Patrick S. Williams
INNOSPECAbout Patrick S. Williams
President & CEO of Innospec Inc. since April 2, 2009; Director since May 11, 2009; age 60. The board maintains an independent, non-executive Chairman and 100% independent committees; Mr. Williams is the sole management director and is not independent by policy . Strategic performance highlights: three-year TSR 49%, ten-year TSR 192%, and ~3,000% TSR since his CEO appointment through Dec 31, 2024; 2024 ended with net cash of $289.2M, no bank debt, and a 10% dividend increase to $1.55; Performance Chemicals operating income grew 52% and ~20% of sales were from products launched in the last 5 years .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Innospec Inc. | President & CEO | 2009–present | Led diversification and cash discipline; delivered long-term TSR well above industry indices |
| Innospec Inc. | EVP & President, Fuel Specialties | 2005–2009 | Grew fuel additives; assumed global Performance Chemicals responsibility in 2008 |
| Innospec Fuel Specialties LLC (predecessor) | CEO of business | 2004–2009 | Senior management and sales leadership; operational execution |
| Starreon Corporation (predecessor) | Senior roles | Joined 1993 | Early industry experience; business building and equity positions |
External Roles
| Organization | Role | Years | Committees / Notes |
|---|---|---|---|
| AdvanSix Inc. | Non-Executive Director | Feb 2020–present | 2025: Chair, Nominating & Corporate Governance; member, Compensation & Leadership Development . 2024: Member, Compensation & Leadership Development, and HSE & Sustainability . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 1,314,807 | 1,381,048 | 1,380,548 |
| Base Salary per CD&A ($) | 1,354,500 (set for 2023) | 1,354,500 | 1,354,500 (not increased) |
| Target Annual Bonus (% of salary) | 85% | 85% | 100% |
| Maximum Annual Bonus (% of salary) | 195.5% | 195.5% | 230% |
| All Other Compensation ($) | 106,374 | 114,856 | 210,104 |
Notes: Base salary shown both as paid (Summary Compensation Table) and as CD&A policy setting .
Performance Compensation
Annual Incentive (MICP) Design and 2024 Outcomes
| Metric | Weighting | Target | Actual | Achievement | Payout factor |
|---|---|---|---|---|---|
| Corporate Operating Income (ex nonrecurring) | 60% | $188.999M | $209.414M | 111% | 155% |
| Corporate Free Cash Flow (ex nonrecurring) | 20% | $58.984M | $150.516M | 255% | 250% |
| Personal Objectives | 20% | Score out of 50 | 46/50 (CEO) | N/A | 150% |
CEO 2024 MICP award: $2,343,285 . Total Non-Equity Incentive Compensation (as reported in SCT) was $6,293,285, reflecting aggregate non-equity payouts beyond the MICP line item .
Key 2024 personal objectives and outcomes included ESG compliance initiatives, top-line growth focus with ~20% of sales from products launched in last 5 years, talent development initiatives, and strategic margin improvements; personal score: 46/50 .
Long-Term Incentives (Omnibus Plan)
Policy target: CEO fair value of RSUs+PSUs at 250% of base salary; actual grant at 150% of policy (375% of base salary) based on performance rating in 2024 . Mix: 70% PSUs (stock- and cash-settled), 30% RSUs .
2024 Grant Detail (grant date 02/26/24):
| Award Type | Threshold | Target | Maximum | Vesting Terms | Grant Date FV ($) |
|---|---|---|---|---|---|
| Stock-settled PSUs | 7,696 | 21,378 | 27,791 | 3-year; metrics TSR 30%, Revenue 30%, EPS 40% | 2,894,581 |
| RSUs | N/A | 12,216 | N/A | 3-year time-based (service) | 1,473,005 |
| Cash-settled PSUs | 2,565 | 7,126 | 9,264 | 3-year; same metrics as stock PSUs | 964,860 |
PSU performance curves:
- TSR vs comparator group: 25th percentile = 50% of TSR tranche; 50th = 100%; 75th = 200% .
- Revenue growth vs 2024 budget: 2% = 30%; 3% = 65%; 5% = 100% .
- EPS growth vs 2024 budget: 2% = 30%; 3% = 65%; 5% = 100% .
2024 vesting/realization activity: CEO had 9,667 shares vest from awards and 29,001 full-value awards transferred; options and cash incentive units exercised where applicable .
Equity Ownership & Alignment
| Item | As of | Value |
|---|---|---|
| Shares owned directly/indirectly | Feb 15, 2025 | 155,161 |
| Right to acquire within 60 days (options/RSUs) | Feb 15, 2025 | 34,423 |
| Total beneficial ownership | Feb 15, 2025 | 189,584 |
| Shares outstanding (ex treasury) | Dec 31, 2024 | 25,117,922 |
| Ownership % of outstanding | Computed | ~0.75% (189,584 / 25,117,922), derived from cited figures |
Stock ownership guidelines: CEO must hold stock valued at 4x base salary; all NEOs were compliant as of end-2024 . Anti-hedging and anti-pledging policies prohibit hedging and pledging except with committee-approved exceptions; none disclosed for Mr. Williams .
Selected outstanding awards at FY-end 2024:
- Options: 99.68 strike, expiring 02/21/2032; 109.42 strike, expiring 02/27/2033; multiple tranches listed in outstanding equity table .
- Unvested RSUs/PSUs: tranches scheduled through 2027 (e.g., 21,378 RSUs/PSUs from 02/26/2027 grants and earlier full-value awards from 2025–2027) with market value references based on $110.06 YE price .
Employment Terms
| Scenario (as of 12/31/2024) | Cash Severance – Salary ($) | Cash Severance – Bonus ($) | Unvested Equity ($) | Vested Equity ($) | Additional LTIP ($) | Life Insurance ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Retirement | 0 | 0 | 60,568 | 5,785 | 0 | 0 | 66,353 |
| Termination without cause | 1,354,500 | 1,151,325 | 60,568 | 5,785 | 0 | 0 | 2,572,178 |
| Termination in event of Change of Control | 2,709,000 | 2,709,000 | 13,269,309 | 5,785 | 3,950,000 | 0 | 22,643,094 |
| Death in service | 0 | 0 | 13,269,309 | 5,785 | 0 | 750,000 | 14,025,094 |
Clawback: Company policy adopted under SEC Rule 10D-1/Nasdaq standards mandates recoupment of erroneously paid incentive compensation following certain restatements, irrespective of executive fault .
Deferred compensation: Company credited $36,319 to Mr. Williams’ nonqualified deferred plan for 2024 (posted in 2025); aggregate 2024 plan earnings $14,506; ending 2024 balance $157,650 .
Board Governance
- IOSP board service: Director since 2009; no committee assignments (as CEO); board operates with separate, independent Chair; all non-employee directors are independent; committees (Audit, Compensation, Nominating/Corporate Governance & Sustainability) are 100% independent .
- Attendance: All directors attended all board and committee meetings in 2024; four executive sessions of independent directors were held .
- Dual-role implications: Separation of Chair and CEO mitigates CEO/Chair concentration risk; independence policies and executive sessions enhance oversight; Mr. Williams’ non-independence is disclosed and standard for a sitting CEO .
Director Compensation (context for board service)
Non-employee director retainers and equity grants are defined and fully independent; as an employee-director, Mr. Williams does not receive NED fees. NED equity grants in 2024 were $97,500 RSUs vesting in 3 years; NED cash retainers: Chair $175,000; other NEDs $90,000; committee chair/member fees per charter .
Say-on-Pay & Shareholder Feedback
| Year | Result |
|---|---|
| 2023 | ~96% approval of executive compensation |
| 2024 | ~96% approval of executive compensation |
Compensation Committee uses independent consultant (Exequity) and references a chemical-industry comparator group to calibrate pay; policy targets around market median with performance-weighted LTI/annual incentives .
Related Party Transactions
Company purchased $382,797 of product at market rates from AdvanSix Inc. in 2023 while Mr. Williams served as a non-executive director of AdvanSix; disclosed pursuant to related party policies and evaluated for independence .
Multi-year Compensation Summary (as reported)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Stock Awards ($) | 2,824,426 | 2,870,922 | 5,332,447 |
| Option Awards ($) | 1,120,932 | 1,183,023 | — |
| Non-Equity Incentive Compensation ($) | 2,521,950 | 1,750,014 | 6,293,285 |
| Total Compensation ($) | 7,888,489 | 7,299,862 | 13,216,384 |
Performance Compensation Mechanics (design summary)
| Element | Weighting | Rationale |
|---|---|---|
| Annual MICP | 80% financial (Operating Income 60%, FCF 20%), 20% personal | Rewards operational profitability and cash generation; recognizes individual leadership |
| PSUs (stock & cash) | 70% of LTI value | TSR (30%), Revenue (30%), EPS (40%) over 3 years; aligns pay with shareholder outcomes and growth metrics |
| RSUs | 30% of LTI value | 3-year cliff vesting; retention and alignment |
Investment Implications
- Strong pay-for-performance alignment: High variable mix with multi-year PSUs tied to TSR, revenue, and EPS creates direct linkage to value creation; 2024 MICP paid above target on superior FCF and operating income delivery .
- Vesting and potential selling pressure: 2025–2027 vesting schedules for material RSU/PSU tranches and significant FY2024 vesting/transfer activity may create episodic Form 4 flows; anti-hedging/anti-pledging policies mitigate misalignment risks .
- Change-of-control economics: Potential payout of ~$22.6M under termination in event of change of control reflects substantial equity acceleration and an additional LTIP component; governance-conscious investors may monitor future CoC terms and burn-rate constraints (stock awards capped to <1% annual burn) .
- Ownership alignment: ~0.75% beneficial stake and 4x-salary ownership guideline compliance support alignment; board independence and separate Chair constrain dual-role risks .
- Shareholder support: Consistently strong Say-on-Pay (~96%) suggests investor acceptance of program design; continued use of independent advisor and median-market targeting reduces inflation risk from peer group ratcheting .
- Related-party oversight: Disclosed AdvanSix purchases at market rates highlight transparent compliance with related-party policies; no pledging or hedging disclosed .