Thomas E. Gottwald
NEWMARKETAbout Thomas E. Gottwald
Thomas E. Gottwald, age 64, is Chairman of the Board (since July 29, 2014), President and CEO of NewMarket Corporation (since March 3, 2004). He previously served as President & CEO of Ethyl Corporation from June 1, 2001 to June 30, 2004, and President & COO of Ethyl prior thereto . NewMarket’s 2024 performance included net income of $462 million and operating profit of approximately $599 million, with strong operating profit driven by efficiency and lower raw material costs; company TSR measured at 121.16 for 2024 versus peer TSR 126.04 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ethyl Corporation | President & Chief Executive Officer | 2001–2004 | Led the predecessor’s executive transition and operations prior to NewMarket CEO role |
| Ethyl Corporation | President & Chief Operating Officer | Pre-2001 | Senior operating leadership supplying industry and company expertise |
External Roles
No other public-company directorships or external board roles for Thomas E. Gottwald are disclosed in the proxy .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,157,467 | 1,191,667 | 1,231,667 |
| Bonus ($) | 0 | 0 | 0 |
| All Other Compensation ($) | 57,873 | 59,583 | 61,583 |
| Total Compensation ($) | 2,090,768 | 3,195,097 | 3,088,406 |
| CEO Pay Ratio (CEO:$ / Median Employee:$) | — | — | 3,112,127 / 127,813 → 24:1 |
Notes:
- 2024 base salary increase approved at 3.6% effective September 1, 2024 .
- All Other Compensation primarily reflects Savings Plan and Excess Benefit Plan contributions ($17,250 and $44,333 for 2024) .
Performance Compensation
Annual Cash Bonus (Executive Bonus Plan)
| Item | Detail |
|---|---|
| Metric | Operating Profit (sum of segment operating profit less CG&A and special items) |
| Formula (Max) | CEO at 0.35% of operating profit, capped at $2,000,000; Committee applies negative discretion to final payout |
| 2024 Operating Profit | ~$599 million (GAAP OP of $590m excluding $9m bonus expense) |
| 2024 Max Under Formula | $2,000,000 |
| 2024 Actual Payout | $800,000 |
| Individual Performance Inputs | Cost and inventory discipline, profitability focus, tech investment, AMPAC integration; strong operating results cited by Committee |
| Weighting/Targets | No threshold/target levels pre-set; Committee discretion across broader metrics and individual performance |
Long-Term Incentive (Performance Stock Awards)
| Grant | Shares (Threshold) | Shares (Target) | Grant-Date Fair Value ($) | Performance Metric | Performance Window | Vesting Terms |
|---|---|---|---|---|---|---|
| 3/5/2024 | 285 | 570 | 360,690 | EPS (ex one-time/non-recurring items), target at FY2028; threshold ≈80% pays 50%, target pays 100% | ||
| Outstanding PS Awards as of 12/31/2024 | — | 610 (2020 grant) | Market value $322,294 | EPS (FY2024 determination) | 2020–2024 | Committee evaluation after period |
| — | 655 (2021 grant) | $346,069 | EPS (FY2025 determination) | 2021–2025 | 100% vest subject to EPS targets | |
| — | 798 (2022 grant) | $421,623 | EPS (FY2026 determination) | 2022–2026 | 100% vest subject to EPS targets | |
| — | 880 (2023 grant) | $464,948 | EPS (FY2027 determination) | 2023–2027 | 100% vest subject to EPS targets | |
| — | 570 (2024 grant) | $301,160 | EPS (FY2028 determination) | 2024–2028 | 100% vest subject to EPS targets |
Additional details:
- Options/SARs: none outstanding for NEOs as of 12/31/2024 .
- 2024 stock awards vested: 625 shares for Mr. Gottwald; value realized $386,994 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 605,139 shares (6.4% of class) |
| Sole vs Shared Power | Sole: 579,385; Shared: 25,754 (disclaims 5,087 shares owned by spouse) |
| Director/Insider Ownership Group | Directors and executive officers as a group: 1,813,716 shares (19.1%) |
| Ownership Guidelines (Executives) | CEO 3x annual cash salary; others 1x; current NEOs in compliance |
| Anti-Hedging | Prohibits collars, forwards, swaps, locks, exchange funds, puts/calls/derivatives on company securities |
| Pledging | Proxy does not specifically address pledging by executives/directors; no pledging disclosure found |
| Deferred Compensation (Excess Benefit Plan—Savings Component) | 2024 registrant contribution $44,333; aggregate balance $7,279,676; 2024 aggregate earnings $(240,289) |
Employment Terms
| Item | Provision |
|---|---|
| Employment Agreements | None for NEOs (no employment, severance, or change-in-control agreements) |
| Retirement & Pension | Pension Plan present value $1,842,276; Excess Benefit Plan (Pension component) $6,019,945; 33 years credited; Director Retirement Plan present value $131,160 |
| Director Retirement Plan | Lifetime $12,000/year after age 60 for directors elected on/before 2/23/1995; Mr. T. E. Gottwald eligible |
| Clawback Policy | Amended in 2023 to comply with SEC/NYSE listing standards; recovery of erroneously awarded incentive comp upon restatement within 3-year lookback |
| Termination/CoC Treatment (LTI) | Death/Disability: pro-rata vesting of performance stock; Retirement: service vesting removed, performance conditions remain; CoC (awards after 2023 not assumed/substituted): vest at actual performance through CoC or target if not determinable; involuntary termination within 12 months triggers vesting |
| Estimated Benefits (12/31/2024, share price $528.35) | Retirement max pro-rata PS: $1,098,301; Disability/Death: $1,098,301; CoC (involuntary termination): PS vest value $301,160 |
Board Governance
- Board service — Director since 1994; Chairman since 2014; combined CEO/Chair model with Lead Independent Director (Mark M. Gambill) to balance oversight and set agendas; executive sessions of independent directors at each regular meeting .
- Committee roles — Executive Committee member; Audit, Compensation, and Nominating/Governance committees composed solely of independent directors (Chairs: Rogers—Audit; Xu—Compensation; Harris—Nominating/Governance) .
- Independence — Independent directors: Messrs. Gambill, Harris, Rogers; Mses. Xu, Ukrop; employee Chairman/CEO is not independent .
- Board activity — Board held five meetings in 2024; each director attended at least 75% of combined Board and committee meetings during service periods .
Director Compensation
- Employee directors (including Chairman/CEO) do not receive board or committee retainers; only change in actuarial present value of the Directors’ Retirement Benefit is disclosed in SCT .
- Non-employee directors: cash retainer $100,000; committee/lead director fees; annual fully vested stock grant (~$100,000) .
Compensation Peer Group and Shareholder Feedback
- Peer group (14 specialty chemicals peers): Ashland; Avient; Axalta; Cabot; FMC; H.B. Fuller; Ingevity; Innospec; Minerals Technologies; Quaker Chemical; RPM; Sensient; Stepan; Valvoline .
- CEO pay positioning: 2024 CEO base salary above peer median; total cash and total direct compensation below 25th percentile vs peers .
- Say-on-pay result: 98.3% approval at 2024 annual meeting; Committee maintained program aligned with long-term objectives .
Company Performance Context (Pay vs Performance)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| CEO SCT Total ($) | 3,149,426 | 2,469,929 | 2,090,768 | 3,195,097 | 3,088,406 |
| CEO Compensation Actually Paid ($) | 1,847,089 | 2,017,197 | 2,185,637 | 3,276,771 | 2,538,195 |
| Total Shareholder Return | 83.52 | 73.56 | 68.64 | 122.96 | 121.16 |
| Net Income ($000s) | 270,568 | 190,908 | 279,538 | 388,864 | 462,413 |
| Operating Profit ($000s) | 319,000 | 266,000 | 363,000 | 493,000 | 599,000 |
Compensation Structure Analysis
- Equity-heavy, EPS-based performance stock over five-year horizons strengthens long-term alignment; options are not used, reducing repricing risk .
- Annual bonus uses operating profit to set maxima with negative discretion, allowing Committee to incorporate broader financial and qualitative metrics; no preset thresholds/targets for payouts .
- Cash vs equity mix: in 2024, CEO SCT total $3.09m with $0 bonus, $360.7k stock awards, and $800k non-equity incentive; Committee cites ~48.5% of CEO total direct compensation as at-risk for 2024 .
Related Party Transactions and Red Flags
- Family control relationships: CEO is son of non-employee director Bruce C. Gottwald; multiple family members employed with disclosed compensation, reviewed per related-party policy by independent committee .
- Pension plan asset manager (The London Company) was a >5% shareholder and received ~$776,654 in fees; Audit Committee reviewed and approved .
- Governance mitigants: Independent committees; Lead Independent Director; executive sessions each regular meeting .
- Hedging is prohibited; proxy does not explicitly address pledging policies (monitor for future disclosure) .
Investment Implications
- Alignment: Significant personal ownership (6.4% of shares) plus five overlapping EPS-based performance stock cycles (2024–2028) anchor multi-year alignment; however, lack of explicit pledging policy disclosure is a minor governance watch item .
- Incentive quality: Operating profit-driven annual bonus with negative discretion and long-dated EPS hurdles reduce short-term gaming risk and favor durable value creation; options’ absence lowers repricing risk .
- Retention and selling pressure: Retirement, disability, death, and CoC provisions show pro-rata or accelerated vest potential; planned vesting windows (2025–2028) and periodic vest events (e.g., 625 shares vested in 2024) can be near-term liquidity/selling catalysts to monitor via Form 4 flows around vesting dates .
- Governance: Combined CEO/Chair with robust Lead Director and independent committees partly mitigates concentration risk; family relationships and related-party context warrant ongoing oversight, but strong say-on-pay (98.3%) and independent compensation consultant support program credibility .