John Chao
WESTLAKEAbout John Chao
John T. Chao (age 48) is a Class II director of Westlake Corporation and, since July 2024, serves as Senior Vice President and Managing Director of Westlake Innovations, Inc. (a Westlake subsidiary). He has been a Westlake director since August 2018. He holds a B.S. in Chemical Engineering from Rice University and an MBA from the Massachusetts Institute of Technology. He is the son of Executive Chairman Albert Y. Chao and a member of the controlling Chao family; he is not listed among Westlake’s independent directors.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Westlake Innovations, Inc. | Senior Vice President & Managing Director | Jul 2024–present | Leads innovation subsidiary; management role precludes independence |
| Westlake Innovations, Inc. | Vice President & Managing Director | Mar 2021–Jul 2024 | Strategy and innovation leadership |
| Tanglewood Property Management Company (affiliate of principal stockholder) | Managing Director | Oct 2018–Feb 2021 | Affiliated with controlling shareholder apparatus |
| New York Public Radio | COO; SVP Business & Strategy; VP Partnerships & New Business | 2015–2018 | Operating leadership at media non-profit |
| McKinsey & Company | Partner (Strategy & Finance; energy/commodities focus) | 2004–2013 | Advised energy/commodity clients |
| Westlake Corporation | Financial Analyst | 2000–2002 | Early career corporate finance role |
External Roles
| Organization | Role | Status |
|---|---|---|
| — | — | No public company directorships disclosed in the Westlake proxy for John T. Chao |
Board Governance
- Independence: Not listed among independent directors; Westlake is a controlled company (72.3% owned by TTWF LP) and utilizes certain NYSE “controlled company” exemptions. John is a company executive and family member, indicating non-independence.
- Committees: Member, Corporate Risk & Sustainability Committee (all directors serve); not listed on Audit, Compensation, or Nominating & Governance (which are comprised of independent directors).
- Chair roles: None (Corporate Risk & Sustainability is chaired by Michael J. Graff).
- Attendance: Board met 12 times in 2024; all directors attended at least 75% of Board/committee meetings; all directors attended the 2024 annual meeting (except Cregg, who joined later).
- Executive sessions: Non-management directors meet; independent directors meet at least annually, with rotating presiding director.
- Board structure: Executive Chairman (Albert Y. Chao), Senior Chairman (James Y. Chao), and CEO roles are separated.
Fixed Compensation
| Component | 2024 Amount |
|---|---|
| Base salary (employee role) | $348,923 |
| Director cash retainer | $0 (John is a full-time employee; employees receive no director compensation) |
| Other (401(k) match, insurance, misc.) | $50,732 total (includes benefits and other compensation) |
Performance Compensation
| Component | 2024 Amount | Notes/Performance Linkage |
|---|---|---|
| Non-equity incentive plan (AIP/QIP combined) | $302,690 | Company-wide AIP requires thresholds on at least one of: relative TSR (top two-thirds vs peer group), EVA rate of return ≥ 33% of WACC, or SG&A ≤ $953.6M; 2024 certified results: TSR 50.0% (met), EVA RoR 7.5% (met), SG&A ~$878M (met). EVA RoR mapped to bonus multiple; QIP tied to operational metrics with EVA gate. |
| Stock awards (RSUs/PSUs) | $165,288 | Westlake LTI uses a 3-part mix: options, RSUs, PSUs; PSUs vest at 25%/100%/200% of target based on relative TSR (≥33rd/50th/75th percentile) or EVA bonus multiple (≥0.5x/1.0x/2.0x), whichever is greater. |
| Option awards | $72,753 | Non-qualified options, typically 10-year term with 3-year ratable vesting; grant pricing at mean of high/low on grant date. |
Performance metric detail (company programs):
- AIP Threshold Metrics (any one unlocks payout): Relative TSR within top two-thirds of peer group; EVA rate of return ≥ 33% of WACC; SG&A ≤ $953.6M. 2024 outcomes: all met; EVA RoR 7.5% implied corporate EVA bonus multiple ~0.86x.
- PSU Metrics: Relative TSR percentile or average EVA bonus multiple over 3 years; greater-of method determines payout (25%/100%/200% at threshold/target/max).
Insider Trading Activity (Form 4)
Notes: “F” indicates tax withholding upon vesting; “M” indicates exempt conversion of RSUs to common upon vesting; quantities reflect Form 4 disclosures; prices reflect grant or withholding prices as reported.
Other Directorships & Interlocks
- Public boards: None disclosed for John T. Chao.
- Family/control interlocks: Westlake is controlled by TTWF LP (72.3% of shares). Multiple Chao family members serve on the Board (Albert, James, David, Catherine, Carolyn, John), elevating potential related-party and entrenchment risks.
- Related-party transactions: Principal executive office leased from affiliates of the principal stockholder/Tanglewood; ~$4M lease payments in 2024; a new office lease with another affiliate begins 3Q25 (approx. $500k in year 1). Transactions were approved by disinterested directors under the related party policy.
Expertise & Qualifications
- Education: B.S. Chemical Engineering (Rice); MBA (MIT).
- Functional expertise: Strategy, finance, operations; prior McKinsey partner advising energy/commodities; operating leadership at NYPR.
- Industry exposure: Chemicals and energy through roles at Westlake and consulting.
Equity Ownership
| Holder | Common Shares Beneficially Owned | Pledged? |
|---|---|---|
| John T. Chao | 10,148 | None of the shares of directors/executives are pledged as security. |
Stock ownership policy: Directors and executives must retain 100% of net vested shares until meeting ownership guidelines (5x annual cash retainer for directors; 6x/3x/1x salary depending on role). Shorting, hedging, and pledging are prohibited; none currently pledge Westlake securities.
Governance Assessment
-
Strengths
- Audit, Compensation, and Nominating & Governance Committees are composed entirely of independent directors; multiple audit committee financial experts identified.
- Clear anti-hedging/anti-pledging and stock ownership policies; clawback policy adopted in Nov 2023 compliant with NYSE/Dodd-Frank.
- Robust use of performance metrics (EVA, relative TSR) in incentive plans; 2024 AIP strictly gated by objective thresholds.
-
Risk indicators and RED FLAGS
- Not independent: John is an employee of a Westlake subsidiary and a member of the controlling family; he is not listed among independent directors. This reduces board independence and may impact oversight perceptions.
- Controlled company exemptions: Westlake avails itself of NYSE controlled company exemptions (given 72.3% family control), potentially limiting independent oversight on certain governance matters.
- Related-party exposure: Material related-party leases with affiliates of the principal stockholder/Tanglewood; presence of multiple family directors heightens conflict risk—though transactions are subject to a related-party review policy and approved by disinterested directors.
- Dual role/time allocation: Director plus executive responsibilities (SVP & MD of Westlake Innovations) can raise concerns about balancing management duties with board oversight.
-
Mitigants
- Independent-only membership on Audit/Compensation/Nominating & Governance committees; rotation of independent director who presides over executive sessions.
- Strong say-on-pay support historically (96% approval in 2023), indicating investor acceptance of pay design.
- No pledging by directors/executives; clear ownership alignment policy.
Overall implication: For investors emphasizing board independence and minimal related-party exposure, John Chao’s profile presents alignment and continuity with the controlling shareholder but increases perceived conflict risks. Monitoring of committee independence, related-party dealings, and insider transaction patterns remains prudent.