James M. Buch

About James M. Buch

James M. Buch, age 64, is President (since 2021) and Chief Executive Officer (since May 2022) of Kronos Worldwide (KRO) and has served on KRO’s board since 2022; prior roles include Chief Operating Officer (2015–2022) and COO, Global Commercial (2014–2015). He currently also serves as Senior Vice President of Contran Corporation, KRO’s controlling affiliate; his earlier career includes Titanium Metals Corporation (Vice President 2001–2011; EVP, Commercial 2011–2013) . In 2024, KRO reported total shareholder return (TSR) value of $98 on a $100 base (vs. $95 in 2023; $83 in 2022), and net income of $86.2 million (vs. loss of $49.1 million in 2023; $104.5 million in 2022) . KRO disclosed it did not use specific financial performance measures to link executive compensation to company performance for 2024 .

Past Roles

External Roles

Fixed Compensation

Notes:

• All KRO named executive officers (NEOs), including the CEO, are employees of Contran and provide services to KRO under an Intercorporate Services Agreement (ISA); the “Salary” shown represents KRO’s portion of Contran’s cost allocation for Buch’s services and is not performance-based .
• KRO disclosed no plan-based awards, no outstanding equity awards, no options granted or exercised, and no stock vested for NEOs in 2024 .

Performance Compensation

KRO did not use specific financial performance measures to link NEO compensation to company performance for 2024; no plan-based awards were granted and no equity incentives are used for executives .

Equity Ownership & Alignment

Additional alignment factors:

• No equity awards outstanding; no equity-based compensation for executives; no management stock ownership requirements/guidelines (directors have 3x cash retainer guideline) .
• Hedging policy: KRO has not adopted specific hedging policies for employees/officers/directors beyond compliance with its insider trading policy; no pledging policy disclosed, and no pledging by Buch disclosed .
• KRO is a controlled company; 81.1% of shares are beneficially owned by the Harold C. Simmons Family Trust No. 2/Lisa K. Simmons via Valhi, NLKW, and Contran .

Implications:

• Skin-in-the-game from the CEO at KRO is minimal (300 shares), and compensation is cash-based via ISA allocations, not equity; scheduled vesting–driven selling pressure is effectively zero .
• Control structure and absence of executive equity programs reduce market signaling from insider equity transactions .

Employment Terms

• Employment status: CEO and other NEOs are employees of Contran and provide services to KRO via ISA; KRO pays a fixed annual fee (allocated quarterly) based on estimated time devoted and Contran’s cost (salary, estimated bonus, benefits/overhead). The fee is not dependent on KRO performance .
• ISA commercial terms: ISAs renew quarterly and can be terminated by either party with written notice 30 days prior to the next quarter; 2024 ISA fees paid to Contran were approximately $23.7 million; expected 2025 fees are ~$25.8 million .
• Severance/Change-in-Control: No KRO-specific executive employment agreements, severance multiples, or change-of-control (CoC) provisions are disclosed for Buch; given Contran employment, any severance/CoC terms (if any) would be with Contran and are not disclosed in the proxy .
• Clawback/Non-compete/Non-solicit: No executive clawback policy or restrictive covenants disclosed in the proxy; insider trading policy is available (filed as an exhibit to the 2024 10-K), but no hedging prohibition beyond policy compliance .

Board Governance

• Board service: Director at KRO since 2022; CEO since 2022; President since 2021 .
• Current leadership structure: Non-executive Chair (Loretta J. Feehan), CEO-director (Buch); KRO is a NYSE “controlled company,” and the board states this structure is appropriate under the guidelines .
• Committee roles: CEO is not listed on standing committees. Audit Committee: Chair Cecil H. Moore, Jr.; members Kevin B. Kramer, John E. Harper, Meredith W. Mendes, R. Gerald Turner (nine meetings in 2024). Management Development & Compensation Committee (MDCC): Chair R. Gerald Turner; members Moore and Harper (one meeting in 2024) .
• Director compensation: Executive officers receive no additional cash/equity compensation for board service (i.e., Buch receives none) .
• Independence considerations: Controlled company exemptions apply; independent directors are identified, but board leadership and affiliation with Contran (e.g., Chair representing Contran) create structural independence considerations .

Performance & Track Record

Notes:

• KRO’s TSR recovered from 2022 lows but remains below 2021 levels; earnings rebounded to $86.2mm in 2024 after a 2023 loss .
• Pay-versus-performance disclosure: KRO did not tie NEO pay to specific performance measures in 2024 .

Say-on-Pay & Shareholder Feedback

• 2024 Say-on-Pay approval: 87.3% support; KRO made no material changes to compensation practices following the vote .
• 2025 Say-on-Pay: Controlling holders (Valhi and NLKW) indicated they will vote FOR, effectively assuring passage given control .

Related Party Transactions (Governance Red Flags)

• Intercorporate Services Agreements (ISAs) with Contran drive executive compensation charges; quarterly renewal/termination mechanics apply .
• 2024 ISA fees paid to Contran: ~$23.7mm; 2025 expected: ~$25.8mm .
• Subordinated, unsecured term loan from Contran: ~$53.7mm in Feb 2024; interest amended Aug 2024 to 9.54%; maturing on demand (not earlier than Sept 2029); subordinated to secured notes and revolver; prepayable at par beginning March 2026 .
• Office sublease from Contran: ~$0.7mm in 2024; deemed fair by Audit Committee .
• Combined risk management and tax sharing arrangements within the Contran/Valhi group; Audit Committee reviewed and approved as fair and reasonable .

Compensation Structure Analysis (Alignment & Risk)

• Cash-heavy, ISA-driven structure with no equity incentives or specified performance metrics risks weak pay-for-performance alignment for executives, including the CEO .
• No executive equity grants and no management ownership guidelines reduce ownership alignment; CEO beneficial ownership is de minimis (300 shares) .
• Hedging policy not specifically restrictive (beyond insider trading policy compliance) and no pledging prohibition disclosed—both below prevailing governance best practices .
• No compensation consultant engaged by the board or MDCC, and MDCC held one meeting in 2024—limited external benchmarking and oversight cadence .
• As a controlled company, Say-on-Pay outcomes are not a reliable gauge of broader shareholder sentiment; control also impacts board independence dynamics .

Equity Ownership & Alignment (Detail)

Employment Terms (Detail)

Investment Implications

• Alignment: CEO compensation is entirely ISA-based cash with no performance metrics or equity; combined with de minimis ownership (300 shares), pay-for-performance alignment is weak and provides limited market signaling from equity awards or vesting events .
• Retention risk: Because employment is with Contran and ISA renews quarterly, retention and compensation levels are primarily parent-driven rather than KRO performance–driven; absence of KRO severance/CoC disclosures adds opacity to retention economics .
• Governance/related-party risk: Extensive related-party structures (ISAs, loans, sublease, risk management, tax sharing) and controlled company status merit a governance discount in some frameworks; Say-on-Pay outcomes are functionally pre-determined by control .
• Trading signals: No equity grants, no vesting schedules, and minimal insider ownership suggest limited near-term insider selling pressure; dividend and leverage/financing (including related-party loans) and TiO2 price/volume remain more salient drivers than insider equity flows .

Overall, governance structure favors control group oversight and ISA efficiency over incentive alignment; investors should underwrite KRO on industry cycle, pricing power, cost position, capital structure (including related-party financing), and cash returns, rather than expecting equity-based management alignment or performance-conditioned incentives to drive outcomes .

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