Jeff Zhu
Executive Vice President and President, Carbon and Silica Technologies and Battery Materials; Head of Asia Pacific Region at 
CABOT
CABOTExecutive
About Jeff Zhu
Executive Vice President and President of Carbon & Silica Technologies and Battery Materials within the Performance Chemicals segment, and head of the Asia Pacific Region; member of Cabot’s Management Executive Committee . In FY2024, Performance Chemicals EBIT grew 31% YoY under his leadership, while company-wide adjusted EPS was $7.06 and Total Segment EBIT was $701M, reflecting strong execution against multi‑year goals . Employment arrangements are governed by a February 2012 offer letter tied to his China assignment (tax equalization, housing, car allowance, home leave, travel), with pay set in USD . Age and formal education are not disclosed in the proxy.
Fixed Compensation
| Item | FY2024 |
|---|---|
| Base Salary ($) | $560,652 |
| Target Bonus % of Salary | 70% |
| Target Bonus ($) | $392,456 |
| Corporate STI factor | 138.4% of target |
| Individual STI factor | 130% of target |
| Actual STI Payout ($) | $533,325 (136% of total target) |
Performance Compensation
FY2024 Short‑Term Incentive (STI) Metrics and Results
| Metric (Weight) | Threshold | Target | Maximum | FY2024 Actual | Payout Factor |
|---|---|---|---|---|---|
| Adjusted EBIT (60%) | $488M | $671M | $633M | $633M | 137.7% |
| Net Working Capital Days (20%) | 80 | 75–73 | 68 | 73 | 100.0% |
| Discretionary Free Cash Flow (20%) | $270M | $365–405M | $500M | $479M | 179.0% |
| Weighted Corporate Payout | 138.4% |
Note: Individual component (30% of STI) was assessed at 130% for Mr. Zhu .
Long‑Term Incentive (LTI) Design and FY2024 PSU Earned Tranches
- Mix: 35% PSUs (Adjusted EPS 65% / Adjusted RONA 35%), 35% stock options, 30% time‑based RSUs; options vest 30%/30%/40% over 3 years; RSUs vest at 3 years; PSUs have three one‑year performance tranches with a 3‑year time-vesting schedule .
- FY2024 PSU tranche outcomes:
| PSU Grant (Tranche) | Metrics and Achievement | Composite Earned |
|---|---|---|
| FY2022 Grant (Y3 of 2022–2024) | Adj. EPS 171.6%; Adj. RONA 200.0% | 181.5% |
| FY2023 Grant (Y2 of 2023–2025) | Adj. EPS 89.4%; Adj. RONA 186.7% | 123.5% |
| FY2024 Grant (Y1 of 2024–2026) | Adj. EPS 177.9%; Adj. RONA 200.0% | 185.6% |
Total Compensation (3‑Year)
| Component ($) | FY2022 | FY2023 | FY2024 |
|---|---|---|---|
| Salary | $517,426 | $546,631 | $559,264 |
| Stock Awards (RSUs/PSUs grant‑date value) | $601,230 | $682,356 | $682,397 |
| Option Awards (grant‑date value) | $323,737 | $367,514 | $367,590 |
| Non‑Equity Incentive Plan Comp (STI) | $540,131 | $267,026 | $533,325 |
| All Other Compensation | $1,046,492 | $1,062,763 | $1,498,903 |
| Total | $3,029,016 | $2,926,290 | $3,641,479 |
All Other Compensation in FY2024 reflects China assignment benefits and tax equalization (details below) .
Equity Ownership & Alignment
Beneficial Ownership and Alignment
| Item | Detail |
|---|---|
| Beneficially Owned Shares | 174,831 |
| Options Exercisable within 60 days | 115,906 |
| Shares Outstanding (1/15/2025) | 54,221,416 |
| Ownership as % of Shares Outstanding | ≈0.32% (174,831 / 54,221,416, derived from cited figures) |
| Stock Ownership Guidelines (MEC) | 3× base salary for CEO direct reports; 5× for CEO |
| Guideline Compliance (MEC) | All MEC members subject ≥5 years had satisfied guidelines (individual statuses not disclosed) |
| Hedging/Pledging | Hedging and pledging prohibited for LTI participants |
2024 Equity Activity (Liquidity Indicators)
| Activity (FY2024) | Quantity | Value |
|---|---|---|
| Options Exercised | 55,233 | $1,655,110 |
| Stock Awards Vested (TSUs/PSUs) | 21,966 | $1,685,824 |
Outstanding Equity and Vesting (Selected)
| Grant | Type | Units | Key Terms / Dates |
|---|---|---|---|
| 11/10/2023 | Options | 13,402 (unexercisable) | $74.40 strike; vest 30%/30%/40% on 11/10/2024, 11/10/2025, 11/10/2026; 10‑yr term |
| 11/11/2022 | Options | 4,195 (exerc.), 9,789 (unexerc.) | $73.84 strike; graded vest; exp. 11/10/2032 |
| 11/12/2021 | Options | 12,178 (exerc.), 8,119 (unexerc.) | $58.27 strike; graded vest; exp. 11/11/2031 |
| 11/10/2023 | TSUs | 4,233 (unvested) | Vest 3 years after grant (11/10/2026) |
| 11/11/2022 | TSUs | 4,265 (unvested) | Vest 3 years after grant (11/11/2025) |
| 2022 PSU award | Earned Tranches | 8,433 (earned in 2024) | Vested 11/12/2024; settled 11/18/2024 |
| 2023 PSU award | Earned Tranches | 2,543 (earned Y1–Y2) | Vest 11/11/2025; remaining Y3 unearned 2,240 (assumes target/max as disclosed) |
| 2024 PSU award | Earned Tranche | 3,055 (earned Y1) | Vest 11/10/2026; remaining Y2–Y3 unearned 6,586 (assumes max as disclosed) |
Notes: RSUs (TSUs) vest 3 years after grant; PSUs earn annually on EPS/RONA goals and generally vest at 3 years; options vest 30/30/40 over 3 years; retirement vesting provisions apply for eligible participants .
Employment Terms
| Topic | Key Terms / Data |
|---|---|
| Employment/Relocation (2012 letter) | China assignment benefits: tax equalization, housing (incl. utilities), car allowance, annual home leave, travel allowance; pay in USD; repatriation to Singapore if terminated by company (without cause/policy violation) while in China |
| FY2024 Assignment Benefits (All Other Comp) | Housing/utilities $146,816; home leave $8,529; travel allowance $25,207; tax equalization estimated $1,132,088; car allowance $79,172; international insurance and other benefits included |
| China Supplemental Pension Plan | Company contribution $38,440 in FY2024; aggregate balance $364,408; vested; lump‑sum upon separation |
| Severance/Change‑in‑Control Plan | Senior Management Severance Protection Plan; double‑trigger CIC; 2× (base + bonus, greater of target or highest in past 3 yrs) + 2 yrs health/welfare + pro‑rated bonus + outplacement (≤15% of salary); “better‑of” 280G excise handling |
| CIC Estimated Payout (as of 9/30/2024) | Severance $2,711,760; accelerated equity $4,910,296; benefits/perqs $170,151; total $7,792,207 |
| Clawbacks | Dodd‑Frank compliant recoupment policy adopted Sept 2023; additional discretionary recoupment also in place |
| Hedging/Pledging | Prohibited for directors and LTI participants; no margin or pledging allowed |
Compensation Structure Analysis
- Pay‑for‑performance: Corporate STI paid at 138.4% on strong EBIT/NWC/DFCF results; Mr. Zhu’s total STI was 136% of target after a 130% individual component .
- Long‑term alignment: 70% of LTI value is performance‑based (PSUs + options); PSUs are driven by EPS/RONA with multi‑year goal setting and produced high FY2024 tranche earn‑outs (e.g., 181.5% for FY2022 grant Y3) .
- Equity mix evolution/governance: Use of PSUs/RSUs/options with caps, no option repricing without shareholder approval, and clawbacks reduce risk-taking and align with shareholder interests .
- Shareholder feedback: Say‑on‑Pay approval was 98%, supporting compensation design .
Related Party Transactions
- None reported since the beginning of FY2024 .
Compensation Peer Group and Say‑on‑Pay
- Peer group used for benchmarking includes Albemarle, Ashland, Celanese, Chemours, Huntsman, RPM, FMC, Orion, Tronox, etc.; Eastman added for FY2025 benchmarking .
- Say‑on‑Pay approval: 98% in 2024 .
Investment Implications
- Alignment and retention: Large unvested PSUs/RSUs and graded‑vesting options, combined with double‑trigger CIC and clawbacks, support retention and long‑term alignment; hedging/pledging prohibitions further align incentives .
- Near‑term selling pressure: 2024 saw 55,233 options exercised and 21,966 shares vest; upcoming scheduled vests (11/2025, 11/2026) could add supply during open windows, subject to trading plans and policies .
- International assignment costs: Elevated “All Other Comp” is driven by assignment/tax equalization, not guaranteed cash; investors should focus on performance‑sensitive STI/LTI that dominated incentive outcomes (STI corporate 138.4%; PSU tranches ≥123.5% in FY2024) .