Michael S. Simmons
KRONOS WORLDWIDEAbout Michael S. Simmons
Michael S. Simmons (age 53) is Vice Chairman of the Board of Kronos Worldwide, Inc. (KRO) and has served as a director since 2023; prior roles at KRO include Executive Vice President, Finance (2022–2023), Senior Vice President, Finance (2021–2022), and Vice President, Finance (2019–2021). He is currently President and Chief Executive Officer of Contran Corporation and Valhi, Inc., and Vice Chairman of NL Industries, Inc. and CompX International Inc.; he previously spent 1994–2018 at PwC, most recently as a managing director . KRO’s operating performance during his board tenure improved in 2024 versus 2023: net sales rose 13% to $1,887.1 million, net income swung from a loss to $86.2 million, production capacity utilization increased from 72% to 96%, and TSR (value of $100 investment) reached 98 in 2024 versus 95 in 2023 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kronos Worldwide (KRO) | Vice Chairman of the Board, Director | Since 2023 | Governance oversight during recovery in demand, production ramp, and debt refinancing . |
| Kronos Worldwide (KRO) | EVP, Finance | 2022–2023 | Finance leadership through demand downturn and cost actions . |
| Kronos Worldwide (KRO) | SVP, Finance | 2021–2022 | Senior finance leadership during late-2022 demand curtailments . |
| Kronos Worldwide (KRO) | VP, Finance | 2019–2021 | FP&A/accounting leadership amid cyclical pricing and volumes . |
| PwC | Managing Director | 1994–2018 | Audit/finance expertise; foundation for governance and controls . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Contran Corporation | President & CEO; Director | Since 2023 | Parent-company executive oversight; intercompany services and financing (ISA, term loan) . |
| Valhi, Inc. | President & CEO; Director | Since 2022 | Controlled-company governance; tax sharing; captive insurance program . |
| NL Industries, Inc. | Vice Chairman; Director | Since 2023 | Affiliate board leadership; shared governance ecosystem . |
| CompX International Inc. | Vice Chairman; Director | Since 2022 | Affiliate board leadership . |
Fixed Compensation
| Component | FY 2024 | Notes |
|---|---|---|
| Base Salary (via ISA allocation) | $932,000 | Represents KRO’s portion of Contran ISA charge; amount is not performance-linked . |
| Bonus | $0 | No bonus disclosed for Simmons at KRO in 2024 . |
| Other Compensation | $0 | No other comp disclosed for Simmons in 2024 . |
- ISA structure: KRO pays Contran a fixed fee that includes executive services; charges are based on Contran’s employment cost allocations (salary, estimated bonus, taxes/benefits/overhead) by expected time devoted, reviewed by KRO’s MDC Committee and approved by independent directors .
- Not tied to KRO performance: amounts charged under the ISA are explicitly “not dependent upon our financial performance” .
Performance Compensation
- No equity-based compensation is granted to executive officers; KRO has never granted stock options or equity incentive awards and did not grant plan-based awards in 2024 .
- Executive officers (including Simmons) are not eligible for director cash or equity compensation at KRO; no fees paid for board service .
- KRO disclosed it did not use specific financial performance measures to link executive compensation to company performance in 2024 .
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| KRO beneficial ownership | Simmons beneficially owns 0 KRO shares; percent of class 0% . |
| NL & Valhi beneficial ownership | Simmons beneficially owns 0 NL and 0 Valhi shares . |
| Options/RSUs/PSUs | None outstanding; no option exercises or stock vested in 2024 . |
| Director stock grants (non-employee directors) | Eligible directors received 1,550 KRO shares on May 15, 2024 (valued $19,685) . Simmons is not eligible (executive officer) . |
| Director stock ownership guidelines | Non-employee directors must hold at least 3× base annual cash retainer; shares from annual grants are subject to holding guideline . |
| Hedging/Pledging | KRO has not adopted policies regarding hedging by employees/directors; insiders must comply with the company’s insider trading policy (filed as Exhibit 19.1 to 2024 Form 10-K) . |
Implications:
- “Skin in the game” is minimal for Simmons at KRO given 0 share ownership and lack of equity awards .
- Absence of hedging policy and lack of management ownership guidelines reduces formal alignment mechanisms, though director guidelines exist .
Employment Terms
| Term | Detail |
|---|---|
| Employment arrangement | Services provided via Intercorporate Services Agreement (ISA) with Contran; renews quarterly; terminable by either party with 30 days’ notice before the next quarter . |
| Severance/COC | No KRO-specific severance or change-of-control terms disclosed for executive officers under the ISA . |
| Clawbacks/Deferred comp | No clawback provisions or nonqualified deferred compensation disclosed for named executive officers at KRO . |
| Tax matters | KRO participates in Contran/Valhi tax sharing agreement; payments to/from Valhi mirror standalone tax position; Valhi indemnifies KRO for group liabilities exceeding KRO’s computed tax . |
BOARD GOVERNANCE
- Controlled company: Valhi and NLKW own ~81% of KRO; KRO is a controlled company under NYSE standards .
- Independence and committees: KRO maintains majority independent directors; no independent nominations/governance committee; Management Development & Compensation Committee has no charter (by choice under controlled company exemptions) .
- Committees and membership: Audit Committee—Moore (Chair), Kramer, Harper, Mendes, Turner (9 meetings in 2024) ; Management Development & Compensation Committee—Turner (Chair), Moore, Harper (1 meeting in 2024) .
- Attendance: In 2024, the board held six meetings; each incumbent director attended at least 90% of board/committee meetings while in office . In 2023, each incumbent attended all meetings .
- Leadership structure: Non-executive Chair (Loretta J. Feehan); CEO (James M. Buch) serves on board; no Lead Independent Director—Audit Chair presides over independent/non-management sessions .
- Dual-role implications: Simmons is a KRO executive officer and director while concurrently serving as Contran’s President & CEO and as a director of Contran—highlighting potential conflicts managed via related-party policies and independent approvals .
COMPENSATION & INCENTIVES — Key Data Points
| Item | FY 2023 | FY 2024 |
|---|---|---|
| Say-on-Pay approval (nonbinding) | 87.7% | 87.3% |
| PEO total compensation (for context) | $2,138,000 (Buch) | $2,247,000 (Buch) |
| Segment profit (loss) | $(39.8)m | $141.0m |
Notes:
- Executive pay is primarily fixed cash via ISA allocations; KRO does not use formulaic performance metrics or grant equity to executives .
- Director compensation (non-employee) consists of cash retainers and annual stock grants; Simmons does not receive director compensation as an executive officer .
PERFORMANCE & TRACK RECORD — Company Context
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Net Sales ($mm) | $1,666.5 | $1,887.1 |
| Net Income (Loss) ($mm) | $(49.1) | $86.2 |
| Production Capacity Utilization | 72% | 96% |
| TiO₂ Sales Volumes (kMT) | 419 | 504 |
| TiO₂ Production Volumes (kMT) | 401 | 535 |
| TSR (Value of $100 investment) | 95 | 98 |
Operational highlights:
- Demand recovered in 2024; average TiO₂ selling prices were ~5% below 2023, but volumes and lower production costs drove margin expansion . Unabsorbed fixed costs fell from $96m (2023) to $12m (Q1 2024 only) .
- LPC acquisition (July 16, 2024) consolidated 100% ownership; non-cash gain recognized and debt structure refinanced into 2029 senior notes; Contran term loan subordinated and later repriced .
RELATED PARTY TRANSACTIONS — Governance Red Flags/Controls
- ISA fees to Contran: ~$23.7m in 2024; independent director approval after MDC review each year .
- Contran subordinated term loan: $53.7m (Feb 2024) at 11.5%; amended to 9.54% in Aug 2024; audit committee oversight with rationale tied to secured notes pricing/spread .
- Risk management program with Valhi’s captive (Tall Pines): ~$25.6m paid in 2024; audit committee annual review .
- Office sublease and IT data services programs with Contran: routine approvals; pass-through cost allocations .
- Tax sharing agreement with Contran/Valhi: structure and indemnities reviewed and approved by audit committee .
Investment Implications
- Alignment: Executive compensation design provides limited pay-for-performance and equity alignment for Simmons (fixed ISA allocations, no equity awards, 0 share ownership), which may dilute direct shareholder alignment but also reduces forced insider selling pressure from vesting events .
- Governance/independence: Controlled company status, dual roles across Contran/Valhi/NL/CompX, and regular related-party transactions (ISA, financing, services) require reliance on independent committee processes and policies to mitigate conflicts; these are disclosed and overseen by independent directors/audit committee but represent structural governance risk .
- Retention risk: ISA renewals quarterly with 30-day termination notice suggest flexibility but also imply that executive services are centralized at Contran; Simmons’ multi-entity leadership likely lowers near-term turnover risk for KRO, though terms are not contractually guaranteed at KRO .
- Trading signals: With no equity grants and zero KRO share ownership, traditional insider-sale pressure from vesting/option exercises is minimal; lack of management ownership guidelines and hedging policy may reduce structural alignment, though insider trading policy applies .
- Company performance trajectory: 2024 demonstrated recovery (sales/volumes/margins), integration of LPC, and refinancing completion; 2025 headwinds include a new 25% U.S. tariff on imports from Canada (material for KRO’s Canadian production) and still-elevated European energy costs, both cited as potential profitability risks despite expected demand improvement .