Company: AVD
Filing Date: 2025-05-29
Form Type: DEF 14A
Source: 0000950170-25-079166
Chunk: 33

Company: AMERICAN VANGUARD CORP
Filing Date: 2025-05-29
Form: DEF 14A
Chunk 33
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 in its current form by our stockholders at the 2022 Annual Meeting. Our second objective means that we want our executives to seek optimal results in both the short and long term. One of the primary means of rewarding performance is through cash incentive compensation. Another means is through performance-based equity, which, during 2024 took the form of options that included TSR triggers. Our third objective is accomplished through ensuring that our compensation is competitive (for example, through benchmarking the compensation practices of similarly-situated companies) and to promote the retention of key talent through awards of stock (either restricted stock units or stock options) that vest over three years.

What We Reward

We expect our executives to operate at a high level and to be involved in setting and executing our business plan. Accordingly, our executives are directly involved in defining the Company’s strategy (its roadmap to success), its budget (the short term business plan), and the associated short term objectives which are established as necessary to achieve the budget. During 2024 and prior, SMART goals (Specific, Measurable, Achievable, Realistic and Time-Based) were the primary measure by which each executive was held accountable. They varied from position to position and included both company-wide goals (as, for example, net sales and net income for the CEO) and individual goals (for example, factory efficiency targets for the Vice President of Manufacturing). The specific plan for short term incentive compensation in 2024 is illustrated in the table below.

For 2025, the Company will be following a formula-driven approach toward incentive compensation that is built upon five companywide key performance indicators (KPIs) – three are financial (net sales, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and net trade working capital) and two operational (transformation execution and manufacturing/opex). We have established a graded scale of targets for each KPI and placed the majority of emphasis on the financial KPIs, while setting target incentive compensation for the CEO at 100% of base wage and for the other NEOs at 60%. See “Elements of 2025 Compensation and Why We Pay Them” for a more detailed discussion on KPIs and our approach toward 2025.

Compensation Program Best Practices

The Compensation Committee continues to implement and maintain sound practices in our executive compensation program and related areas. Our current compensation program includes features that we believe drive performance and excludes features we do not believe serve our stockholders’ long-term interests. The table below highlights