations personnel and other colleagues also make efforts to raise the Company’s profile within the investor and analyst community. For example, as a result of
such efforts, effective March 20, 2023, Axalta was added to the S&P MidCap 400 Index.
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2023 PROXY STATEMENT
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Succession Planning and Increasing Diversity
The Company actively engages in succession planning in order to ensure that it has a strong pipeline of internal executive talent. The Board of Directors and the Compensation Committee regularly review succession plans for the CEO and other members of senior management, including plans for emergency scenarios. The Board and the Compensation Committee also regularly assess the staffing of the Company’s key leadership positions to identify and develop employees for these positions. In addition, the Company provides a number of leadership development opportunities, including various senior leadership meetings to bring together leaders from around the globe to provide them with opportunities to network, build skills, drive Company engagement and gain exposure to Executive Committee members.
In 2022, the Board, the CEO Search Committee, the Compensation Committee and the Nominating & Corporate Governance Committee spent a significant amount of time reviewing and overseeing the CEO transitions discussed in this Proxy Statement.
The Company believes that the diversity of background, experience and views of our employees, including a diversity of race, gender, ethnicity, nationality, sexual
orientation and cultural background, is important to our long-term success, and we remain committed to enhancing the diversity of our leadership and broader employee population. In addition to the 2030 ESG Goals that we published in 2022, certain of which were launched with the intent of increasing diversity within our management population, we also launched a Diversity & Inclusion strategy to ensure that we are creating a culture of inclusion across the organization. To that end, we have built out training for both individual contributors and managers, are expanding upon our existing employee resource groups, and added an Inclusion Index component to our annual employee engagement survey. We also strive to ensure that our hiring processes include candidates with diverse backgrounds and we seek to identify high-potential employees with diverse backgrounds in connection with our internal talent reviews.
The Board has also proactively focused on increasing the diversity of its membership in connection with the addition of new directors, with four of the five most recent additions to the Board being diverse with respect to gender or race/ethnicity.
Communications with the Board
The Board of Directors provides a process for shareholders and other interested parties to send communications to the Board. Shareholders and other interested parties may send written communications to the Board, c/o the Corporate Secretary of the Company at Axalta Coating Systems Ltd., 50 Applied Bank Blvd, Suite 300, Glen Mills,
PA 19342. Communications concerning substantive Board or Company matters shall promptly be forwarded by the Corporate Secretary to the non-executive Board Chair, and the Corporate Secretary shall keep and regularly provide to the non-executive Board Chair a summary of any communications received.
Stock Ownership Guidelines
In order to ensure meaningful share ownership in Axalta by the Company’s directors and officers, the Company has adopted minimum share ownership requirements. More information is set forth under the headings “Non-
employee Director Stock Ownership Guidelines” and “Executive Officer Stock Ownership Guidelines” in the Director Compensation and Compensation Discussion and Analysis sections, respectively, of this Proxy Statement.
Clawback Policy
The Board of Directors has adopted a policy regarding the recoupment of compensation paid to current and former executive officers and certain other members of our senior leadership team in the event of a restatement of the Company’s financial results, as well as certain other circumstances, including violations of certain Company
policies, such as the Code of Business Conduct and Ethics. We intend to timely update the policy to reflect any requirements under NYSE’s listing standards. More information is set forth under the heading “Incentive Compensation Recoupment Policy” in the Compensation Discussion and Analysis section of this Proxy Statement.
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Certain Relationships and Related Person Transactions
From time to time the Company may engage in ordinary course transactions with other parties affiliated with our directors; however, to the Company’s knowledge, since the beginning of fiscal year 2022 there have been no transactions or any currently proposed transactions in which we were or are to be a participant, the amount involved exceeds $120,000 and any of our directors, executive officers, or shareholders owning 5% or more of our outstanding common shares, or any of their immediate family members, had or will have a direct or indirect material interest.
Our Board has adopted a written policy for the review and approval of transactions involving us and “related persons,” which include our executive officers, directors, director nominees, shareholders owning 5% or more of our outstanding common shares, and the immediate family members of any of the foregoing persons. The policy covers any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved exceeds $100,000 and a related person had or will have a direct or indirect material interest. Pursuant to this policy, our management will present to our Audit Committee each proposed related person transaction, including all relevant facts and circumstances relating thereto. Our Audit Committee will then:
review the relevant facts and circumstances of each related person transaction, including the financial terms
of the transaction, the benefits to us, the availability of other sources for comparable products or services, whether the transaction is on terms no less favorable to us than those that could be obtained in arm’s-length dealings with an unrelated third party or employees generally and the extent of the related person’s interest in the transaction; and
consider the impact on the independence of any independent director and the actual or apparent conflicts of interest.
All related person transactions require the approval of our Audit Committee in accordance with the guidelines set forth in the policy. Certain types of transactions have been pre-approved by our Audit Committee under the policy, including ordinary course purchases of Company products, resolution of warranty claims, receipt of compensation and benefits, reimbursement of expenses and transactions where the related person’s interest arises only from certain roles with the other party. No director may participate in the approval of a related person transaction in which such director, or such director’s immediate family member, is a party.
From time to time the Company may engage in ordinary course transactions with other parties affiliated with our directors; however, to the Company’s knowledge, since the beginning of fiscal year 2022, no related person has had a material interest in any of the Company’s business transactions or relationships.
2023 PROXY STATEMENT
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Environmental, Social and Governance Matters
Axalta is committed to thoughtfully managing ESG matters across our business. Our approach includes internal and external stakeholder perspectives to ensure we are focusing our policies, programs and performance improvements on relevant ESG matters. As described above, in 2021 we formed an ESG Steering Committee in order to continue to drive Axalta’s ESG practices. We also announced our 2030 ESG goals in January 2022, certain of
which goals are described below and depicted in the accompanying graphics and reflect how we strive to embed meaningful environmental progress, inclusive social values and strong corporate governance in Axalta’s operations.
The following are highlights of the ESG programs and practices at Axalta.
Environment
Environmental Stewardship – the Company is committed to environmental compliance and reducing the environmental impact of our operations. In adherence with Responsible Care®, the chemical industry’s environmental, health, safety and security performance initiative, we have strong policies and procedures in place to protect the environment. We manage our environmental efforts through our robust management systems, which are third-party certified to both the RC14001 and ISO14001 standards. We strive to reduce our environmental footprint through reductions in energy use, emissions and waste at our manufacturing sites globally. We will provide more detail regarding our recent efforts in our 2020-2022 Sustainability Report, which we expect to issue later this year.
A number of our 2030 ESG goals demonstrate our commitment to environmental stewardship in our operations. We are targeting a 50% absolute reduction of Scope 1 and 2 greenhouse gas emissions by 2030, on our way to becoming carbon neutral in our operations by 2040. In addition, we are targeting by 2030 a 10% reduction of process waste, volatile organic compound (VOC) emissions and water use from operations (normalized to production).
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Product Stewardship – ensuring our products and services meet all regulatory compliance obligations while also protecting the health and safety of employees, customers and consumers is a key element of our ESG efforts. We manage potential hazards with our raw materials and finished products responsibly and safely in our operations and communicate the known risks to others across our value chain.
Product Innovation and Sustainability – in 2022, Axalta continued to launch innovative products that delivered improved performance and attributes around appearance, durability, productivity, and sustainability. In our global Refinish business, we continued to grow our Spies Hecker® full waterborne collision repair system in China, a technology that won an Edison Award for sustainability. This sustainable solution provides best-in-class appearance and performance while reducing VOC emissions by more than ~60% compared to solvent-based repair systems. In our global Industrial Coatings business, we continued our commitment to sustainability with the launch of a new and improved water-based wood coating system in the Building Products business. In the General Industrial business, an expanded portfolio of corrosion-resistant products was launched, including our Abcite®2060 flame spray powder coating, which won an R&D 100 Award and provides significant VOC reduction compared to liquid technologies. Our Imron® Industrial improved performance primer was launched to meet the corrosion-resistant specifications for the Agricultural and Construction Equipment markets while also reducing VOC, hazardous air pollutants and decreasing the bake temperature required for curing, thus decreasing our customers’ carbon footprint. This technology was also recognized as an R&D 100 award finalist. In the Commercial Vehicle end-market within our global Mobility Coatings segment, we launched our next generation Imron® (EY quality) color coat technology that provides outstanding vehicle appearance, expanded color space, and lower VOC emissions. By 2030, we have committed that 80% of our new technology and innovation developments will have a sustainability benefit and that we will increase by at least 20% the percentage of net sales from products, services and tools that offer sustainability benefits to our customers, markets and communities.
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Social
Human Capital Management – our employees are our greatest resource. In order to attract and retain high performing individuals, we are committed to partnering with our employees to provide opportunities for their professional development and to promote their well-being. In support of this commitment, in 2021 we launched our first employee engagement survey, which is now an annual element of our human capital management efforts. The survey, the results of which are discussed with the Compensation Committee, is designed to measure employee sentiment across a wide range of topics relevant to our employees, including culture, development opportunities, leadership and diversity and inclusion. Approximately 87% of our employees responded to the 2022 engagement survey, marking a 20% increase in the response rate from 2021. Employee engagement, as measured by the survey, also improved significantly. We believe that such improvements reflect our team’s implementation of action plans to address feedback that was provided as part of the 2021 survey, as well as greater intentionality with respect to our employees and their needs. Examples of actions taken based on the feedback obtained in the 2021 survey include an increased focus on learning and development with the launch of Aspire, our digital learning platform available to all employees, a new Front Line Leader Program and various leadership opportunities.
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Diversity and Inclusion – respect for every individual is an essential value and the foundation of our success, and diversity and inclusion has always been important to us. In addition, diversity and inclusion drives diversity in experience and points of view and leads to better decisions. We aspire to a diverse talent pool and to foster an inclusive workplace culture where differences are valued and expressed freely, and all our employees have the individual support they need to develop and grow. To ensure our continued progress in these areas, our 2030 ESG goals include three targets relating to diversity and inclusion: (1) 30% of management positions to be filled by women globally, (2) 30% of management positions to be
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filled by underrepresented racial/ethnic groups in the U.S., and (3) establish, track and improve upon a favorable Inclusion Index.
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Purpose and Values – we launched our new purpose statement and values in November 2022, and they serve as the foundation for everything we do. Our Company PurposeWe innovate smarter surface solutions for better living and a sustainable future – clearly states our mission as a company. It is the greater good and impact we want to achieve through our business. Our Values are our shared beliefs around what matters most and how we will work together to achieve our strategy, priorities and purpose. They get to the heart of how individuals are expected to behave.
Do What’s Right is doing the right thing in all situations. We act with integrity and adhere to Axalta’s high ethical standards in all situations.
Act Boldly reinforces that we aren’t content with the status quo - we pride ourselves in always looking for innovative solutions, whether it’s automating a process or developing a new technology.
Win Together builds on the impressive teamwork and collaboration that happens today and that is so vital to our continued success. This starts with trusting one another. The behavior of creating belonging is tied to our commitment to Diversity & Inclusion.
Management Transparency and Availability – our CEO and other members of our senior leadership team regularly communicate with our global employee population. For instance, following our earnings releases we hold a quarterly “town hall” that is accessible by all employees. During the town hall, our CEO and other business and functional leaders provide an update on various matters affecting our business. The town halls also offer our employees the opportunity to ask questions of, and to engage with, Company leaders.
Safety Performance – our global team is committed to maintaining a safe work environment for all employees and contractors at our sites. In 2022, Axalta achieved strong safety performance – an OSHA TRIR of 0.59 – even in the face of a variety of operational challenges. “Zero Incidents,” our commitment to safety, quality and
the environment, is a key initiative at Axalta, and shows our team’s dedication to protecting our employees’ health and well-being. Our focus and record on safety reflects the importance of our employees – our human capital – to our business and our strategy for value creation. Safety is and will remain our top priority.
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Responsible Sourcing – Axalta is committed to ensuring responsible sourcing practices are upheld and human rights are respected throughout our supply chain. Our Supplier Code of Conduct, updated in 2022 and available on our website at www.axalta.com, outlines the expectations we have of our suppliers regarding compliance with laws, business practices and treatment of people. We work closely with our suppliers and customers to identify and mitigate risks in our global supply chain. Axalta is an active member of the Responsible Minerals Initiative and works alongside peers, customers, suppliers and other stakeholders to advance responsible sourcing practices for mica, cobalt and conflict minerals, particularly in conflict-affected and high-risk areas. We have also committed, as part of our 2030 ESG goals, that 100% of key suppliers will be assessed against a robust set of sustainability criteria, reflecting environmental, governance and reputational risks, including human rights.
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Axalta Bright Futures – the Company’s community engagement and corporate giving activities make a positive impact in the communities where we live and operate. We focus our Axalta Bright Futures programming on two areas:
STEM and vocational education: developing the next generation of scientists, engineers, color experts, operators and auto body painters – especially women and people from disadvantaged and diverse backgrounds – to promote the vitality of the coatings industry and our customers’ industries.
Children, health, safety and the environment in our communities: supporting local organizations, community initiatives and environmental stewardship efforts that improve the lives of people where our employees and our customers live and work, with a focus on supporting diverse and disadvantaged community members.
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Governance
Regular Independent Director Meetings – independent directors meet regularly in executive sessions without
the presence of management, including Mr. Villavarayan. These sessions are normally held prior to, following or in conjunction with regular Board and committee meetings.
Oversight of ESG Practices – the Nominating & Corporate Governance Committee regularly reviews our ESG practices with management and the Board to ensure that we continue to develop and enhance such practices, and that the Board and its committees are appropriately overseeing current and potential ESG risks to the Company.
Annual Board and Committee Evaluations – each year the Nominating & Corporate Governance Committee oversees an evaluation of the Board and its standing committees, including an assessment of the Board and committee composition, as discussed in greater detail above under the heading “Board Evaluation Process.”
Director Education – the Company encourages Board members, and supports them in their efforts, to attend outside programs on topics relevant to their Board responsibilities, and augments such education with presentations from internal and external speakers as appropriate.
Stock Ownership Guidelines for Directors and Executive Officers – the Company has adopted stock ownership guidelines for directors and executive officers. Each of the directors and executive officers satisfies the stock ownership guidelines or is within the grace period provided by the guidelines to achieve compliance.
For additional information on certain components of our ESG programs, please visit the Sustainability section of our website at axalta.com/sustainability.
2023 PROXY STATEMENT
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DIRECTOR COMPENSATION
Overview
Our non-employee director compensation program is designed to fairly compensate directors for the work required at a company of our size and scope as well as to align directors’ interests with the long-term interests of our shareholders. The annual compensation under our program is detailed below. We pay additional annual compensation to the non-executive Board Chair, Presiding Director (if any) and chairs of each standing committee in
recognition of the workload and responsibilities required of these positions. No additional meeting or committee fees are paid. The members of the CEO Search Committee, which was formed to lead the search for, and was dissolved upon, the appointment of a new CEO as described above, did not receive any additional compensation for their service on such committee.
Compensation Component
Amount
Annual equity retainer – restricted stock units (“RSUs”)(1)
$200,000
Annual cash retainer(2)
$75,000
Board Chair annual fee(2)
$125,000
Presiding Director annual fee(2)(3)
$10,000
Audit Committee Chair annual fee(2)
$20,000
Compensation Committee Chair annual fee(2)
$15,000
Other Committee Chair annual fee(2)
$10,000
(1)
RSUs vest 100% on the first anniversary of the grant date
(2)
Payable quarterly in arrears
(3)
Payable only during the service of a Presiding Director, if any
The CEO receives no additional compensation for serving on our Board of Directors or its committees.
The Compensation Committee reviews all director compensation, including the non-executive Board Chair compensation, annually and is assisted by a third-party compensation consultant. The Compensation Committee did not make any changes to the components and amounts of non-employee director compensation for 2022. In March 2023, the Compensation Committee reviewed a peer comparison of director compensation conducted by
its new independent compensation consultant, Pearl Meyer, and increased the fees payable to the committee chairs as follows: Compensation Committee Chair fee - $17,500; Nominating & Corporate Governance Committee Chair fee - $15,000; and Environment, Health, Safety & Sustainability Committee Chair fee - $15,000. The increased committee chair fees became effective on January 1, 2023, and the Compensation Committee made no other changes to the Company’s non-employee director compensation program.
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AXALTA COATING SYSTEMS
                                                                                                                                                         

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DIRECTOR COMPENSATION
Director Compensation Table 2022
For the year ended December 31, 2022, we provided the compensation set out in the table below to our directors.
Name(1)
Fees Earned or
Paid in Cash(2)
($)
Stock
Awards(3)
($)
Total
($)
Jan A. Bertsch(4)
22,418
60,252
82,670
Steven M. Chapman
75,000
199,982
274,982
William M. Cook
200,000
199,982
399,982
Tyrone M. Jordan
75,000
199,982
274,982
Deborah J. Kissire
85,000
199,982
284,982
Elizabeth C. Lempres(5)
63,832
199,982
263,814
Robert M. McLaughlin
99,361
199,982
299,343
Samuel L. Smolik
85,000
199,982
284,982
(1)
Mr. Bryant stepped down as our CEO and President and a member of our Board effective August, 31, 2022. He did not receive compensation for his service as an employee director. Mr. Sachdev served as our interim CEO from August 31, 2022 through December 31, 2022 and he did not participate in the non-employee director compensation program during such time. The compensation received by Mr. Sachdev during 2022, including the compensation received solely for his service as a non-employee director, is reported in the Summary Compensation Table below.
(2)
Amounts reflect the director cash retainer, Board Chair fee and committee chair fees earned in 2022. Such amounts are paid quarterly in arrears and prorated for partial service in any relevant period.
(3)
The number of RSUs granted for each director in 2022 is calculated by dividing the value of the grant ($200,000 or a prorated portion of such amount for Ms. Bertsch) by the closing price of our common shares on the grant date. The amounts in this column reflect the grant date fair value of directors’ stock awards for 2022 computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, which is calculated using the number of shares granted multiplied by the closing price of our common shares on the date of grant. The grant date for Mr. Chapman, Mr. Cook, Mr. Jordan, Ms. Kissire, Ms. Lempres, Mr. McLaughlin and Mr. Smolik was February 15, 2022. The grant date for Ms. Bertsch was September 13, 2022. The aggregate number of awarded RSUs outstanding at 2022 fiscal year-end for each non-employee director is as follows: Ms. Bertsch, 2,374, Mr. Chapman, 6,939; Mr. Cook, 6,939; Mr. Jordan, 6,939; Ms. Kissire, 6,939; Ms. Lempres, 0; Mr. McLaughlin, 6,939; and Mr. Smolik, 6,939. Awarded RSUs outstanding to Mr. Sachdev at 2022 fiscal year end are reported in the “Outstanding Equity Awards” table in “Executive Compensation” below.
(4)
Ms. Bertsch was appointed to the Board effective September 2022
(5)
Ms. Lempres ceased Board service effective September 15, 2022. In recognition of Ms. Lempres's service to the Company, the Compensation Committee determined to accelerate the vesting of a prorated portion of her annual RSU grant effective as of Ms. Lempres's last day of Board service.
Non-Employee Director Stock Ownership Guidelines
Our Compensation Committee adopted stock ownership guidelines for all non-employee directors, which require that, within five years after a first appointment to the Board, each of our non-employee directors must directly or indirectly own an amount of our common shares equal to
five times the director’s annual cash retainer for Board service (excluding any additional fees for leadership roles), or $375,000, based on the amount of the retainer at this time. All directors are in compliance with this requirement or within the grace period of the guidelines.
2023 PROXY STATEMENT
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Proposal
2
Appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm and auditor until the conclusion of the 2024 Annual General Meeting of Members and delegation of authority to the Board, acting through the Audit Committee, to set the terms and remuneration thereof
 The Board recommends a vote FOR this proposal.
• Independent firm
• Significant industry, global audit and financial reporting expertise
The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm and auditor to examine the books of account and other records of the Company and its consolidated subsidiaries for the 2023 fiscal year. The Board of Directors is asking shareholders to approve this action and to delegate authority to the Board, acting through the Audit Committee, to set the terms and remuneration thereof.
Representatives of PwC are expected to be present at the Annual Meeting and will be afforded the opportunity to
make a statement and will be available to respond to appropriate questions that may come before the Annual Meeting.
In the event that shareholders fail to approve the appointment of PwC as the Company’s independent registered public accounting firm and auditor, the Audit Committee will consider the shareholder vote in determining whether to retain the services of PwC in connection with the 2023 audit.
Independent Registered Public Accounting Firm
The following table shows the aggregate fees for professional services provided by PwC and its affiliates for the audits of the Company’s consolidated financial statements for the years ended December 31, 2022 and 2021, and other services rendered during such years.
Fee Category
2022
($000s)
2021
($000s)
Audit Fees
$5,134
$5,350
Audit-Related Fees
87
41
Tax Fees
2,322
2,733
All Other Fees
12
10
TOTAL
$    7,555
$    8,134
Audit Fees
Audit Fees were for professional services rendered for the audit of the GAAP consolidated financial statements and the effectiveness of internal controls over financial
reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, statutory audits and quarterly reviews.
Audit-Related Fees
Audit-Related Fees consist of the fees and expenses for audits and related services that are not required under
securities laws and reviews of financial statements.
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PROPOSAL NO. 2: APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AUDITOR
Tax Fees
Tax Fees consist of the fees and expenses for tax planning, advisory and compliance services. Compliance fees consist of the aggregate fees billed for professional services
rendered for tax return preparation and related tax compliance documentation. The following table details the associated tax fees for 2022 and 2021.
 
2022 ($000s)
2021 ($000s)
Tax Legislation and Related Developments
$504
$826
Tax Planning and Advisory Services
1,549
1,530
Tax Compliance
269
377
TOTAL
$       2,322
$       2,733
When engaging PwC on these matters, management and the Audit Committee considered PwC’s expertise in domestic and international corporate taxation as well as its institutional knowledge of our operations. As such, management and the Audit Committee determined that the engagement of PwC would ensure efficient and quality advice that is pertinent to our business and consistent with our overall business strategy.
For each service proposed, the Audit Committee discussed and determined that PwC’s performance of the tax services would not impair its independence. Nonetheless, our Audit Committee has instructed PwC and management that, absent extenuating circumstances, PwC’s audit, audit-related and tax compliance fees should comprise a majority of its overall fees.
All Other Fees
All Other Fees are fees for all other services and related expenses not included in other fee categories, principally for accounting research software.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee is responsible for selecting the independent registered public accounting firm retained by us to audit our financial statements. The Audit Committee also has responsibility for the retention, compensation, oversight and termination of any independent auditor employed by us.
The Audit Committee has adopted policies and procedures for pre-approving all audit and non-audit services provided by the Company’s independent registered public accounting firm prior to the engagement of such firm with respect to such services. Under these policies and procedures, proposed services may be pre-approved on a periodic basis or individual engagements may be separately approved by the Audit Committee prior to the services being performed. However, the authority to pre-approve services not anticipated to exceed $500,000 per engagement, per calendar year, has been delegated to the Audit Committee Chair to accommodate time-sensitive
service proposals and the Audit Committee Chair reports any such pre-approvals to the full committee at the next meeting. In each case, the Audit Committee and/or the Audit Committee Chair considers whether the provision of such services would impair the independent registered public accounting firm’s independence. All audit services, audit-related services, tax services and other services provided by PwC for 2022 and 2021 were pre-approved.
The approval of Proposal No. 2, to appoint PwC as our independent registered public accounting firm and auditor until the conclusion of the 2024 Annual General Meeting of Members and delegation of authority to the Board, acting through the Audit Committee, to set the terms and remuneration thereof, requires the affirmative vote of a majority of the votes cast on such proposal at the Annual Meeting, whether cast in-person or through proxy. Abstentions and broker non-votes will have no effect on the outcome of the vote.
The Board of Directors recommends a vote “FOR” Proposal No. 2, to approve the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm and auditor until the conclusion of the 2024 Annual General Meeting of Members and the delegation of authority to the Board, acting through the Audit Committee, to set the terms and remuneration thereof.
2023 PROXY STATEMENT
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AUDIT COMMITTEE REPORT
Notwithstanding anything to the contrary set forth in any of the previous or future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 that might incorporate this Proxy Statement, in whole or part, the following report shall not be deemed to be incorporated by reference into any such filing.
The Audit Committee of the Board of Directors is providing this report to enable shareholders to understand how the Audit Committee monitors and oversees the Company’s financial reporting process. The Audit Committee serves an independent oversight role by consulting with and providing guidance to management and the Company’s independent registered public accounting firm on matters such as accounting, audits, compliance, controls, disclosure, finance and risk management. The Audit Committee members do not act as accountants or auditors for the Company. Management is responsible for the preparation of the Company’s financial statements and the financial reporting process, including the implementation and maintenance of effective internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for expressing an opinion on the conformity of those audited financial statements with U.S. generally accepted accounting principles. The Company’s independent registered public accounting firm has free access to the Audit Committee to discuss any matters it deems appropriate. The Audit Committee operates pursuant to an Audit Committee charter that is reviewed annually by the Audit Committee and updated as appropriate. A copy of the charter can be found on the Company’s website at www.axalta.com.
The Audit Committee is responsible for the appointment of the independent registered public accounting firm, as well as for reviewing the appointment or replacement of the leader of the Company’s internal audit function. In 2018, the Audit Committee reviewed and participated in the appointment of a new leader of the Company’s internal audit function, which included conducting interviews with candidates for the role. Additionally, the Audit Committee is directly involved in selecting the lead audit partner to ensure that the lead audit partner is appropriately qualified to lead the Company’s audit. Under SEC rules, the lead audit partner is required to rotate every five years. A new lead audit partner from PwC, which has served as the Company’s independent registered public accounting firm since 2011, was appointed beginning with fiscal year 2021.
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AUDIT COMMITTEE REPORT
Regularly throughout fiscal year 2022, the Audit Committee reviewed and discussed with management, including internal audit, and PwC, with and without management present, the Company’s progress in the testing and evaluation of its internal control over financial reporting and discussed the results of their respective audit examinations and the overall quality of the Company’s financial reporting. The Audit Committee also met separately with the Company’s Senior Vice President and Chief Financial Officer, as well as the Company’s Senior Vice President and General Counsel. The Audit Committee also discussed and reviewed with management and the Company’s internal auditors the Company’s enterprise-wide risk assessment as well as cyber and information security risks generally.
The Audit Committee consists of four directors, Messrs. McLaughlin, Chapman and Cook and Ms. Bertsch, each of whom satisfies the independence requirements promulgated by the SEC and applicable NYSE rules. The Board has determined that each of Messrs. McLaughlin and Cook and Ms. Bertsch are audit committee financial experts as defined by the rules of the SEC.
This report confirms that the Audit Committee has: (i) reviewed and discussed the audited financial statements for the year ended December 31, 2022 with management and the Company’s independent registered public accounting firm, PwC, which included reviewing and discussing the reasonableness of significant estimates and judgments and the clarity of the disclosures related to critical accounting estimates and critical audit matters; (ii) discussed with PwC the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board, or the “PCAOB,” and the SEC; (iii) reviewed the written disclosures and letters from PwC as required by the rules of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence; and (iv) discussed with PwC its independence from the Company.
The Audit Committee has considered whether the provision of non-audit professional services rendered by PwC, and disclosed elsewhere in this Proxy Statement, is compatible with maintaining its independence.
Based upon the above review and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements for the year ended December 31, 2022 be included in the Company’s Annual Report on Form 10-K for filing with the SEC.
Respectfully submitted,
AUDIT COMMITTEE
Robert M. McLaughlin (Chair)
Jan A. Bertsch
Steven M. Chapman
William M. Cook
2023 PROXY STATEMENT
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Proposal
3
Approval of the amendment and restatement of our Amended and Restated 2014 Incentive Award Plan
 The Board recommends a vote FOR this proposal.
•  Increases the number of available shares by 5,600,000 shares
•  Updates certain provisions for changes in law
•  Modernizes certain provisions
On April 19, 2023, the Board of Directors unanimously approved and adopted, subject to the approval of the shareholders at the Annual Meeting, an amendment and restatement of the Axalta Coating Systems Ltd. Amended and Restated 2014 Incentive Award Plan, which was amended and restated in 2018 (the “A&R 2014 Plan”). The A&R 2014 Plan is a long-term incentive plan providing for the grant of cash and equity-based awards, which is designed to attract and retain officers and other employees, directors and consultants of the Company and its subsidiaries, help align the economic interests between such persons and our shareholders, and provide such persons with incentives and rewards for performance.
The proposed amendment and restatement of the A&R 2014 Plan (the “Restated Plan”) will make 5,600,000 additional shares of our Common Shares (“shares”) available for issuance while also updating a number of provisions from the A&R 2014 Plan to reflect changes in law since the adoption of the A&R 2014 Plan, as well as making changes to modernize certain provisions. We believe that the adoption of the Restated Plan is necessary
in order to allow continued utilization of equity awards to attract, retain and motivate officers and other employees, directors and consultants of the Company and its subsidiaries. The material features of, and changes to, the Restated Plan are summarized below, which summaries are qualified in their entireties by reference to the complete text of the Restated Plan, a copy of which is attached as Appendix B to this Proxy Statement.
If the Restated Plan is not approved by the shareholders, we will continue to make equity-based grants from the A&R 2014 Plan as it is critical to our compensation philosophy and to incentivize the achievement of our strategic business objectives. In the event there are insufficient available shares remaining under the A&R 2014 Plan to provide equity-based compensation, we may be required to consider using alternative forms of compensation such as cash. The use of cash in place of compensation that would typically be delivered in the form of equity-based grants could have an adverse impact on our recruitment and retention efforts as well as on our financials.
Overview of Principal Changes to the A&R 2014 Plan
Increase in the Number of Available Shares. The Restated Plan seeks to make an additional 5,600,000 shares available for issuance under the plan (all of which may be granted as incentive stock options), bringing the total number of shares available for future awards to approximately 11,633,774. Under the A&R 2014 Plan as in effect today, restricted stock, restricted stock units, performance share units (“PSU”) and other “full value” awards reduce the share pool by 2.3 shares for every award share issued, because full-value awards are more valuable than an option or stock appreciation right (“SAR”). The size of the requested share pool takes this fungible share pool approach into account, resulting in a larger requested increase than if the share pool was reduced by only one share for each full-value award share issued. Our three-year average annual number of shares granted from 2020-2022, assuming maximum PSU performance and applying our fungible share pool approach, was approximately 3,647,000 shares. We anticipate that this increase in available shares will be
sufficient to cover all grants made over the next three to four years, which we believe are necessary in order to attract and retain talented employees. Once the increased share reserve nears exhaustion, we will again need to seek shareholder approval to authorize more shares. Requesting shareholder approval for only a limited number of shares at a given time means that shareholders will have a more regular opportunity to express their views on our incentive compensation program.
Incorporation of Incentive Compensation Recoupment Policy. The Restated Plan includes a provision that makes all awards under the Restated Plan subject to the Company’s Incentive Compensation Recoupment Policy, as amended from time to time (the “Recoupment Policy”), which provides the Company with the ability to recoup incentive compensation paid to certain members of the Company’s senior leadership team, including all executive officers, in certain circumstances, including if the Company is required to restate its financial results. Any future amendments to the Recoupment Policy, including to
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PROPOSAL NO. 3: APPROVAL OF THE AMENDMENT AND RESTATEMENT OF OUR AMENDED AND RESTATED 2014 INCENTIVE AWARD PLAN
implement any listing requirements adopted by NYSE, do not require participant consent.
Share Counting Provisions. The Restated Plan provides that shares issued under awards other than options and SARs count as 1.9 shares for every one share issued for purposes of counting against the limit of shares that may be issued under the Restated Plan after its adoption. The A&R 2014 Plan provided for a ratio of 2.3 to one with respect to shares issued under such awards.
Extend Term. The Restated Plan provides for a new 10-year term, continuing in effect until 2033.
Other Changes. The Restated Plan provides for certain other updates to reflect changes in applicable laws and to modernize certain provisions of the A&R 2014 Plan, including, without limitation, the removal of certain inoperative provisions due to changes of Section 162(m) of the Internal Revenue Code of 1986 (the “Code”) and updates to the withholding provision, as well as other clarifying revisions to administrative provisions and definitions.
Key Data
The following table includes information regarding outstanding equity awards and shares available for future awards under the A&R 2014 Plan as of April 13, 2023 (and
without giving effect to approval of the Restated Plan under this proposal):
Total shares available for future awards under A&R 2014 Plan
​6,033,774*
Total shares underlying outstanding options
731,652
Weighted average exercise price of outstanding options
$26.83
Weighted average remaining contractual life of outstanding options
​3.49 years
Total shares subject to outstanding, unvested shares of time-vesting restricted stock
0
Total shares subject to time-vesting restricted stock units
​1,607,314
Total shares subject to outstanding earned (performance condition satisfied) and unvested restricted stock and restricted stock unit awards
0
Total shares subject to outstanding unearned (performance condition not satisfied) restricted stock and restricted stock unit awards
​1,736,760*
Total common shares outstanding
​221,514,180
* Assumes maximum payout of our outstanding PSUs.
The following table reflects the aggregate number of shares subject to outstanding awards, shares available for future awards under the A&R 2014 plan, each as of April 13, 2023, and the additional shares that would be available for future awards if our shareholders approve this proposal
and the Restated Plan, the sum of which is referred to as “overhang,” and the ratio of overhang, before and after giving effect to approval of this proposal and the Restated Plan, to outstanding common shares as of April 13, 2023.
Shares subject to outstanding awards
​4,075,726
Shares available for future awards under A&R 2014 Plan
​6,033,774
Total “Overhang” prior to giving effect to approval of this proposal
​10,109,500
“Overhang” as a percentage of outstanding shares prior to giving effect to this proposal
4.56%
Shares to be added pursuant to this proposal to be available for future awards
5,600,000
Total “Overhang” after giving effect to approval of this proposal
​15,709,500
“Overhang” as a percentage of outstanding shares after giving effect to approval of this proposal
7.09%
2023 PROXY STATEMENT
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PROPOSAL NO. 3: APPROVAL OF THE AMENDMENT AND RESTATEMENT OF OUR AMENDED AND RESTATED 2014 INCENTIVE AWARD PLAN
As shown in the following table, our three-year average annual burn rate was 0.54%. Burn rate represents all awards granted in a fiscal year divided by the number of basic weighted average common shares outstanding for that fiscal year. The following table does not reflect any adjustment for the fungible share pool share counting provisions of the A&R 2014 Plan.
 
Options
Granted(1)
Time-Based Full
Value Awards
Granted(2)
Target
Performance-
Based Awards
Granted(3)
Performance
Based-Awards
Earned(4)
Total(5)
Burn
Rate = Total
Granted/Weighted
Average
Common
Shares
Outstanding(6)
2022
1,327,690
381,682
54,113
1,709,372
0.77%
2021
717,857
379,363
1,097,220
0.47%
2020
525,580
331,699
86,059
857,279
0.36%
Three-Year
Average
857,042
364,248
46,724
1,221,290
0.54%
(1)
No options were granted during 2022, 2021 or 2020.
(2)
Time-based full value awards (comprised solely of RSUs) granted during fiscal years 2022, 2021 and 2020 subsequently forfeited are included here. The number of time-based full value awards granted in each of the last three fiscal years, but subsequently forfeited, was: 2022, 171,254; 2021, 119,868; and 2020, 115,012. Time-based full value awards granted in 2021 and 2022 were elevated when compared to 2020 as a result of awards made in connection with executive transitions, including the CEO transition during 2022, as discussed in greater detail throughout this Proxy Statement, and sign-on awards for newly hired executives in 2021.
(3)
Performance-based awards (comprised solely of PSUs) granted during fiscal years 2022, 2021 and 2020 and subsequently forfeited are included here. The number of shares with respect to performance-based awards granted in each of the last three fiscal years, but subsequently forfeited, was: 2022, 105,259; 2021, 162,335; and 2020, 200,298. The actual number of shares awarded is adjusted to between zero and 200% of the target award amount based upon achievement of pre-determined objectives. Except for with respect to the PSUs granted in 2020 for the 2020-2022 performance period, which were determined in February 2023 to have vested at 0% of target, the amounts actually earned with respect to these awards are not yet determinable.
(4)
Represents PSUs and performance stock awards ("PSAs"), as applicable, vesting in each of the covered fiscal years. For 2022, represents the PSUs granted in 2019 for the 2019-2021 performance period and determined in February 2022 to have vested at 32.86% of target. For 2021, represents the PSUs granted in 2018 for the 2018-2020 performance period and determined in February 2021 to have vested at 0% of target. For 2020, represents the PSAs granted in 2017 for the 2017-2019 performance period and determined in February 2020 to have vested at 92.65% of target.
(5)
Includes time-based full value awards granted and target performance-based awards granted.
(6)
Our basic weighted average common shares outstanding in each of the last three fiscal years was approximately: 2022, 221.7 million; 2021, 231.0 million; and 2020, 235.2 million.
Summary of Provisions of the Restated Plan
The A&R 2014 Plan includes a number of provisions that we believe serve the interests of our shareholders, facilitate effective corporate governance and demonstrate reasonable use of shares. Certain of these provisions, which are not substantively modified by the Restated Plan, are as follows:
a.
Minimum vesting period of one year from the date of grant, subject to certain limited exceptions;
b.
No repricing of options or SARs and no cash buyout of underwater options and SARs without shareholder approval;
c.
No “liberal” share recycling provisions;
d.
No dividend equivalents on options or SARs and no payment of dividends or dividend equivalent rights on awards that do not vest;
e.
No evergreen provision;
f.
No excise tax gross-up on change in control benefits; and
g.
No automatic single-trigger vesting in the event of a Change-in-Control.
The following summary of the Restated Plan is qualified in its entirety by reference to the complete text of the Restated Plan, a copy of which is attached as Appendix B to this Proxy Statement.
Share Reserve. Subject to adjustment as described under “Adjustments of Awards” below, if shareholders approve the Restated Plan, increasing the number of shares available for issuance by 5,600,000 shares, the Restated Plan’s aggregate share reserve, which represents the total number of shares that have been authorized for issuance under the plan since its inception in 2014, would be 29,355,000 shares. Of this total, as of April 13, 2023, approximately 17,721,226 shares have already been issued (either vested or exercised awards) or are subject to outstanding awards, leaving approximately
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PROPOSAL NO. 3: APPROVAL OF THE AMENDMENT AND RESTATEMENT OF OUR AMENDED AND RESTATED 2014 INCENTIVE AWARD PLAN
11,633,774 shares available for future awards, if the Restated Plan is approved. The shares are issuable under a variety of share-based awards, including stock options, SARs, restricted stock awards, restricted stock unit awards, dividend equivalent awards, stock payment awards and performance awards. The A&R 2014 Plan provides that any shares issued under options or SARs are counted against this limit as one share for every one share issued under the award, and any shares issued under awards other than
options or SARs are counted against this limit as 2.3 shares for every one share issued. If the shareholders approve the Restated Plan, any shares issued under options or SARs will continue to be counted against this limit as one share for every one share issued under the award, and any shares issued under awards other than options or SARs that are granted after the date of the adoption of the Restated Plan will be counted against this limit as 1.9 shares for every one share issued.
The following counting provisions will be in effect for the share reserve under the Restated Plan.
a.
If an award (including awards under the A&R 2014 Plan) is forfeited, expires or lapses for any reason, or an award is settled in cash without the delivery of shares, any shares subject to the award at such time will be added back to the share reserve. Shares would be added back as one share if they were subject to options or SARs granted under each of the A&R 2014 Plan and the Restated Plan. Shares underlying awards (other than options or SARs) granted under the A&R 2014 Plan would be added back as 2.3 shares and shares underlying awards (other than options or SARs) granted under the Restated Plan would be added back as 1.9 shares.
b.
Shares that are tendered or withheld to satisfy the exercise price or tax withholding obligation with respect to an award will not be added back to the share reserve.
c.
If shares are issued upon exercise of a SAR, the share reserve will be reduced by the gross number of shares subject to the SAR, not the net number of shares issued.
d.
Shares purchased on the open market with the cash proceeds from the exercise of options will not be added to the share reserve.
e.
The payment of dividend equivalents in cash in conjunction with any outstanding awards will not be counted against the share reserve.
f.
To the extent permitted by applicable law or any exchange rule, shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of corporate transaction or combination by us or any of our subsidiaries will not be counted against the share reserve.
Administration. The Compensation Committee (or another committee or a subcommittee of our Board) is the administrator of the Restated Plan. Except as otherwise determined by our Board, the Compensation Committee will consist of at least two members of our Board, each of whom will be intended to qualify as a “non-employee
director” for purposes of Rule 16b-3 under the Exchange Act and, to the extent required by applicable law, an “independent director” under the rules of the NYSE or other principal securities market on which shares are traded. The Restated Plan provides that the Compensation Committee may from time to time delegate its authority to grant awards to a committee consisting of one or more members of our Board or one or more of our officers, provided that no officer shall be delegated such authority to grant awards to individuals who are subject to Section 16 of the Exchange Act, or officers or directors who have been delegated the authority to grant or amend awards under the Restated Plan.
Subject to the terms and conditions of the Restated Plan, the administrator will have the authority to select the persons to whom awards are to be made, to determine the type of awards to be granted and the number of shares to be subject to awards and the terms and conditions of awards, to determine when awards can be settled in cash, shares or other awards or whether to cancel, forfeit or surrender awards, to prescribe the form of award agreement, to accelerate vesting or lapse restrictions and to make all other determinations and to take all other actions necessary or advisable for the administration of the Restated Plan. The administrator will also be authorized to adopt, amend or rescind rules relating to administration of the Restated Plan.
Eligibility. The Restated Plan provides that awards may be granted to individuals who are our employees, consultants or non-employee directors or the employees, consultants or non-employee directors of certain of our subsidiaries. As of January 1, 2023, we (together with our covered subsidiaries) had approximately 12,000 employees and 8 non-employee directors. Since January 1, 2023, approximately 400 consultants have provided services to us and our covered subsidiaries. Only employees of our Company or certain of our subsidiaries may be granted incentive stock options (“ISOs”). Because the Restated Plan provides for broad discretion in selecting which eligible persons will participate in the Restated Plan and in making awards thereunder, the total number of persons who will
2023 PROXY STATEMENT
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PROPOSAL NO. 3: APPROVAL OF THE AMENDMENT AND RESTATEMENT OF OUR AMENDED AND RESTATED 2014 INCENTIVE AWARD PLAN
participate in the Restated Plan and the benefits that will be provided to participants cannot be determined at this time.
Awards. The Restated Plan provides that the administrator may grant or issue stock options, SARs, restricted stock, restricted stock units, dividend equivalents, performance awards and stock payment awards, or any combination thereof. The terms and conditions of awards are set forth in an agreement with the person receiving the award. The following is a brief description of the awards that may be granted under the Restated Plan.
a.
Options
i.
Nonqualified stock options (“NQSOs”) provide for the right to purchase shares at a specified price, which may not be less than the fair market value of a share on the date of grant, and usually become exercisable in one or more installments after the grant date, subject to the satisfaction of applicable vesting conditions. NQSOs may have terms of up to ten years.
ii.
ISOs are stock options that are intended to comply with the provisions of Section 422 of the Code. ISOs, like NQSOs, must have an exercise price of not less than the fair market value of a share on the date of grant and can have a term of up to ten years, unless granted to an individual who owns (or is deemed to own) at least 10% of the total combined voting power of all classes of our capital stock, in which case the exercise price must be at least 110% of the fair market value of a share on the date of grant and that term may not exceed five years.
iii.
The exercise price of options granted under the Restated Plan may be paid in cash, by tendering previously acquired shares having a fair market value equal to the exercise price, through broker-assisted cashless exercise, by net exercise or any other means permitted by the administrator consistent with applicable law or by a combination of any of the permitted methods.
b.
Restricted stock is a share of stock that is subject to such vesting, transfer and other restrictions as may be determined by the administrator. Restricted stock, typically, will be forfeited for no consideration or repurchased by the Company at the original purchase price if the conditions or restrictions on vesting are not met. The Restated Plan provides that restricted stock generally may
not be sold or otherwise transferred until restrictions are removed or expire. Recipients of restricted stock have voting rights and may receive dividends. Dividends relating to the restricted stock are subject to the same vesting conditions as the restricted stock.
c.
Restricted stock units provide for the issuance of shares or cash of equal value after vesting and any other conditions are satisfied. Unlike restricted stock, shares underlying restricted stock units are not issued until the restricted stock units have vested, and recipients of restricted stock units have no voting or dividend rights prior to the time when vesting conditions are satisfied; however, dividend equivalents, which are a form of phantom dividends, may be provided, and all such dividend equivalents are subject to the same vesting conditions as the restricted stock units.
d.
SARs are similar to stock options, except that no exercise price is paid. If applicable vesting conditions are satisfied, the participant may exercise the SAR by providing an exercise notice to the Company. Upon exercise, any post-grant appreciation in the value of a share of our stock is paid (either in shares, cash or a combination of both). Subject to certain exceptions, the base price used to calculate the payment upon exercise of SARs must be at least 100% of the fair market value of a share on the date of grant. SARs may have a term of up to ten years.
e.
Dividend equivalents, which may not be granted or paid with respect to options or SARs, represent the value of the dividends, if any, paid by us on shares while the award is outstanding, calculated with reference to the number of shares covered by the award. Dividend equivalents may be settled in cash or shares and at such times as determined by the administrator; provided that, dividend equivalents are subject to the same vesting conditions as the award to which they relate and are paid at the same time the cash is paid or shares are issued at or after vesting of the award.
f.
Performance awards are awards with vesting conditions that are based upon specific performance targets. Performance awards may be paid in cash or in shares or in a combination of both. Performance awards may include “phantom” stock awards that provide for payments based upon the value of our shares and bonuses payable in cash or in shares or in a combination of both.
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PROPOSAL NO. 3: APPROVAL OF THE AMENDMENT AND RESTATEMENT OF OUR AMENDED AND RESTATED 2014 INCENTIVE AWARD PLAN
g.
Stock payment awards are awards that provide for payment in the form of shares, options or other right to purchase shares, as part of a bonus, deferred compensation or other arrangement. Stock payment awards may, but are not required to, be granted in lieu of base salary, bonuses, fees or other cash compensation.
h.
Substitute awards are awards issued in assumption or substitution of awards granted under incentive plans sponsored or maintained by an entity with which we engage in a corporate transaction. Substitute awards generally have substantially the same terms and conditions as the award they replace, except that the number of shares, the exercise price, grant price or other price of shares or any performance conditions may differ from the awards they replace.
Termination of Employment or Service. Each award agreement will set forth the holder’s rights with respect to the award following termination of employment or service.
Change in Control. In the event of a change in control, outstanding awards shall be assumed, continued or substituted by the acquirer or its parent. If not so assumed, continued or substituted in connection with a change in control, we may provide for (i) the termination of such award in exchange for an amount of cash, rights or other property having a value equal to the amount that would have been attained upon the exercise or settlement of such award, (ii) adjustments to the number, type or terms of awards or (iii) the award to become fully vested and exercisable immediately prior to the change in control. The treatment of performance goals or criteria underlying performance-based awards shall be determined by the administrator in its discretion in connection with a change in control, subject to the terms of any applicable award agreements.
Under the Restated Plan, a change in control is generally defined as:
a.
an acquisition immediately after which any person, group or entity directly or indirectly acquires more than 50% of the total combined voting power of our securities outstanding immediately after such acquisition, excluding any acquisition directly from us, by us, or by any of our employee benefit plans and certain other acquisitions, including corporate transactions that do not trigger the merger prong of the change in control definition;
b.
during any period of two consecutive years, the individuals who, as of the beginning of such period, constituted our Board, which we refer to as the incumbent board, cease to constitute at least a majority of the Board, provided that any individual who becomes a member of our Board subsequent to the beginning of such period and whose election or nomination was approved by at least two-thirds of the members of the incumbent board will be considered as though he or she were a member of the incumbent board;
c.
consummation of a merger, consolidation, reorganization, or business combination; a sale or other disposition of all or substantially all of our assets; or the acquisition of assets or stock of another entity unless (a) our shareholders immediately before the transaction continue to have beneficial ownership of at least a majority of our outstanding shares or shares of the
successor entity and (b) no person or group has beneficial ownership of 50% or more of the combined voting power of the successor entity’s outstanding voting securities; or
d.
shareholder approval of our liquidation or dissolution.