Frank Bozich
TrinseoAbout Frank Bozich
Frank A. Bozich (age 64) is President & CEO of Trinseo since March 2019 and has served on Trinseo’s Board since June 2019; he sits on the Environmental, Health, Safety, Sustainability & Public Policy (EHSS&PP) Committee . He holds a BS and MS in Chemistry and an MBA (University of Chicago; University of Illinois), and is described as an accomplished CEO with transformation experience across global chemical markets . 2024 performance context: Adjusted EBITDA was $203.7 million; Free Cash Flow was $(77.5) million; Trinseo’s 2024 TSR value of an initial $100 was $16 versus a peer group $146, reflecting challenging macro and restructuring actions under his leadership .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SI Group, Inc. | President & CEO | 2013–2019 | Led a global phenolic resins and chemicals business; growth and corporate transformation experience |
| BASF Corporation | President, Catalysts Division; Group VP roles | 2010–2013 (President); prior roles earlier | Led catalysts and precious/base metals services; integration management leadership |
| Engelhard Corporation | Group VP, Enterprise Technologies & Ventures | Pre-2006 (company acquired by BASF in 2006) | Technology portfolio and venture leadership prior to BASF acquisition |
| Rohm and Haas; Croda Adhesives, Inc.; Apex Adhesives | Various leadership roles; Founder (Apex Adhesives) | Apex founded in 1986; earlier roles at Rohm and Haas, Croda | Early entrepreneurial and operating experience in chemicals and adhesives |
External Roles
| Organization | Role | Years |
|---|---|---|
| OGE Energy Corp (NYSE: OGE) | Director | Since Feb 2016 |
Fixed Compensation
Multi-year CEO compensation detail:
| Metric | 2022 | 2023 | 2024 | |---|---|---| | Base Salary ($) | $1,050,000 | $1,050,000 | $1,050,000 | | Stock Awards ($) | $2,761,179 | $2,804,973 | $2,656,057 | | Option Awards ($) | $1,197,862 | $1,322,998 | $335,082 | | Non-Equity Incentive (Annual Bonus) ($) | $650,000 | $449,768 | $1,226,146 | | Deferred Comp Earnings ($) | $2,041 | $13,387 | $20,379 | | All Other Compensation ($) | $132,501 | $138,719 | $135,635 | | Total ($) | $5,793,583 | $5,779,845 | $5,423,299 |
Additional structure:
- Target annual bonus: 130% of base salary .
- 2024 Long-Term Incentive (LTI) grant target: 420% of salary ($4,410,000) .
Performance Compensation
Annual Cash Incentive Plan (ACI) design and 2024 outcomes:
| Component | Weight | Target | Actual | Payout vs Target | Vesting/Timing |
|---|---|---|---|---|---|
| First Half ACI Adjusted EBITDA | 7.5% | $90M | $74M | 0% | Annual bonus FY24 |
| Second Half ACI Adjusted EBITDA | 15% | $119M | $113M | 79% | Annual bonus FY24 |
| Full Year ACI Adjusted EBITDA | 7.5% | $213M | $187M | 51% | Annual bonus FY24 |
| ACI Free Cash Flow | 30% | $(50)M | $8M (adjusted) | 100% (negative discretion from max) | Annual bonus FY24 |
| Responsible Care: TRIR | 5% | 0.25 | 0.3 | 0% | Annual bonus FY24 |
| Responsible Care: Spills | 5% | 8 | 5 | 200% | Annual bonus FY24 |
| Responsible Care: Process Safety Incidents | 5% | 2 | 0 | 200% | Annual bonus FY24 |
| Individual Goals (CEO) | 25% | Company-set | Assessed | 105% of target (26.25% of total bonus) | Annual bonus FY24 |
CEO ACI payout summary:
- Target payout amount: $1,365,000 (130% of salary) .
- Actual payout: $1,226,146 (89.83% of target) .
Long-Term Incentives (2024 grant mix, vesting):
- Options: 10%; 136,212 options at $4.33, vest 1/3 annually over 3 years, 9-year term .
- RSUs: 29%; 224,368 RSUs, vest 1/3 annually over 3 years .
- PSUs: 29%; 224,368 target PSUs with multi-period vesting on relative TSR vs S&P 600 Chemicals/Basic Materials peer group: 25th/50th/75th percentile maps to 50%/100%/200% payout; negative TSR caps at 100%; value cap at 300% of grant-date value; delivery at 3rd anniversary .
- RCUs: 32%; 247,579 cash-settled, vest 1/3 annually, cash per unit equals closing price at vesting, capped at $5.70 per share for CEO grants .
Equity Ownership & Alignment
- Beneficial ownership: 555,231 shares; 1.54% of class; 321,473 shares acquirable within 60 days (options) .
- Stock ownership guidelines: CEO required to hold 6x base salary; due solely to share price decline he was not in compliance as of March 31, 2025, but prior-year compliance avoids breach; retention requirement of 50% of net shares until met; no NEO share sales in 2024 .
- Anti-hedging and anti-pledging: hedging and pledging prohibited; margin accounts disallowed without preapproval .
Outstanding awards snapshot (12/31/2024):
| Award | Quantity | Notes |
|---|---|---|
| Options (2024) | 136,212 @ $4.33, expiring 2/22/2033 | 3-year ratable vest |
| RSUs (2024) | 224,368 unvested; market value $1,144,277 @ $5.10 | 3-year ratable vest |
| RCUs (2024) | 247,579 unvested; market value reference $1,262,653 @ $5.10 | Cash-settled, price cap $5.70 |
| PSUs (target 2024) | 224,368 unvested; market value $1,144,277 @ $5.10 (target basis) | TSR-linked multi-period vest |
Underwater options clean-up proposal:
- 2025 Proposal 8 seeks approval for voluntary forfeiture (no consideration) of deeply underwater options (exercise prices $51.02–$81.20) by CEO/CFO/CLO to reduce dilution and increase Plan capacity; CEO/CFO/CLO collectively hold ~237,000 eligible options .
Employment Terms
- Employment agreement: initial 3-year term (Dec 2018), auto-renews for one-year periods; termination notice at least one year .
- Severance (no CIC): 2.0x base + target bonus, paid monthly over 24 months; 24 months health benefits or cash equivalent .
- Change-in-control (double trigger): 3.0x base + target bonus, lump sum; equity vesting per plan terms; no 280G gross-ups; payments reduced if better net after-tax outcome .
- Non-compete and non-solicit: 2-year post-termination duration .
- Clawback: incentive compensation subject to recoupment upon accounting restatement or certain covenant breaches; equity award agreements enable reimbursement/cancellation .
Illustrative potential payments (as of 12/31/2024):
| Scenario | Cash Separation Payment ($) | Unvested Equity Value ($) | Health/Welfare ($) | Insurance Benefit ($) | Total ($) |
|---|---|---|---|---|---|
| Termination Without Cause | $4,830,000 | $1,930,252 | $36,092 | — | $6,796,345 |
| Death | — | $2,656,383 | — | $500,000 | $3,156,383 |
| Disability | — | $2,656,383 | — | $250,000 | $2,906,383 |
| Retirement | — | $3,568,299 | — | — | $3,568,299 |
| Change in Control | $7,245,000 | $4,560,521 | $36,092 | — | $11,841,613 |
Board Governance
- Board structure: roles of Chair and CEO are separated; current Board Chair is independent (K’Lynne Johnson) .
- Independence: all current directors and nominees are independent except the CEO (Frank Bozich) .
- Committee membership: Bozich serves on EHSS&PP Committee .
- Executive sessions: non-management and independent directors meet in executive session; chaired by the Board Chair .
- Attendance: Board held 8 meetings in 2024; audit (10), compensation (6), nominating (5); directors attended 100% of board and committee meetings .
Performance & Track Record
- 2024 actions: restructuring (product line shutdowns, workforce reductions), closure of global styrene operations, exit from virgin polycarbonate and decommissioning of Stade PC plant; incrementally improved liquidity through $1.1 billion refinancing, extending nearest maturity to 2028 .
- Strategic portfolio moves: sale process for Americas Styrenics JV interest; sale and license of Stade PC assets/technology to Deepak Chem Tech ($52 million) .
- Liquidity focus: reductions in capex, opex and working capital; expanded recycled manufacturing capabilities and pilot facilities for PC, PMMA depolymerization and ABS dissolution .
Multi-year pay-versus-performance context:
| Year | CEO Total Comp ($) | CEO Compensation Actually Paid ($) | TSR ($100 basis) | Peer TSR ($100 basis) | Net Income (Loss) ($mm) | Adjusted EBITDA ($mm) |
|---|---|---|---|---|---|---|
| 2020 | 5,035,919 | 11,989,919 | 149 | 118 | 7.9 | 285.1 |
| 2021 | 7,001,892 | 6,409,637 | 151 | 149 | 440.0 | 729.4 |
| 2022 | 5,793,583 | (1,961,363) | 68 | 132 | (430.9) | 311.7 |
| 2023 | 5,779,845 | 2,320,488 | 26 | 146 | (701.3) | 154.3 |
| 2024 | 5,423,299 | 4,947,052 | 16 | 146 | (348.5) | 203.7 |
Compensation Committee & Peer Group
- Committee: chaired by Joseph Alvarado; retains Willis Towers Watson as independent consultant; assessed independence and broader services; 2024 consultant fees ~$200k (comp) and ~$390k (other services) .
- Peer group used for benchmarking (23 companies including Ashland, H.B. Fuller, Huntsman, Avient, Cabot, Chemours, Eastman, Olin, Westlake, RPM, etc.) .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval ~95% of votes cast in favor; ongoing shareholder engagement and incorporation of feedback .
Compensation Structure Analysis
- Equity mix evolution: introduction of restricted cash units (RCUs) for CEO in 2024 due to share availability constraints and per-person limits; RCUs time-vest, cash-settled with price cap; committee views RCUs as having less retention value than equity .
- Negative discretion applied: ACI Free Cash Flow achieved above maximum, but committee applied negative discretion to pay at target, considering share price decline and overall performance .
- Governance features: double-trigger CIC; no 280G gross-ups; anti-hedging/pledging; mandatory ownership guidelines; clawbacks; no repricing of underwater options without shareholder approval .
Risk Indicators & Red Flags
- Underwater options and dilution pressure: significant historical option strikes ($51–$81) deeply above stock levels; board proposed voluntary forfeiture to reduce overhang and future dilution .
- Plan share constraints and dilution: 2025 proposal to add 2,425,000 shares to Omnibus Plan; total basic dilution would rise from 11.8% to 18.59% if approved, highlighting equity overhang considerations .
- Retention risk in finance/legal functions: one-time cash retention awards in 2024 to CFO ($2.0M) and CLO ($1.0M) vesting over two years, reflecting key-person risk during refinancing and litigation .
- Operating headwinds: goodwill impairments in 2022–2023 for PMMA and Aristech units; multi-year net losses and TSR underperformance relative to peer group .
Board Service History and Dual-Role Implications
- Board service: Director since June 2019; EHSS&PP Committee member .
- Independence and leadership: CEO is not independent; roles of Chair and CEO are separated; independent Chair leads executive sessions to mitigate dual-role concerns .
- Attendance: Board and committees recorded 100% attendance in 2024; supports active governance oversight .
Investment Implications
- Pay-for-performance alignment has tightened: the committee used negative discretion on FCF payouts; PSUs grounded in relative TSR with caps for negative TSR, suggesting tighter linkage to shareholder outcomes .
- Retention and dilution are central levers: RCUs and retention bonuses balance talent risk; option forfeiture and plan share increase address overhang but raise dilution, requiring scrutiny of future grant sizing and burn rate (5.7% in 2024; 3-year average 3.4%) .
- Strategic execution risk remains: portfolio exits, asset closures, and JV sale process are significant catalysts; success in refinancing extended runway to 2028 but ongoing macro demand weakness and transformation execution will drive compensation outcomes and insider selling pressure via vesting schedules .