Company: AVD
Filing Date: 2025-05-29
Form Type: DEF 14A
Source: 0000950170-25-079166
Chunk: 34

Company: AMERICAN VANGUARD CORP
Filing Date: 2025-05-29
Form: DEF 14A
Chunk 34
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 the “Sound

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Practices” features that our compensation program includes and “Poor Pay Practices,” which are excluded. Certain of these features are described in greater detail after the table.

1. High Percentage of Performance/TSR In the several year period prior to 2024, the Company had awarded performance shares that were based upon financial metrics achieved by the Company as compared to peers that had been identified in the proxy (at time of award). However, in 2024, the Company turned toward total shareholder return as a performance metric, splitting equity awards between time-based restricted stock (having a three-year, cliff-vesting period) and options which, for the then current NEOs also included an additional trigger to the effect that half of the options would be exercisable only if the fair market value (FMV) Company’s common stock equaled or exceeded $20 per share for 30 continuous trading days and the other half when the FMV equaled or exceeded $25 per share for same length of time.

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Since the Company began the process of granting awards of performance shares, we have experienced mixed vesting performance. Because there had been multiple factors used to determine vesting (EBIT, sales and TSR versus two different comparator groups), it was typical for one or more metrics to vest at or above target, while another vests below target (resulting in a partial forfeiture). Based upon this experience, then, we can say that the performance metrics are neither too lax, nor overly restrictive.

Effective Cap on Individual Bonuses

By employing a formula-driven incentive compensation policy (starting in 2025), the Company continues to follow a policy of effectively capping an individual’s annual incentive cash compensation. As more fully explained below (please see Incentive Compensation at p.29), if all KPIs are exceeded to the maximum extent, the CEO would receive 1.8 times his annual salary, while the other NEOs would receive 90% of their salary. The Compensation Committee has put these effective caps in place both to eliminate the possibility that any one individual will receive an excessive share of the bonus pool and to prevent windfall payments in the event that unforeseen circumstances result in goals being drastically exceeded. Further, as was the case in 2024, to the extent that a threshold level of profitability is not met, no incentive compensation is conferred.

Clawback Policy

The Company continues to follow a clawback policy that provides, among