James O'Brien
EASTMAN CHEMICALAbout James J. O’Brien
James J. O’Brien, age 70, is an independent director of Eastman Chemical Company (EMN) who has served since February 2016. He is the retired Chairman and Chief Executive Officer of Ashland Inc. and brings deep chemical industry leadership, finance, governance, and risk oversight expertise. O’Brien currently chairs Eastman’s Compensation and Management Development Committee and serves on the Environmental, Safety and Sustainability, Finance, and Nominating & Corporate Governance Committees; he attended 100% of Board and committee meetings in 2024.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Ashland Inc. | Chairman & CEO | 2002–2014 | Led transformation to a global specialty chemicals company |
| Ashland Inc. | President & COO; Senior VP & Group Operating Officer | 2001–2002 | Executive leadership across operations and finance |
| Ashland Inc. | Various roles | 1976–2000 | Progressive leadership across business units |
| Humana Inc. | Director | 2006–2023 | Long-tenured public company board experience |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Albemarle Corporation | Director | Current | Chemical industry peer; governance and strategic oversight |
| Humana Inc. | Director | 2006–2023 | Health insurance industry board experience |
Board Governance
| Committee | Role | Meetings in 2024 | Notes |
|---|---|---|---|
| Compensation & Management Development | Chair | 6 | Oversees executive pay, talent, succession, risk assessment of pay; uses independent consultant (Aon) |
| Environmental, Safety and Sustainability | Member | 2 | Oversight of HSE, sustainability strategy, climate disclosures |
| Finance | Member | 4 | Oversight of capital structure, M&A, pension, capex, dividends, hedging |
| Nominating & Corporate Governance | Member | 4 | Board refresh, director compensation recommendations, evaluations |
| Board of Directors | Independent director | 6 | Executive sessions at each meeting; 100% attendance by all nominees |
- Independence: All non-employee directors (including O’Brien) meet NYSE and SEC independence standards and heightened independence for key committees.
- Succession planning: Lead Director and Compensation Chair routinely review CEO and senior management succession with independent directors.
- Executive sessions: Led by the Lead Independent Director at each Board meeting.
Fixed Compensation (Director)
| Component | Amount | Detail |
|---|---|---|
| Fees Earned or Paid in Cash | $145,000 | Annual director retainer $125,000 plus $20,000 Compensation Committee chair retainer |
| Stock Awards (grant-date fair value) | $120,092 | Annual restricted stock award; one-year vest to next annual meeting |
| All Other Compensation (automatic DDCP deferral) | $60,000 | Automatic annual deferral into Eastman phantom stock account |
| Total | $325,092 | Sum of fees, stock awards, automatic deferral |
Program features:
- Annual director cash retainer increased to $125,000 for 2024; annual restricted stock award increased to $120,000; one-time $10,000 restricted stock award upon initial election; no meeting fees (only “event” fee $1,500 when directed).
- Directors may elect to defer awards into the Directors’ Deferred Compensation Plan; one-third of equity automatically deferred into the Eastman Stock Fund equivalent.
Performance Compensation (Oversight Signals)
Eastman directors do not receive performance units; however, as Compensation Committee Chair, O’Brien oversees executive incentive design and outcomes. Key 2024 metrics:
| Annual Incentive Plan (UPP) Metric | Weight | Threshold / Target / Max | Actual 2024 | Payout Factor |
|---|---|---|---|---|
| Adjusted EBIT | 40% | $500mm / $1.25bn / $1.44bn | $1.298bn | 125% |
| Modified Operating Cash Flow (GAAP OCF) | 40% | $540mm / $1.35bn / $1.55bn | $1.287bn | 88% |
| Strategic & Operational Objectives (Safety, New Business from Innovation, Inclusion) | 20% | Multi-goal scorecard | Mixed: exceeded/achieved across sub-metrics | 102% |
| Total Weighted Corporate Payout | — | — | — | 106% |
Long-Term Incentive (2024–2026):
- Mix: 60% Performance Share Awards (PSAs), 20% Stock Options, 20% RSUs; RSUs added in 2024 to improve resilience.
- PSA metrics: rTSR (60%) vs S&P 1500 Chemicals cohort; ROIC (40%) using multi-year average; continuous payout functions; eliminated ESG modifier used in prior cycles.
- Prior cycle payout: 2022–2024 PSAs paid at 135% of target (3rd quintile TSR, 10.0% avg ROIC) with a 5% strategic modifier.
Program governance changes in 2024:
- Shifted AIP weighting (financial 80%, strategic 20%), added explicit safety/new business/inclusion goals; introduced RSUs (20%), simplified PSA formulas, removed payout modifier; realigned peer group (added Huntsman, removed Eaton).
Other Directorships & Interlocks
| Company | Role | Interlocks/Notes |
|---|---|---|
| Albemarle Corporation | Director | Current board service; chemical industry peer |
| Humana Inc. | Director | 2006–2023; prior board experience |
| Compensation Committee Interlocks | — | No interlocks or insider participation in 2024; no EMN executives served on other companies’ compensation committees with reciprocal ties. |
Expertise & Qualifications
- Skills and Experience: International, Accounting/Financial Reporting, ERM, Human Capital, Chemicals Industry, Manufacturing/Operations Safety, Government/Regulatory, M&A, Executive Leadership.
- Summary credential: Transformed Ashland to a global specialty chemicals company; extensive public board experience.
Equity Ownership
| Item | Value | Notes |
|---|---|---|
| Beneficially owned shares | 4,825 (<1% of class) | Includes 1,252 restricted shares with voting rights prior to vesting |
| Shares/Units toward ownership guideline | 20,661 | Directors must hold 5x annual retainer; all directors met or are on track |
| Ownership guidelines | 5x retainer; count includes DDCP phantom stock units | Compliance within five years expected |
| Hedging/Pledging | Prohibited for directors/executives/employees | No pledging of EMN stock |
Say‑on‑Pay & Shareholder Feedback
| Year | Say‑on‑Pay Approval | Engagement |
|---|---|---|
| 2023 | ~91.8% | — |
| 2024 | ~75.4% | Lead Independent Director engaged investors holding ~35% of shares; topics included executive compensation, governance, board composition, sustainability; program changes implemented in response. |
Compensation Peer Group (Oversight)
| Change | Detail |
|---|---|
| 2024 Realignment | Specialty chemicals/advanced materials focus; circular economy emphasis; revenue-based sizing; regression adjustments for size. |
| Added/Removed (2024) | Added Huntsman Corporation; removed Eaton Corporation plc (July 2024). |
| Proxy peers snapshot | Lists additions (e.g., Albemarle, Axalta, Corteva, IFF, RPM) and removals (e.g., Danaher, Goodyear, Mosaic, Rockwell). |
Governance Assessment
- Independence and attendance: O’Brien is independent and maintained 100% attendance, supporting board effectiveness.
- Compensation stewardship: As Chair, he oversaw meaningful pay program changes (AIP strategic goals; LTI RSUs; simplified PSA metrics; peer group realignment) after say‑on‑pay support fell to ~75.4%, indicating responsiveness to investor feedback.
- Clawbacks and alignment: Eastman maintains Dodd‑Frank compliant clawback and an additional policy for “detrimental conduct”; strong stock ownership expectations; anti‑hedging/pledging policies—positive alignment signals.
- Board process: Robust committee structure and executive sessions; succession reviewed by Lead Director and Compensation Chair; active facility/site visits and education.
- Potential conflicts: Current service on Albemarle’s board (a chemicals peer) merits monitoring for information flow; Eastman’s NCG Committee reviews related‑party transactions annually and found no material relationships.
RED FLAGS: None disclosed specific to O’Brien—no related‑party transactions, hedging/pledging prohibited, 100% attendance. Monitoring warranted on dual directorship in a sector peer (Albemarle) for perceived interlock risk, although no formal interlock issues are disclosed.