Brad Lich
EASTMAN CHEMICALAbout Brad Lich
Brad A. Lich (age 57) is Executive Vice President and Chief Commercial Officer (CCO) at Eastman, responsible for the Advanced Materials segment (including the circular platform) and leadership of marketing, sales, supply chain, corporate strategy, and regional operations; he joined Eastman in 2001 and has served as CCO since July 2016 . Company performance metrics influencing executive pay include Adjusted EBIT, Operating Cash Flow, relative TSR and ROIC; in 2024, Eastman generated approximately $9.38B revenue, Adjusted EBIT of ~$1.30B, and operating cash flow of ~$1.29B , and pay-versus-performance disclosure highlights Adjusted EBIT as the most important measure linking compensation to performance . In 2023, Lich’s segment leadership delivered ~$765M earnings in Advanced Materials and Fibers while navigating weak demand, contributing to cash generation priorities .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Eastman Chemical | Director, Global Product Mgmt & Marketing (Coatings) | 2001 | Built product/marketing foundations in coatings |
| Eastman Chemical | VP, Global Marketing | 2006 | Led company-wide global marketing functions |
| Eastman Chemical | VP & GM, CASPI segment | 2008 | Ran Coatings/Adhesives/Specialty Polymers/Inks portfolio |
| Eastman Chemical | VP & GM, AFP segment | 2012 | Led Additives & Functional Products growth |
| Eastman Chemical | EVP (AFP & AM; marketing, sales, pricing) | Jan 2014 | Drove portfolio/category and commercial strategy |
| Eastman Chemical | Exec. responsibility for outside-U.S. regional leadership | Mar 2016 | Expanded global/regional execution capabilities |
| Eastman Chemical | EVP & Chief Commercial Officer | Jul 2016–Present | Oversees AM segment, circular platform, and commercial/supply chain leadership |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $800,655 | $827,160 | $852,289 |
| Target UPP Incentive (% of Base) | 100% | 100% | 100% |
| Actual UPP Payout ($) | $0 | $647,400 | $906,300 |
| All Other Compensation ($) | $126,585 | $63,256 | $123,982 |
Performance Compensation
2024 UPP Metrics and Payout
| Metric | Weighting | Threshold / Target / Max | Actual 2024 | Payout Factor |
|---|---|---|---|---|
| Adjusted EBIT | 40% | $500m / $1.25b / $1.44b | $1.298b | 125% |
| Modified Operating Cash Flow | 40% | $540m / $1.35b / $1.55b | $1.287b | 88% |
| Strategic & Operational Objectives | 20% | Safety, New Business $550m, Inclusion targets | New Business $589m; mixed safety/inclusion outcomes | 102% |
| Corporate Payout | — | — | — | 106% |
| Lich UPP Payout (Formulaic) | — | Target base $855,000; Target UPP 100% | Corporate 106%; Individual 100% | $906,300 |
Long-term Incentive Design (2024–2026 PSUs; RSUs; Options)
| Award | Design / Metrics | Weighting | Terms |
|---|---|---|---|
| PSUs | rTSR (60%) + ROIC (40%); continuous formulas; modifier eliminated in 2024–2026 | ~60% of LTI | 3-year performance period (2024–2026); payout contingent on rTSR vs S&P1500 Chemicals peers and ROIC targets |
| RSUs | Time-based RSUs added for resilience across cycles | ~20% of LTI | Vesting at 3 years; paid in unrestricted shares upon vest |
| Stock Options | Time-vested, at-market strike; Black-Scholes valuation | ~20% of LTI | Graduated vesting over 3 years |
2024 Grants of Plan-Based Awards (Brad Lich)
| Component | Shares / Units / Options | Key Dates / Price | Grant-Date Fair Value |
|---|---|---|---|
| PSUs (2024–2026) | Threshold 2,315; Target 19,292; Max 48,231 | Effective 1/1/2024 | $2,113,867 |
| RSUs | 6,431 units | Vest 2/28/2027 | $554,031 |
| Stock Options | 31,773 options | Strike $86.15 (2/27/2024) ; Vest 1/3 on 2/27/2025, 2/27/2026, 2/27/2027 | $672,317 |
Performance Share Outcomes (Prior Cycles)
| PSA Period | ROIC Target | ROIC Actual | TSR Quintile | Payout (% of Target) | Modifier |
|---|---|---|---|---|---|
| 2022–2024 | 8.50% | 10.0% | 3rd (50%) | 135% | +5% aggregate (Climate +2.5%; Gender +2.5%) |
| Historical Cycles | — | — | — | 2018–2020: 130%; 2019–2021: 100%; 2020–2022: 100%; 2021–2023: 80%; 2022–2024: 135% | — |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (12/31/2024) | 356,271 shares; less than 1% of class |
| Options Acquirable | 270,646 shares acquirable via options |
| Ownership Guideline | 2.5x base salary for executive officers; 5x CEO; 5x director retainer |
| Compliance Status | Lich owns 88,416 shares and units under the guideline; all NEOs met or on schedule |
| Hedging/Pledging | Prohibited for directors/executives/employees |
Outstanding equity at FY2024 year-end:
- Unvested RSUs: 6,431 units; market value $587,279 (12/31/2024 close) .
- Unearned PSUs: 71,111 units; indicative payout value $6,493,482 (subject to actual performance) .
- 2024 options grant: 31,773 unexercisable at year-end; vest ratably through 2027 .
Employment Terms
| Scenario (following a change-in-control) | Amount |
|---|---|
| Cash Severance (2x salary + target bonus) | $3,420,000 |
| Unvested Stock-Based Awards (at target) | $5,853,069 |
| Health/Welfare Continuation (18 months) | $39,780 |
| Total | $9,312,849 |
Key provisions:
- Double-trigger equity vesting and PSAs treated at target if CIC occurs in first half, or based on actual performance through last quarter prior if CIC occurs in second half; full vesting if stock is no longer publicly traded post-CIC .
- CIC agreements commit to a two-year employment period post-CIC, then severance on termination without cause or for good reason; no tax gross-ups; health/welfare continuation for 18 months .
- Individual severance agreement (Feb 2025): if terminated “Without Cause” or resigns for “Good Reason” after March 1, 2027 → $2,000,000 cash severance plus any other severance under company programs, and up to four months of company-paid healthcare coverage .
- Clawbacks: Dodd-Frank compliant recoupment for restatements (3-year lookback) and an additional “Detrimental Conduct” clawback adopted Dec 2024 .
Nonqualified Deferred Compensation (EDCP)
| Name | Exec Contributions ($) | Company Contributions ($) | Aggregate Earnings ($) | Aggregate Balance ($) |
|---|---|---|---|---|
| Brad A. Lich | $0 | $57,533 | $270,262 | $2,558,680 |
Notes: Company contributions equal 5% of eligible compensation; credits include quarterly dividend equivalents; balances reflect prior deferrals of salary, incentives, and stock-based awards where applicable .
Governance, Peer Group, and Shareholder Feedback
- Say-on-pay approval: 91.8% at 2023 annual meeting ; 75.4% at 2024 annual meeting (Board/management engaged investors and updated compensation programs in response) .
- Peer group adjustments (2024): realigned toward specialty chemicals/advanced materials, added Albemarle, Axalta, Corteva, IFF, RPM; removed Danaher, Goodyear, Mosaic, Rockwell; Aon engaged as independent consultant .
- 2024 LTI changes: added RSUs (20%), PSUs (60%) with rTSR/ROIC and eliminated ESG modifier; options (20%); reduced probability of above-target payout with below-median rTSR absent exceptional ROIC .
Insider Transactions and Potential Selling Pressure
- Recent Form 4 filings indicate transaction activity: November 27, 2024 period; filing on December 2, 2024 .
- Additional Form 4 filed February 26, 2025 .
- These filings often reflect equity award grants, vesting, option exercises, and tax-withholding transactions typical around grant/vesting dates; details should be evaluated directly in the filings prior to inferring selling pressure .
Investment Implications
- Alignment: High proportion of at-risk pay tied to Adjusted EBIT, OCF, rTSR, and ROIC, with the 2024 redesign emphasizing rTSR (60%) and ROIC (40%) in PSUs; RSUs added for resilience, improving retention while maintaining performance linkage .
- Retention risk: Strong CIC protections (2x cash + equity vesting), plus an individual $2M severance for good reason post-March 2027, reduce near-term departure risk; prohibition on hedging/pledging and robust clawbacks improve governance quality .
- Trading signals: Significant unearned PSUs (~71,111 units; indicative value ~$6.49M) and RSUs vesting in Feb 2027 may create episodic supply upon vesting/settlement; monitor Form 4s around vesting dates and year-end; option exercises follow staged vesting through 2027 .
- Pay scrutiny: 2024 say-on-pay support declined to 75.4%, prompting investor engagement and program changes—continued delivery on rTSR and ROIC should mitigate pressure; execution in circular economy initiatives and AM margins remains key to favorable PSA outcomes .